0

The Commonwealth of Puerto Rico

Parking Facilities at Luis Muñoz MarinAirport

1

Agenda

Puerto Rico Public-Private Partnership (PPP) Initiative

Puerto Rico Economic Overview and Business Environment

Puerto Rico Ports Authority (PRPA) Overview

Luis Muñoz Marin (LMM) Airport Parking Overview

LMM Parking Transaction Overview

2

Puerto Rico Public-Private Partnership (PPP)

Initiative

3

The Government Development Bank (GDB) is the Financial Advisor and Fiscal Agent of the Government

• GDB’s mission Act as financial advisor and fiscal agent

to the Commonwealth, its public corporations and municipalities

Provide financing for infrastructure development, public works, and public services

Facilitate financing for private enterprises to advance the island’s economy

• Key Highlights 363 employees $9.4 billion in assets and $8.0 billion in

liabilities

4

Puerto Rico Welcomes Private Investment and Has Utilized PPP Strategies In the Past

• Commonwealth has significant experience working with private entities on public purpose projects Teodoro Moscoso Bridge with Dragados, Abertis and Supra Power plants with AES Corporation and Ecoelectrica Tren Urbano (commuter rail) with Siemens (DBO) SuperAcueducto with Thames Dick Corporation Port of Mayaguez with Holland Group Gasoducto Del Sur with Skanska

• UBS and Morgan Stanley are serving as advisors to evaluate and implement opportunities at five public corporations

5

GDB and the Public Corporations Have Identified a Number of Attractive PPP Opportunities

• Ports Authority Luis Muñoz Marín International Airport Parking

Garage

• Highway and Transportation Authority PR-22 Toll Way (RFQ launch expected in the

coming weeks)

• Port of the Americas Authority Port of the Americas

• Aqueduct and Sewer Authority Water Metering Project Reservoir Project

• Electric Power Authority Gasoducto Del Norte Water re-use project

6

Puerto Rico Provides Investors With Unique Financing Alternatives for PPP Projects

• Commonwealth’s tax system creates a capital market that is distinct and complementary to the US and international markets Single local market debt issues > $1 billion Local market issue provided financing to

Teodoro Moscoso Bridge

• Local banks actively finance infrastructure in the Commonwealth and would participate in syndicated loans for projects (e.g. AES and Ecoelectrica)

• GDB has also facilitated financing in the US tax-exempt market for PPP projects (e.g. Superaqueductos)

7

Puerto Rico Economic Overview and Business

Environment

8

Puerto Rico: Economic Perspective• Puerto Rico is the fourth largest island in the Caribbean• Self governing territory of the United States with Commonwealth status• Puerto Rico shares a common defense, market, and currency with the

United States

Pharmaceuticals, Electronics, Food Products, Apparel

Major Industries

Civil Law, within the US Federal Judicial System

Legal System

US DollarCurrency

1.40 MnLabor Force

$14,462GNP per Capita

9,104 Sq. KmTotal Area

San Juan (~450,000)Capital / (Pop)

3.93 mmPopulation

2006Metric

Commonwealth Facts and Figures

9

Puerto Rico: Economic Perspective

N/M243Primary Highway Mileage

+2.1%1.26 mmAverage Employment (LTM)2

+9.3%$45.4 bnTotal Imports (LTM)

+5.5%$59.9 bnTotal Exports (LTM)

N/M5.1%Inflation Rate (2006)1

+1.5%$45.2 bnReal GNP (2006)

5-Year CAGRStatistics

Other Key Economic Metrics

Sources: Government Development Bank for Puerto Rico (GDB), Office of Economic Studies and Analysis; PRHTA Official Statements(1) Inflation rate as reported by GDB Office of Economic Studies and Analysis(2) Average LTM total employment, according to data reported in the Housing Survey.

