Comprehensive Annual Financial Report - Port …€™s Discussion and ... Assistance Required by OMB Circular A-133 and Chapter 10.550 ... we hereby issue the comprehensive annual

For the Year Ended September 30, 2015 and 2014 Port Canaveral, Florida

Comprehensive Annual Financial Report

Canaveral Port Authority • 445 Challenger Road, Suite 301 • Cape Canaveral, FL 32920

COMPREHENSIVE ANNUAL FINANCIAL REPORT

of the Canaveral Port Authority

For the Year Ended September 30, 2015 and 2014

Port Canaveral, Florida

Prepared by the Department of Finance

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Canaveral Port Authority Port Canaveral, Florida

Comprehensive Annual Financial Report Year Ended September 30, 2015 and 2014

TABLE OF CONTENTS

Page INTRODUCTORY SECTION

Table of Contents .................................................................................................. i - iv Organizational Chart .......................................................................................................................... v Listing of Principal Officials ..................................................................................................................... vii Letter of Transmittal by Chief Financial Officer ....................................................................................... ix - xiv Certificate of Achievement for Excellence in Financial Reporting ............................................................................ xv

FINANCIAL SECTION

Independent Auditors’ Report ......................................................................... xvii - xix Management’s Discussion and Analysis ...................................................... xxi – xxviii Financial Statements Statements of Net Position .............................................................................. 2 - 3 Statements of Revenues, Expenses and Changes in Net Position ..................................................................................... 4 Statements of Cash Flows ............................................................................... 5 - 6 Notes to Financial Statements ....................................................................... 7 - 46 Required Supplementary Information Schedule of Proportionate Share of Net Pension Liability .................................. 48

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FINANCIAL SECTION (CONTINUED) Page Schedule of Contributions ........................................................................................ 49 Schedule of Funding Progress of Other Postemployment Benefits ......................... 50

Supplementary Information Schedule of Revenues, Expenses and Income before Capital Contributions Compared with Budget ........................................... 53 - 57 Schedule of Comparative Revenues, Expenses and Changes in Net Position, Years Ended September 30, 2015, 2014, 2013, 2012, and 2011 ......................................................................................... 59 - 63 Schedule of Comparative Operating Revenues by Activity, Years Ended September 30, 2015, 2014, 2013, 2012, and 2011 ................................................................................................ 64 Schedule of Construction in Progress and Capital Costs Compared with Budget ................................................................... 65 - 66 Schedule of Expenditures of Federal Awards and State Financial Assistance ................................................................. 67 - 68

STATISTICAL SECTION - NOT COVERED BY AUDITORS’ OPINION

Narrative for Statistical Section ............................................................................ 70 A. Financial Trend Schedules A-1 Net Position - Last Ten Fiscal Years ...................................................... 71 A-2 Operating Revenues By Source - Last Ten Fiscal Years .................................................................................... 72 - 73 A-3 Operating Revenues By Activity - Last Ten Fiscal Years ..................................................................... 74 - 75 A-4 Non-Operating Revenues - Last Ten Fiscal Years ................................ 76 A-5 Total Revenue By Activity - Fiscal Year 2015 ........................................ 77

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STATISTICAL SECTION (CONTINUED) Page A-6 Operating Expenses - Last Ten Fiscal Years .................................. 78 - 79 A-7 Non-Operating Expenses - Last Ten Fiscal Years ................................. 80 A-8 Changes in Net Position - Last Ten Fiscal Years ................................... 81 A-9 Total Expenses - Fiscal Year 2015 ........................................................ 82 A-10 Operating Revenues and Expenses - Fiscal Years 1995 through 2015 ............................................................................... 83 B. Revenue Capacity Schedules B-1 Cargo Revenue - Last Ten Fiscal Years ......................................... 84 - 85 B-2 Cargo Revenue - Last Ten Fiscal Years ................................................ 86 B-3 Cargo Revenue - Fiscal Year 2015 ........................................................ 87 B-4 Revenue Passengers - Last Ten Fiscal Years ....................................... 88 B-5 Revenue Passengers - Last Ten Fiscal Years ....................................... 89 B-6 Ten Largest Revenue Generating Customers - Fiscal Year 2006 & 2015 ................................................................ 90 - 91 C. Debt Capacity Information Schedule C-1 Revenue Bond Coverage - Last Ten Fiscal Years .......................... 92 - 93 C-2 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ............... 94 D. Demographic and Economic Information Schedules D-1 Demographic Statistics for Brevard County – Last Ten Fiscal Years .......................................................................... 95 D-2 Principal Employers – Brevard County 2015 & 2006 ............................. 96

D-3 Map of Port District & Commission District ............................................ 97

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STATISTICAL SECTION (CONTINUED) Page E. Operating Information Schedules E-1 Employee Positions by Function - Last Ten Fiscal Years ...................... 98 E-2 World Trading Partners Map .................................................................. 99 E-3 Cargo Tonnage - Last Ten Fiscal Years ..................................... 100 - 101 E-4 Operating Indicators by Function- Last Ten Fiscal Years .................... 102 E-5 Capital Assets by Function – Last Ten Fiscal Years ............................ 103 E-6 Capital Improvements - Last Ten Fiscal Years .................................... 104

COMPLIANCE SECTION

Additional Elements Required by Government Auditing Standards and the Rules of the Auditor General Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................. 105 - 106 Independent Auditors’ Report on Compliance for Each Major

Program: Report on Internal Control Over Compliance; and Report on Schedule Of Federal Awards and State Financial Assistance Required by OMB Circular A-133 and Chapter 10.550, Rules of the Auditor General .......................................................... 107 - 108

Schedule of Findings and Questioned Costs – Federal Programs and State Projects ............................................ 109 - 110

OTHER INFORMATION - NOT COVERED BY AUDITORS’ OPINION Schedule of Insurance in Force .................................................................... 111 - 112 Map of Port Canaveral ........................................................................................... 113

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Canaveral Port Authority

2014/2015

Thomas “Tom” WeinbergCommission Secretary/Treasurer

Jerry W. AllenderCommission Chairman

Robert “Bruce” DeardoffCommissioner

Wayne E. JusticeCommissioner

John H. “Hank” EvansCommission Vice-Chairman

John E. Walsh*Chief Executive Officer

Patricia G. PostonSenior Director of Finance

Rodger ReesDeputy Executive Director/Chief Financial Officer

Diana Mims-ReidController

*Resigned January 21, 2016

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Listing of Principal Officials As of September 30, 2015

Elected Officials

The Canaveral Port Authority, governing body of the Canaveral Harbor Port District, consists of five elected Commissioners. The Board meets on the third Wednesday of each month at 9:00 A.M. The meetings are held in the Board Room of the Port Authority office building located at 445 Challenger Road. In addition, special meetings and public hearings are scheduled throughout the year.

Years of Term Commissioner Position Service Expires Jerry W. Allender Chairman 5 12/31/18 John H. Evans Vice Chairman 3 12/31/16 Thomas W. Weinberg Secretary/Treasurer 5 12/31/18 R. Bruce Deardoff Commissioner 6 12/31/16 Wayne Justice Commissioner 1 12/31/18

Appointed Officials Years of Service John Walsh* Chief Executive Officer 4 Rodger Rees Deputy Exec. Director/Chief Financial Officer 2 Jim Dubea

Deputy Exec. Director/ Government & Strategic Partnerships

2

George Arocha Director/GM, Cargo & Container Operations 1

Brian Blanchard Sr. Director of Cruise Operations 2

Alberto Cabrera Sr. Director Cargo Business Development 1

William Crowe Director of Civil Engineering & Construction 1

Robert Giangrisostomi Sr. Director of Business Development 15

Terry Hicks* Sr. Director of Facilities, Construction & Engineering 1

Rosalind P. Harvey Sr. Director of Communications & Community Affairs 16

Cindy Kane* Sr. Director of Human Resources 2

Mark Lorusso Sr. Director of Information Technology 4

Tim Macy* Director of Recreation 2

Clyde Mathis Sr. Director of Cargo & Logistics 1

Diana Mims-Reid Controller 15

Carol Noble* Director of Environmental Plans & Programs 5

Karen Pappas Director of Purchasing & Policies 14

David Perley* Sr. Director of Construction & Infrastructure 4

David T. Poston Director of Cruise, Tourism & Hospitality 14

Patricia G. Poston Sr. Director of Finance 17

Scott Shepard Director of Real Estate 1 *No longer on staff as of 2016

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Port Canaveral445 Challenger Road P.O. Box 267 Cape Canaveral, Florida 32920 USA321.783.7831 888.767.8826 www.portcanaveral.org

May 10, 2016 To the Canaveral Port Authority Commissioners, Chief Executive Officer (CEO) and Citizens of the Canaveral Harbor Port District: State law requires that all general-purpose local governments, including special districts, publish within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with U. S. general accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards and Government Auditing Standards by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Canaveral Port Authority for the fiscal years ended September 30, 2015 and 2014. This report consists of management’s representations concerning the finances of the Canaveral Port Authority (the Authority). Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Canaveral Port Authority has established a comprehensive internal control framework that is designed to: 1) protect the government’s assets from loss, theft, or misuse and 2) compile sufficient reliable information for the preparation of the Authority’s basic financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Authority’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Carr, Riggs & Ingram, LLC, a firm of licensed certified public accountants, has audited the Canaveral Port Authority’s basic financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Authority for the fiscal year ended September 30, 2015 and 2014, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Canaveral Port Authority’s basic financial statements for the fiscal year ended September 30, 2015 and 2014, are fairly presented. These statements are included as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The Canaveral Port Authority’s MD&A can be found immediately following the report of the independent auditors.

Back to Table of Contents

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Profile of the Canaveral Port Authority The Canaveral Harbor Port District, as presently structured, was created by House Bill Number 1136, Chapter 28922, from the Laws of Florida Special Acts of 1953, as amended and restated by Chapter 2003-335, Laws of Florida, Acts of 2003, and acts amendatory thereof and supplemental thereto. This bill created, organized and established a port district in Brevard County, Florida and designated the area as the Canaveral Harbor Port District. The Canaveral Port Authority is a quasi-public governmental body, an independent special taxing district that is a political subdivision of the state of Florida. As such, it is not under the jurisdiction of Brevard County or any neighboring city. The Canaveral Port Authority has operated under the Commission-manager form of government since 1953. Five elected commissioners, representing the five Port districts, serve as a board of directors and have jurisdiction over all fiscal and regulatory policies and operations of the Port. Commissioners are chosen by the public via an at-large election and serve four-year terms. These terms are staggered, with three commissioners up for election at one time, and the remaining two up for election two years hence. As an independent special district of the State of Florida, the Canaveral Port Authority is empowered to levy ad valorem taxes to finance expansion and operation, incur indebtedness through the sale of bonds or use of bank loans, establish tariff rates, negotiate for government grants, condemn necessary land, zone its land, and exercise police powers. The commission is responsible, among other things, for passing policies, adopting a budget, appointing committees, and hiring both the government’s manager (CEO) and attorney. The CEO’s authority and responsibilities are similar to those of both the manager of a local government and the president of a sizable private corporation. The major goals of the Port Authority are to give the residents of the area the benefits of low-cost ocean transportation, a foreign trade zone and to create economic opportunity and jobs. The Authority also provides substantial facilities for recreation for the local population and visitors alike. The annual budget serves as the foundation for the Canaveral Port Authority’s financial planning and control. All departments of the Port Authority are required to submit budget requests to the CEO during June of each year. The CEO uses these requests as the starting point for developing a proposed budget. The Chief Financial Officer (CFO) then prepares and presents this proposed budget to the commission for review prior to September 30. The commission holds two public hearings on the proposed budget and adopts a final budget no later than September 30, the close of the Canaveral Port Authority’s fiscal year. The budget is prepared by functional department. Due to operating or unforeseen activities during the year, department heads may request modifications to their departmental budget. Changes to the capital budget require the approval of the Commission. Budget-to-actual comparisons are provided in this report for each individual department. Economic Conditions in Fiscal Year 2015 The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the Canaveral Port Authority operates.


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Local Economy The Canaveral Harbor Port District encompasses approximately the northern two-thirds of Brevard County. The County is home to a number of large employers, both public and private. According to the Florida Department of Economic Opportunity: Bureau of Labor Market Statistics, the County’s as well as the nation’s unemployment rate at September 2015 is estimated at 5.6% with the state of Florida’s unemployment rate slightly lower at 5.2%. Economic Outlook Port Canaveral is strategically located on the central east coast of the state and enjoys a significant “drive-to” market for cruising. During fiscal year 2015, Port Canaveral served as homeport to 11 different multi-day cruise vessels and 7 regularly scheduled port-of-call ships. Three other ships also made multiple port-of-call visits with eleven ships stopping for a single port-of-call visit. Total revenue passengers for multi-day cruises and port-of-calls in FY2015 were 4,168,666 vs. 4,167,258 in FY14, representing a slight increase of .03%. Total revenues from cruise operations excluding cruise parking for FY2015 increased 8.4% over FY2014. Cruise parking revenues increased 7.2% over FY2014. As compared to fiscal year 2014, cargo revenue increased by 15.8% and cargo tonnage increased 23.5% for FY15. Most commodities experienced an increase in volume with slag, fertilizer, petroleum and salt increasing 132%, 39.4%, 23.5% and 16.7%, respectively. The Authority continues to implement new security measures to ensure the safety of the traveling public as well as Port Canaveral tenants. The annual costs of these services exceeded $7.5 million for FY15. This is an increase of 12.1% over FY14. These annual costs include both police and fire protection provided to cargo and cruise operations as well as Port Canaveral tenants and visitors. As of September 30, 2015, the Port completed $1.4 million in security infrastructure projects with an additional $1.8 million budgeted. We continue to work with Federal and State agencies to obtain funding assistance to help offset these important costs. Long-Term Financial Planning In addition to the Authority’s operating budget process, a five-year capital plan is developed to assess future needs. As part of this capital plan, projects are continuously evaluated to determine approriate rates of return on investment to the Port with careful consideration taken in identifying the needed funding. The Authority continues to invest its cash resources to achieve the desired results along with prudent borrowing policies using bond financing and bank debt. Relevant Financial Policies During FY2013, the Authority convened a charter review committee consisting of Port staff and outside parties to review its charter. Changes were approved by the Board of Commissioners and were later passed by the Florida legislation in FY2014. Several of the approved changes were technical corrections with more specific changes affecting public meeting notice periods, charter review procedures and a provision for preservation of commercial fishing at Port facilities.


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The Authority continues to follow financial policies in effect which includes policies governing budget, investment, fraud, leasing land, travel, purchasing, and Commissioners minor expenses. These policies are reviewed annually, with amendments approved by the Board. Major Initiatives The master cruise plan initiated in FY2013 and completed during FY2014 indicated continued growth for the Authority’s cruise market. With ship size expected to continue along its current growth trend and the Authority’s challenge with its aging terminals inventory, it is anticipated that the Authority will need an additional terminal capacity in late 2016 or early 2017 when passenger count is expected to increase at an exponential rate. The cruise lines are building larger cruise ships and the Authority’s berthing capability will need to be expanded to accommodate new class of ships. In early FY2015, the 180,000 square foot Cruise Terminal One, its new cruise ship berth and 1,000 car parking garage was completed at a cost of $111 million (including the new public boat ramp). The new multi-purpose terminal will serve as a homeport terminal for a global cruise line who has agreed to reimburse the Authority for approximately 44% of the construction costs over the next ten years. The new terminal will also be used for port-of-call visits for multiple cruise lines. As a result of the project, assets were disposed of in FY2014 having a book value of $2.7 million and a new public boat ramp was constructed on the east side of the Port at a cost of $5.1 million. Financing for the project was provided by two national banks in the amount of $105 million and a reimbursable grant from the Florida Department of Transportation for dredging and passenger transportation equipment in the amount of $1.8 million. The balance was paid for from operating cash flows. During FY2015, the Authority began planning for renovations, upgrades and expansion of Cruise Terminals 5 and 10 in preparation for passenger growth and ship size as projected in its master cruise plan. New announcements of ship orders from several global cruise lines confirmed that large ships are in fact commencing construction. The total budgeted renovation cost for both terminals is estimated at $83.5 million and is anticipated to be completed in two phases during FY2016 and FY2017. Renovation began in FY2015 on Cruise Terminal 5 at a cost anticipated to be $48.4 million. The scope of the construction includes a new security lobby, expanded luggage facilities, vertical transportion, new seating capacity, two new gangways, berth improvements and a small pier extension. Also included in the project are berth improvements, new interior finishes, HVAC systems and a new 1,000 space parking facility. The Cruise Terminal 5 work is expected to be completed in June 2016. Planning as well as the design and permitting for the Cruise Terminal 10 project commenced in FY2015 with the formal solicitiation process for construction beginning in the first month of FY2016. Construction is anticipated to begin in June of 2016. Completion of the project is expected to take place in November 2016 (FY2017) at a cost of $35.1 million. The renovation, upgrade and expansion scope will be similar to Cruise Terminal 5 but will not include a parking facility. During FY2014 the development contract was set for phase one of the Cove Development project. During FY2015, it was determined that the Cove Development was not attacting the desired tenant type and no development or construction activity has commenced.


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Also during FY2014, the Authority took delivery of two ship-to-shore container cranes to accommodate the anticipated market demand in the Central Florida container shipping market. A 35-year marine terminal lease and operating agreement was signed by the Authority with an international terminal management firm. The agreement requires the management firm to invest $100 million for container equipment, operations and infrastructure costs with the Authority being required to operate and maintain the cranes. During FY2014 and FY2015, the Authority invested $6.7 million and $5.5 million, respectively, to refurbish and upgrade the cranes. During FY2014 and FY2015, the Authority also invested $21.1 million in North Cargo Pier 5 and $14.6 million in North Cargo Pier 6. Both cargo piers were placed in service during FY2015. The Authority awarded a $6.4 million contract to the highest ranked proposer to construct a 10 acre paved multi-use cargo area adjacent to the North Cargo Pier 5 container yard. In conjunction with the Authority’s cargo initiative and continuing the work started with the U.S. Department of Transportation’s Surface Transportation Board in FY2013, the Authority’s plan to connect the Port with regular rail traffic on the mainland was paused at the request of the Authority’s Board of Commissioners in order to more fully study the potential alternate routes. The widening and deepening of the Authority’s shipping channel commenced in FY2014 and continues to be a priority to allow the Port to accommodate larger cruise ships and the massive container ships currently in use or on order by the world’s major shipping lines. The project is expected to be completed in June of 2016. Upon completion, the depth of the Port will be 44 feet deep in the channel west of the middle turning basin and up to 46 feet deep from there to the ocean entrance to the Port. In order to begin the next phase of the deepening of the Channel, planning for that phase has begun. The Authority is evaluating the feasiblity of dredging between 46 and 50 feet with anticipated depth of 47-48 feet. This evalualtion is to be finalized by FY2017. Sand bypass is anticipated to be completed in early FY2017, a federal program to reverbish beaches south of the ports entrance. At the end of FY2015, the Authority has invested in excess of $38 million in the channel project, with assistance from grants provided by the Florida Department of Transportation. During FY2014, a contract was signed with the local county sheriff’s department tranferring port security services. The agreement outlined services to be performed in accordance with the approved Port Security Plan at a contract price of $5.0 million per year. In accordance with the contract the Port transferred certain security related assets to the Sheriff’s department. These assets were acquired at a cost to the Port of $2.8 million and had a book value at September 30, 2014 of $694,000. During FY2015, the port security services contract was renewed for FY2016 in the amount of $5,688,000. It was determined that additional furniture fixtures, transportation equipment and operational software should be transferred to the Sheriff’s department. Canaveral Port Authority transferred assets with an acquisition cost of $2.7M and a net book value of approximately $421,700. Also during fiscal year 2015, $1.73 million of security related projects were completed with over $4.4 million budgeted for the next five years. In excess of $4.7 million was spent to improve the Port’s road systems.


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Nearly all of the above improvements have been or will be funded from existing and future cash flows as a result of the increased revenues from existing and projected cruise, cargo, and land lease operations, Federal and State grants and bank financing. The Port continues to seek federal and state assistance in the form of grants and capital improvement funding. The Authority has received federal funding for portions of the security infrastructure and funding from the Florida Department of Transportation for the deepening and widening of the Port’s channel, cargo berths 5 and 6 infrastructure, cargo expansion projects and the Ports road system. Awards and Acknowledgments The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Canaveral Port Authority for its comprehensive annual financial report for the fiscal year ended September 30, 2014. This was the twenty-fourth consecutive year that the Authority has received this prestigious award. In order to be awarded a Certificate of Achievement, the Authority published an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department. I would like to extend my thanks to all members of the department who assisted and contributed to the preparation of this report, with special recognition given to Controller, Diana Mims-Reid. Thanks and appreciation are also extended to the Government Affairs department, Tracy Krutz with her help on reviewing and coordinating this report and also to the firm of Carr, Riggs, & Ingram, LLC, CPA’s for their professional approach and high standards in the conduct of their independent audit of the Authority’s financial records and transactions as well as their assistance in the preparation of this report. Finally, I would also like to express my appreciation to the Canaveral Port Authority Board of Commissioners for their guidance and support throughout the year. I appreciate their interest and leadership in planning and conducting the financial operation of the Authority in a progressive and responsible manner. Respectfully submitted, _ Rodger Rees Deputy Executive Director/ Chief Financial Officer


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Carr, Riggs & Ingram, LLC 215 Baytree Drive Melbourne, Florida 32940 (321) 255-0088 (321) 259-8648 (fax) www.cricpa.com

INDEPENDENT AUDITORS’ REPORT The Board of Commissioners Canaveral Port Authority Report on the Financial Statements We have audited the accompanying financial statements of the Canaveral Port Authority as of and for the years ended September 30, 2015 and 2014, and the related notes to the financial statements, which collectively comprise the Canaveral Port Authority’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Canaveral Port Authority as of September 30, 2015 and 2014 and the respective changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 5 to the financial statements, the Authority implemented the provisions of GASB Statement 68, Accounting and Financial Reporting for Pensions: An Amendment of GASB Statement No. 27. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management’s discussion and analysis, the schedule of proportionate share of net pension liability, the schedule of contributions and the schedule of funding progress of other postemployment benefits on pages xxi to xxviii and pages 48-50 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Canaveral Port Authority’s basic financial statements. The schedule of revenues, expenses, and income before capital contributions compared with budget, the schedule of comparative revenues, expenses and changes in net position, the schedule of comparative operating revenues by activity, the schedule of construction in progress and capital costs compared with budget, and the schedule of expenditures of federal awards and state financial assistance, as required by Office of Management and Budget Circular A-133, Audits of States, Local Governments and Non-Profit Organizations, and Chapter 10.550 of the Rules of the Auditor General of the State of Florida, and other information, such as the introductory and the financial information listed as supplementary information are presented for purposes of additional analysis and are not a required part of the basic financial statements.

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The schedule of expenditures of federal awards and state financial assistance on pages 67 - 68 and the financial information listed as supplementary information on pages 53 - 66 are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards and state financial assistance on pages 67 - 68 and the financial information listed as supplementary information on pages 53 – 66 are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section on pages i – xvi, the supplementary information on pages 111 - 113 and the statistical information on pages 69 - 104 have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 20, 2016, on our consideration of the Canaveral Port Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Canaveral Port Authority’s internal control over financial reporting and compliance.

Melbourne, Florida April 20, 2016

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THIS PAGE IS INTENTIONALLY LEFT BLANK.

