Kent Britton|Financial Controller · 2019-03-21 · Longest cable-stayed bridge in NA 100-year design life 205’ air draft clearance Hillcrest Washington-Coles Voluntary Acquisition

COPASKent Britton|Financial Controller

September 20, 2018

The Port of Corpus Christi

▪ Breakwater was constructed following the storm of 1919

▪ Port of Corpus Christi Founded in 1926

▪ Moving Texas cotton was original focus

▪ 1930s - First refining company, Taylor refining Co., began operations

▪ 1959 – completion of the harbor bridge

▪ Efforts to deepen and widen channel consistent throughout history

THE ENERGY

PORT OF THE AMERICAS

▪ Independent political district of

the State of Texas, governed by

seven commissioners

▪ Global energy hub and the

Economic centerpiece of South

Texas

▪ A landowner, a land developer,

and a landlord

Job Creation &Economic Growth

Educational &Workforce

Development

Safety & CorporateSocial Responsibility

Sustainability & Environmental

Stewardship

Port Corpus Christi delivers excellence and

demands the same from its partners.

Pillars of Success

Po r t C o r p u s C h r i s t i

• The #1 US Crude Oil Export Port

• 4th Largest Port in the US

(>100M Tons)

• $150B in Annual Economic

Output

• $100M Goods Value Movement

Per Day

• Greater than $95M Annual Port

Revenues

• $724.8M Total Assets

2017 By the Numbers

$50 Billion

Port Industry Capital Investments

($10 Billion Foreign Direct Investment)

Po r t C o r p u s C h r i s t i

▪ Intracoastal Waterway Barge Access (M-69)

▪ Expanding Highway System (I-37 & I-69)

▪ 36 Miles of Ship Channel (-47’ -54’)

▪ 60 Miles of Railroad Tracks (UP, KCS, BNSF)

▪ Pipelines, Terminals and Storage Tanks

▪ New Large Ship Docks

▪ Liquid Bulk, Dry Bulk, & Breakbulk

Intermodal Connectivity

P R E S E N TAT I O N T E M P L AT E

• Newly developed 25 acres at Rincon West Yard for

Heavy Haul Cargo

• Close proximity to Northside Cargo Dock 9

• Potential for onsite rail access

• Foreign Trade Zone #122

• Future expansion under development

P o r t o f C o r p u s C h r i s t i

Rincon Industrial Park Expansion

Po r t C o r p u s C h r i s t i

▪ Purchased in 2001

▪ Site of major industrial interest and

development

▪ Beneficial use site (wildlife mitigation

habitat)

La Quinta Trade Gateway

Po r t C o r p u s C h r i s t i

▪ Bulk Dock 1 and 2

▪ Gantry Crane and Ship Unloader

▪ Truck and Rail Dump

▪ Tenant Pad Operations (Koch, Citgo, Valero)

▪ Public Pad Operations

▪ 6 NSRs, Multiple PBRs

Bulk Terminal

P R E S E N TAT I O N T E M P L AT E

▪ Over 15,000 tons of wind

turbine components

moved through Aug2018

Wind Cargoes

P o r t o f C o r p u s C h r i s t i

Po r t C o r p u s C h r i s t i

▪ Major New Port Customers

▪ Maverick Terminal

(Howard Energy)

▪ Gulf Coast Growth Ventures

(ExxonMobil and SABIC Joint

Venture)

▪ South Texas Cement

(GCCM Holdings)

2016-2017 Growth

ENERGY EXPORTS

Crude Oil Outbound/Exports 2016-2018 (BPD)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Barr

els

Per

Day (

BP

D)

PCC Crude Oil Outbound/Exports 2016-2018 (Barrels Per Day-BPD)

Domestic Exports

73%

49%

48%

64%55%

64%49%

51%

44%36%37%

20%

48%

28%

10%

25%

8%

13%23%

2%

11%

62%

73%

68%

Hu

rric

an

eH

arv

ey

Avg Outbound 372,541 BPD

Avg Out 517,699 BPD

2016 Exports 22%

76%

71%

2017 Exports 59%

77%

86%

80%

Avg Out 593,844 BPD

2018 Exports 75%

78%

54%

U.S. Crude Oil Production by Major Growth Basin (MMb/d)

New Permian Crude Oil Pipelines

Export Markets

CORPUS CHRISTI SHIP CHANNEL DEEPENING & WIDENING PROJECT

P R E S E N TAT I O N T E M P L AT E

▪ Authorization

▪ Funding

▪ Cost Increases

▪ Economics Update

▪ Budget Eligibility

▪ Partnership Agreement

PROJECT OVERVIEW

P o r t o f C o r p u s C h r i s t i

Implementation of Channel Improvement Project

Benefits Achieved

▪ $150 billion in economic activity for the United States

▪ $50 billion in privately-funded industrial projects

▪ Add nearly $35 billion annually in additional goods value

exports

▪ Reduce the current U.S. trade deficit

▪ Over $100 million in annual transportation cost savings

▪ Support Announced pipelines

▪ Energy Dominance

▪ Study will examine deepening the Entrance Channel from the Gulf of

Mexico through Harbor Island to LaQuinta Junction

▪ Deepen to between 75 and 85 feet MLLW to allow fully loaded VLCCs

▪ Better prepare Port for long-term future for all commodities

Channel Deepening Study

P R E S E N TAT I O N T E M P L AT E Po r t C o r p u s C h r i s t i

▪ Longest cable-stayed bridge in NA

▪ 100-year design life

▪ 205’ air draft clearance

▪ Hillcrest Washington-Coles

Voluntary Acquisition &

Relocation Program

New Harbor Bridge$900M Project, $85M Port Investment

The Future of Energy Exports

▪ Larger, more efficient vessels

▪ Safer and reduced environmental impacts

▪ Eliminate current reverse lightering operations for crude oil

shipments

▪ Export of LNG to Europe and Asia

Po r t C o r p u s C h r i s t i

• ISO 14001 Certified since 2007

• Green Marine Certified Port since 2016

(1st Texas Port to Receive this Distinction)

• TCEQ Texas Environmental Excellence Award Winner,

2018

• Reached 1 Million Pounds of Recycled Materials

Milestone, 2017

• Utilizing 100% Renewable Power Supply

• Recognized Leader in Environmental

Management Systems

Environmental Highlights

Role of Port as Landlord

▪ Previous model was to sell land or issue franchise agreements

▪ Current model is to derive highest and best use

▪ Scarcity of land

▪ No sales, acquire when land is cheap

▪ Long term lease agreements

▪ Use of Port’s capital rather than customers

▪ Generate acceptable IRR, similar to a for profit business

Financial Accounting

▪ Political Subdivision of the State of Texas

▪ Single Enterprise Fund – we run like a business!

▪ Primary revenue sources – ship movements, land rental

▪ Primary expenses – labor costs, maintenance

▪ 15 person Accounting group, with separate Procurement and

Payroll functions

▪ Annual financial reports can be found at PortofCC.com at

About/Financials

Financial Accounting – complex issues

▪ Revenue accounting

▪ Complex deals

▪ Up front cash payments

▪ Guaranteed minimum throughputs

▪ Land acquisition as part of Harbor Bridge project

▪ Restrictions on control of land

▪ Valuation dependent on future use

▪ Capitalization of cost of acquisition and site prep

Debt Financing

▪ Potential capital needs of $750 million over next 10 years

▪ Revenue bonds issues to cover short term capital needs

▪ $110 million in existing revenue bonds from 2015

▪ $215 million raised in two separate bond issuances this

summer

▪ Port generates $50 million in free cash flow annually, and

goal will be to retire debt early

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