10

Puerto Rico: Economic Perspective

• Puerto Rico is the ideal place for investment: Stable environment - benefits and

protections of US legal and regulatory systems

Openness to trade and investment Strong base of multinational

companies Closely linked to the US economy Highly educated bi-lingual

workforce Intersection of North American and

European trade routes Strong physical infrastructure –

best in region Significant tax and foreign trade

zone advantages

11

Puerto Rico: Economic Perspective• The Commonwealth’s Economic Development Plan Is Made To

Improve the Business Climate Accelerate Puerto Rico’s Knowledge-Based Economy Promote local entrepreneurship Diversify and improve tourism offerings Reduce the cost of energy Transform Government into a more responsive, effective, agile

organization Investment in world-class infrastructure

– Public-Private Partnerships

12

Puerto Rico: Economic PerspectiveImprove and Diversify Tourism Offering

• Administration facilitating the construction of new tourism facilities utilizing innovative financing models Over 3,700 new rooms built and in construction, with $1.2

billion in new investments; 2,106 new direct jobs and 4,275 new indirect jobs

Additional 4,500 hotel rooms to begin construction; representing an investment of $445 million and 3,000 new jobs anticipated in the next five years

• Improve access by sea and air No passport required 35 new direct flights recently added representing $85.2 million

addition to the Island’s economy 240 new cruise visits expected during 2007-2008 representing

672,000 additional passengers

13

Puerto Rico: Economic PerspectiveInvestment In World Class Infrastructure

• PPP’s are a Key Component of Governor’s Economic Development and Government Transformation Plan

• Infrastructure Forum unveils the results of Puerto Rico’s study of first round PPP’s opportunities over the past year

• Focused on achieving results over next six to twelve months

14

• Commonwealth will invest $11 billion over the next five years

• Private sector necessary to complete and augment this investment

Puerto Rico: Economic PerspectiveInvestment In World Class Infrastructure

$0.9 bnPorts Authority

$0.2 bnUniversity of Puerto Rico

$0.7 bnPort of the Americas

$0.5 bnInfrastructure Finance Authority$2.3 bnAqueduct and Sewer Authority$2.2 bnElectric Power Authority$2.2 bnHighways and Transportation Authority$2.0 bnCentral Government

15

Puerto Rico: Economic Perspective

• The Administration is focused on economic growth and reform

• PPP’s are a high priority initiative and the Commonwealth plans to implement many of the initiatives highlighted at the Forum over the next six to twelve months

• Focus is on investment in infrastructure, with proceeds being reinvested within the relevant sectors

• Puerto Rico is an attractive and stable investment opportunity

16

Puerto Rico Ports Authority Overview

17

History of PRPA

• The Ports Authority of Puerto Rico is a public corporation created by Law 125 of May 7, 1942

• Headed by an Executive Director and a Board of Directorsappointed by the Governor

18

PRPA’s Current Operations

• Administers and enforces the ports, docks and port facilities ofPuerto Rico

• Operates and regulates: – Airports:

• LMM as well as airports in Isla Grande, Ponce, Mayaguez, Arecibo, Aguadilla, Culebra, Humacao, Patillas, Fajardo and Vieques

– Ports: • Puerto Nuevo in San Juan as well as port facilities in Arecibo, Fajardo,

Guanica, Guayanilla, Guayama, Yabucoa, Ceiba, Culebra andVieques

19

LMM Parking Overview

20

LMM Overview – Gateway to the Caribbean

10 miles, 15 minutes

21

Passenger Movements Continue to Rise

• LMM airport has experienced continuous growth increases in passenger movements

– 4.23% compound annual growth rate

Passenger Movements at LMM 1 (mm)

1 Puerto Rico Ports Authority FY 2006 Aviation Statistic Report

9.0

9.5

10.0

10.5

11.0

2002 2003 2004 2005 2006

22

Enplaned Passengers

• In 2007, there were 5.1 million enplaned passengers– The FAA forecasts that enplaned passengers will increase by 38%

to 7.2 million passengers by 2025, about 2% annually

Passenger Enplanements at LMM 1 (mm)

1 FAA Terminal Area Forecast, 2008

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1976 1982 1988 1994 2000 2006 2012 2018 2024