Canaveral Port Authority Management's Discussion and Analysis

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As management of the Canaveral Port Authority, we offer readers of the Canaveral Port Authority's financial statements this narrative overview and analysis of the financial activities of the Canaveral Port Authority for the fiscal years ended September 30, 2015 and 2014. All amounts, unless otherwise indicated, are expressed in thousands of dollars. Financial Highlights

• The assets of the Canaveral Port Authority exceeded its liabilities at the close of the most recent fiscal year by $326,883 (net position). Of this amount, $(1,343) (unrestricted net position) may be used to meet the Authority's ongoing obligations to creditors.

• The Authority's total net position increased by $29,484. This increase consists of $2,073 of income before capital contributions and special items, a special item reduction of $422 (book value of assets transferred for seaport security and law enforcement services) and capital contributions of $27,833.

• At the end of the current fiscal year, the unrestricted net position was (1.77) percent of total expenses and was in a deficit position of $1,343. This deficit was eliminated in the first quarter of fiscal year 2016.

Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Canaveral Port Authority's basic financial statements. The Canaveral Port Authority's basic financial statements are comprised of two components: fund financial statements and notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. The basic financial statements report information about the Authority using full accrual accounting methods as utilized by similar business activities in the private sector. The financial statements include a statement of net position, a statement of revenues, expenses, and changes in net position, and a statement of cash flows. The statement of net position presents information on all of the Canaveral Port Authority's assets and deferred outflows of resources as well as liabilities and deferred inflows of resources, with the difference between the two groups reported as total net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Canaveral Port Authority is improving or deteriorating. During fiscal year 2014, the Authority adopted Government Accounting Standards Board Statement No. 65, Items Previously Reported as Asset and Liabilities which establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities. This standard also requires expensing bond issuance costs instead of recording them as an asset and amortizing them over the life of the bond. Existing bond issuance costs must be written off and therefore required a restatement of fiscal year 2014 and 2013. During fiscal year 2015, the Authority adopted GASB Statement No. 68, Accounting and Financial Reporting for Pensions. This pronouncement required the restatement of the September 30, 2013


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net position in the enterprise fund. This change is in accordance with generally accepted accounting principles. The statement of revenues, expenses, and changes in net position presents information showing how the Authority's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. The statement of cash flows presents changes in cash and cash equivalents from operational, financing, and investing activities. This statement presents cash receipt and disbursement information without consideration of the earnings event, when an obligation arises, or depreciation of capital assets. The basic enterprise fund financial statements can be found on pages 2-6 of this report. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the basic financial statements. The notes to the financial statements can be found on pages 9-46 of this report. In addition to the basic financial statements and accompanying notes, this report also presents other supplementary information. This supplementary information can be found on pages 49-68 of this report. Financial Analysis As noted earlier, net position may serve over time as a useful indicator of an entity’s financial position. Assets exceeded liabilities as of September 30, 2015 and 2014 by $326,883 and $297,399, respectively. The following table reflects the condensed statement of net position:

CANAVERAL PORT AUTHORITY’S NET POSITION

(In thousands)

2015 2014

(Restated) 2013

(Restated) Current and other assets $ 36,632 $ 91,129 $ 40,567 Capital assets 522,907 454,733 359,995

Total assets 559,539 545,862 400,562 Deferred outflows of resources 1,171 1,310 1,001 Current liabilities 45,958 48,867 26,940 Noncurrent liabilities 187,790 200,721 93,474

Total liabilities 233,748 249,588 120,414 Deferred inflows of resources 79 185 - Net position: Net investment in capital

assets 326,401 245,995 265,049 Restricted 1,825 4,566 4,566 Unrestricted (1,343) 46,838 11,534 Total net position $ 326,883 $ 297,399 $ 281,149


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By far the largest portion of the Canaveral Port Authority's net position as of September 30, 2015 and 2014 (99.85 percent and 82.72 percent, respectively) reflects its investment in capital assets (e.g., land, buildings, improvements, equipment, intangibles, and construction in progress); less any related debt used to acquire those assets that are still outstanding. These assets are not available for future spending. Although the Canaveral Port Authority's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from operations, since the capital assets themselves cannot be used to liquidate these liabilities. In addition, a portion of the Canaveral Port Authority's net position as of September 30, 2015 and 2014 (0.56 percent and 1.54 percent, respectively) represents the reserve for maximum debt service restricted in accordance with existing bond covenants. The remaining balance of unrestricted net position may be used to meet the Authority's ongoing obligations to creditors. At the end of the current fiscal year, the Canaveral Port Authority’s unrestricted net position decreased by $48,181. In the prior year, unrestricted net position increased by $35,304. This resulted in the Authority having a deficit balance of $1,343 in unrestricted net position. This deficit was eliminated in the first quarter of fiscal year 2016 by the Authority’s positive change in net position. The Authority's total net position increased by $29,484 during the current fiscal year. Of this amount, $2,073 represents net income before capital contributions and a special item. The remaining $27,411 represents the net of a special item relating to the book value of assets transferred for seaport security and law enforcement services in the amount of $(422) and capital contributions from federal and state sources in the amount of $27,833. There is no assurance that these capital contributions from other sources will continue in the future.

Net Position

The following table shows condensed revenue and expense data: CANAVERAL PORT AUTHORITY’S CHANGES IN NET POSITION

(in thousands)

2015 2014

(Restated) 2013

(Restated) Operating revenues:

Fees and charges for services $ 77,705 $ 71,929 $ 68,224 Non-operating revenues:

Investment earnings 193 67 226 Other 181 307 1,092

Total non-operating revenues 374 374 1,318 Total revenues 78,079 72,303 69,542

-$40,000$0

$40,000$80,000

$120,000$160,000$200,000$240,000$280,000$320,000$360,000

2015 2014 2013

Net investment in capital assets

Restricted

Unrestricted


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Operating expenses:

Operations, maintenance and security 21,647 19,334 17,687

Executive, finance and administration 7,664 7,729 6,732 Engineering and environmental 1,970 2,001 1,585 Other 5,479 6,147 3,662 Depreciation and amortization 33,226 26,180 23,123

Total operating expenses 69,986 61,391 52,789

Non-operating expenses Interest 5,640 3,708 3,980 Other 380 3,444 247 Total non-operating expenses 6,020 7,152 4,227

Total expenses 76,006 68,543 57,016 Income before contributions 2,073 3,760 12,526 Special Item (422) (694) - Capital contributions 27,833 13,184 10,006 Change in net position 29,484 16,250 22,532 Net position – beginning 297,399 281,149 259,605 Prior period adjustment - - (988) Net position, beginning, as adjusted 297,399 281,149 258,617 Net position – ending $ 326,883 $ 297,399 $ 281,149

Key elements of the increase in net position for the fiscal year ended September 30, 2015 are as follows.

• Overall fees and charges for services increased 8.0 percent. Included in the overall fees and charges were revenues from cruise operations, cargo and recreation which increased 8.1 percent, 15.8 percent and 10.4 percent, respectively. Parking and land leases increased 7.2 percent and 2.4 percent, respectively. Other revenues did not increase.

• Overall, non-operating revenues increased less than 1 percent. Investment earnings increased by 188.6 percent but were offset by grant revenues and gain on equipment disposals which decreased 59.5 percent and 14.7 percent, respectively.

• Capital contributions from federal and state grants for capitalized projects increased during the current fiscal year by $14,649 or 111.1 percent. This increase was mainly due to the collection of previously approved grant funds associated with work on our new cargo berths 5 and 6 and associated storm water systems, refurbishment of cranes, deepening and widening of the Canaveral Port Authority channel as well as State Road 401 improvements and close out of fiscal years 2013 and 2014 security projects. These grant funds contributed $27,833 to the change in net position in the current fiscal year.

Key elements of the increase in net position for the fiscal year ended September 30, 2014 are as follows.

• While overall fees and charges for services increased 5.4 percent, revenues from cruise operations, recreation and other revenues increased 9.6 percent, 12.98 percent and 12.01 percent, respectively. Parking increased 10.9 percent. These increases were offset by a 20.28 percent decrease in cargo and 13.81 percent decrease in land leases.


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• Non-operating revenues decrease by 71.63 percent due mainly to decreases in grant

revenue recognized for non-capital purposes and earnings on cash balances. These decreases were offset by an increase in gain on disposed assets sold.

• Capital contributions from federal and state grants for capitalized projects increased during the current fiscal year by $3,178 or 31.76 percent. This increase was mainly due to the collection of previously approved grant funds associated with work on our new cargo berths 5 and 6 and refurbishment of cranes, deepening and widening of the Canaveral Port Authority channel road improvements and close out of security projects. These grant funds contributed $13,184 to the change in net position.

Total Revenues and Expenses

Capital Asset and Debt Administration Capital assets. The Canaveral Port Authority's capital assets as of September 30, 2015 and 2014 amount to $522,907 and $454,733, respectively, (net of accumulated depreciation). These balances include land, buildings, improvements, equipment, intangibles, and construction in progress. The total increase in the Canaveral Port Authority's capital assets was 15 percent and 26.32 percent for fiscal years 2015 and 2014, respectively. Major capital asset events during the current fiscal year include the following:

• Construction began or continued on several major projects for the Authority, including, Northside Land Improvements, Northside Cargo Backup Area and Paving, Auto Terminal, Cruise Terminal 5 Upgrades and West Turning Basin Widening and Deepening. These additions totaled $101,881 and were offset by the total value of projects completed and moved from Construction in Progress to capital assets of $181,526.

Several major projects included in Construction in Progress were completed in fiscal year 2015 including:

• North Cargo Piers 5 and 6 at a cost of $35,689 • Container Cranes at a cost of $12,225 • Land, building and lease acquisitions at a cost of $7,155 • Cruise Terminal 1 at a cost of $104,740 • Cruise Terminal 6 building and gangway upgrade at a cost of $1,621

$30,000$35,000$40,000$45,000$50,000$55,000$60,000$65,000$70,000$75,000$80,000

2015 2014 2013

Total Revenues

Total Expenses


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Additions for the year ended September 30, 2015 were offset by depreciation expense of $31,507 and amortization expense of $1,719. Major capital asset events for the fiscal year ended September 30, 2014 were as follows:

• Construction began or continued on several major projects for the Authority, including, Cruise Terminal 1-(including Terminal Building, Waterside, Parking Garage, and Gangways), North Cargo Piers, Northside Cargo Backup Area and Paving, Cargo Crane Project, and West Turning Basin Widening. These additions totaled $124,337 and were offset by the total value of projects completed and moved from Construction in Progress to capital assets of $49,762.

Several major projects included in Construction in Progress were completed in fiscal year 2014 including:

• Exploration Tower, Exhibits and infrastructure at a cost of $22,270 • George King Boulevard and adjacent roadway improvements at a cost of $8,858 • Land, building and lease acquisitions at a cost of $5,721 • New Public Boat Ramps at a cost of $5,122 • New Parking System at a cost of $1,969 • Northside Cargo Improvements at a cost of $1,460 • Northside Cargo Pier Improvements at a cost of $659

Additions for the year ended September 30, 2014 were offset by depreciation expense of $24,667 and amortization expense of $1,514.

CANAVERAL PORT AUTHORITY’S CAPITAL ASSETS (net of depreciation)

(in thousands)

2015

2014

2013

Land $ 4,603 $ 4,603 $ 4,603 Buildings 99,924 43,945 22,709 Improvements other than

Buildings 312,820 232,785 233,608 Equipment 33,338 20,971 20,016 Intangibles Construction in progress

2,213 70,009

2,775 149,654

3,979 75,080

Total $ 522,907 $ 454,733 $ 359,995 Additional information on the Canaveral Port Authority's capital assets can be found in note 3.C. on pages 15-16 of this report. Long-term debt. At September 30, 2015 and 2014, the Canaveral Port Authority had total bonded debt outstanding of $197,370 and $209,610, respectively, net of unamortized discounts and premiums. The Canaveral Port Authority's debt represents bonds secured solely by operating revenues (i.e., revenue bonds).


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CANAVERAL PORT AUTHORITY’S OUTSTANDING DEBT

REVENUE BONDS (in thousands)

2015 2014 2013

Revenue Refunding Bonds, Series 2005 $ - $ 11,995 $ 13,440 Revenue Refunding Bonds, Series 2006A 11,720 13,600 15,405 Revenue Bonds, Series 2006B 1,330 1,330 1,330 Revenue Bonds, Series 2008 24,310 25,810 27,320 Revenue Bonds, Series 2010 27,338 30,304 33,179

Revenue Bonds, Series 2012 5,988 6,916 7,829 Revenue Bonds, Series 2013 13,750 14,599 - Revenue Bonds, Series 2014 102,325 105,000 - Revenue Bonds, Series 2015 10,660 - - Less deferred amounts for discounts (51) (68) (87) Plus deferred amounts for premiums - 124 158 Total revenue bonds $ 197,370 $ 209,610 $ 98,574

The Canaveral Port Authority's total revenue bonds decreased by $12,240 (5.84 percent) during the current fiscal year and increased by $111,036 (112.64 percent) during the prior year. The major factor for the decrease during the current fiscal year was due to routine debt service payments on revenue bonds offset partially by the issuance of the Revenue Bonds, Series 2015. The major factor for the increase during the prior fiscal year was due to issuance of Revenue Bonds, Series 2013 and 2014. Due to the change in reporting requirements the deferred loss on refunding has been removed from this calculation for fiscal year 2014. The outstanding Revenue Refunding Bonds Series 2006A and Series 2006B of the Canaveral Port Authority are the only outstanding debt that are insured by Financial Guarantee Insurance Company (FGIC), which is currently not rated by the three national rating agencies. The underlying rating assigned by all three national rating agencies is in the “A” category. Additional information on the Canaveral Port Authority's long-term debt can be found in note 3.F. on pages 19 - 25 of this report.

Economic Factors and Next Year's Budgets and Rates

• Charges for services are budgeted to increase 10.13 percent for the fiscal year ending September 30, 2016 due to anticipated increase in cargo and cruise related business. Operating expenses are budgeted to increase 8.68 percent, due to expected expansion of cargo business upon completion of North Cargo Piers 5 and 6, full year depreciation as a result of transfers of completed assets from construction in progress and significant additions in staffing requirements to support the cargo operations. The Authority has budgeted a significant increase of $2,616 (18.56 percent) in the operations and maintenance budget over current fiscal year levels as well as an increase in the public safety budget of $930 (12.32 percent) over current year levels.

• Income before capital contributions, for the fiscal year ending September 30, 2016 is budgeted at $3,149. This represents a 50.46 percent increase over the current year.


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Requests for Information This financial report is designed to provide a general overview of the Canaveral Port Authority's finances for all those with an interest in the Authority's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, Canaveral Port Authority, 445 Challenger Road, Suite 301, Cape Canaveral, Florida, 32920.

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BASIC FINANCIAL STATEMENTS

Canaveral Port Authority Statements of Net Position

The accompanying notes are an integral part of these financial statements. - 2 -

2014September 30, 2015 "Restated"

ASSETSCurrent assets

Cash and cash equivalents 10,623,552$ 16,291,154$ Restricted cash and cash equivalents 2,734,023 47,627,850 Investments 5,463,444 1,557,753 Accounts receivable - trade, net 6,266,769 4,764,629 Prepaid expenses 2,992,443 2,480,507 Due from other governmental units 5,649,453 12,646,812 Inventory 37,944 20,163 Other receivables, current 645,869 695,153

Total current assets 34,413,497 86,084,021

Noncurrent assetsRestricted cash and equivalents 1,824,500 4,566,238 Other receivables, long-term 394,136 478,500 Capital assets (net of accumulated depreciation or amortization):

Land 4,602,954 4,602,954 Buildings 99,923,410 43,944,809 Improvements other than buildings 312,819,817 232,785,039 Equipment 33,338,304 20,970,796

Intangible assets 2,212,710 2,775,670Construction in progress 70,009,436 149,653,938 Total noncurrent assets 525,125,267 459,777,944

Total assets 559,538,764 545,861,965

DEFERRED OUTFLOWS OF RESOURCES Deferred outflow - pension 75,788 91,817 Deferred loss on bond refunding 1,095,202 1,217,962

Total deferred outflows of resources 1,170,990 1,309,779


Statements of Net Position (continued)


2014

September 30, 2015 "Restated"

LIABILITIESCurrent liabilities

Accounts payable and accrued expenses 17,585,236 32,561,228 Unearned revenue 738,333 596,985 Payroll and sales taxes payable 103,887 103,944 Revenue bonds payable, current portion 12,411,356 11,174,121 Note payable, current portion 122,718 115,589 Compensated absences, current portion 305 748 Line of credit 11,404,709 - Other liabilities, current portion 812,988 913,538 Payable from restricted assets: Accrued interest payable 2,125,301 2,272,596 Revenue bonds payable, current portion 653,333 1,128,334

Total current liabilities 45,958,166 48,867,083

Noncurrent liabilitiesRevenue bonds payable, less current portion 184,305,290 197,307,954 Note payable, less current portion 108,027 230,746 Compensated absences, less current portion 586,350 489,239 Net OPEB liability 1,591,000 1,488,000 Other liabilities, long-term portion 522,500 638,000 Insurance reserve 284,130 284,130 Net pension liability 392,927 283,048

Total noncurrent liabilities 187,790,224 200,721,117

Total liabilities 233,748,390 249,588,200

DEFERRED INFLOWS OF RESOURCESDeferred inflow - pension 78,582 184,816

Total deferred inflows of resources 78,582 184,816

NET POSITIONNet investment in capital assets 326,401,109 245,994,424 Restricted for debt service 1,824,500 4,566,238 Unrestricted (1,342,827) 46,838,066

Total net position 326,882,782 297,398,728

Total liabilities and net position 560,709,754$ 547,171,744$

Canaveral Port Authority Statements of Revenues, Expenses and Changes in Net Position


2014Years ended September 30, 2015 "Restated"Operating revenues

Fees and charges for services 77,705,203$ 71,928,585$ Operating expenses

Operations 5,601,931 2,979,762 Facilities 8,501,598 9,625,661 Public safety 7,543,563 6,728,207 Parks and recreation 1,479,180 1,391,024 Fire training facility 196,661 189,265 Commission 310,845 239,759 Executive 1,555,030 1,602,846 Finance and accounting 1,530,154 1,399,690 Administrative services 4,578,866 4,726,757 Engineering and environmental 1,969,934 2,001,318 Business development 1,517,277 1,323,052 Tenant development 519,388 387,836 Communications 710,681 1,865,729 Exploration Tower 745,218 749,959 Depreciation 31,506,831 24,666,694 Amortization 1,718,755 1,513,820

Total operating expenses 69,985,912 61,391,379 Operating income 7,719,291 10,537,206 Non-operating revenues

Investment earnings 193,291 66,985 Grant revenue 73,179 180,716 Gain on sale/disposal of assets 107,814 126,384

Total non-operating revenues 374,284 374,085 Non-operating expenses

Interest expense 5,639,606 3,707,926 Amortization of bond discounts 182,870 167,489 Loss on disposal of capital assets 60,692 2,723,558 Commissions and fees 100,474 432,562 Federal grant expense - 50,500 Grant administration fee 36,866 69,534

Total non-operating expenses 6,020,508 7,151,569 Income before capital contributions and special item 2,073,067 3,759,722

Special item (Note 6) (421,690) (693,999) Capital contributions 27,832,677 13,184,167

Change in net position 29,484,054 16,249,890 Net position, beginning of year (Note 5) 297,398,728 281,148,838Net position, end of year 326,882,782$ 297,398,728$

-$ -$

Canaveral Port Authority Statements of Cash Flows


2014

Year ended September 30, 2015 "Restated"Cash flows from operating activities:

Cash received from customers and users 76,478,059$ 71,376,934$ Cash paid to suppliers for goods and services (26,926,052) (17,917,501) Cash payments to employees for services (10,748,347) (16,346,027)

Net cash provided by operating activities 38,803,660 37,113,406

Cash flows from non-capital financing activities:Grant revenue received 51,731 334,435

Net cash provided by non-capital financing activities 51,731 334,435

Cash flows from capital and related financing activities:Interest paid on revenue bonds (5,872,081) (2,696,316) Proceeds from revenue bond 11,080,000 146,666,000 Costs of bond issuance (75,565) (715,978) Principal payments on revenue bonds (23,212,455) (35,615,063) Acquisition and construction of capital assets (116,614,474) (106,572,616) Proceeds from the sale of capital assets 107,814 126,384 Net draws on line of credit 11,404,709 - Contributed capital 34,851,484 6,845,436 Principal payments on note payable (115,590) (108,874)

Net cash provided by (used in) capital and related financing activities (88,446,158) 7,928,973

Cash flows from investing activities:Interest received on investments 193,291 67,624 Sale of investments 1,557,753 276,258 Purchase of investments (5,463,444) -

Net cash provided by (used in) investing activities (3,712,400) 343,882 Net increase (decrease) in cash and cash equivalents (53,303,167) 45,720,696 Cash and cash equivalents, beginning of year 68,485,242 22,764,546 Cash and cash equivalents, end of year 15,182,075$ 68,485,242$

- -

Canaveral Port Authority Statements of Cash Flows (continued)

- 6 -

2014

Year ended September 30, 2015 "Restated"Reconciliation of operating income to net cash provided by

operating activities:Operating income 7,719,291$ 10,537,206$ Adjustment to reconcile operating income to net cash

provided by operating activitiesDepreciation expense 31,506,831 24,666,694 Amortization expense 1,718,755 1,513,820 Loss on sale of assets (47,122) - Grant administration (36,866) (69,534) Federal grant expense - (50,500) (Increase) decrease in assets:

Accounts receivable (1,502,140) (646,172) Inventory (17,781) (20,163) Other receivables, current 133,648 237,417 Prepaid expenses (511,936) 1,462,925 Deferred outflows of resources - pension 16,029 (47,010)

Increase (decrease) in liabilities:Accounts payable and accrued expenses (303,603) (699,706) Unearned revenue 141,348 (142,896) Compensated absences 96,668 6,523 Net OPEB liability 103,000 324,000 Net pension liability 109,879 (157,865) Deferred inflows of resources - pension (106,234) 184,816 Other liabilities, current (216,050) (276,210) Payroll and sales tax payable (57) 5,931 Insurance reserve - 284,130

Total adjustments 31,084,369 26,576,200 Net cash provided by operating activities 38,803,660$ 37,113,406$ Supplemental schedule of non-cash investing, capital and financing activities:During 2015 and 2014, the Authority reallocated the amounts related to environmental remediation between current and long term.

Increase in other receivables, current (84,364)$ (98,438)$ Decrease in other receivables, long term 84,364 98,438 Increase in other liabilities, current 115,500 415,380 Decrease in other liabilities, long term (115,500) (415,380)

Net non-cash effect -$ -$

During 2015 and 2014, the Authority recorded an unrealized gain (loss) on investments of $(21,110) and $2,854, respectively.

During 2015 and 2014, the Authority's balance in due from other governmental units relating to capital contributions (decreased) increased by $(7,018,807) and $6,338,731 respectively.

