Speaker

Joanne Brown General Manager

1 Port of (“PAG”) Access and Facilities Facilities are located on situated on the West Coast of Guam. The main navigation channel at provides access to the Port facilities and Naval Base

§ Apra Harbor is divided into two regions: § Outer Apra Harbor (Northern End)

― Main navigation channel ― Cabras Island (Port facilities)

― Navy’s Delta and Echo wharves § Inner Apra Harbor (Southern End) ― Location of

― Includes Naval facilities including Navy Dry Docks

2 Overview of the Port Authority of Guam The Port Authority of Guam is an autonomous agency of the and oversees the Island’s only commercial port as well as two marinas

Jose D. Leon Guerrero Commercial Port of Guam § Guam’s only deep water and sole commercial port

§ Handles 90% of the Island’s total imports (civilian and military)

§ Primary seaport in Micronesia and serves as a transshipment hub for the entire Western Pacific Region

― Serves as the primary hub for the Commonwealth of the Northern Mariana Islands (CNMI) of Saipan, Tinian, Rota, Republic of Palau, and the Federated States of Micronesia

Gregorio Perez Marina and Agat Marina

§ Located in Central and Southern portions of the Island

§ Provides combined capacity for approximately 170 boats

3 Port Authority of Guam Commercial Facilities Located on 62 acres of land, the facilities provide deep draft waterfront access and landside support services for container, breakbulk, fishing, and passenger vessels

Facilities: ü Breakbulk terminal

ü Container terminal ü Four cargo holding berths & 2 fuel piers

ü Cargo handling equipment ü 40.1 acres of cargo storage ü Administration and equipment repair facilities

4 Commercial Carrier Service Vessels serving Guam are involved in three trade routes: Trans Pacific, Asia Pacific, and Micronesia transshipment services

Vessel Calls (2010-2016)

Total Containers Handled (2010-2016)

5 Overview of PAG Financials

Operating Revenues (2011-2016) Cargo Revenue Tons in Millions (2011-2016)

60,000 7.8% Compound 50,000 Annual Growth 40,000 30,000 20,000 10,000 0 2011 2012 2013 2014 2015 2016

Fiscal Year

Primary Sources of Revenue (FY 2016) Primary Expenditure Categories (1) (FY 2016)

(1) Expenses net of depreciaon

6 Port of Guam Modernization Plan The Port’s Modernization Program is designed to meet the Island’s growth including the expansion of the military and the growing tourism market Key Project Initiatives § Expansion of wharf space to accommodate larger vessels and increase vessel handling capacity

§ Upgrade of terminal operating system to allow for automated invoicing, cargo and container tracking, financial management and maintenance management

§ Expansion of existing facilities to support fishing and cruise line industries § Replacement of gantry cranes at the end of useful life to maintain continuous, uninterrupted cargo movement Current and Anticipated Projects(1) Agat Marina Hagatna/Agat LAN Infrastructure Waterline Port Police Security Loading Dock Yard Lighting Marina WiFi Digital Upgrades Replacements Upgrade Structural Repair Connectivity

A/E Services for Rehabilitation of Acquisition of Cargo Demolition of Renovations to Demolish Admin Storm Drainage and Hotel Wharf and Handling Equipment Equipment Harbor Refuge Building Gatehouse Access Road

Upgrade of Power Inbound/Outbound Electrical Work for Gate Operating System for IT Off/ Data Warehousing OCR Portals and Gulf Pier Repairs Additional 45 System Genset & Line Systems Canopies Reefer Outlets Conditioner

Replacement of Architectural/ Pavement Trailer Chassis Agat Marina Administration Engineering Replacement all Gatehouse CapEx Landing Continuous Demolition Dock B Building Services - IDQ Terminal Yards Pad

(1) Representave list and may not include all potenal projects 7 2017-2021 Five Year Capital Improvement Plan As part of the Port’s Modernization Program, the Port currently estimates that approximately $58 million will be needed to fund its CIP

§ The Port is evaluating funding alternatives for its CIP which may include the issuance of municipal bonds ― Subject to approval by the Governor and Guam Legislature ― Portion of bond proceeds will be used as the Port’s local match toward its recently awarded TIGER Grant for the Rehabilitation of Hotel Wharf and Access Road

§ To help fund its five-year CIP, the Port recently submitted a new Five-Year Tariff Petition to the Guam PUC, which oversees and approves all tariff increases ― Proposes a 17% tariff increase phased in over five years

Proposed Tariff Increase FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Variable Tariff 7.00% 7.00% 1.00% 1.00% 1.00%

§ Guam PUC approved a 7% increase on Port tariffs in December of 2015

8 Summary PAG manages Guam’s only commercial port, provides facilities used by both civilian and military operations and is an essential component for the Guam and Micronesian economies

§ PAG receives 90% of the region’s goods and supplies

§ PAG serves as a transshipment hub for all of Micronesia

§ The Port’s facilities provide support for both civilian and military goods and supplies

§ The PAG Modernization Program will help ensure the Port’s facilities are able to grow in order to meet the economic and military expansions

§ Expansion of Port facilities will increase capacity and provide additional infrastructure for larger vessels and cruise ships

§ Manageable CIP with comprehensive plan to implement necessary tariff increases to support investments

9 QUESTIONS?

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