23

• The airport currently serves over 30 domestic and international airlines

LMM Overview – Represented by all Major Carriers

Passenger Movements at LMM by Carrier - FY 2006 1

Other7%

Jet Blue5%

Continental6%

US Air6%

Delta8%

American63%

United2%Spirit

3%

1 Puerto Rico Ports Authority FY 2006 Aviation Statistic Report

24

• The Ports Authority has recently invested significant capital in upgrading the airports facilities

• New Terminal A ($83mm estimated investment)

– Designated terminal for charter flight passengers

• Full reconstruction of the airport’s second runway

LMM Airport – Building for the Future

• Through 2011, PRPA will invest approximately $390 million on 13 LMM airport projects

25

A World Class Parking Facility for LMM

• A six story parking structure – Built in 1999 – Connected to Terminals C & D via

2nd floor ramp– Public parking (c. 2,400 spots) – Airport employee parking (c. 1,600

spots)

• An adjacent surface parking lot – Currently serves as parking for

federal agency employees– 700 parking spots

• Surface lot in the airport’s central sector

26

Airport Facility Layout

Central Sector Auxiliary Parking

Existing Structure and Adjacent Lot

Central Sector Auxiliary Parking

Existing Structure and Adjacent Lot

27

Parking Facility Layout

Surface LotParking Structure

Site of New Terminal A

Terminal B

Terminal C

Terminal DWest Terminal

Taxi Staging Area

Surface LotParking Structure

Site of New Terminal A

Terminal B

Terminal C

Terminal DWest Terminal

Taxi Staging Area

28

Exterior Views of Facility

Transactions Revenues

29

Additional Facility Pictures

Transactions Revenues

30

Restaurants and Elevator Lobby

Transactions Revenues

31

Entry Plaza and Ramps

Transactions Revenues

32

Exit Plaza, Card Reader, Fee Computers

Transactions Revenues

33

Well Designed Floor Plan

• 531-680 Spaces per Floor • 8 Elevators• 4 Staircases• 2 Entry Ramp• 1 Exit Ramp

34

Investment Highlights

• Only “on-airport” parking at LMM– LMM is the principal airport of Puerto Rico; over 10.6 million annual

passenger movements, with a 4.2% continued growth rate since 2002

– Limited “off-airport” or public transportation alternatives

• Proven history of stable cash flows

• Ability to expand facility and revenue opportunities with the construction of a second structure

– The basis for expansion will be agreed upon in the concession agreement

• Upside revenue potential via ancillary services– Currently no services offered

35

Tickets by Duration 1

88%

7%5%

Revenues by Duration 1

42%

7%

51%

Facility Usage, CY 2007

1 PRPA parking activity reports

0-4 hours4-24 hoursOver 24 hours

36

• Monthly revenue not materially impacted by seasonal events (tourism, hurricane season, etc.)

Limited Exposure to Seasonality

1 FY 2006 indexed to July 2005, FY 2007 indexed to July 2006

0

20

40

60

80

100

120

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Inde

xed

1

0

20

40

60

80

100

120

FY2006FY2007Series3

37

Current Garage Usage

February 2008 estimated (Noon, mid-week)

0.664,0942,700Total1.151,3961,600Employee vehicles

0.412,6981,100Public vehicles

Demand / CapacityCapacityParked

Based on February 2008 visual inspection of garage usage.

• If employees remain in garage– At 1-2% growth per year, additional public parking may be

needed by 2011-2013

• If employees are relocated from garage– At 1-2% growth per year, additional public parking will be needed

in the longer term

38

Puerto Rico Cars Per Capita Continue to Rise

• Among the highest rate of cars per capita in the world• Local growth despite recent US reduction of cars per capita

Passenger Cars Per Capita – 2000-2006 1 Regional Passenger Cars Per Capita 2006 1

1 Euromonitor International

0.44

0.48

0.52

0.56

0.60

2000 2001 2002 2003 2004 2005 2006

Puerto RicoUnited States

0.00

0.20

0.40

0.60

Passenger Cars Per Capita

Puerto RicoUnited StatesBahamasDominican Rep.Jamaica

39

Growth Potential From Ancillary Services

• The facility currently offers no luxury or ancillary services

• Possible new revenue sources could include:– Car rental agencies– Valet and preferred parking services– EZ Pass style payment options– Car detailing / maintenance services– Expanded food and beverage concessions– Improved revenue control mechanisms