Canaveral Port Authority Notes to Financial Statements

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Note Contents PAGE 1. Summary of Significant Accounting Policies

A. Reporting Entity 9 B. Measurement, Focus, Basis of Accounting and Financial

Statement Presentation 9 C. Assets, Liabilities and Net Position 9 D. Revenues and Expenses 12

2. Budgetary Information 13

3. Detail NotesA. Deposits and Investments 13 B. Restricted Assets 14 C. Capital Assets 15 D. Accounts Payable and Accrued Expenses 17 E. Other Liabilities 17 F. Revenue Bonds Payable 19 G. Note Payable 25 H. Line of Credit 26 I. Changes in Long-term Liabilities 26 J. Restricted Net Position 27 K. Retirement Plan 27 L. Defined Contribution Plan 36

M. Other Postemployment Benefits 37 N. Leasing and Operating Agreement Arrangements

with Authority as Lessor 40 O. Major Customers 40 P. Risk Management 40 Q. Significant Estimate 41 R. Wastewater Service Capacity Agreement 41 S. Concentration - Collective Bargaining Unit 41 T. Capital Contributions 42

4. Commitments and ContingenciesA. Construction 42 B. Marine Terminal Leases 42 C. Litigation 43 D. Employment Agreement 43

5. Change in Accounting Principle 43

6. Special Item 44

7. Future Accounting Pronouncements 45

8. Subsequent Events 45

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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The Canaveral Port Authority (the “Authority”) is the governing body of the Canaveral Harbor Port Authority, an independent special taxing Authority established in 1953 by Chapter 28922, Laws of Florida, Special Acts of 1953, as amended. B. Measurement Focus, Basis of Accounting and Financial Statement Presentation The Authority uses the proprietary fund basis for the presentation of its financial statements. Proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Authority are fees and charges for cruise ships, cargo ships and land leases. Operating expenses include costs to operate and maintain facilities of the Authority, administrative expenses and depreciation and amortization expenses related to long-lived assets. All revenues and expenses not meeting these definitions are reported as non-operating revenues and expenses. The Canaveral Port Authority operates as an enterprise fund that accounts for the construction, operation and maintenance of the Authority. An enterprise fund is a type of proprietary fund that provides services to the general public. This fund is used to account for the acquisition, operation and maintenance of governmental facilities and services which are entirely or predominantly self-supported by user charges. The operations of the Authority are accounted for in such a manner as to show a profit or loss similar to comparable private enterprises. When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed. C. Assets, Liabilities and Net Position 1. Cash and Cash Equivalents State statutes authorize the government to invest in the Local Government Surplus Funds Trust Fund or any intergovernmental investment pool authorized pursuant to the Florida Interlocal Cooperation Act, SEC registered money market funds with the highest credit quality rating, interest-bearing time deposits or savings accounts in qualified public depositories, and direct obligations of the U. S. Treasury.


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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Liabilities and Net Position (Continued) 1. Cash and Cash Equivalents (Continued) The Canaveral Port Authority invests certain surplus funds in an external investment pool, the Local Government Surplus Funds Trust Fund (the “State Pool”). The State Pool is administered by the Florida State Board of Administration (the “SBA”), who provides regulatory oversight. The Florida PRIME (formally LGIP) has adopted operating procedures consistent with the requirements for a 2a7-like fund. The Canaveral Port Authority’s investment in the Florida PRIME is reported at amortized cost. The fair value of the Authority’s position in the pool is equal to the value of pooled shares. Cash and cash equivalents include cash deposits, short term investments with original maturities of three months or less from the date of acquisition and investments held in the Florida PRIME. 2. Accounts and Other Receivables The Authority considers most accounts and other receivables to be fully collectible; however the Authority has created an allowance for those, where based upon historical attempts at collection, it deems collection to be unlikely. The allowance for the years ended September 31, 2015 and 2014 were $15,000 and $0, respectively. 3. Inventory Inventories are valued at cost on the first-in, first-out method. Inventory consists of materials held for consumption. The cost is recorded as an expenditure at the time individual inventory items are issued. 4. Capital Assets Capital assets are defined by the Authority as assets with an initial cost of more than $1,000 and an estimated useful life in excess of one year. Such assets are recorded at cost, if purchased and at fair market value at date of gift, if donated. Major additions are capitalized while maintenance and repairs, which do not improve or extend the life of the respective assets, are charged to expense. Contributions received in aid of construction are credited to capital contributions and do not reduce the cost of the assets acquired with such contributions. Depreciation is recognized on the straight-line method over the estimated useful lives of the assets. The following estimated useful lives are used for depreciation purposes:

Classification Range of Lives Buildings 30 years Improvements Other Than Buildings 5-30 years Equipment 3-20 years


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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Liabilities and Net Position (Continued) 5. Deferred outflows of resources The deferred amount for bond refunding of debt is classified as deferred outflows of resources and was $1,095,202 and $1,217,962 at September 30, 2015 and 2014, respectively. The deferred outflows related to pensions are an aggregate of items related to pensions as calculated in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Total deferred outflows of resources related to pensions were $75,788 and $91,817, respectively, for the years ended September 30, 2015 and 2014. 6. Restricted Assets Debt proceeds and funds set aside for payment of revenue bonds and construction projects are classified as restricted assets on the statement of net position because their use is limited by applicable debt covenants. 7. Compensated Absences All permanent employees of the Authority are eligible for annual leave. Each employee working a normal week earns vacation leave at certain rates depending on the employee's length of service. All annual leave is accrued when earned in the statement of net position. There is no liability for unpaid accumulated sick leave since the Authority does not have a policy to pay such amounts upon termination. 8. Deferred inflows of resources The deferred inflows related to pensions are an aggregate of items related to pensions as calculated in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions. Total deferred inflows of resources related to pensions were $78,582 and $184,816, respectively, for the years ended September 30, 2015 and 2014. 9. Net Position – Restrictions The Authority’s statement of net position reports a restriction on net position that is maintained for a specific purpose. The nature and purpose of this restriction is:

• Restricted for Debt Service – represents, in accordance with legal restrictions, amounts for payment of principal and interest maturing in later years.


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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Assets, Liabilities and Net Position (Continued) 10. Net Position – Unrestricted Deficit At September 30, 2015, the Authority had a deficit unrestricted net position. The deficit was eliminated during the first quarter of 2016 through normal operations. The deficit occurred at the end of September 30, 2015 due to capital investments made by the Authority that are expected to have a significant return on investment. D. Revenues and Expenses

1. Grants Grant revenue that can be used for operating purposes is recognized when earned by the Authority. Grants restricted for capital acquisition and construction are recorded as capital contributions when earned. A grant receivable is recorded when the Authority has a right to reimbursement under the related grant. 2. Amortization The Authority recognizes amortization as follows:

Category Period Method Deferred expenses 3-30 years straight-line Spoil dike 30 years straight-line Beach restoration 5 years straight-line Software 10 years straight-line Trademarks 5 years straight-line Bond discounts and premiums term of related issue interest Investment costs life of investments straight-line

3. Capitalized Interest The Authority’s policy is to capitalize interest costs related to construction projects in accordance with generally accepted accounting principles. The net effect of interest expense and interest income generated from borrowings used for construction projects in progress are capitalized through the date the project is substantially complete and ready for its intended use. During the years ended September 30, 2015 and 2014, $1,140,311 and $1,107,400 of interest expense was capitalized.


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NOTE 2: BUDGETARY INFORMATION The Authority’s enabling legislation requires adoption of an annual operating budget. The Authority adopts an annual operating and capital improvement budget resolution prior to September 30, for the next ensuing fiscal year. The Authority’s budgets are prepared on the accrual basis of accounting which is consistent with generally accepted accounting principles. Operating budgets for the enterprise fund are based on level of service expectations. Capital improvement projects are budgeted to provide control over authorized project expenses and ensure legal compliance. Budget control is maintained at the departmental level. Actions which change the annual budget must be authorized by the Board of Commissioners. Budget amounts have been adjusted for legally authorized revisions of the annual budgets approved during the year. The Authority’s schedule of revenues, expenses and income before capital contributions compared with the legally adopted budget is presented as supplementary information on pages 53 through 57. The Authority has statutory authority to levy ad valorem taxes up to three (3) mills annually on all taxable property within the Authority’s district boundaries for operation, maintenance and improvement of Authority facilities. The Authority has not levied property taxes since 1986 and does not expect to do so in the foreseeable future. NOTE 3: DETAIL NOTES A. Deposits and Investments At September 30, 2015 and 2014, the carrying amount of the Authority’s recorded deposits with banks, investments and savings and loans was $5,851,078 and $3,474,290, respectively, and the bank balance was $8,237,520 and $8,469,569, respectively. In addition, the Authority held $500 of petty cash at September 30, 2015 and 2014. As of September 30, 2015, the Authority’s bank balances are covered by the Federal Deposit Insurance Corporation (FDIC), per bank, up to $250,000. Monies invested in amounts greater than the insurance coverage are secured by the banks pledging securities with the State Treasurer in the multiple financial institutions collateral pool. Credit risk The Authority’s investment policy addresses credit risk by restricting the types of investments in which it can invest, consistent with limitations defined in Florida Statutes, as described in Note 1.C.1. Interest rate risk The Authority’s investment policy does not limit the maturities of investments to reduce the interest rate risk. However, in accordance with the Authority’s investment policy, investments should be invested to match investment maturities with known cash needs and anticipated cash flow requirements.


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NOTE 3 – DETAIL NOTES (Continued) A. Deposits and Investments (Continued) Concentration of credit risk The Authority’s investment policy does not specifically address concentration of credit risk. However, the policy indicates that investments should be diversified to control the risk of loss resulting from over concentration of assets. At September 30, 2015, the Authority had the following investments:

At September 30, 2014 the Authority had the following investments:

B. Restricted Assets

Debt proceeds and funds set aside for payment of revenue bonds and construction projects are classified as restricted cash and cash equivalents and investments since their use is limited by applicable bond indentures. During fiscal year 2015 the Authority changed to a new financial institution which had no requirement to maintain a compensating balance on deposit.

Investment Type Fair Value Less than 1 1-5 6-10 Rating AgencySBA Florida PRIME 1,144,012$ 1,144,012$ -$ -$ AAAm S&PCertificates of Deposit 468,566 468,566 - - Not Rated -US Government Securities 2,349,771 425,392 1,924,379 - AA+ S&PAgency Discount notes 8,356,023 8,356,023 - - AA+ S&PAgency notes 2,475,569 1,521,570 953,999 - AA+ S&P

14,793,941$ 11,915,563$ 2,878,378$ -$

Investment Maturities (in years)

Investment Type Fair Value Less than 1 1-5 6-10 Rating AgencySBA Florida PRIME 1,076,592$ 1,076,592$ -$ -$ AAAm S&PUS Treasuries 63,933,860 63,933,860 - - AA+ S&PCertificates of Deposit 1,557,753 1,557,753 - - Not Rated -

66,568,205$ 66,568,205$ -$ -$

Investment Maturities (in years)

2015 2014Series 2005, Series 2006-A and 2006-B, Series 2008 Bond, Series 2010 Bond, Series 2012 Bond, Series 2013 Bond and Series 2014 Bond Debt Service and Reserve

Compensating Balance -$ 2,395,747$ Daily Investment Pool 2,658,231 6,084,282 Construction Trust Account 1,900,292 42,303,920 Exploration Tower - 1,410,139

Total 4,558,523$ 52,194,088$


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NOTE 3: DETAIL NOTES (Continued) C. Capital Assets Capital asset activity for the years ended September 30, 2015 and 2014 was as follows:

Balance October 1, 2014 Increases Decreases

Balance September 30,

2015Capital assets, not being

depreciated/amortized:Land 4,602,954$ -$ -$ 4,602,954$ Construction in progress 149,653,938 101,881,393 (181,525,895) 70,009,436 Total capital assets, not being

depreciated/amortized 154,256,892 101,881,393 (181,525,895) 74,612,390 Capital assets, being

depreciated/amortized:Buildings 61,559,760 60,589,784 (3,165) 122,146,379 Improvements other than buildings 401,224,470 99,257,209 (82,529) 500,399,150 Equipment 41,629,241 20,523,106 (3,343,629) 58,808,718 Intangible assets 15,802,005 1,155,795 - 16,957,800 Total capital assets being

depreciated/amortized 520,215,476 181,525,894 (3,429,323) 698,312,047 Less accumulated

depreciation/amortization for:Buildings (17,614,951) (4,611,183) 3,165 (22,222,969) Improvements other than buildings (168,439,431) (19,221,425) 81,523 (187,579,333) Equipment (20,658,445) (7,674,224) 2,862,255 (25,470,414) Intangible assets (13,026,335) (1,718,755) - (14,745,090) Total accumulated

depreciation/amortization (219,739,162) (33,225,587) 2,946,943 (250,017,806) Total capital assets, being

depreciated/amortized, net 300,476,314 148,300,307 (482,380) 448,294,241 Capital assets, net 454,733,206$ 250,181,700$ (182,008,275)$ 522,906,631$

2015


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NOTE 3: DETAIL NOTES (Continued) C. Capital Assets (Continued)

Intangible assets include deferred expenses, which consist of maintenance dredging; costs incurred in developing an inlet management plan; costs of constructing a spoil dike and an off-shore sand berm; and beach restoration projects. Intangible assets also consist of computer software and a trademark.

Balance October 1, 2013 Increases Decreases


2014Capital assets, not being

depreciated/amortized:Land 4,602,954$ -$ -$ 4,602,954$ Construction in progress 75,079,636 124,336,508 (49,762,206) 149,653,938 Total capital assets, not being

depreciated/amortized 79,682,590 124,336,508 (49,762,206) 154,256,892 Capital assets, being

depreciated/amortized:Buildings 37,979,409 23,726,274 (145,923) 61,559,760 Improvements other than buildings 400,751,885 20,135,521 (19,662,936) 401,224,470 Equipment 35,969,127 8,168,664 (2,508,550) 41,629,241 Intangible assets 15,491,305 310,700 - 15,802,005 Total capital assets being

depreciated/amortized 490,191,726 52,341,159 (22,317,409) 520,215,476 Less accumulated

depreciation/amortization for:Buildings (15,270,272) (2,438,845) 94,166 (17,614,951) Improvements other than buildings (167,144,215) (15,717,991) 14,422,775 (168,439,431) Equipment (15,952,543) (6,509,858) 1,803,956 (20,658,445) Intangible assets (11,512,515) (1,513,820) - (13,026,335) Total accumulated

depreciation/amortization (209,879,545) (26,180,514) 16,320,897 (219,739,162) Total capital assets, being

depreciated/amortized, net 280,312,181 26,160,645 (5,996,512) 300,476,314 Capital assets, net 359,994,771$ 150,497,153$ (55,758,718)$ 454,733,206$

2014


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NOTE 3: DETAIL NOTES (Continued) D. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are comprised of the following as of September 30:

E. Other Liabilities In 1995, the Authority discovered a toxic, contaminated area east of the Authority’s former office. During fiscal year 1996, the Authority assessed the degree of contamination at the site, removed contaminated materials and prepared a contamination assessment report. A liability for $1,100,000 was recorded on the balance sheet at September 30, 1996. The pollution remediation obligation is an estimate and subject to changes resulting from price increases or reductions, technology, or changes in applicable laws or regulations. During fiscal year 1996, the Authority reached an agreement, in writing, with the previous lessee of the contaminated site to indemnify the Authority for 75% of the future out-of-pocket costs incurred to monitor and clean-up the site. At September 30, 1996, the Authority accrued a receivable of $1,299,561 for amounts due under this agreement. During fiscal year 2000, the original liability had decreased to zero, but the soil decontamination was not complete. The Authority retained the services of a professional site assessment and remediation firm to determine an estimated cost to complete the clean-up. At September 30, 2000, the Authority accrued an additional liability of $2,250,000 to complete the soil decontamination. A corresponding additional receivable of $1,687,500 was accrued as the estimated receivable from the former lessee based on the agreement reached in 1996. During fiscal year 2006, the Authority determined, collaboratively with the assistance of a professional site assessment and remediation firm, the liability was insufficient to close the site, due to testing results indicating the contamination is not contained solely to property owned by the Authority. Accordingly, the Authority accrued an additional liability of $700,000 to complete the soil decontamination. A corresponding additional receivable of $525,000 was accrued as the estimated receivable from the former lessee based on the agreement reached in 1996.

2015 2014Accounts and contracts payable 9,757,631$ 20,744,970$ Retainages payable 6,997,903 10,962,991 Accrued payroll and employee benefits 829,702 853,267

17,585,236$ 32,561,228$


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NOTE 3: DETAIL NOTES (Continued)

E. Other Liabilities (Continued)

During fiscal year 2008, the Authority determined, collaboratively with the assistance of a professional site assessment and remediation firm, the liability was insufficient to close the site, due to testing results indicating the requirement of additional monitoring. Accordingly, the Authority accrued an additional liability of approximately $310,000 to complete the soil decontamination. A corresponding additional receivable of approximately $233,000 was accrued as the estimated receivable from the former lessee based on the agreement reached in 1996.

During fiscal year 2009, the Authority implemented Governmental Accounting Standards Board ("GASB") Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, which required a change in the methodology used to calculate the Authority’s liability related to cleanup of the contaminated area. The Authority is now required to utilize the expected cash flow technique, which measures the liability as the sum of probability-weighted amounts in a range of possible estimated amounts. As a result of implementing GASB Statement No. 49 and new estimates provided by the engineers, the Authority accrued an additional liability of approximately $1,132,000 to complete the soil decontamination. A corresponding additional receivable of approximately $849,000 was accrued as the estimated receivable from the former lessee based on the agreement reached in 1996.

During fiscal years 2011 and 2010, the Authority determined, collaboratively with the assistance of a professional site assessment and remediation firm, the liability was insufficient to close the site, due to additional feedback obtained from a state monitoring agency. Accordingly, the Authority accrued an additional liability of approximately $566,000 and $436,000 to complete the soil decontamination at September 30, 2011 and 2010, respectively. A corresponding additional receivable of approximately $425,000 and $327,000 was accrued at September 30, 2011 and 2010, as the estimated receivable from the former lessee based on the agreement reached in 1996. During fiscal years 2015, 2014, 2013 and 2012, there were no additional estimated costs for cleanup and therefore no additional accruals necessary.

At September 30, 2015 and 2014, the liability balances for the clean-up are $1,335,488 and $1,551,538, respectively. These liabilities are reported as other liabilities, current portion in the amount of $812,988 and $913,538 at September 30, 2015 and 2014, respectively, and as other liabilities, long-term portion in the amount of $522,500 and $638,000, respectively. In accordance with GASB Statement No. 49, the September 30, 2015 pollution remediation liability of $1,335,488 is based on the weighted average probability of expected outlays (($375,635 x 0.05) + ($953,271 x 0.45) + ($1,612,663 x 0.45) + ($3,240,720 x 0.05)) for a total other liabilities balance for the clean-up of $1,335,488. The $1,551,538 liability for the year ended September 30, 2014 is based on the weighted average probability of expected outlays as follows: (($436,403 x 0.05) + ($1,107,487 x 0.45) + ($1,873,553 x 0.45) + ($3,764,991 x 0.05)).


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E. Other Liabilities (Continued)

As of September 30, 2015, management believes the actual liability recorded in the Statement of Net Position will more than cover the future costs expected to be incurred for the clean-up.

The receivable balances remaining at September 30, 2015 and 2014 are $1,040,005 and $1,173,653, respectively. These receivables are included in other receivables, current in the amount of $645,869 and $695,153 at September 30, 2015 and 2014, respectively, and in other receivables, long-term in the amount of $394,136 and $478,500, respectively.

A reconciliation of changes in the aggregate liabilities for the claims related to the contamination follows:

*Payments on claims are reimbursed by the former lessee at a rate of 75%.

F. Revenue Bonds Payable

The revenue bonds are secured by and payable from the gross operating revenues of the Canaveral Port Authority. The proceeds of these issues were used for capital improvements and refunding certain outstanding issues of the Authority.

The resolutions applicable to the revenue bonds require the establishment of various bond principal and interest sinking funds and reserve accounts with various requirements for deposits. These requirements have been met for the fiscal years ended September 30, 2015 and 2014.

Claims Liability October 1, 2014

Fiscal Year 2015 Incurred Claims

Fiscal Year 2015 Payment on Claims

Claims Liability September 30, 2015

1,551,538$ -$ (216,050)$ 1,335,488$

Claims Liability October 1, 2013

Fiscal Year 2014 Incurred Claims

Fiscal Year 2014 Payment on Claims

Claims Liability September 30, 2014

1,804,497$ -$ (252,959)$ 1,551,538$


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F. Revenue Bonds Payable (Continued)

A summary of long-term debt at September 30, 2015 and 2014 is as follows:

PORT REVENUE REFUNDING BONDS, SERIES 2005

On May 18, 2005, the Canaveral Port Authority issued Port Improvement Revenue Refunding Bonds, Series 2005 in the principal amount of $16,360,000 (i) to advance refund a portion of the Authority’s Improvement Revenue Refunding Bonds, Series 1996B, (ii) to fund various capital improvements and (iii) to pay bond issuance costs. Gross revenues are pledged for repayment of these bonds.

The refunded bonds are considered defeased and the liability has been removed from the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $1,052,074. This amount is being netted against the new debt and amortized over the remaining life of the refunded debt, which is the same as the life of the new debt issued.

The Series 2005 bonds bear interest at rates ranging from 3.0% to 5.0% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2006, in amounts increasing from $125,000 to $1,960,000 at final maturity in 2021.

The Series 2005 bonds maturing on or after June 1, 2016 are subject to redemption prior to their respective dates of maturity, on or after June 1, 2015, at the option of the Authority, in whole or in part, at a redemption price equal to 100% of the principal amount of the Series 2005 bonds to be redeemed, plus accrued interest to the redemption date.

2015 2014Port Revenue Refunding Bonds, Series 2005 -$ 11,995,000$ Port Revenue Refunding Bonds, Series 2006A 11,720,000 13,600,000 Port Improvement Revenue Bonds, Series 2006B 1,330,000 1,330,000 Port Improvement Revenue Bonds, Series 2008 24,310,000 25,810,000 Port Improvement Revenue Bonds, Series 2010 27,338,272 30,303,726 Port Revenue Refunding Bonds, Series 2012 5,988,000 6,916,000 Port Improvement Revenue Bonds, Series 2013 13,750,000 14,599,000 Port Improvement Revenue Bonds, Series 2014 102,325,000 105,000,000 Port Revenue Refunding Bonds, Series 2015 10,660,000 -

Total revenue bonds 197,421,272 209,553,726 Less: unamortized discounts (51,293) (68,247) Plus: unamortized premiums - 124,930

197,369,979 209,610,409 Less: current maturities (13,064,689) (12,302,455) Revenue bonds payable, less current portion 184,305,290$ 197,307,954$


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PORT REVENUE REFUNDING BONDS, SERIES 2006A and 2006B

On March 27, 2006, the Canaveral Port Authority issued Port Revenue Refunding Bonds, Series 2006A in the principal amount of $16,915,000 (i) to currently refund all of the Authority’s Port Improvement Revenue Refunding Bonds, Series 1996A and (ii) to pay bond issuance costs. Gross revenues are pledged for repayment of these bonds.

The Series 2006A bonds bear interest at rates ranging from 3.4% to 5.0% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2006, in amounts increasing from $165,000 to $1,075,000 at final maturity in 2021.

The Series 2006A and 2006B bonds maturing on or after June 1, 2017 are subject to redemption prior to their respective dates of maturity, on or after June 1, 2016, at the option of the Authority, in whole or in part, at a redemption price equal to 100% of the principal amount of the Series 2006A bonds to be redeemed, plus accrued interest to the redemption date.

PORT IMPROVEMENT REVENUE BONDS, SERIES 2006B

On March 27, 2006, the Canaveral Port Authority issued Port Improvement Revenue Bonds, Series 2006B in the principal amount of $1,330,000 to (i) fund various capital improvements and (ii) to pay bond issuance costs. Gross revenues are pledged for repayment of these bonds.

The Series 2006B bonds bear interest at a rate of 3.40% to 4.25% per annum, payable semi-annually on June 1 and December 1. Principal is due June 1, 2021.

The Series 2006B bonds maturing on or after June 1, 2017 are subject to redemption prior to their respective dates of maturity, on or after June 1, 2016, at the option of the Authority, in whole or in part, at a redemption price equal to 100% of the principal amount of the Series 2006B bonds to be redeemed, plus accrued interest to the redemption date.

PORT IMPROVEMENT REVENUE BONDS, SERIES 2008

On July 1, 2008, the Canaveral Port Authority issued Port Improvement Revenue Bonds, Series 2008 in the principal amount of $32,000,000 to fund various capital improvements. Gross revenues are pledged for repayment of these bonds.


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The Series 2008 bonds bore interest at a rate of 4.752% per annum, payable semi-annually on June 1 and December 1. Principal was due annually beginning December 1, 2008, in amounts increasing from $860,000 to $7,935,000 at final maturity in 2023.

On November 15, 2013, the Series 2008 bonds were refinanced for $26,613,000. All the Series 2008 bonds now bear and interest rate of 3.10% per annum, payable semi-annually on June 1 and December 1. Principal is due semi-annually beginning December 1, 2013, in amounts increasing from $803,000 to $2,231,000 at final maturity in 2028. The difference in cash flows required to service the new debt versus the old debt is a decrease of approximately $872,416. The economic gain resulting from the refunding is $510,052.

At any time up to and including June 1, 2018, the Series 2008 bonds are subject to redemption in whole or in part on any principal due date, at the option of the Authority, for 103% of the principal amount being redeemed, plus accrued interest to the redemption date. At any time after June 1, 2018, the Series 2008 bonds shall be subject to redemption in whole only, at the option of the Authority, for 100% of the principal amount being redeemed, plus accrued interest to the redemption date.


On December 21, 2010, the Canaveral Port Authority issued Port Improvement Revenue Bonds, Series 2010 in the principal amount of $42,000,000 to fund various capital improvements. Gross revenues are pledged for repayment of these bonds.

The Series 2010 bonds bear interest at a rate of 3.144% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2011, in amounts increasing from $2,702,460 to $3,798,771 at final maturity in 2023.

On or prior to June 1, 2017, the Series 2010 bonds are subject to redemption upon notice prior to maturity, at election of the Issuer, as a whole at any time, or in part on any interest date, at the redemption price of 100% of the principal amount being redeemed, plus accrued interest to the redemption date, plus the cost of prepayment as laid out in the bond document. At any time after June 1, 2017, the Series 2010 bonds shall be subject to redemption upon notice prior to maturity at the election of the Issuer, as a whole at any time, or in part on an interest date, at the redemption price of 100% of the principal amount being redeemed, plus accrued interest to the redemption date.


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On March 6, 2012, the Canaveral Port Authority issued Port Revenue Refunding Bonds, Series 2012 in the principal amount of $8,747,000 (i) to currently refund all of the Authority’s Port Improvement Revenue Refunding Bonds, Series 2002B and (ii) to pay bond issuance costs. Gross revenues are pledged for repayment of these bonds.

The Series 2012 bonds bear interest at a fixed rate of 1.75% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2012, in amounts increasing from $27,000 to $1,030,000 at final maturity in 2021.

The Series 2012 bonds maturing on or after June 1, 2016 are subject to redemption upon notice prior to maturity, in whole or in part on any interest date payment, at a redemption price set forth below, together with accrued interest to the redemption date.

Redemption Date Redemption Price

June 1, 2016 through May 31, 2017 101% June 1, 2017 and thereafter 100%


On November 15, 2013, the Canaveral Port Authority issued Port Improvement Revenue Bonds, Series 2013 in the principal amount of $15,053,000 to fund the capital improvement project of a welcome center at the Cove. Gross revenues are pledged for repayment of these bonds.

The Series 2013 bonds bear interest at a rate of 3.10% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2014, in amounts increasing from $454,000 to $1,262,000 at final maturity in 2028.



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On June 13, 2014, the Canaveral Port Authority issued Port Improvement Revenue Bonds, Series 2014 in the principal amount of $105,000,000 to fund improvements to Cruise Terminal 1. Gross revenues are pledged for repayment of these bonds.

The Series 2014 bonds bear interest at a rate of 3.39% per annum, payable semi-annually on June 1 and December 1. Principal is due semi-annually beginning December 1, 2014, in amounts from $750,000 to $5,335,000 at final maturity in 2034.



On March 3, 2015, the Canaveral Port Authority issued Port Revenue Refunding Bonds, Series 2015 in the principal amount of $11,080,000 (i) to currently refund all of the Authority’s Port Revenue Refunding Bonds, Series 2005 and (ii) to pay bond issuance costs. Gross revenues are pledged for repayment of these bonds.

The refunded bonds are considered defeased and the liability has been removed from the statement of net position. The reacquisition price exceeded the net carrying amount of the old debt by $20,730. This amount is included in the deferred loss on refunding.

The Series 2015 bonds bear interest at rates ranging from 2.08% per annum, payable semi-annually on June 1 and December 1. Principal is due annually beginning June 1, 2015, in amounts increasing from $420,000 to $1,870,000 at final maturity in 2021.

The Series 2015 bonds are subject to redemption prior to their respective dates of maturity, at any time, at the option of the Authority, in whole or in part, at a redemption price equal to 100% of the principal amount of the Series 2015 bonds to be redeemed, plus accrued interest to the redemption date.


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FUTURE MATURITIES

Future maturities and sinking fund requirements, including unamortized discounts of $51,293 for all outstanding revenue bonds payable, as of September 30, 2015, are as follows:

The total future principal and interest on all the bonds is $257,665,815 and the current principal and interest is $19,415,169. The current pledged revenue is $77,705,203. The current principal and interest due is 25.0% of current pledged revenue.

G. Note Payable

During 2007, the Authority entered into a $1,000,000 note payable agreement related to the purchase of certain capital assets. Monthly repayments of $11,102 are required for 120 months, which include interest at a fixed rate of 6%. The note matures on July 1, 2017. Future maturities for the note payable, as of September 30, 2015, are as follows:

Principal Interest Total2016 13,064,689$ 6,350,480$ 19,415,169$ 2017 11,936,854 5,960,364 17,897,218 2018 12,206,043 5,595,055 17,801,098 2019 14,010,350 5,207,750 19,218,100 2020 14,344,873 4,769,454 19,114,327 2021 to 2025 47,626,463 18,130,345 65,756,808 2026 to 2030 43,627,000 11,075,937 54,702,937 2031 to 2034 40,605,000 3,155,158 43,760,158

Total 197,421,272$ 60,244,543$ 257,665,815$

Principal Interest Total2016 122,718$ 10,506$ 133,224$ 2017 108,027 2,993 111,020

Total 230,745$ 13,499$ 244,244$


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H. Line of Credit

On March 2, 2015, the Authority authorized entering into an agreement with a bank for a line of credit not to exceed $30,000,000. On December 16, 2015 the Authority authorized an increase in the line of credit to $50,000,000. The line of credit matures April 30, 2016. The interest rate on the debt is the highest of the: (i) the bank’s prime rate, (ii) Daily Libor + 100 basis points or (iii) Federal Funds Open Rate + 50 basis points. The interest rate as of September 30, 2015 was based on the 1-month LIBOR rate plus 75 basis points and was 0.94%. The balance at December 31, 2015 was $11,404,709. As of April 20, 2016, the line of credit is in the process of being extended to December 30, 2016 pending final analysis and credit approval. See Note 8.

I. Changes in long-term liabilities

Long-term liability activity for the years ended September 30, 2015 and 2014 was as follows:

Balance October 1,2014 Additions Reductions


2015Due Within

One YearRevenue bonds payable 209,553,726$ 11,080,000$ (23,212,454)$ 197,421,272$ 13,064,689$ Less deferred amounts:

For issuance discounts (68,247) - 16,954 (51,293) - For issuance premiums 124,930 - (124,930) - -

Note payable 346,335 - (115,590) 230,745 122,718 Compensated absences 489,987 96,668 - 586,655 305 Net OPEB liability 1,488,000 103,000 - 1,591,000 - Other liabilities, long-term 1,551,538 - (216,050) 1,335,488 812,988

Long-term liabilities 213,486,269$ 11,279,668$ (23,652,070)$ 201,113,867$ 14,000,700$

Balance October 1,2013 Additions Reductions


2014Due Within

One YearRevenue bonds payable 98,502,789$ 146,666,000$ (35,615,063)$ 209,553,726$ 12,302,455$ Less deferred amounts:

For issuance discounts (87,427) - 19,180 (68,247) - For issuance premiums 158,076 - (33,146) 124,930 -

Note payable 455,209 - (108,874) 346,335 115,589 Compensated absences 483,464 638,560 (632,037) 489,987 748Net OPEB liability 1,164,000 324,000 - 1,488,000 - Other liabilities, long-term 1,827,748 - (276,210) 1,551,538 913,538

Long-term liabilities 102,503,859$ 147,628,560$ (36,646,150)$ 213,486,269$ 13,332,330$


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NOTE 3: DETAIL NOTES (Continued) J. Restricted Net Position The following schedule lists the amounts of net position that are restricted as of September 30, 2015 and 2014, in accordance with the provisions of the respective bond indentures. These amounts represent restricted assets less certain current liabilities payable from restricted assets included in the various debt service, reserve, bond and interest sinking fund accounts.

K. Retirement Plan Florida Retirement System: General Information - The Authority participates in the Florida Retirement System (the "System"). Generally, membership is compulsory for all full time and part time employees hired prior to January 1, 1996. The employer paid all contributions through June 30, 2011. Effective July 1, 2011, employees were required to contribute 3% of gross salary. As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan (“Pension Plan”) and the Retiree Health Insurance Subsidy (“HIS Plan”). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan (“Investment Plan”) alternative to the FRS Pension Plan, which is administered by the State Board of Administration (“SBA”). As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, Authority government, district school board, state university, community college, or a participating city or special district within the State of Florida. The FRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida State Legislature. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the Web site: www.dms.myflorida.com/workforce_operations/retirement/publications. Pension Plan Plan Description – The Pension Plan is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (“DROP”) for eligible employees.

2015 2014Restricted for Future Debt Service

Series 2005 -$ $ 2,060,250 Series 2006A 1,691,500 2,452,788 Series 2006B 133,000 53,200

Total debt service restrictions $ 1,824,500 4,566,238$


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NOTE 3: DETAIL NOTES (Continued) K. Retirement Plan (Continued) Benefits Provided - Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special Risk Administrative Support class members who retire at or after age 55 with at least six years of credited service or 25 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary, for each year of credited service. Special Risk class members (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with at least six years of credited service, or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers’ class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their final average compensation based on the five highest years of salary for each year of credited service. For Plan members enrolled on or after July 1, 2011, the vesting requirement is extended to eight years of credited service for all these members and increasing normal retirement to age 65 or 33 years of service regardless of age for Regular, Senior Management Service, and Elected Officers’ class members, and to age 60 or 30 years of service regardless of age for Special Risk and Special Risk Administrative Support class members. Also, the final average compensation for all these members will be based on the eight highest years of salary. As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the Pension Plan before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of- living adjustment is three percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of three percent determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement multiplied by three percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.


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NOTE 3 - DETAIL NOTES (Continued)

K. Retirement Plan (Continued)

In addition to the above benefits, the DROP program allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. There are no required contributions by DROP participants.

Contributions – Effective July 1, 2011, all enrolled members of the FRS, other than DROP participants, are required to contribute three percent of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates established by the Florida Legislature. These rates are updated as of July 1 of each year. Employer contribution rates ranged from 7.26% to 12.88% during 2015, 7.37% to 12.28% during 2014, and 6.95% to 12.84% during 2013. The amount of covered payroll for the years ended September 30, 2015, 2014 and 2013 was $527,368, $567,320, and $543,880, respectively. The Authority’s contributions to the System for the three years ended September 30, 2015, 2014 and 2013 were $43,828, $47,462, and $30,103, respectively and are equal to the required contributions for each year.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At September 30, 2015 and 2014, the Authority reported a liability of $208,521 and $106,826, respectively, for its proportionate share of the Pension Plan’s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The Authority’s proportionate share of the net pension liability was based on the Authority’s 2014-15 fiscal year contributions relative to the 2013-14 fiscal year contributions of all participating members. At June 30, 2015, the Authority's proportionate share was .0018 percent, which was an increase of .0016 percent from its proportionate share measured as of June 30, 2014.

For the fiscal year ended September 30, 2015 and 2014, the Authority recognized pension expense of $8,450 and a pension benefit of $25,514, respectively. In addition the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:


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NOTE 3 - DETAIL NOTES (Continued)


Deferred Outflows Deferred InflowsSeptember 30, 2015 of Resources of ResourcesDifferences between expected and actual experience 22,014$ 4,946$

Change of assumptions 13,840 -

Net difference between projected and actual earnings on Pension Plan investments - 49,792

Changes in proportion and differences between Authority Pension Plan contributions and proportionate share of contributions 16,126 17,906

Authority Pension Plan contributions subsequent to the measurement date 6,741 -

Total 58,721$ 72,644$

Deferred Outflows Deferred InflowsSeptember 30, 2014 of Resources of ResourcesDifferences between expected and actual experience -$ 6,611$

Change of assumptions 18,501 -

Net difference between projected and actual earnings on Pension Plan investments - 178,205

Changes in proportion and differences between Authority Pension Plan contributions and proportionate share of contributions 19,877 -

Authority Pension Plan contributions subsequent to the measurement date 39,360 -

Total 77,738$ 184,816$


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The deferred outflows of resources related to the Pension Plan, totaling $6,741 and $39,360 for the years ending September 30, 2015 and 2014, respectively, resulting from Authority contributions to the Plan subsequent to the measurement date, will be recognized as an increase in net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the Pension Plan will be recognized in pension expense as follows:

Actuarial Assumptions – The total pension liability in the June 30, 2015 and 2014 actuarial valuation was determined using the following actuarial assumption, applied to all period included in the measurement:

Inflation 2.60 % Salary increases 3.25%, average, including inflation Investment rate of return 7.65%, net of pension plan investment

expense, including inflation

Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables.

The actuarial assumptions used in the July 1, 2015 and 2014, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013.

The long-term expected rate of return on Pension Plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table:

Fiscal Year EndingSeptember 30: Amount

2016 (6,951)$ 2017 (6,951) 2018 (6,951) 2019 (6,951) 2020 (6,951)

Thereafter (6,951)


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Discount Rate - The discount rate used to measure the total pension liability was 7.65%. The Pension Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculation the total pension liability is equal to the long-term expected rate of return.

Sensitivity of the Authority’s Proportionate Share of the Net Position Liability to Changes in the Discount Rate - The following represents the Authority’s proportionate share of the net pension liability calculated at September 30, 2015 and 2014 using the discount rate of 7.65%, as well as what the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (6.65%) or one percentage point higher (8.65%) than the current rate:

CompoundAnnual Annual

Target Arithmetic (Geometric) StandardAsset Class Allocation (1) Return Return DeviationCash 1.00% 3.11% 3.10% 1.65%Intermediate-Term Bonds 18.00% 4.18% 4.05% 5.15%High Yield Bonds 3.00% 6.79% 6.25% 10.95%Broad US Equities 26.50% 8.51% 6.95% 18.90%Developed Foreign Entities 21.20% 8.66% 6.85% 20.40%Emerging Market Equities 5.30% 11.58% 7.60% 31.15%Private Equity 6.00% 11.80% 8.11% 30.00%Hedge Funds/Absolute Return 7.00% 5.81% 5.35% 10.00%Real Estate (Property) 12.00% 7.11% 6.35% 13.00%Total 100.00%

Assumed Inflation - Mean 2.60% 2.00%

(1) As outlined in the Pension Plan's investment policy

Current1% Decrease Discount Rate 1% Increase

September 30, 2015 (6.65%) (7.65%) (8.65%)Authority's proportionate share of the net pension liability 540,325$ 208,521$ (67,594)$


September 30, 2014 (6.65%) (7.65%) (8.65%)Authority's proportionate share of the net pension liability 456,909$ 106,826$ (184,376)$


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Pension Plan Fiduciary Net Position - Detailed information regarding the Pension Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report.

HIS Plan

Plan Description – The HIS Plan is a cost-sharing multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes, and may be amended by the Florida legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement.

Benefits Provided – For the fiscal year ended September 30, 2015 and 2014, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month. To be eligible to receive these benefits, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare.

Contributions – The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended September 30, 2015 and 2014, the HIS contribution for the period October 1, 2013 through June 30, 2014, October 1, 2014 through June 30, 2015 and from July 1, 2015 through September 30, 2015 was 1.20%, 1.26% and 1.66%, respectively. For both years the Authority contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or cancelled.

The Authority’s contributions to the HIS Plan totaled $6,456 and $6,912 for the fiscal year ended September 30, 2015 and 2014, respectively.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions – At September 30, 2015 and 2014, the Authority reported a liability of $184,406 and $176,222, respectively, for its proportionate share of the HIS Plan’s net pension liability. The net pension liability was measured as of June 30, 2015 and June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015 and July 1, 2014. The Authority’s proportionate share of the net pension liability was based on the Authority’s 2014-15 and 2013-14 fiscal year contributions relative to the 2013-14 and 2012-13 fiscal year contributions of all participating members.


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NOTE 3 - DETAIL NOTES (CONTINUED)


At June 30, 2015, the Authority's proportionate share was .0018 percent, which was a decrease of .0001 percent from its proportionate share measured as of June 30, 2014. At June 30, 2014, the Authority’s proportionate share was .0019 percent which is the same share as of June 30, 2013.

For the fiscal year ended September 30, 2015 and 2014, the Authority recognized pension expense of $11,134 and $5,455, respectively. In addition the Authority reported deferred outflows of resources and deferred in flows of resources related to pensions from the following sources:

Deferred Outflows Deferred InflowsSeptember 30, 2015 of Resources of ResourcesChange of assumptions 14,508$ -$

Net difference between projected and actual earnings on HIS Plan investments 101 -

Changes in proportion and differences between Authority HIS Plan contributions and proportionate share of contributions 681 5,938

Authority HIS Plan contributions subsequent to the measurement date 1,777 -

Total 17,067$ 5,938$

Deferred Outflows Deferred InflowsSeptember 30, 2014 of Resources of ResourcesChange of assumptions 6,271$ -$

Net difference between projected and actual earnings on HIS Plan investments 85 -

Changes in proportion and differences between Authority HIS Plan contributions and proportionate share of contributions 811 -

Authority HIS Plan contributions subsequent to the measurement date 6,912 -

Total 14,079$ -$


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The deferred outflows of resources related to the HIS Plan, totaling $1,777 and $6,912 for the years ending September 30, 2015 and 2014, respectively, resulting from Authority contributions to the HIS Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended September 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to the HIS Plan will be recognized in pension expense as follows:

Actuarial Assumptions – The total pension liability in the July 1, 2015 and 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 2.60 % Salary increases 3.25%, average, including inflation Municipal bond rate 4.29 %

Mortality rates were based on the Generational RP-2000 with Projection Scale BB tables.

The actuarial assumptions used in the July 1, 2015 and 2014, valuation were based on the results of an actuarial experience study for the period July 1, 2008 through June 30, 2013.

Discount Rate - The discount rate used to measure the total pension liability was 4.29%. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index.

Fiscal Year EndingSeptember 30: Amount

2016 1,517$ 2017 1,517 2018 1,517 2019 1,517 2020 1,517

Thereafter 3,034


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NOTE 3: DETAIL NOTES (Continued) K. Retirement Plan (Continued) Sensitivity of the Authority’s Proportionate Share of the Net Position Liability to Changes in the Discount Rate - The following represents the Authority’s proportionate share of the net pension liability calculated at September 30, 2015 and 2014 using the discount rate of 4.29%, as well as what the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is one percentage point lower (3.29%) or one percentage point higher (5.29%) than the current rate:

Pension Plan Fiduciary Net Position - Detailed information regarding the HIS Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State-Administered Systems Comprehensive Annual Financial Report. L. Defined Contribution Plan Effective January 1, 1996, the Authority adopted Resolution 96-12, pursuant to 95-338 Laws of Florida, whereby the Authority revoked its participation in the System and established the Canaveral Port Authority Defined Contribution Plan and Trust (the “Plan”) for employees hired after January 1, 1996. The Plan is administered by the Authority as a Qualified Retirement Plan as defined by Section 401 (a) of the Internal Revenue Service Code. Plan provisions and contribution requirements are established and may be amended by the Board of Commissioners. The Authority contributes 10.77% of the employees’ eligible compensation to the Plan; employee contributions to the Plan are not permitted. The amount of covered payroll by the Plan for the years ended September 30, 2015 and 2014 was $8,497,008 and $9,772,008, respectively. The amount of retirement expense related to the Plan for the years ended September 30, 2015 and 2014 was $905,441 and $1,052,445, respectively.


September 30, 2015 (3.29%) (4.29%) (5.29%)Authority's proportionate share of 210,122$ 184,406$ 162,963$ the net pension liability


September 30, 2014 (3.29%) (4.29%) (5.29%)Authority's proportionate share of 200,438$ 176,222$ 156,008$ the net pension liability


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NOTE 3: DETAIL NOTES (Continued) M. Other Postemployment Benefits The Authority follows GASB Statement No. 45, Accounting and Reporting by Employers for Postemployment Benefits Other than Pensions (OPEB), for certain postemployment health care benefits provided by the Authority. Plan description. The Authority administers a single-employer defined benefit healthcare plan (the “Healthcare Plan”) that provides health care benefits including medical coverage and prescription drug benefits to its employees and their eligible dependents. Pursuant to Section 112.0801 Florida Statutes, the Authority is required to provide eligible retirees (as defined in the Authority’s ordinances) the opportunity to participate in this Healthcare Plan at the same cost that is applicable to active employees. Employees who are active participants in the Healthcare Plan at the time of retirement and are either age 62 with completion of six years of service or have 30 years of service are eligible to receive benefits. The Healthcare Plan has 17 retirees and spouses receiving benefits and has a total of 190 active participants and dependents. Of that total, 173 are not yet eligible to receive benefits. Benefit provisions can only be amended by the Board of Commissioners of the Authority. The Board approves the Authority’s annual budget and, therefore, indirectly approves the annual costs associated with the Healthcare Plan. The Authority has not established a trust or agency fund for the Healthcare Plan. The Authority does not issue standalone financial statements for the Healthcare Plan. All financial information related to the Healthcare Plan is accounted for in the Authority’s basic financial statements. Funding policy. The Authority is funding the Healthcare Plan on a pay-as-you-go basis. The annual premium costs are between $7,245 and $17,150 for retirees and spouses under age 65 and between $858 and $3,696 for retirees and spouses over age 65. Employees who retired from CPA prior to October 1, 2014, elected medical insurance plan coverage under either the employee group medical insurance plan or the Medicare-eligible medical insurance plan with the majority of cost incurred by the retiree. CPA may subsidize a portion of the premium cost based on retiree only vs. retiree/spouse/family elections and increased costs of the Medicare-eligible Point of Service (POS) and employee group insurance coverage premiums. Employees and Commissioners who retire after October 1, 2014, will be able to elect medical insurance coverage under either the employee medical insurance plan or the Medicare-eligible medical insurance plan per the guidelines set in policy outlined vesting schedule, cost share and age limitations for both employees and Commissioners. For the years ended September 30, 2015 and 2014, the contributions made by the Authority were $29,000 and $75,000, respectively, which includes both an estimate of the implied subsidy described above and the explicit subsidy paid on behalf of eligible retirees.