40

Potential Opportunities for Increased Revenues

• Evaluation of rate structure for optimization of revenues– Public short term – $2.00 per hour up to $18.50 max per day– Public long term – $18.50 first day and $12.00 each additional day– Employees – Typically $20.00 per month

• Relocate employees– Level 1 and Level 2 largely dedicated to employees currently– Relocation may require additional gates and card readers but would

free up spaces that would be attractive to public or other potential users

• Additional products– Relocation of rental car companies to use portions of garage– Other potential products and services

41

Additional Factors Potentially Affecting Profitability

• Competition– Private parking operators (approximately 600 total spaces located

away from the Airport)– No public train or bus service to/from the Airport– Other competing modes (e.g. pick up / drop off, taxi cabs, etc.)

• Operations– Improved fraud-prevention controls within revenue control system– Operating expense efficiencies

• Capacity– Relocation of employees will provide more than adequate capacity for

near term public parking needs (potentially allowing for new uses)– More efficient use of prime parking locations (e.g. both departures and

arrivals levels currently dedicated to employees)

42

Structural Overview

43

State of the Asset

• A full engineering report is being prepared– No major construction defects or signs of extraordinary

wear and tear are expected

• Visual inspection and engineering report will:– Identify near term issues requiring repair and maintenance– Recommend annual repair and maintenance necessary to

keep garage in proper condition

• Assuming proper maintenance, the garage will likely have a useful life in excess of 50 years

44

LMM Parking Transaction Overview

45

Proposed Public Private Partnership Transaction

• PRPA intends to offer a long-term concession of the LMM Parking facility

• Concessionaire will:

– Set and collect parking fees, subject to caps set by PRPA

– Operate and maintain existing parking facility

– Potentially design, build, finance, operate and maintain second parking structure

46

Key Terms of Concession

• Facilities:– Main parking structure– Surface parking lot– Auxiliary lot located in the Airport’s central sector

• Expansion rights/obligations:– Operator may be required to construct a second structure upon

exceeding certain capacity triggers

• Length of concession:– 50-75 years

47

Key Terms of Concession (Cont’d)

• Pricing:– Rate setting subject to caps set by PRPA – Reasonable pricing for airport employees– Free parking for 100 PRPA employees

• Financial considerations– Upfront payment– Fixed or variable periodic payments on new business ventures at

the facilities

• Car Rental Agencies:– Possible inclusion in expansion of facilities

48

Key Terms of Concession (Cont’d)

• Employee Parking:– PRPA employees– General airport employees– Federal agency employees

• Existing Contracts:– Restaurants (Wendy’s and sports bar)– Car rental agencies

49

RFQ / RFP Process

• Respond to Request for Qualifications (“RFQ”)– Due March 3rd

• Select qualified parties based on RFQ responses

• Qualified parties will be asked to respond to Request for Proposal (“RFP”) and be given opportunity to conduct detailed due diligence ahead of responding to RFP

– Management presentation– Data room access– Concession Agreement review

50

• The Commonwealth anticipates award of concession by June 2008

Expected Schedule

March 3, 2008Response to RFQs Due

2Q 2008Release RFPs to Qualified Parties

2Q 2008Final RFPs Due

Expected TimingEvent

51

Bruce CraneDirector299 Park AvenueNew York, NY 10171Tel: (212) 821-5189 bruce.crane@ubs.com

Henry CatryExecutive Director299 Park AvenueNew York, NY 10171Tel: (212) 821-6547henry.catry@ubs.com

Denotes Primary Contacts

Contact Information

• Please note that the PRPA and GDB should not be contacted directly

• Interested parties should contact:

Alex GreenbaumAnalyst299 Park AvenueNew York, NY 10171Tel: (212) 821-6395alexander.greenbaum@ubs.com