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NOTE 3: DETAIL NOTES (Continued) M. Other Postemployment Benefits (Continued) Annual OPEB cost and net OPEB obligation. The Authority’s annual OPEB cost (expense) is calculated based on the annual required contribution ("ARC") of the employer, an amount actuarially determined in accordance with the parameters of GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial accrued liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the Authority’s annual OPEB cost for the last three fiscal years, the amount actually contributed to the Healthcare Plan, and changes in the Authority’s net OPEB obligation to the Healthcare Plan:

The Authority’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Healthcare Plan, and the net OPEB obligation for the fiscal years ending September 30, 2015, 2014 and 2013 were as follows:

Funded status and funding progress. Because the Authority has greater than 200 members in the prior year, the Authority is required to obtain an actuarial valuation at least every two years. The most recent actuarial valuation was performed as of October 1, 2015. Accordingly, the Authority will be required to obtain a subsequent actuarial valuation within two years of that date. As of the October 1, 2015 valuation, the actuarial accrued liability for benefits for the Authority was $915,000 all of which was unfunded. The covered payroll (annual payroll of active employees covered by the Healthcare Plan) was approximately $9,345,000, and the ratio of unfunded actuarial accrued liability ("UAAL") to the covered payroll was 9.8%.

September 30, 2013 2014 2015Annual required contribution 459,000$ 491,000$ 249,000$ Interest on net OPEB obligation 34,000 47,000 60,000 Adjustment to annual required contribution (100,000) (138,000) (176,000)

Annual OPEB cost (expense) 393,000 400,000 133,000 Contributions made (75,000) (75,000) (29,000) Interest on employer contributions (1,000) (1,000) (1,000)

Increase in net OPEB obligation 317,000 324,000 103,000 Net OPEB obligation – beginning of year 847,000 1,164,000 1,488,000 Net OPEB obligation – end of year $ 1,164,000 1,488,000$ 1,591,000$

Year Ending Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation

September 30, 2015 133,000$ 22% 1,591,000$ September 30, 2014 400,000 19% 1,488,000September 30, 2013 393,000 19% 1,164,000


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NOTE 3: DETAIL NOTES (Continued) M. Other Postemployment Benefits (Continued) Actuarial valuations for an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts are subject to continuous revision as actual results are compared to past expectations and new estimates about the future are formulated. Although the valuation results reflect a long-term perspective and, as such, are merely an estimate of what future costs may be, deviations in any of several factors, such as future interest rates, medical cost inflation, Medicare coverage and changes in marital status, could result in actual costs being less or greater than estimated. The schedule of funding progress presented as required supplementary information following the notes to the financial statements, will present multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Fiscal year 2009 was the first year of implementation of GASB Statement No. 45. The Authority elected to apply the statement prospectively. Actuarial methods and assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the October 1, 2015 actuarial valuation, the projected unit credit cost method was used. The actuarial assumptions included a 4.0% investment rate of return (including inflation of 2.75%) and an annual healthcare cost trend rate of 8% initially, reduced by decrements to an ultimate rate of 5.5% after seven years. The actuarial methods and assumptions used are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The UAAL is being amortized using a level-dollar payment method over a 10 year open period


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NOTE 3: DETAIL NOTES (Continued) N. Leasing and Operating Agreement Arrangements with Authority as Lessor The Authority leases land and enters into marine terminal facilities agreements with various businesses throughout the Port Authority area. All of the leases and agreements are accounted for as operating leases and agreements. Revenue from leases and agreements was $5,069,270 for 2015 and $4,951,406 for 2014. Future lease payments to be received are as follows:

O. Major Customers Gross revenues from three cruise line companies totaled $17,209,609, $12,910,561 and $12,920,024 in 2015. At September 30, 2015, the outstanding trade accounts receivable balances of these three cruise line companies amounted to $1,540,977, $1,063,239 and $1,445,269. Gross revenues from three cruise line companies totaled $17,579,288, $13,197,047 and $9,765,263 in 2014. At September 30, 2014, the outstanding trade accounts receivable balances of these three cruise line companies amounted to $597,621, $481,422 and $734,905. There was also one additional customer with an accounts receivable balance of $641,754. P. Risk Management The Authority purchases commercial insurance to cover risk of loss for general liability, property and casualty, comprehensive crime and flood and fire. The Authority bases its need for commercial insurance on “An Analysis of Risk Exposures to Natural Hazards” prepared by the Authority's engineering consulting firm. This analysis showed the Authority has limited exposure in the area of piers and bulkheads and therefore the costs of carrying such insurance do not outweigh the benefits. The Authority is, in essence, insuring itself in these areas. In the past three years, there have been no claims settled exceeding the Authority's insurance coverage. As of September 30, 2015 and 2014, there were no outstanding claims.

2016 4,706,283$ 2017 4,608,882 2018 4,352,215 2019 4,205,193 2020 3,960,271 2021 to 2025 17,839,365 2026 to 2030 13,360,699 2031 to 2035 12,304,065 2036 to 2040 7,522,930 2041 to 2045 4,590,797 2046 to 2050 1,482,211

Total 78,932,911$


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NOTE 3: DETAIL NOTES (Continued) Q. Significant Estimate At September 30, 1996, the Authority accrued a liability for the estimated cost of soil decontamination and a receivable for the estimated amount to be received from the lessee to indemnify the Authority for the contamination (see Note 3.E.). During subsequent fiscal years, the Authority revised its estimate of its liability to complete the soil decontamination, and the corresponding receivable from the former lessee to indemnify the Authority for the contamination. At September 30, 2015 and 2014, the balance of the liability is $1,335,488 and $1,551,538, respectively and the receivable balance is $1,040,005 and $1,173,653, respectively. R. Wastewater Service Capacity Agreement The Authority entered into a franchise agreement for wastewater service capacity with the City of Cocoa Beach (“the City”). Under this agreement, beginning April 22, 2000, the City was granted an exclusive franchise to provide wastewater service capacity to the Authority area. This agreement required the Authority to construct wastewater and reclaimed water facilities outside of the Authority area and to contribute the constructed facilities to the City. Related costs of $1,608,520 were expensed during 2000. In addition, this agreement required the Authority to construct wastewater and reclaimed water facilities on Port property in the amount of $1,343,443. These assets were included in the Authority’s capital assets at September 30, 2001. The City, in accordance with the agreement, has placed into effect a surcharge upon users in the Port area to reimburse the Authority for their costs incurred to construct the Authority’s wastewater and reclaimed water facilities. As the surcharge is collected, it is recorded as capital contributions on the Authority’s financial statements. During 2015 and 2014, the surcharge collected from the City was $133,245 and $122,429, respectively. S. Concentration - Collective Bargaining Unit Substantially all of the Authority’s non-management operations, maintenance and security employees are covered by a collective bargaining agreement. The Authority’s initial agreement with the Authority 2A, transportation, technical, warehouse, industrial and service employees became effective December 12, 2000 and ran through December 31, 2002. That agreement was renewed for additional terms through December 31, 2008. Upon the termination of that agreement, the Authority entered into a new collective bargaining agreement covering substantially all public safety, parking operations, enforcement, support, maintenance, supply and safety employees. The agreement became effective January 1, 2009 and ran through December 31, 2014. The agreement was renewed effective January 2, 2015 and now runs through December 31, 2018.


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NOTE 3: DETAIL NOTES (Continued) T. Capital Contributions For the years ending September 30, 2015, and 2014, the Authority recognized capital contributions of $27,832,677 and $13,184,167, respectively, composed primarily of federal and state grants used for various capital projects. NOTE 4: COMMITMENTS AND CONTINGENCIES A. Construction Commitments for the repair, modification, improvements, materials and new construction of Port Authority owned property at September 30, 2015 totaled approximately $49,456,000. B. Marine Terminal Leases During 2008, the Authority entered into a marine terminal lease agreement with a commercial cruise line company, whereby the cruise line company will offer new passenger cruise services initiating from the Canaveral Port Authority. The agreement requires a commitment from the cruise line company through December 31, 2022. The agreement requires the Authority to complete cruise terminal improvements, including dock extension, gangway modifications and an additional parking garage. The estimated costs of such improvements were approximately $22,000,000. The improvements were completed by December 31, 2010. In return, the cruise line company guaranteed repayment to the Authority over the life of the agreement, in an amount equal to the cost of the improvements, via a passenger facility charge to be charged by the cruise line company. During fiscal years 2015, and 2014, the Authority collected $4,558,295 and $4,741,947 in passenger facility charges, respectively, under this agreement. During 2014, the Authority entered into a marine terminal lease agreement with a commercial cruise line company. The agreement requires a commitment from the cruise line company through March 30, 2024. The agreement requires the Authority to construct a new cruise terminal, including building, landside, waterside, gangway and parking garage. The estimated cost of the new construction including related relocation of existing infrastructure was $111 million. The new construction was completed and the facility received its first cruise passenger ship in December 2014. The cruise line company guaranteed repayment of the cost of the cruise terminal building, an agreed $48.5 million, plus the debt service interest. The repayment is to be spread over the life of the agreement which is ten years. The repayment agreement went into effect April 1, 2015. During fiscal year 2015, the Authority collected $2,946,096 in passenger facility charges under this agreement which is a reduction of the $48.5 million guaranteed to the Authority.


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NOTE 4: COMMITMENTS AND CONTINGENCIES (Continued) C. Litigation The Authority is named as a defendant in various other lawsuits. The outcome of the lawsuits is not determinable at this time. It is the opinion of management and of the Authority’s legal counsel that the resolution of these matters will not have a material adverse effect on the financial condition of the Authority. D. Employment Agreement On January 20, 2016, the Port entered into a three year, with successive one year options for extension by the Board, agreement with a new CEO commencing February 15, 2016. The agreement between the Board of Commissioners of the Authority (the “Board”) and the Chief Executive Officer (CEO) provides for termination benefits. If the Board terminates its agreement with the CEO without cause, the Board shall continue to pay his then current base salary and supplemental deferred income benefits for a period of twenty weeks from the date of termination as an agreed upon severance payment and pay for employee and family coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 for a period of six months. In the event the CEO terminates his employment agreement or the Board terminates its agreement with the CEO for cause, the Board shall have no further obligation to the CEO other than for base salary and benefits accrued and/or earned to the date of termination. NOTE 5: CHANGE IN ACCOUNTING PRINCIPLE

In fiscal year 2015, the Authority implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which amends or supersedes the Accounting for Pensions by State and Local Governmental Employers. The statement required the restatement of the September 30, 2014 net position in the enterprise fund to record the net position liability related to the Florida Retirement System. This change is in accordance with generally accepted accounting principles.

Business-type Activities

Net position, September 30, 2013, as previously reported 281,544,944$ FRS Net Pension Liability Adjustment (239,418) HIS Net Pension Liability Adjustment (156,688) Net position, September 30, 2014, as restated 281,148,838$


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NOTE 6: SPECIAL ITEM In September 2014, the Canaveral Port Authority executed an agreement with the Brevard County Sheriff’s Department to provide seaport security and law enforcement services on behalf of the Canaveral Port Authority. The three year agreement commenced on October 1, 2014 and requires the Sheriff to provide services in compliance with the Standing Port Security Plan and encompasses duties and functions under the jurisdiction of and customarily rendered by the Sheriff pursuant to Florida Statutes. The Sheriff’s department is responsible for security at each cruise terminal, parking lots and garages, debarkation and embarkation processing, assistance to the U.S. Customs and Border Protection agency and concealed weapons enforcement. Also included in the agreement are marine services including waterside security sweeps, vessel escort and zone enforcement as well as special event staffing. The 24 hour/7 days a week agreement provides access, when needed, of up to 33 sworn officers and 32 non-sworn staff. For the initial twelve months of the agreement, the Canaveral Port Authority was required to pay annual compensation of approximately $5 million. The fee was paid in twelve equal monthly installments beginning on November 6, 2014. On September 17, 2014, the Authority also paid a $150,000 contingency payment to cover the Sheriff’s costs and expenses associated with the implementation and transition of the seaport security and law enforcement services. As per the agreement, both parties negotiated a mutually agreeable fee for the next twelve months of the agreement. The new annual compensation for fiscal year 2016 is $5,688,000 and will be paid in twelve equal monthly installments beginning on October 1, 2015. Article 12 of the agreement required certain vehicles, vessels, equipment and supplies be transferred by the Port to the Brevard County Sheriff’s department. Items transferred included specially equipped vehicles both land and water with trailers, defensive equipment such as tasers and weapons, computers and audio/visual equipment. The Sheriff’s department was also permitted to occupy approximately 10,000 square foot of office and operations space in Canaveral Port Authority owned real estate. During fiscal year 2015, Canaveral Port Authority determined that additional furniture and fixtures, transportation equipment and operational software should be transferred to the Sheriff’s department. Canaveral Port Authority transferred assets with acquisition costs of $2.7M and a net book value of $421,690. On September 30, 2014, Canaveral Port Authority transferred assets to the Sheriff’s department with the acquisition cost of $2.8M and net book value on the date of the transfer of $693,999. The Authority also transferred other non-capital items previously expensed in the amount of approximately $178,000.


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NOTE 7: FUTURE ACCOUNTING PRONOUNCEMENTS

The Governmental Accounting Standards Board has issued statements that will become effective in 2016. The statements address: • Fair value measurement and application; and • GAAP hierarchy. The Authority is currently evaluating the effects that these statements will have on its 2016 financial statements

NOTE 8: SUBSEQUENT EVENTS In August 2015, the Authority’s Board of Commissioners approved moving forward with the design and permitting for the renovation of Cruise Terminal 10 with the formal solicitation for the project approved at the October 28, 2015 Commission meeting. On November 18, 2015 the Authority’s Board of Commissioners approved the selection committee recommendation to negotiate a contract with a manufacturer of adjustable passenger boarding bridges for the Cruise Terminal 10 project in the amount not to exceed $4.5 million. At the same meeting, renovation of Cruise Terminal 8, via a continuing service contract, was approved in an amount not to exceed $1.8 million. On December 16, 2015, a purchase order in the amount of approximately $6.4 million was issued to the highest ranked proposer to construct a 10 acre paved multi-use cargo terminal at North Cargo Terminal 5 and adjacent to the recently completed container yard. In addition a purchase order was approved for CT10 in the amount of $1.3 million for architectural services. On January 8, 2016, a special meeting was held to discuss and vote on a candidate to fill the vacated Chief Executive Officer position. The previous Chief Executive Officer resigned effective January 21, 2016. A new CEO was selected and on January 20, 2016, the Board entered into an employment agreement with the new CEO. (See Note 4.D.) On January 20, 2016, the Authority’s Board of Commissioners approved a purchase order in the amount of approximately $2.5 million as part of the Cruise Terminal 5 renovation project for site work and ground transportation surrounding the terminal and new parking garage. At the same meeting, a bid was awarded to the lowest responsive bidder out of 7 qualified contractors, for pier modifications at Cruise Terminal 10, in the amount of approximately $1.8 million. The Authority exercised its purchase option on a 246,300 square foot cargo logistics center located in Titusville, Florida. The option requires a purchase price of approximately $20 million, which is inclusive of closing costs and estimated interest costs. The Authority had previously entered into a 20 year lease agreement with the owner that included the purchase option.


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NOTE 8: SUBSEQUENT EVENTS (Continued) At the March 23, 2016 Board of Commissioners meeting, the selection committee as a result of a request for proposals recommended a construction company for the Construction Manager at Risk renovation project for Cruise Terminal 10 at an amount not to exceed approximately $26.2 million. The contract price included project management services from a third party, engineering design services for CCTV and security, threshold inspection services and a comprehensive maintenance assessment for the existing Cruise Terminal 10 parking garage. The above mentioned projects are expected to be financed with proceeds from the Authority’s existing line of credit. Subsequently, it is anticipated that the line of credit will be satisfied using long-term financing provided from bank loans and a capital market (municipal bonds) transaction. As of April 20, 2016, the line of credit was in the process of being extended to December 30, 2016 pending final analysis and credit approval. In November 2015 payment was made to a contractor who had been awarded the construction contracts for Cruise Terminal (CT) 6 and the Welcome Center (Exploration Tower). The payment was recorded in the fiscal year 2015 financial statements which closed out the contractual obligation to the contractor from the Authority for the CT6 portion. The Welcome Center contract remains open and is being reviewed by Authority attorneys. There is currently a claim but no lawsuit has been filed and there is no current litigation on this issue. Both parties are reviewing claims from either side and anticipate there will be an agreement reached during FY 2016.

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REQUIRED SUPPLEMENTARY INFORMATION

Canaveral Port Authority Schedule of Proportionate Share of Net Pension Liability

Last Two Years

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2015 2014

Authority's proportion of the net pension liability (asset) 0.001614396% 0.001750831%

Authority's proportionate share of the net pension liability (asset) 208,521$ 106,826$

Authority's covered-employee payroll 527,368$ 567,320$

Authority's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 39.54% 18.83%

Plan fiduciary net position as a percentage of the total pension liability (Note 2) 92.00% 96.09%

2015 2014Authority's proportion of the net pension liability (asset) 0.00180818% 0.00188468%

Authority's proportionate share of the net pension liability (asset) 176,222$ 184,406$


Authority's proportionate share of the net pension liability (asset) as a percentage of its covered-employee payroll 33.42% 32.50%

Plan fiduciary net position as a percentage of the total pension liability (Note 2) 0.50% 0.99%

Note 1: GASB 68 requires information for 10 years. However, until a full 10-year trend is compiled, the Authority is presenting information for only those years for which information is available.

Note 2: The Plan's fiduciary net position as a percentage of the total pension liability is published in Note 3K of the Plan's Comprehensive Annual Financial Report.

Health Insurance Subsidy (HIS)*

* The amounts presented for each fiscal year were determined as of 6/30.

Florida Retirement System (FRS)*

Canaveral Port Authority Schedule of Contributions

Last Two Years

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2015 2014Contractually required contribution 39,360$ 38,351$

Contributions in relation to the contractually required contribution (39,360) (38,351)

Contribution deficiency (excess) -$ -$


Contributions as a percentage of covered-employee payroll 7.46% 6.76%

2015 2014Contractually required contribution 4,468$ 9,111$

Contributions in relation to the contractually required contribution (4,468) (9,111)

Contribution deficiency (excess) -$ -$


Contributions as a percentage of covered-employee payroll 0.85% 1.61%

Note 1: GASB 68 requires information for 10 years. However, until a full 10-year trend is compiled, t is presenting information for only those years for which information is available.

* The amounts presented for each fiscal year were determined as of 6/30.

Florida Retirement System (FRS)*

Health Insurance Subsidy (HIS)*

Canaveral Port Authority Schedule of Funding Progress of Other Postemployment Benefits

Most Recent Actuarial Valuation

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UAAL asActuarial Unfunded a % of

Actuarial Actuarial Accrued AAL Funded Covered Valuation Value of Liability (UAAL) Ratio Covered Payroll

Date Assets (a) AAL (b) (b-a) (a/b) Payroll (c) ((b-a)/c)

10/01/15 - 915,000$ 915,000$ 0% 9,345,000$ 9.8%12/01/13 - 1,762,000 1,762,000 0% 8,731,000 20.2%07/01/11 - 1,692,000 1,692,000 0% 6,696,000 25.3%

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SUPPLEMENTARY INFORMATION

- 52 -


Canaveral Port Authority Schedule of Revenues, Expenses and Income before Capital Contributions

Compared with Budget

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For period ended September 30, 2015 Budget Actual

VariancePositive

(Negative)Operating revenues

Dockage 6,194,100$ 6,571,994$ 377,894$ Wharfage 45,222,400 44,584,996 (637,404) Leases 5,331,250 5,069,270 (261,980) Water 1,373,000 1,268,708 (104,292) Parking 14,974,900 14,666,522 (308,378) Line handling 1,082,600 1,037,664 (44,936) Permits 93,500 85,526 (7,974) Badging fees 70,000 102,573 32,573 Commercial vehicle 738,500 654,018 (84,482) Miscellaneous 472,000 554,619 82,619 Camping 1,623,300 1,444,462 (178,838) Recreational parking 625,000 744,002 119,002 Fire training 160,500 175,657 15,157 Other park revenues 230,200 264,090 33,890 Exploration Tower 444,000 433,417 (10,583) Concessions 56,400 47,685 (8,715)

Total operating revenues 78,691,650 77,705,203 (986,447)

Non-operating revenuesInvestment earnings 150,000 193,291 43,291 Grant revenue 181,100 73,179 (107,921) Gain on sale/disposal of assets - 107,814 107,814

Total non-operating revenues 331,100 374,284 43,184 Total revenues 79,022,750 78,079,487 (943,263)

Operating expensesOperations

Salaries 2,299,700 2,196,696 103,004 Benefits 1,018,900 995,430 23,470 Utilities 15,900 3,451 12,449 Cruise terminal maintenance 341,900 343,243 (1,343) Other 831,900 829,450 2,450 Maintenance and supplies 101,500 96,789 4,711 Service contracts 1,203,600 1,121,111 82,489 Travel 38,000 15,761 22,239

Total operations 5,851,400 5,601,931 249,469


Compared with Budget (continued)

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VariancePositive

(Negative)Facilities

Salaries 2,326,200 2,164,630 161,570 Benefits 1,450,000 1,228,881 221,119 Utilities 3,493,480 3,380,330 113,150 Fleet maintenance 20,500 4,548 15,952 Other 56,700 47,541 9,159 Maintenance and supplies 945,250 838,020 107,230 Fuel 177,770 150,971 26,799 Service contracts 889,100 685,126 203,974 Travel 2,200 1,551 649

Total facilities 9,361,200 8,501,598 859,602 Public safety

Salaries 417,800 411,472 6,328 Benefits 236,400 206,901 29,499 Security - special events 3,500 712 2,788 Security badging 7,850 4,368 3,482 Fire protection 2,054,350 2,017,754 36,596 Police protection 4,959,100 4,861,060 98,040 Other 32,950 29,532 3,418 Communications services 8,000 5,059 2,941 Training - 132 (132) Maintenance and supplies 30,700 6,418 24,282 Travel 250 155 95

Total public safety 7,750,900 7,543,563 207,337 Parks and recreation

Salaries 525,500 509,054 16,446 Benefits 325,600 314,035 11,565 Maintenance and supplies 13,800 12,995 805 Service contracts 193,100 193,824 (724) Utilities 287,200 294,622 (7,422) Camp store merchandise 86,000 86,019 (19) Other park expense 70,100 68,631 1,469

Total parks and recreation 1,501,300 1,479,180 22,120 Exploration tower

Salaries 281,000 276,018 4,982 Benefits 161,800 158,467 3,333 Maintenance and supplies 13,500 13,112 388 Service contracts 7,400 - 7,400



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VariancePositive

(Negative)Utilities 101,000 100,623 377 Merchandise and supplies 76,200 71,034 5,166 Exhibit and special events 34,000 32,804 1,196 Office expenses 1,300 285 1,015 Advertising 79,000 82,827 (3,827) Promotions 4,700 - 4,700 Travel 2,000 2,394 (394) Other expenses 3,400 7,654 (4,254)

Total exploration tower 765,300 745,218 20,082 Fire training facility

Service contracts 82,300 81,447 853 Utilities 31,900 31,960 (60) Insurance 43,000 42,493 507 Maintenance and supplies 40,500 40,291 209 Other 1,500 470 1,030

Total fire training facility 199,200 196,661 2,539 Commission

Salaries 106,800 104,772 2,028 Benefits 93,500 87,843 5,657 Office 15,100 3,736 11,364 Planning and studies - - - Legal 50,000 57,575 (7,575) Promotions 4,000 16,300 (12,300) Education and seminars 1,000 - 1,000 Travel 43,000 40,619 2,381

Total commission 313,400 310,845 2,555 Executive

Salaries 713,400 712,204 1,196 Benefits 250,000 248,335 1,665 Federal legislative consultant 100,000 96,647 3,353 State legislative consultant 75,000 55,389 19,611 Legal 200,000 183,466 16,534 Office 199,600 198,336 1,264 Planning and studies 75,000 13,386 61,614 Fraud hotline 3,000 2,000 1,000 Travel 39,000 36,694 2,306 Education/seminars 14,000 8,573 5,427

Total executive 1,669,000 1,555,030 113,970



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VariancePositive

(Negative)Finance and accounting

Salaries 769,000 754,934 14,066 Benefits 310,000 303,366 6,634 Office 76,100 76,375 (275) Computer support & training 247,000 253,782 (6,782) Education and seminars 8,750 182 8,568 Travel 6,500 4,363 2,137 Accounting and auditing 150,000 137,152 12,848

Total finance and accounting 1,567,350 1,530,154 37,196 Administrative services

Salaries 1,000,300 1,013,275 (12,975) Benefits 452,800 425,124 27,676 Legal 60,000 48,201 11,799 Insurance 2,588,000 2,439,592 148,408 Office 169,410 160,379 9,031 Personnel training & recruiting 76,000 29,028 46,972 Computer support & training 481,250 450,676 30,574 Education and seminars 9,540 5,480 4,060 Travel 13,350 7,111 6,239

Total administrative services 4,850,650 4,578,866 271,784 Engineering and environmental

Salaries 899,500 809,214 90,286 Benefits 360,500 309,183 51,317 Engineering - general 269,300 349,384 (80,084) Engineering - planning 10,000 - 10,000 Engineering - environment 372,500 417,682 (45,182) Office 75,500 62,635 12,865 Education and seminars 18,700 10,391 8,309 Travel 11,550 11,445 105

Total engineering and environmental 2,017,550 1,969,934 47,616 Business development

Salaries 475,800 473,610 2,190 Benefits 174,500 156,915 17,585 Advertising 297,750 285,287 12,463 Trade development 506,550 501,474 5,076 FTZ development 15,500 4,314 11,186 Travel 111,900 95,677 16,223

Total business development 1,582,000 1,517,277 64,723



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VariancePositive

(Negative)Tenant development

Salaries 150,500 143,239 7,261 Benefits 43,600 38,949 4,651 Office 6,800 2,934 3,866 Land use planning 25,000 20,445 4,555 Lease preparation 305,200 310,896 (5,696) Travel 3,000 2,925 75

Total tenant development 534,100 519,388 14,712 Communications

Salaries 242,800 227,591 15,209 Benefits 104,200 91,005 13,195 Promotions 137,000 84,089 52,911 Publications 150,200 145,672 4,528 Electronic media 94,400 86,522 7,878 Advertising 60,000 64,977 (4,977) Office 8,900 4,822 4,078 Travel 10,500 6,003 4,497

Total communications 808,000 710,681 97,319

Depreciation 29,000,000 31,506,831 (2,506,831) Amortization 1,633,100 1,718,755 (85,655)

Total operating expenses 69,404,450 69,985,912 (581,462) Non-operating expenses

Commissions and fees 86,800 100,474 (13,674) Amortization of bond discounts 182,905 182,870 35 Interest expense 5,957,995 5,639,606 318,389 Loss on disposal of capital assets 347,000 60,692 286,308 Grant administration fee 40,000 36,866 3,134

Total non-operating expense 6,614,700 6,020,508 594,192 Total expenses 76,019,150 76,006,420 12,730 Income before capital contributions and

special item 3,003,600$ 2,073,067$ (930,533)$

Loss on special item (421,690) (421,690) -

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THIS PAGE IS INTENTIONALLY BLANK.

Canaveral Port Authority Schedule of Comparative Revenues, Expenses and Changes in Net Position

- 59 -

* These items have been reclassified to conform to the September 30, 2015 financial statement presentation. ~ These items have been restated due to GASB 68 implementation.

Years ended September 30, 2015 2014 2013 2012 2011

Operating revenuesDockage 6,571,994$ 6,613,071$ 7,518,459$ 8,655,205$ 7,798,486$ Wharfage 44,584,996 40,006,862 35,933,607 32,916,999 27,701,101 Other leases 5,069,270 4,951,406 5,744,753 5,465,805 5,315,084 Water 1,268,708 1,280,968 1,625,124 1,784,161 1,349,609 Parking 14,666,522 13,684,515 12,337,901 12,823,140 9,962,760 Line handling 1,037,664 1,124,910 1,272,129 1,566,581 1,330,848 Permits 85,526 85,031 90,567 105,157 280,958 Badging fees 102,573 61,923 40,185 37,713 174,783Commercial vehicle 654,018 813,757 * 898,947 * 799,538 * 158 *Miscellaneous 554,619 519,910 * 605,018 * 516,615 * 510,303 *Camping 1,444,462 1,298,392 1,189,898 812,690 808,831 Recreational parking 744,002 688,713 601,686 570,272 604,956 Fire training 175,657 159,150 153,512 149,514 106,176 Other park revenues 264,090 226,463 168,536 106,710 85,978 Exploration Tower 433,417 363,188 - - - Concessions 47,685 50,326 43,640 45,392 42,461

Total operating revenues 77,705,203 71,928,585 68,223,962 66,355,492 56,072,492

Non-operating revenuesInvestment earnings 193,291 66,985 226,349 331,304 264,570 Grant revenue 73,179 180,716 1,044,042 2,183,352 2,146,632 Gain on sale/ disposal of assets 107,814 126,384 48,184 40,895 205,761

Total revenues 78,079,487$ 72,302,670$ 69,542,537$ 68,911,043$ 58,689,455$

Operating expensesOperations

Salaries 2,196,696$ 2,028,852$ * 1,678,861$ * 1,440,113$ * 1,078,117$ *Benefits 995,430 ~ 816,967 * ~ 567,365 * 497,870 * 433,802 *Utilities 3,451 4,321 * 19,303 * 2,830 * 62,367 *Travel 15,761 15,649 * 4,912 * 2,218 * 1,674 *Cruise terminal maintenance 343,243 35,092 * 28,920 * 56,150 * 35,903 *Maintenance and supplies 96,789 11,771 * 8,634 * 10,532 * 5,722 *Fuel - - * - * 244,427 * 218,753 *Service contracts 1,121,111 15,820 * 7,076 * 67,034 * 13,769 *Other 829,450 51,290 * 46,842 * 44,203 * 60,493 *

Total operations 5,601,931 2,979,762 2,361,913 2,365,377 1,910,600

FacilitiesSalaries 2,164,630 1,629,547 * 1,452,868 * 1,456,459 * 2,137,971 *Benefits 1,228,881 ~ 1,011,337 * ~ 947,557 * 1,119,746 * 1,370,221 *Service contracts 685,126 2,270,884 * 1,412,394 * 1,112,468 * 538,726 *Utilities 3,380,330 3,340,318 * 3,104,911 * 2,715,428 * 2,247,460 *Maintenance and support 838,020 1,044,515 * 1,108,648 * 1,055,986 * 1,063,656 *Fleet maintenance 4,548 46,028 * 81,698 * 33,745 * 60,657 *Fuel 150,971 271,558 * 252,807 * - * - *Travel 1,551 732 * 37 * 96 * 32 *Other 47,541 10,742 * 16,541 * 30,122 * 17,100 *

Total facilities 8,501,598 9,625,661 8,377,461 7,524,050 7,435,823

Canaveral Port Authority Schedule of Comparative Revenues, Expenses and Changes in Net Position (continued)

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** These items have been reclassified to conform to the September 30, 2013 financial statement presentation.

Years ended September 30, 2015 2014 2013 2012 2011Public Safety

Salaries 411,472 3,106,616 3,332,249 2,837,622 2,459,518Benefits 206,901 ~ 1,465,149 ~ 1,637,826 1,382,925 1,143,389Police protection 4,861,060 173,000 - - 1,781,404Guard services - 6,435 - 393,517 341,171Security - special events 712 5,004 3,218 2,283 11,852Harbor patrol - - - - 3,866Security badging 4,368 3,221 3,410 3,893 95,866Fire protection 2,017,754 1,791,183 1,671,179 1,548,171 1,430,525Travel 155 3,821 7,077 4,111 3,545Communications services 5,059 8,023 15,794 28,308 23,464Training 132 12,316 16,621 7,743 1,033 Maintenance and supplies 6,418 93,746 151,442 143,529 139,282Other 29,532 59,693 108,674 145,869 116,632

Total public safety 7,543,563 6,728,207 6,947,490 6,497,971 7,551,547

Parks and recreationSalaries 509,054 467,572 350,563 278,375 306,608Benefits 314,035 264,247 157,743 118,570 146,811Service contracts 193,824 190,019 173,589 140,384 140,043Utilities 294,622 269,443 214,732 222,294 180,079Maintenance & supplies 12,995 43,263 34,974 25,891 28,776Camp store merchandise 86,019 90,106 38,216 45,500 4,957 Other park expense 68,631 66,374 74,576 60,167 52,831

Total parks and recreation 1,479,180 1,391,024 1,044,393 891,181 860,105

Fire training facilityService contracts 81,447 70,370 63,189 61,285 54,208Utilities 31,960 48,179 35,122 26,863 24,860Insurance 42,493 40,842 37,450 39,905 39,667Maintenance and supplies 40,291 29,404 41,106 56,966 54,506Other 470 470 - 940 -

Total fire training facility 196,661 189,265 176,867 185,959 173,241

CommissionSalaries 104,772 99,910 74,035 52,580 ** 52,670 **Benefits 87,843 ~ 89,386 ~ 91,691 81,114 ** 87,402 **Office 3,736 3,564 3,923 - - Planning and studies - - 45,818 - - Legal 57,575 26,884 - - - Promotions 16,300 2,107 - - - Travel 40,619 17,908 28,368 18,011 ** 14,754 **

Total commission 310,845 239,759 243,835 151,705 154,826

ExecutiveSalaries 712,204 511,540 527,067 557,654 531,428Benefits 248,335 ~ 194,898 ~ 242,214 217,170 ** 207,121 **Federal legislative consultant 96,647 96,000 96,000 39,083 35,000State legislative consultant 55,389 50,000 51,021 49,999 45,833Legal 183,466 435,910 449,026 205,969 192,115Office 198,336 211,705 174,344 107,996 93,056Planning and studies 13,386 57,038 162,538 107,411 6,300


- 61 -

Years ended September 30, 2015 2014 2013 2012 2011Travel 36,694 39,250 30,143 18,748 8,311Community relations cons - - - 30,000 30,000 Fraud hotline 2,000 2,333 1,667 833 2,583 Joint marketing initiative - - 8,750 - - Education and seminars 8,573 4,172 1,890 1,790 4,869

Total executive 1,555,030 1,602,846 1,744,660 1,336,653 1,156,616

Finance and accountingSalaries 754,934 704,048 564,278 488,485 461,153 Benefits 303,366 ~ 274,541 ~ 232,183 199,278 189,089 Office 76,375 60,627 51,458 64,671 50,235 Computer support & training 253,782 220,025 189,098 200,940 166,422 Education and seminars 182 6,768 1,534 1,544 1,819 Travel 4,363 5,171 951 2,591 9,462 Accounting and auditing 137,152 128,510 131,740 86,365 125,175

Total finance andaccounting 1,530,154 1,399,690 1,171,242 1,043,874 1,003,355

Administrative servicesSalaries 1,013,275 1,026,658 535,795 468,264 472,137 Benefits 425,124 ~ 384,693 ~ 252,147 248,486 239,321 Insurance 2,439,592 2,784,698 2,672,787 2,276,130 2,037,368 Office 160,379 162,009 89,276 79,261 75,177 Personnel training & recruiting 29,028 39,681 99,366 43,808 144,564 Computer support & training 450,676 235,685 159,048 137,883 110,666 Education and seminars 5,480 4,007 5,167 2,691 958 Legal 48,201 78,843 - - - Travel 7,111 10,483 2,748 2,477 3,049

Total administrativeservices 4,578,866 4,726,757 3,816,334 3,259,000 3,083,240

Engineering and environmentalSalaries 809,214 843,350 623,465 593,169 484,726Benefits 309,183 ~ 301,126 ~ 244,867 242,073 200,497Engineering - general 349,384 386,865 183,191 231,431 1,168,177Engineering - planning - 16,498 49,500 - - Engineering - environment 417,682 405,835 403,946 453,450 651,586Office 62,635 38,189 70,298 19,233 11,650Education and seminars 10,391 4,731 5,603 2,278 2,450Travel 11,445 4,724 4,160 2,808 1,452

Total engineering and environmental 1,969,934 2,001,318 1,585,030 1,544,442 2,520,538

Business developmentSalaries 473,610 542,727 276,540 316,073 303,155Benefits 156,915 ~ 194,798 ~ 110,391 130,005 107,764Advertising 285,287 248,518 357,105 270,162 259,501Trade development 501,474 235,457 249,750 145,444 163,741FTZ development 4,314 6,776 15,518 6,133 1,725Travel 95,677 94,776 50,605 48,377 42,489

Total business development 1,517,277 1,323,052 1,059,909 916,194 878,375


- 62 -


Tenant developmentSalaries 143,239 71,165 65,557 71,020 64,107Benefits 38,949 ~ 17,991 ~ 18,259 25,107 31,517Office 2,934 1,197 2,061 4,285 2,109Land use planning 20,445 104,078 28,100 6,800 6,300 Lease preparation 310,896 193,405 180,095 169,465 78,531Travel 2,925 - - - -

Total tenant development 519,388 387,836 294,072 276,677 182,564

CommunicationsSalaries 227,591 183,290 155,153 136,089 130,746Benefits 91,005 ~ 80,022 ~ 57,743 49,891 48,329Publications - journals 145,672 175,631 188,527 191,348 146,867Electronic media 86,522 128,758 97,956 80,538 88,371Advertising 64,977 78,043 145,126 66,567 129,600Promotions 84,089 1,202,581 178,288 257,577 178,845Office 4,822 13,419 8,146 6,545 11,906Cove marketplace - - 4,813 49,551 49,031 Travel 6,003 3,985 7,542 4,561 5,343

Total communications 710,681 1,865,729 843,294 842,667 789,038

Exploration towerSalaries 276,018 216,319 - - - Benefits 158,467 115,614 - - - Merchandise and supplies 71,034 51,601 - - - Utilities 100,623 54,488 - - - Exhibit and special events 32,804 9,035 - - - Maintenance and supplies 13,112 130,657 - - - Other expenses 7,654 3,518 - - - Office expense 285 - - - - Service contracts - 67,407 - - - Advertising 82,827 96,909 - - - Cove marketplace - 4,040 - - - Travel 2,394 371 - - -

Total exploration tower 745,218 749,959 - - -

Depreciation 31,506,831 24,666,694 21,932,610 16,935,458 14,709,184Amortization 1,718,755 1,513,820 1,190,100 1,699,522 1,302,388

Total operating expenses 69,985,912 61,391,379 52,789,210 45,470,730 43,711,440

Non-operating expensesCommissions and fees 100,474 432,562 - 2,500 2,500Amortization of bond costs

and discounts 182,870 167,489 237,015 343,349 388,897Interest expense 5,639,606 3,707,926 3,980,652 3,365,964 2,808,058Loss on disposal of capital assets 60,692 2,723,558 - - - Federal grant expense - 50,500 53,474 48,472 168,648Grant administration fee 36,866 69,534 48,300 61,500 120,400

Total non-operating expense 6,020,508 7,151,569 4,319,441 3,821,785 3,488,503 Total expenses 76,006,420$ 68,542,948$ 57,108,651$ 49,292,515$ 47,199,943$


- 63 -

Years ended September 30, 2015 2014 2013 2012 2011Total operating revenues 77,705,203$ 71,928,585$ 68,223,962$ 66,355,492$ 56,072,492$ Total operating expenses 69,985,912 61,391,379 52,789,210 45,470,730 43,711,440 Net operating income 7,719,291$ 10,537,206$ 15,434,752$ 20,884,762$ 12,361,052$

Total non-operating revenues 374,284$ 374,085$ 1,318,575$ 2,555,551$ 2,616,963$ Total non-operating expenses 6,020,508 7,151,569 4,319,441 3,821,785 3,488,503

Net non-operating loss (5,646,224)$ (6,777,484)$ (3,000,866)$ (1,266,234)$ (871,540)$

Total revenues 78,079,487$ 72,302,670$ 69,542,537$ 68,911,043$ 58,689,455$ Total expenses 76,006,420 68,542,948 57,108,651 49,292,515 47,199,943 Net income before capital

contributions and special item 2,073,067 3,759,722 12,433,886 19,618,528 11,489,512 Special Item (421,690) (693,999) - - - Capital contributions 27,832,677 13,184,167 10,005,978 6,407,256 10,724,264Changes in net position 29,484,054$ 16,249,890$ 22,439,864$ 26,025,784$ 22,213,776$

Canaveral Port Authority Schedule of Comparative Operating Revenues by Activity

- 64 -


Cruise ships 63,006,688$ 58,284,973$ 53,135,894$ 52,401,125$ 42,270,635$ Cargo ships 5,123,196 4,425,353 5,551,327 5,344,961 5,872,169

Total ship related operating revenue 68,129,884 62,710,326 58,687,221 57,746,086 48,142,804

Land leases 5,069,270 4,951,406 5,744,753 5,465,805 5,315,084 Park operations 2,500,239 2,263,894 2,003,759 1,535,064 1,542,226 Miscellaneous 2,005,810 2,002,959 1,788,229 1,608,537 1,072,378

Total non-ship relatedoperating revenue 9,575,319 9,218,259 9,536,741 8,609,406 7,929,688

Total operating revenue 77,705,203$ 71,928,585$ 68,223,962$ 66,355,492$ 56,072,492$ - - - - -

Canaveral Port Authority Schedule of Construction in Progress and Capital Costs Compared with Budget

(Prior to Transfer of Completed Projects to Capital Assets)

- 65 -

Budget

Year Ended September 30, 2015Prior

YearsCurrent

YearCumulative

TotalCumulative

Total

Road Improvements $ 1,139 $ (1,139) -$ $ 201,299 Portwide Parking Lot Improvement 343,589 87,337 430,926 1,847,589 Security Fencing/Lighting - - - 60,000 Communications Equipment - 14,056 14,056 25,000 Maintenance Dredging 52,923 1,034,372 1,087,295 1,224,000 Other Computer Equipment - 125,897 125,897 126,184 CT 6/7 Waterside & Dredging - - - 20,502 Park Upgrades - 2,005 2,005 104,951 Improve Piers,Bldgs,Structures 100 2,357,229 2,357,329 2,670,587 Northside Land Improvements 494,127 5,425 499,552 695,758 NS Land Impr-20 Acres Paving 201,427 16,153,841 16,355,268 17,552,000 Container Cranes Project 6,718,754 5,506,585 12,225,339 12,500,000 Marine Terminal Ph2-10 Acre - 25,933 25,933 30,000 Fire Fighting Equipment - 62,366 62,366 78,000 Fire Fighting Equipment-CPA - 72,085 72,085 75,027 Utilities and Improvements - 341,870 341,870 458,432 Minor Equipment - 14,810 14,810 35,066 New/Replacement Vehicles - 324,414 324,414 579,187 Welcome Center - 850,499 850,499 1,194,636 Welcome Center-Exhibits/Movies - 18,583 18,583 20,617 CT Furniture/Equipment - - - 355,520 Northside Cargo Backup Area 2,453,245 2,951,346 5,404,591 6,614,076 Northside Pier Rejuvenation 250,668 80,041 330,709 375,000 Northside Stormwater Improvement - 11,490 11,490 1,465,813 George King Blvd Improvements - - - 79,126 Stormwater Improvements NPDES - - - 100,000 WTB Deepen/Widen/Cutoff 3,468,242 11,000 3,479,242 3,668,242 North Cargo Pier 8 1,371,255 78,859 1,450,114 1,571,255 Financial System Upgrade - 9,613 9,613 19,015 South Side Pier Rejuvenation 45,092 360,898 405,990 414,886 SCP4 East Extension/Widening 274,134 - 274,134 274,134 Portwide Signage - 72,960 72,960 117,630 Cove Roads Phase 2 940,579 2,388,727 3,329,306 3,329,516 Equipment 3,700 50,895 54,595 200,098 Landscape & Rec Improvements - - - 5,281 CT 5 Terminal Upgrades 33,500 3,094,531 3,128,031 3,133,500

Actual

Canaveral Port Authority Schedule of Construction in Progress and Capital Costs Compared with Budget

(Prior to Transfer of Completed Projects to Capital Assets) (continued)

- 66 -

BudgetPrior

YearsCurrent

YearCumulative

TotalCumulative

Total

CT10 Terminal Improvements 4,996 473,402 478,398 569,996 CT10 Waterside Berth Expansion 13,799 - 13,799 13,999 Maritime Ctr Tenant Improvement 18,192 360,973 379,165 3,300,647 CT# 8 Renovations 20,263 9,600 29,863 53,283 WTB Channel Widen/Inner Reach 2,583,212 672,618 3,255,830 4,781,726 WTB Phase 1 Widen & Deepen 13,952,055 16,848,737 30,800,792 38,196,224 WTB Channel Entrance Phase 2 247,506 1,000,272 1,247,778 1,500,000 WTB-Cargo Area Deepening - 195,759 195,759 500,000 MTB Dredging - 1,007,787 1,007,787 1,700,000 CT#6 Cruise Terminal 1,088,448 131,575 1,220,023 1,220,307 CT6 Retail Build Out 5,800 - 5,800 652,365 CT6 Gangway Rehab 446 400,649 401,095 800,000 North Cargo Pier 5 21,255,843 (189,194) 21,066,649 21,471,211 North Cargo Pier 6 13,984,634 637,277 14,621,911 14,625,396 North Cargo Piers 1&2 - - - 25,850 CPA Int'l Commerce Center Improvement 90,144 (12,153) 77,991 98,259 PSGP-FY2013 Projects 346,717 1,023,921 1,370,638 1,395,000 PSGP-FY2014 Projects - 702,732 702,732 1,072,000 Commercial Access & Billing 15,000 - 15,000 867,000 Improved Fender System - 310,000 310,000 310,669 SR 401 Improvements 181,174 416,140 597,314 1,499,750 Tug Piers 75,003 72,708 147,711 1,200,293 CT#1 Cruise Terminal 78,398,793 26,341,009 104,739,802 106,795,491 Rail Connectivity Ph1 (State) 213,411 1,432,809 1,646,220 2,950,000 Cargo Berth & Terminal Phase 2 - 15,804 15,804 200,000 NC Area Tanker/Multipurpose - 19,874 19,874 250,000 Land Acquisitions 409,211 7,335,287 7,744,498 8,769,772 CT Rental Car Facility 64,209 3,528 67,737 89,860 CT Visitor Center - 54,756 54,756 60,000 Auto Terminal - 6,108,922 6,108,922 10,000,000 EUL-USAF 32,608 390,263 422,871 625,000 SR524 ILC - 145 145 1,000 Titusville Logistics Center - 9,665 9,665 10,000

149,653,938$ 101,881,393$ 251,535,331$ 286,827,025$

Actual

Canaveral Port Authority Schedule of Expenditures of Federal Awards and State Financial Assistance

For the fiscal year ended September 30, 2015

- 67 -

Note: This schedule is prepared on the accrual basis of accounting.

Federal Agency/ Program Title/ CFDAPass-through Entity Number Contract/Grant Number Expenditures

Federal Programs:

Department of Homeland SecurityDirect Programs

Port Security Grant ProgramFY2014 Port Security Grant 97.056 EMW-2014-PU-00158-S01 $ 533,211 FY2013 Port Security Grant 97.056 EMW-2013-PU-00234-S01 806,337

Subtotal 1,339,548

Total expenditures of federal awards $ 1,339,548

Canaveral Port Authority Schedule of Expenditures of Federal Awards and State Financial Assistance

(continued) For the fiscal year ended September 30, 2015

- 68 -

Note: This schedule is prepared on the accrual basis of accounting.

State Agency/ Program Title/ CSFAPass-through Entity Number Contract/Grant Number Expenditures

State Projects:

Florida Department of TransportationDirect Programs Seaport Grants

North Cargo Development 55.005 APU24/422533-1-94-01 2,368,286$ North Cargo Berths 5 & 6 and Dredging

of North Cargo Berth 6 55.005 AQN37/431768-1-94-01 1,473,676 State Route 401 Improvements 55.005 AQX94/428367-1-94-01 385,147 Widen West Turning Channel 55.005 AR955/431203-1-94-01 7,012,637 North Cargo Development - Stormwater

and Marine Cargo Development 55.005 ARN50/422533-2-94-01 7,817,051 Cruise Terminal 1 Gangway and Dredging 55.005 ARP64/735031-1-94-01 1,756,551

Subtotal 20,813,348 Widen West Turning Channel Widening

and Deepening 55.034 AR956/431203-1-94-02 5,600,777 Total Department of Transportation 26,414,125

Florida Department of Environmental ProtectionDirect Programs

Canaveral Inlet Management Plan 37.003 12BE1 2,979 Canaveral Inlet Management Plan 37.003 15BE2 70,200

Total Department of Environmental Protection 73,179

Florida Department of Highway Safety and Motor VehiclesIndirect Programs

Passed through the St. Johns River WaterManagement District

State of Florida Indian River Lagoon License Plate ProgramCanaveral Inlet Lionfish Battle 76.01 27807 9,549

Total expenditures of state financial assistance 26,496,853$

STATISTIC

AL SEC

TION

-69-

STATISTICAL SECTION (unaudited)

-70-

CANAVERAL PORT AUTHORITY

Statistical Section Narrative

This section of the Authority’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and supplementary information says about the Authority’s overall financial position. This information has not been audited. PAGE A. FINANCIAL TRENDS 71-83 These schedules contain trend information to help the reader understand how the Authority’s financial performance and well-being has changed over time. The Authority engages in business-type activities and presents revenues by major source and distinguishes between operating and non-operating revenues and expenses. B. REVENUE CAPACITY 84-91 These schedules contain information to help the reader assess the Authority’s most significant revenue sources: cargo and cruise revenue. C. DEBT CAPACITY 92-94 These schedules present information that assist the reader in analyzing the affordability of the Authority’s current levels of outstanding debt and the Authority’s ability to issue additional debt in the future. Details regarding the Authority’s outstanding debt can be found in the notes to the financial statements. D. DEMOGRAPHIC AND ECONOMIC INFORMATION 95-97 These schedules offer demographic and economic indicators that are commonly used for financial analysis and that can enhance one’s understanding of the Authority’s present and ongoing financial status. E. OPERATING INFORMATION 98-104 These schedules contain information about the Authority’s operations and resources to help the reader understand how the Authority’s financial information relates to the services it provides and the activities it performs. Source: Unless otherwise noted, the information in these schedules is derived from the annual financial reports for the relevant year.

Schedule A-1

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Net Position (in thousands)

Fiscal Years ended September 30, 2006 through 2015

Net Investment RestrictedFiscal in Capital for Debt Unrestricted TotalYear Assets Service

2006 142,849$ 6,016$ 30,735$ 179,600$

2007 * 155,572 6,016 30,453 192,041

2008 * 156,102 6,016 32,909 195,027

2009 167,915 6,016 29,292 203,223

2010 170,233 6,016 35,116 211,365

2011 186,803 6,016 40,760 233,579

2012 232,306 4,566 22,732 259,604

2013 ** 265,049 4,566 11,534 281,149

2014 ** 245,995 4,566 46,838 297,399

2015 326,401 1,825 (1,343) 326,883

* Balances have been reclassified to conform to September 30, 2009 financial presentation. ** Balances have been restated as of September 30, 2014 and 2013 due to implementing GASB 68

Schedule A-2

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Operating Revenues by Source


ForeignFiscal Line- Trade Year Dockage Wharfage Leases Water Parking handling Zone

2006 7,239,781$ 24,595,271$ 3,823,550$ 1,324,480$ 9,116,579$ 1,435,631$ 14,100$

2007 6,049,562 23,762,323 4,113,670 1,272,840 9,014,333 1,365,856 17,155

2008 5,146,752 22,013,965 ** 5,234,516 1,202,840 9,343,286 1,190,739 34,453

2009 5,179,737 18,564,588 ** 4,961,324 1,198,144 9,871,355 1,141,142 29,968

2010 6,124,205 21,026,079 5,325,455 1,348,997 9,580,489 1,089,165 17,500

2011 7,798,486 27,701,101 5,315,084 1,349,609 9,962,760 1,330,848 13,500

2012 8,655,205 32,916,999 5,465,805 1,784,161 12,823,140 1,566,581 17,042

2013 7,518,459 35,933,607 5,744,753 1,625,124 12,337,901 1,272,129 10,000

2014 6,613,071 40,006,862 4,951,406 1,280,968 13,684,515 1,124,910 10,000

2015 6,571,994 44,584,996 5,069,270 1,268,708 14,666,522 1,037,664 10,750

* These items have been reclassified to conform to the September 30, 2009 financial statement presentation.** These items have been reclassified to conform to the September 30, 2010 financial statement presentation.*** These items have been reclassified to conform to the September 30, 2015 financial statement presentation.

Schedule A-2 (cont'd)

-73-


Operating Revenues by Source


Camping and FireFiscal Recreational Exploration Training CommercialYear Parking Tower Facility Vehicle Miscellaneous Total

2006 1,169,178$ -$ 107,787$ -$ 624,601$ 49,450,958$

2007 1,291,583 * - 124,899 - 559,560 * 47,571,781

2008 1,309,645 * - 132,865 - 496,658 * 46,105,719 **

2009 1,606,984 - 130,163 - 481,029 43,164,434 **

2010 1,539,766 - 107,505 - 861,397 47,020,558

2011 1,542,226 - 106,176 158 *** 952,544 *** 56,072,492

2012 1,535,064 - 149,514 799,538 *** 642,443 *** 66,355,492

2013 2,003,760 - 153,512 898,947 *** 725,770 *** 68,223,962

2014 2,263,894 363,188 159,150 813,757 *** 656,864 *** 71,928,585

2015 2,500,239 433,417 175,657 654,018 731,968 77,705,203

Schedule A-3

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Operating Revenues by Activity


Fiscal Layberths ParkYear Cruise Ships Cargo Ships and Other Operations

2006 36,865,544$ 7,039,393$ 110,122$ 1,169,178$

2007 36,348,454 5,151,315 - 1,291,583 *

2008 34,969,584 ** 3,948,920 - 1,309,645 *

2009 32,037,675 ** 3,936,169 - 1,606,984

2010 34,488,305 4,686,092 - 1,539,766

2011 42,270,635 5,872,169 - 1,542,226

2012 52,401,125 5,344,961 - 1,535,064

2013 53,135,894 5,551,327 - 2,003,759

2014 58,284,973 4,425,353 - 2,263,894

2015 63,006,688 5,123,196 - 2,500,239

* These items have been reclassified to conform to the September 30, 2009 financial statement presentation. ** These items have been reclassified to conform to the September 30, 2010 financial statement presentation.


-75-


Operating Revenues by Activity


Fiscal ForeignYear Land Leases Trade Zone Other Total

2006 3,564,605$ 14,100$ 688,016$ 49,450,958$

2007 4,113,670 17,155 649,604 * 47,571,781

2008 5,234,516 34,453 608,601 * 46,105,719 **

2009 4,961,324 29,968 592,314 43,164,434 **

2010 5,325,455 17,500 963,440 47,020,558

2011 5,315,084 13,500 1,058,878 56,072,492

2012 5,465,805 17,042 1,591,495 66,355,492

2013 5,744,753 10,000 1,778,229 68,223,962

2014 4,951,406 10,000 1,992,959 71,928,585

2015 5,069,270 10,750 1,995,060 77,705,203

Schedule A-4

-76-


Non-Operating Revenues


Fiscal Interest GrantYear Earnings Revenue Other Total

2006 1,633,515$ 78,577$ 4,539$ 1,716,631$

2007 1,961,062 61,698 - 2,022,760

2008 650,194 * 384,047 38,554 1,072,795 *

2009 410,363 271,809 42 682,214

2010 427,989 1,327,866 39,122 1,794,977

2011 264,570 2,146,632 205,761 2,616,963

2012 331,304 2,183,352 40,895 2,555,551

2013 226,349 1,044,042 48,184 1,318,575

2014 66,985 180,716 126,384 374,085

2015 193,291 73,179 107,814 374,284

* These items have been reclassified to conform to the September 30, 2009 financial statement presentation.

- 77 -

Schedule A-5


Total Revenue by Activity - FY2015

Land Leases6%

Other Operating3%

Cargo Ships7%

Cruise Ships81%

Park Operations3%

$78,079,487

Schedule A-6

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Ex-Fiscal Public Parks & ploration FireYear Operations Facilities Safety Recreation Tower Training Commission Executive

2006 8,850,042$ -$ 6,066,899$ 1,015,770$ -$ 154,221$ 126,193$ *** 1,334,682$ ***

2007 9,314,809 - 6,553,510 925,753 - 195,585 122,928 *** 1,302,362 ***

2008 * 10,148,744 - 7,221,901 1,177,051 - 189,165 163,155 *** 1,098,373 ***

2009 ** 9,333,672 - 6,779,382 1,226,187 - 174,658 129,910 *** 1,124,743 ***

2010 8,731,013 - 7,030,095 969,248 - 164,207 138,096 *** 1,157,410 ***

2011 1,910,600 **** 7,435,823 **** 7,551,547 860,105 - 173,241 154,826 *** 1,156,616 ***

2012 2,365,377 **** 7,524,050 **** 6,497,971 891,181 - 185,959 151,705 *** 1,336,653 ***

2013 2,361,913 **** 8,377,461 **** 6,947,490 1,044,393 - 176,867 243,835 1,744,660

2014 2,979,762 **** 9,625,661 **** 6,728,207 **** 1,391,024 749,959 189,265 239,759 **** 1,602,846 ****

2015 5,601,931 8,501,598 7,543,563 1,479,180 745,218 196,661 310,845 1,555,030

* FY2008 expenses have been reclassified to conform to the September 30, 2009 financial statement presentation.** FY2009 expenses have been reclassified to conform to the September 30, 2010 financial statement presentation.*** FY2006-2012 expenses have been reclassified to conform to the September 30, 2013 financial statement presentation.**** FY2011-2014 expenses have been reclassified to conform to the September 30, 2015 financial statement presentation.


Operating Expenses



-79-


Operating Expenses


Admini- Engineering Business TenantFiscal Finance & strative & Environ- Develop- Develop- Comm-Year Accounting Services mental ment ment unications Depreciation Amortization Total

2006 2,273,668$ -$ 1,154,735$ 902,485$ 695,808$ 635,771$ 9,279,605$ 146,743$ 32,636,622$

2007 4,160,274 - 1,362,156 823,939 460,669 572,227 9,772,259 137,843 35,704,314

2008 * 846,443 3,293,793 2,352,466 934,804 489,910 592,642 12,436,688 1,076,006 42,021,141

2009 ** 910,855 2,942,404 1,659,732 805,548 344,705 582,543 12,733,871 1,227,743 39,975,953

2010 847,530 2,855,999 1,518,036 713,148 246,852 624,356 13,557,270 1,227,075 39,780,335

2011 **** 1,003,355 3,083,240 2,520,538 878,375 182,564 789,038 14,709,184 1,302,388 43,711,440

2012 **** 1,043,874 3,259,000 1,544,442 916,194 276,677 842,667 16,935,458 1,699,522 45,470,730

2013 **** 1,171,242 3,816,334 1,585,030 1,059,909 294,072 843,294 21,932,610 1,190,100 52,789,210

2014 **** 1,399,690 4,726,757 2,001,318 1,323,052 387,836 1,865,729 24,666,694 1,513,820 61,391,379

2015 1,530,154 4,578,866 1,969,934 1,517,277 519,388 710,681 31,506,831 1,718,755 69,985,912

* FY2008 expenses have been reclassified to conform to the September 30, 2009 financial statement presentation.** FY2009 expenses have been reclassified to conform to the September 30, 2010 financial statement presentation.*** FY2006-2012 expenses have been reclassified to conform to the September 30, 2013 financial statement presentation.**** FY2011-2014 expenses have been reclassified to conform to the September 30, 2015 financial statement presentation.

Schedule A-7

-80-


Non-Operating Expenses


Loss onFiscal Interest & Commissions Capital AssetYear Amortization & Fees Disposals Other Total

2006 3,055,330$ 2,963$ 104,602$ 337,909$ 3,500,804$

2007 2,907,200 500 65,192 84,843 3,057,735

2008 ** 2,890,928 1,500 4,559 554,137 * 3,451,124

2009 2,742,600 1,000 21,888 181,580 2,947,068

2010 2,613,926 3,000 - 357,709 2,974,635

2011 3,196,955 2,500 - 289,048 3,488,503

2012 3,709,313 2,500 - 109,972 3,821,785

2013 4,217,667 - - 101,774 4,319,441

2014 3,875,415 432,562 2,723,558 120,034 7,151,569

2015 5,822,476 100,474 60,692 36,866 6,020,508

* Includes $517,137 in casualty loss from a tropical storm.** FY2008 expenses have been reclassified to conform to the September 30, 2009 financial statement presentation.

Schedule A-8

-81-

NetNet Non-Operating Income before

Fiscal Operating Revenue or Contributions Special Capital Change inYear Income (Expense) & Special Items Item Contributions Net Position

2006 16,814,336$ (1,784,173)$ 15,030,163$ -$ 2,691,176$ 17,721,339$

2007 11,867,467 (1,034,975) 10,832,492 - 1,609,053 12,441,545

2008 4,084,578 (2,378,329) 1,706,249 - 1,279,271 2,985,520

2009 3,188,481 (2,264,854) 923,627 - 7,272,236 8,195,863

2010 7,240,223 (1,179,658) 6,060,565 - 2,081,489 8,142,054

2011 12,361,052 * (871,540) 11,489,512 * - 10,724,264 22,213,776 *

2012 20,884,762 (1,266,234) 19,618,528 - 6,407,256 26,025,784

2013 15,434,752 (3,000,866) 12,433,886 - 10,005,978 22,439,864

2014 10,537,206 ** (6,777,484) 3,759,722 ** (693,999) 13,184,167 16,249,890 **

2015 7,719,291 (5,646,224) 2,073,067 (421,690) 27,832,677 29,484,054

* FY 2011 income has been reclassified to conform to the September 30, 2012 financial statement presentation.** FY 2014 income has been reclassified to conform to the September 30, 2015 financial statement presentation.


Changes in Net Position


Depreciation/Amortization44%

Exploration Tower1%

Tenant Development1%

Communications1%

Business Development2%

Parks & Recreation2%

Finance & Accounting2%

Executive2%

Engineering &Environmental3%

AdministrativeServices6%

Operations7%

Non-Operating8%

Public Safety10%

Facilities11%

- 82-

$76,006,420


Total Expenses - FY2015

Schedule A-9

- 83 -


Operating Revenues & Expenses FY1995 - FY2015

Schedule A-10

Mill

ions

of D

olla

rs

Fiscal Years

0

10

20

30

40

50

60

70

80

20152010200520001995

0

10

20

30

40

50

60

70

80

'2015''2010''2005''2000''1995'

OPERATING REVENUES OPERATING EXPENSES

Schedule B-1

-84-


Cargo Revenue


Commodity 2006 2007 2008 2009 2010

Petroleum 1,356,691$ 1,296,561$ 1,033,953$ 1,187,035$ 1,823,733$ Cement*** 2,379,207 912,321 64,922 20,000 60,000 Newsprint 294,397 302,014 191,926 170,013 145,061 Scrap Metal - - - - 13,841 **Salt 308,717 313,311 357,481 369,065 388,900 Pumice 50,965 30,973 - 13,823 - Lumber 1,331,859 523,960 277,060 90,569 33,473 Concentrate 114,089 125,504 89,105 103,549 105,044 Single Strength Juice 158,341 76,193 117,601 195,985 108,655 Fresh Citrus/Produce - 182,759 216,511 239,381 80,894 Bananas 7,752 - - - - General Misc.* 232,684 259,871 677,448 412,478 856,304 Automobiles/Trucks 240,861 313,707 379,940 224,890 235,968 Bulk Fertilizer - - - - 16,034 **Limestone/Aggregate 70,372 323,435 268,474 582,620 388,535 Granite/Rock 212,489 287,533 105,520 243,363 211,784 Slag/Sand 280,969 203,173 168,979 83,398 217,866

Totals 7,039,393$ 5,151,315$ 3,948,920$ 3,936,169$ 4,686,092$

* Included in FY2010 $536,652, FY2011 $740,815, FY2012 $496,002, FY2013 $479,268, FY14 $469,290 in revenue on northside and southside cargo contracts from required minimum guarantees. ** FY2010 balances have been reclassified to appropriate commoditites out of the General Miscellaneous category.*** FY2009-2014 Revenue is from a contract with required shortage minimum guarantee.

Schedule B-1 (cont'd)

-85-


Cargo Revenue


Commodity 2011 2012 2013 2014 2015

Petroleum 2,628,105$ 2,587,916$ 2,427,711$ 2,017,413$ 2,581,687$ Cement*** 40,000 40,000 35,000 73,153 162,868 Newsprint - - - 22,330 - Scrap Metal 20,671 - - - 129,612 Salt 421,546 417,027 463,705 332,004 269,032 Pumice - - - - - Lumber 23,418 15,360 36,934 29,759 38,958 Concentrate 161,650 139,218 138,119 108,709 108,458 Single Strength Juice 122,630 76,018 54,561 61,909 62,146 Fresh Citrus/Produce 41,335 544 532 - - Bananas - - 3,515 - - General Misc.* 1,397,355 1,301,413 1,187,739 715,900 385,549 Automobiles/Trucks 214,324 104,976 110,817 111,276 121,000 Bulk Fertilizer 82,874 98,205 175,307 106,130 129,218 Limestone/Aggregate 314,572 256,786 321,641 387,007 288,768 Granite/Rock 224,285 119,657 320,386 275,022 344,450 Slag/Sand 179,404 187,841 275,360 184,741 501,450

Totals 5,872,169$ 5,344,961$ 5,551,327$ 4,425,353$ 5,123,196$

* Included in FY2010 $536,652, FY2011 $740,815, FY2012 $496,002 FY2013 $479,268 FY14 $469,290 in revenue on northside and southside cargo contracts from required minimum guarantees. ** FY2010 balances have been reclassified to appropriate commoditites out of the General Miscellaneous category.*** FY2009-2015 Revenue is from a contract with required shortage minimum guarantee.

-86 -


Cargo Revenue FY2006 - FY2015

Schedule B-2

Fiscal Years

Mill

ions

of D

olla

rs0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000Bulk Fertilizer

Scrap Metal

Other

Granite/Aggregate

Limestone

Automobiles/Trucks

Concentrate/Juice

Slag/Sand

Fresh Citrus/Produce

Lumber

Salt

Newsprint

Cement

Petroleum

2015201420132012201120102009200820072006Bulk Fertilizer

Scrap Metal

Other

Granite/Aggregate

Limestone

Automobiles/Trucks

Concentrate/Juice

Slag/Sand


Lumber

Salt

Newsprint

Cement

Petroleum

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

2014201320122011201020092008200720062005

0

1

2

3

4

5

6

7

8

2014 201520132012201120102009200820072006

Cement

Other*

Newsprint


Automobiles/Trucks

Limestone/Aggregate

Slag/Sand

Salt

Petroleum

Concentrate/Juice

Lumber

Granite/Rockupdate this chart above with new data and then braek apart just the bar graphs and overlay on to chart on page.... apply bevel already set up as graphic style... expand to fill width...slant 179 to straigthen bars after extruded .... watch for RED color and replace as needed.

Scrap Metal

Bulk Fertilizer

-87 -

$5,123,196


Cargo Revenue - FY2015

Schedule B-3

Petroleum 50%Lumber1%Automobiles/Trucks2%Cement 3%Scrap Metal 3%Bulk Fertilizer 3%Concentrate/Juice 3%Salt 5%Limestone/Aggregate 6%Granite/Rock 7%Other 7%Slag/Sand 10%

Schedule B-4

-88-


Revenue Passengers


Fiscal Greater ThanYear One Day Cruises One Day Cruises Total

2006 1,759,344 2,782,712 4,542,056

2007 1,557,506 2,718,416 4,275,922

2008 1,089,456 2,484,504 3,573,960

2009 782,336 2,468,439 3,250,775

2010 80,200 2,722,751 2,802,951

2011 44,469 3,100,199 3,144,668

2012 243,227 3,761,056 4,004,283

2013 269,408 3,717,586 3,986,994

2014 303,652 3,863,606 4,167,258

2015 308,441 3,860,225 4,168,666

- 89 -


Revenue Passengers FY2006 - FY2015

Schedule B-5

Thou

sand

s of

Rev

enue

Pas

seng

ers

One Day Cruises Longer Cruises

Fiscal Years

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

5000000

'2015''2014''2013''2012''2011''2010''2009''2008''2007''2006'

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2015201420132012201120102009200820072006

Schedule B-6

-90-

FY 2006 FY 2006 Percentage ofCustomer Revenue Rank Total Revenue

Carnival Cruise Lines 11,844,538$ * 1 23.1%

Eller Maritime Services, LLC 10,835,648 * 2 21.2%

Florida Transportation 7,554,434 * 3 14.8%

Sterling Cruise Lines 5,438,219 4 10.6%

Ambassador Services 2,978,070 5 5.8%

Coastal Fuels Marketing & Refining 1,156,068 6 2.3%

Fillette Green & Company 1,099,512 7 2.1%

Mid Florida Freezers 970,283 8 1.9%

Oceans Casino Cruises 957,773 9 1.9%

Civil & Marine 461,178 10 0.9%

Totals 43,295,723$ 84.6%

* These amounts differ from those in the notes to the financial statements due to the inclusion of parking lot revenue.

This report is generated by the Finance Department.


Ten Largest Revenue Generating Customers

Fiscal Years ended September 30, 2006 and 2015

Schedule B-6 (cont'd)

-91-

FY 2015 FY 2015 Percentage ofCustomer Revenue Rank Total Revenue

Magical Cruise Company 21,431,190$ * 1 27.4%

Carnival Cruise Lines 18,735,126 * 2 24.0%

MLSBC Cruise Ltd. 16,991,100 * 3 21.8%

Victory Casino Cruise 2,341,744 * 4 3.0%

Ambassador Services, Inc & LLC 2,102,467 5 2.7%

Norwegian Cruise Line 1,640,900 6 2.1%

Seaport Canaveral 1,601,927 7 2.0%

Intercruises Shoreside 1,460,574 * 8 1.9%

Moran Gulf Shipping 532,854 9 0.7%

TransMontaigne Terminals LLC 523,497 10 0.7%

Totals 67,361,379$ 86.3%

* These amounts differ from those in the notes to the financial statements due to the inclusion of parking lot revenue.

This report is generated by the Finance Department.


Ten Largest Revenue Generating Customers

Fiscal Years ended September 30, 2006 and 2015

Schedule C-1

-92-


Revenue Bond Coverage


Net Revenue Fiscal Gross Revenue Total Expenses AvailableYear (1) (2) for Debt Service

2006 51,084,473$ 23,540,121$ 27,544,352$

2007 49,532,843 25,795,555 23,737,288

2008 46,757,126 * 29,027,084 * 17,730,042

2009 44,132,230 26,015,339 18,116,891

2010 47,588,935 24,998,990 22,589,945

2011 56,337,062 27,702,248 28,634,814

2012 66,686,796 26,838,250 39,848,546

2013 68,450,311 29,666,500 38,783,811

2014 71,995,570 35,643,427 ** 36,352,143

2015 77,898,494 36,860,800 41,037,694

(1) Gross revenue includes operating revenues, investment earnings, adding back bad debt per bond covenant.

(2) Expenses do not include non-cash outlays such as depreciation, amortization, bad debt expense, loss on equipment disposals, interest or any grant related expenses. * These items have been reclassified to conform to the FY09 financial statement presentation.

Schedule C-1 (cont'd)

-93-


Revenue Bond Coverage


Fiscal CoverageYear Principal Interest Total (3)

2005 3,235,000$ 2,634,614$ 5,869,614$ 4.69

2007 3,485,000 2,526,389 6,011,389 3.95

2008 3,575,000 2,437,154 6,012,154 2.95

2009 4,585,000 3,722,974 8,307,974 2.18

2010 4,610,000 3,695,413 8,305,413 2.72

2011 8,106,324 4,119,687 12,226,011 2.34

2012 7,679,461 4,611,109 12,290,570 3.24

2013 7,298,426 4,033,486 11,331,912 3.42

2014 8,295,063 3,779,364 12,074,427 3.01

2015 12,346,205 6,834,674 19,180,879 2.14

(3) Required coverage is 1.25

Debt Service Requirements

Schedule C-2

-94-

Ratio of Total DebtFiscal Revenue Capital Notes Total Debt to Ship PerYear Bonds Leases Payable Debt Revenue Passenger

(1) (2)

2006 62,351,205$ * 69,626$ -$ 62,420,831$ 142% 14$

2007 59,099,768 * 35,649 1,000,000 60,135,417 145% 14

2008 87,733,284 * - 911,739 88,645,023 228% 25

2009 83,358,532 * - 831,022 84,189,554 234% 26

2010 78,960,608 * - 745,328 79,705,936 203% 28

2011 113,068,377 * - 654,348 113,722,725 236% 36

2012 104,807,323 * - 557,757 105,365,080 182% 26

2013 98,573,438 ** - 455,209 99,028,647 169% 25

2014 209,610,409 *** - 346,335 209,956,744 335% 50

2015 197,369,979 *** - 230,745 197,600,724 290% 47

(1) Ship Revenue (Cruise and Cargo) used to find Ratio to Debt can be found in Schedule A-3.

(2 ) To find Total Debt per Passenger Schedule B-4 was used.

* Revenue bonds payable net of unamortized discounts, premiums, and loss on refunding.** FY2013 has been restated due to implementation of GASB 65 which requires deferred loss on refunding to be shown as an asset, deferred outflow of resources, instead of netted against revenue bonds to conform to the FY2014 financial statement presentation. *** Revenue bonds payable net of unamortized discounts and premiums.


Ratios of Outstanding Debt By Type


Schedule D-1

-95-


Demographic Statistics for Brevard County(Estimates)


Personal Per CapitaFiscal Income Personal Unemployment Year Population (in thousands) Income Rate

(1) (2) (2) (1)

2006 543,050 18,891,718$ 35,303$ 3.5%

2007 552,109 19,748,200 36,590 4.6

2008 556,213 20,440,080 37,686 7.3

2009 555,657 19,521,711 36,011 11.3

2010 543,376 19,945,159 36,675 11.9

2011 543,566 * 20,670,931 38,028 11.6

2012 547,307 * 21,766,214 39,770 9.1

2013 548,424 21,713,658 39,420 7.2

2014 558,489 21,647,137 38,872 6.4

2015 561,714 N/A N/A 5.6

(1) Florida Research and Economic Database of Labor Market Information.(2) U.S. Bureau of Economic Analysis N/A- information not available for this year.

* Revised numbers for FY2013 presentation.

Schedule D-2

-96-

Number of Percentage Number of Percentage Employer Employees of Total Rank Employees of Total Rank

Brevard County School Board 8,858 3.54% 1 9,064 3.62% 1

Health First, Inc. 7,800 3.11% 2 6,100 2.43% 4

Harris Corporation 6,005 2.40% 3 6,500 2.59% 2

Brevard County Government 2,405 0.96% 4 3,137 1.25% 6

U.S. Department of Defense 2,090 0.83% 5 - - -

NASA 2,040 0.81% 6 2,018 0.81% 9

Wuesthoff Health System 1,610 0.64% 7 2,500 1.00% 8

Eastern Florida State College 1,490 0.60% 8 - - -

Rockwell Collins 1,445 0.58% 9 - - -

Florida Institute of Technology 1,340 0.54% 10 - - -

Northrop Grumman Corporation - - - 2,000 0.80% 10

United Space Alliance - - - 6,500 2.59% 3

Space Gateway Support - - - 3,000 1.20% 7

45th Space Wing - - - 4,174 1.67% 5

Total 35,083 14.01% Total 44,993 17.96%

Total County Employment 250,404 250,632

Source: Florida Research and Economic Database & Economic Development of Florida's Space Coast, and Brevard County.

2015 2006


Principal Employers

Brevard County 2015 and 2006

Titusville

Cocoa

Kennedy Space Center

SR 405

SR 4

07

SR 3

SR 528

SR 520

Rockledge

Cocoa Beach

Port Canaveral

Cape Canaveral

SR A

1A

33,324Voters

34,917 Voters

26,620 Voters

35,085 Voters

29,990 Voters

Canaveral Port AuthorityApproved Commissioner Districts and Registered Voters, January 2016

-97-

Schedule D-3

Schedule E-1

-98-

Fiscal OperationsYear Administration & Facilities Public Safety Total

2006 37.0 111.0 47.0 195.0

2007* 41.0 127.5 38.0 206.5

2008 39.0 126.5 27.0 192.5

2009 36.0 112.5 32.0 180.5

2010 39.0 102.0 40.5 181.5

2011 35.0 107.0 66.5 208.5

2012 36.0 88.5 66.5 191.0

2013 41.0 98.0 66.5 205.5

2014 57.0 117.0 50.0 224.0

2015 58.0 117.5 8.0 183.5

* FY2007 corrected for full time equivalents in Operations.Source: Full time equivalent employees per the adopted budget.


Employee Positions by Function- Full Time Equivalent


Schedule E-2

-99-

COUNTRY COMMODITYArgentina PetroleumAntigua Cars/TrucksAscension Island Cars/Trucks

The Bahamas Petroleum, Limestone, Salt, GeneralBelgium PetroleumBrazil PetroleumCanada Petroleum, GraniteChile Fertilizer, GeneralJapan SlagThe Netherlands Petroleum, SlagNigeria PetroleumNorway PetroleumNova Scotia Granite, LimestonePeru PetroleumPortugal PetroleumRussia PetroleumSpain PetroleumSweden Lumber, Paper Products

COUNTRY COMMODITYAscension Island Cars/Trucks, General.The Bahamas Slag, General, SaltCosta Rica Cars/TrucksDominican Republic Cars/TrucksItaly Scrap MetalKorea Cars/TrucksMalaysia Cars/TrucksThe Netherlands Juice Concentrate, Single-Strength Juice, Cars/TrucksPanama Cars/TrucksSingapore Cars/TrucksSuriname Cars/TrucksTurkey Scrap MetalU.S.A. Petroleum, Slag, Salt, GeneralVirgin Islands Sand

IMPORTS

EXPORTS

U.S.A. Petroleum, Juice Concentrate, Fertilizer, GeneralVenezuela Petroleum

Port Canaveral World Trading Partners

Schedule E-3

-100-


Cargo Tonnage(in short tons)


Commodity 2006 2007 2008 2009 2010

Petroleum 1,359,576 1,251,171 920,585 990,594 1,892,632 Cement 1,292,208 536,471 34,667 33,898 32,787 Newsprint 106,952 105,689 71,381 56,377 42,404 Scrap Metal - - - - 7,498 *Salt 198,000 192,000 204,100 210,900 192,050 Pumice 51,758 28,687 - 8,818 - Lumber 599,976 211,805 113,601 30,733 9,297 Concentrate 50,883 50,739 39,427 46,448 37,539 Single Strength Juice 59,655 34,264 42,580 66,432 41,191 Fresh Citrus/Produce - 59,564 67,035 78,672 16,261 Bananas 3,761 - - - - General Miscellaneous 69,956 28,146 57,719 10,075 5,261 Automobiles/Trucks 18,499 24,487 31,924 21,115 24,462 Bulk Fertilizer - - - - 9,320 *Limestone/Aggregate 97,864 476,177 433,468 643,560 426,115 Granite/Rock 246,236 306,769 147,170 292,004 185,263 Slag/Sand 398,432 266,237 232,122 137,169 296,064

Totals 4,553,756 3,572,206 2,395,779 2,626,795 3,218,144

* FY2010 balances have been reclassified to appropriate commodities out of the General Miscellaneous category.

Schedule E-3 (cont'd)

-101-


Cargo Tonnage(in short tons)


Commodity 2011 2012 2013 2014 2015

Petroleum 3,399,958 2,949,703 2,556,890 2,280,510 2,817,361 Cement - - - - - Newsprint - - - 4,907 - Scrap Metal 9,985 - - - 27,528 Salt 227,708 219,311 241,910 192,125 224,272 Pumice - - - - - Lumber 7,533 4,477 11,758 9,383 15,151 Concentrate 50,972 34,871 37,159 29,693 25,163 Single Strength Juice 35,492 27,125 21,143 19,465 18,134 Fresh Citrus/Produce 10,159 279 258 - - Bananas - - 230 - - General Miscellaneous 14,477 15,196 8,093 6,777 10,162 Automobiles/Trucks 23,237 8,799 7,240 5,585 4,868 Bulk Fertilizer 55,914 52,378 86,613 48,122 67,100 Limestone/Aggregate 282,826 246,996 304,968 354,693 259,206 Granite/Rock 193,607 102,016 291,367 234,786 281,395 Slag/Sand 235,856 243,835 306,637 176,236 397,903

Totals 4,547,724 3,904,986 3,874,266 3,362,282 4,148,243

Schedule E-4

-102-

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CruiseMulti Day Cruises 557 539 482 495 524 590 705 682 698 679

Gaming Vessels 1,410 1,379 1,064 1,088 94 115 658 722 721 702

Public SafetyArrests* - - - - - - 23 32 24 -

Uniform Traffic Citations* - - - - - - 80 252 199 -

Parking Citations* - - - - - - 76 74 5 -

Fire Calls 74 62 83 75 75 79 70 61 241 231

Non-Fire Response Calls 2,166 1,963 1,926 1,844 1,964 2,204 2,315 2,497 2,225 2,256

Source: Cruise information comes from the Finance Department, Public Safety information comes from the Public Safety Department and Fire Department


Operating Indicators by Function


*The Port Police was disbanded as of Sept. 30th, 2014 instead we have a contract with the Sherriff's office.

Schedule E-5

-103-

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GeneralCruise Terminals 6 6 6 6 6 6 7 7 7 7

Cargo Terminals 11 11 11 11 11 11 11 10 10 11

Warehouse Storage -sq ft (in thousands) 70.8 70.8 70.8 70.8 106.5 106.5 106.5 106.5 317 317

Developed Land 535 535 535 535 535 535 535 603 643 715

Public Boat Docks 9 9 9 9 9 9 9 9 10 10

Public Safety

Security Building 1 1 1 1 1 1 1 1 1 1

Interagency Maritime Operations Center 0 0 0 0 0 1 1 1 1 1

Patrol Vehicles 0 0 0 3 12 12 19 21 21 0 *

Sargeant Vehicles 0 0 0 0 3 3 3 4 4 0 *

Chief/Lieutenant Vehicles 0 0 0 1 1 3 3 3 3 0 *

Patrol Boats 2 2 4 4 4 4 4 5 5 0 *

Public Safety 0 0 0 0 0 0 0 0 0 4

Mobile Command Center 0 1 1 1 1 1 1 1 1 1

Fire Station 1 1 1 1 1 1 1 2 2 2

Fire/Rescue Vehicles 5 5 5 5 5 5 5 6 6 6

Source: Gerenal information section comes from the Engineering and Tenant & Property Development department. Public safety section is supplied by the Public Safety Department and Fire Department.

* The Port Police was disbanded as of Sept. 30th, 2014. Assets were transferred to the Sherriff's office.


Capital Assets by Function


Schedule E-6

-104-


Capital Improvements


FiscalYear Total

2006 20,583,783$

2007 19,994,276

2008 11,901,462

2009 27,308,361

2010 23,897,711

2011 35,227,062

2012 93,531,719

2013 54,273,091 *

2014 124,336,508

2015 101,881,393

* Corrected to conform with FY2013 Financial Statements

CO

MPLIA

NC

E SECTIO

N

‐ 105 ‐


INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners Canaveral Port Authority We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Canaveral Port Authority, as of and for the year ended September 30, 2015 and the related notes to the financial statements, which collectively comprise the Canaveral Port Authority’s basic financial statements, and have issued our report thereon dated April 20, 2016. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Canaveral Port Authority’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Canaveral Port Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Canaveral Port Authority’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

‐ 106 ‐

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Canaveral Port Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


‐ 107 ‐


INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE REQUIRED BY OMB CIRCULAR A‐133 AND CHAPTER 10.550, RULES OF THE FLORIDA AUDITOR GENERAL

The Board of Commissioners Canaveral Port Authority Report on Compliance for Each Major Federal Program and State Project We have audited the Canaveral Port Authority’s compliance with the types of compliance requirements described in the OMB Circular A‐133 Compliance Supplement, and the Executive Office of the Governor's State Projects Compliance Supplement that could have a direct and material effect on each of the Canaveral Port Authority’s major federal programs and state projects for the year ended September 30, 2015. The Canaveral Port Authority’s major federal programs and state projects are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to each of its federal programs and state projects. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of the Canaveral Port Authority’s major federal programs and state projects based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A‐133, Audits of States, Local Governments, and Non‐Profit Organizations; and Chapter 10.550, Rules of the Auditor General. Those standards, OMB Circular A‐133, and Chapter 10.550, Rules of the Auditor General require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program or state project occurred. An audit includes examining, on a test basis, evidence about the Canaveral Port Authority’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program and state project. However, our audit does not provide a legal determination of the Canaveral Port Authority’s compliance.

‐ 108 ‐

Opinion on Each Major Federal Program and State Project In our opinion, the Canaveral Port Authority complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs and state projects for the year ended September 30, 2015. Report on Internal Control Over Compliance Management of the Canaveral Port Authority is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Canaveral Port Authority’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program or state project to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and state project and to test and report on internal control over compliance in accordance with OMB Circulars A‐133 and Chapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Canaveral Port Authority’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state project on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program or state project will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program or state project that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A‐133 and Chapter 10.550, Rules of the Auditor General. Accordingly, this report is not suitable for any other purpose.


Canaveral Port Authority Schedule of Findings and Questioned Costs ‐ Federal Programs and State Projects

For the fiscal year ended September 30, 2015

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Section I–Summary of Auditors’ Results

Financial Statements Type of auditors’ report issued: Unmodified Internal control over financial reporting:

Material weakness(es) identified? ___ yes X no Significant deficiency(ies) identified? ___ yes X none reported

Noncompliance material to financial statements noted? ___ yes X no Federal Awards and State Projects Internal control over major federal programs and state projects:

Material weakness(es) identified? ___ yes X no Significant deficiency(ies) identified? ___ yes X none reported

Type of auditors’ report issued on compliance for major federal programs and state projects: Unmodified Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A‐133 and/or Chapter 10.550? ___ yes X no Identification of major federal programs and state projects: Federal CFDA Numbers Federal Program or Cluster 97.056 Port Security Grant Program FY2013 – FY2014 State CSFA Numbers Name of State Project 55.005 Seaport Grants North Cargo Pier Development North Cargo Berths 5 & 6 and Dredging of North Cargo Berth 6 State Route 401 Improvements Widen West Turning Channel North Cargo Development – Stormwater and Marine Cargo Development Cruise Terminal 1 Gangway and Dredging 55.034 Widen West Turning Channel – Widening and Deepening Dollar threshold used to distinguish between type A and B programs was $300,000 for both major federal programs and state projects. Auditee qualified as a low‐risk auditee for federal purposes? X yes ___ no

Canaveral Port Authority Schedule of Findings and Questioned Costs ‐ Federal Programs and State Projects

(continued) For the fiscal year ended September 30, 2015

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Section II–Financial Statement Findings

No matters were reported.

Section III–Federal Award Findings and Questioned Costs

No matters were reported.

Section IV–State Project Findings and Questioned Costs No matters were reported.

Section V–Other Issues No Summary Schedule of Prior Audit Findings is required because there were no prior audit findings related to Federal award or State financial assistance projects. No Corrective Action Plan is required because there were no findings required to be reported under either OMB Circular A‐133 or the Florida Single Audit Act.

OTH

ER IN

FOR

MA

TION

Canaveral Port Authority Appendix B ‐ Schedule of Insurance in Force

For the Year Ended September 30, 2015

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Property Coverage

Total insured values $397,275,290 Limit on buildings, contents, EDP, signs, Boats $311,944,277

Primary Flood insurance policies 101 George J King Blvd.; Office Building/Lunch Hall $500,000 111 George J King Blvd; Bank $500,000 180 Christopher Columbus Drive; Baggage Building $500,000 180 Christopher Columbus Drive; Cruise Terminal #2 $500,000 180 Christopher Columbus Drive; Metal office $57,200 200 Christopher Columbus Drive; Electrical Switchgear Bldg $100,000 220 Christopher Columbus Drive; Restrooms $500,000 220 Christopher Columbus Drive; Baggage Building $200,000 220 Christopher Columbus Drive; Cruise Terminal #3 $500,000 397 Challenger Road; Warehouse $350,000 399 Challenger Road; Warehouse $400,000 405 Atlantis Road; Office Building $150,000 445 Challenger Road; Administration Building $500,000 620 Magellan Blvd; Office Building $500,000 665 Glen Cheek Drive; Office Premises/Public Restroom $45,100 670 Dave Nisbit Drive; Welcome Center $500,000 9001 Marlin Street; Modular Office $100,000 9001 Marlin Street; Warehouse $500,000 9005 Charles M Rowland Drive; Cruise Terminal #10 $500,000 9012 Pompano Street; Security Office $450,000 9015 Pompano Street; Maintenance Building West $400,000 9015 Pompano Street; Metal Office $50,000 9020 Pompano Street; Maintenance Building East $200,000 9050 Discovery Road; Cruise Terminal #1 $400,000 9155 Charles M Rowland Drive; Cruise Terminal #8 $500,000 9241 Charles M Rowland Drive; Cruise Terminal #6 $500,000 9245 Charles M Rowland Drive; Cruise Terminal #5 $500,000

Canaveral Port Authority Appendix B ‐ Schedule of Insurance in Force (continued)

For the Year Ended September 30, 2015

‐ 112 ‐

Comprehensive General Liability

Comprehensive per occurrence/bodily injury and property damage $1,000,000

Automobile Liability and Physical Damage

Bodily Injury and Property Damage $1,000,000 Auto Medical Payments, any one accident or loss $5,000 Personal Injury Protection Statutory Hired Auto Liability $1,000,000

Umbrella Liability

Per occurrence/aggregate $50,000,000

Public Officials Liability, Claims Made Policy, includes D&O and EPLI

Each claim and aggregate, including claims expense $10,000,000

Comprehensive Crime insurance

Employee Theft, per loss/aggregate $500,000 Forgery or alteration $500,000 Computer fraud $500,000

Florida Storage Tank

Each incident/Aggregate $2,000,000

Fiduciary Liability, Claims Made Policy

Aggregate $1,000,000

Privacy & Network Protection Policy

Privacy Liability, Network Security per occurrence/aggregate $1,000,000

Kidnap & Ransom

Kidnap, Ransom, & Extortion ‐ Each insured event/aggregate $1,000,000 Threat – each insured event $75,000 Death & Dismemberment – each insured person $250,000 Death & Dismemberment – each insured event/aggregate $1,250,000

Terrorism‐Wrap‐Property

Combined single limit per occurrence/aggregate $150,000,000

Workers’ Compensation, Employers Liability

Bodily injury by accident/each accident $1,000,000 Bodily injury by disease/each employee $1,000,000 Bodily injury by disease/aggregate $1,000,000

Canaveral Port Authority445 Challenger Rd, Suite 301Cape Canaveral, FL 32920 USA 1-888-767-8226 TEL: 321-783-7831FAX: 321-784-6223www.portcanaveral.com

NO

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40 feet /12.2 meters MLW, planned to 43 feet MLW

40 feet /12.2 meters MLW, planned to 43 feet MLW

CAPECANAVERALAIR FORCE STATION

CANAVERAL PORT AUTHORITY (CPA) MARITIME CENTER

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Berth Draft Limits Depth in Feet Depth in Meters

SOUTH CARGO BERTHS

1 34 10.32 40 12.23 39 11.84 40 12.2

TANKER BERTHS

1 39 11.8

NORTH CARGO BERTHS

1 40 12.22 40 12.23 32 9.74 34 10.35 40 12.26 40 12.28 35 10.6

CRUISE TERMINALS

1 3810.011.5

2 3310.03 33

5 35 10.66 35 10.68 35 10.610 35 10.6

TRANSMONTAIGNE FUEL TERMINAL

CITY OF CAPE CANAVERAL

Atlanta, GA(436 miles/703 km)

Birmingham, AL(507 miles/817 km)

Charleston, SC(310 miles/499 km)

Charlotte, NC(471 miles/757 km)

Freeport, The Bahamas(171 miles/275 km)

Jacksonville, FL(140 miles/226 km)

Knoxville, TN(560 miles/901 km)

Miami, FL(183 miles/295 km)

Nassau, The Bahamas(314 miles/505 km)

Orlando, FL(31 miles/50 km)

Raleigh, NC(522 miles/840 km)

Richmond, VA(653 miles/1053 km)

Savannah, GA(254 miles/410 km)

Tampa, FL(123 miles/198 km)

Gulf of Mexico

AtlanticOcean

Distances to key markets from the Port FL

OR

ID

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Port CanaveralLatitude: 28° 24’ 46” NorthLongitude: 80° 3’ 49” West

CT6

CRANES

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EXPLORATIONTOWER

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CT2

CT3

= SOUTH SIDE OF PORT

B SIDE CRUISE TERMINALS— Royal Caribbean International

— Victory Casino Cruises

— Port-of-Calls

= GATECT = CRUISE TERMINALNCB = NORTH CARGO BERTHSCB = SOUTH CARGO BERTHTB = TANKER BERTH

= NORTH SIDE OF PORT

A SIDE CRUISE TERMINALS

CT5 — Carnival Cruise Lines CT6 — Carnival Cruise Lines

CT8 — Disney Cruise Line

CT10 — Carnival Cruise Lines Royal Caribbean International

CARGO TERMINALS

CONTROLLED ACCESS ROADS

FUEL STORAGE

FUTURE PROJECTS

MARINA DISTRICT

PARKS

THE COVE/RESTAURANTS/RETAIL AREA

UNDER CONSTRUCTION

Legend

= COMMERCIAL FISHING

SCRAP

BULKCONVEYOR

PARKINGGARAGE

Port Canaveral, Florida

Comprehensive Annual Financial Report - Port …€™s Discussion and ... Assistance Required by OMB Circular A-133 and Chapter 10.550 ... we hereby issue the comprehensive annual

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