Port of Los AngelesPresentation to 

Los Angeles 3rd Regional Investors Conference 

March 31, 2016

1. Introduction to the Port of L.A. 2. Evolving Industry Dynamics3. Cargo Volumes4. Capital Improvement Program5. Financial Position

OUTLINE

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1. INTRODUCTION TO THE PORT OF  LOS ANGELES 

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Mission: “We deliver value to our customers by providing superior infrastructure and promoting efficient operations that grow our port as North America’s preferred gateway.”

STRATEGIC OBJECTIVE 1 STRATEGIC OBJECTIVE 2

STRATEGIC OBJECTIVE 3 STRATEGIC OBJECTIVE 4

World‐Class Infrastructure thatPromotes Growth

An Efficient, Secure and Environmentally SustainableSupply Chain

Improved FinancialPerformance of Port Assets

Strong Relationships withStakeholders

Initiative 1 Develop a Capital Improvement Program (CIP) that improves the port’s operational strength and financial sustainability.

Initiative 2 Deliver terminal and infrastructure projects on time and within budget.

Initiative 3 Optimize maintenance to extend infrastructure life and utility.

Initiative 1 Facilitate supply chain efficiencies and terminal velocity with supply chain partners.

Initiative 2 Implement security and public safety strategies that support goods movement and mitigate risk.

Initiative 3 Continue environmental stewardship through implementation of programs with clear and measurable standards.

Initiative 1 Increase cargo revenue by attracting new volumes and establishing long-term volume commitments.

Initiative 2 Increase the utilization of port facilities.

Initiative 3 Ensure that port properties are revenue efficient and reflect current land values and market-based compensation.

Vision: 

Initiative 1 Enhance a world-class customer servicedelivery product.

Initiative 2 Attract visitors to the LA Waterfront ofWilmington and San Pedro.

Initiative 3 Make the Harbor Department the employerof choice by providing opportunities forprofessional development and promoting excellence.

“We are America’s Port® ‐ the nation’s #1 container port and the global model for sustainability, security, and social responsibility.”

Back to Basics Priority Outcome: Prosperous City Back to Basics Priority Outcomes: Livable City, Prosperous City, Safe City

Back to Basics Priority Outcome: Engaged CityBack to Basics Priority Outcomes: Prosperous City, Well-run City

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#1 Container Port in the Americas

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Founded in 1907

Proprietary City Department

Mayoral‐Appointed Board of 5

State Tidelands Trust Guidelines

Traditionally A “Landlord” Port Model

Container Volume

• Twenty‐foot Equivalent Units (TEUs)• 8.3 million TEUs in 2014• 7.9 million TEUs in 2013• 8.1 million TEUs in 2012• 7.9 million TEUs in 2011• 7.8 million TEUs  in 2010• 6.7 million TEUs  in 2009• 7.8 million TEUs in 2008• 8.4 million TEUs in 2007• 8.5 million TEUs in 2006 (best year)

8.2MillionTEUs in 2015

Scrap Metal 746,354 metric tons

Autos (WWL)164,231 units

Fruit (SSA)90,323 metric tons

8,160,457 TEUs

Our Lines of Business

+46%

Liquid Bulk (Petroleum)93,660,059 barrels

Steel (PASHA)2,690,097 metric tons

Visitors to LA Waterfront 1.6 million in 2015

+33%

‐2.1%

‐13%

+43%

Cruise 123 calls in 2015 (up by 1 call)

A “Full Service” Port

+29%

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POLA Has Key Service Advantages 

• 53 feet depth of water• 8 container terminals, 91 cranes• Superior intermodal connections 

InfrastructureInfrastructure

• Proximity to Asia• 20 million consumer base in Southern California• Proximity to 1.5 billion sq. ft. of warehouse space 

Prime LocationPrime Location

• Clean truck program• Alternative Maritime Power• Significant decrease in pollution 

Environmental Initiatives

Environmental Initiatives

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POLA Can Serve Mega Ships

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We serve ships that will be too large to transit the Panama Canal  In December 2015, POLA served CMA‐CGM Benjamin Franklin, an 18,000‐

TEU capacity ship and the largest to call North America The CMA CGM Benjamin Franklin docked alongside the 15,000‐TEU 

Maersk Edmonton, the second largest vessel to ever call North America

Gateway of Connectivity

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SPEED – FREQUENCY ‐ RELIABILITYSuperior Access to US Markets• Mega-region of 22 million consumers

• Good weather year-round

• 14,000-strong longshore workforce

• $1.8 Billion square feet of warehouse/DC space

• $2.4 Billion Alameda Corridor

• 100 trains daily through LA basin

• 2 Class 1 Carriers: Union Pacific& BNSF

• Access to Major Freight Hubs, including:

Chicago Atlanta New York

Memphis Houston

San Antonio Denver

Kansas City Dallas

2. EVOLVING INDUSTRY DYNAMICS

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The Container Shipping Industry is Going Through a Profound Transformation

‐17.9%

‐19.6%

‐18.1% ‐12.0%

‐1.1%

10.7%

16.0%

7.4%

‐0.2%

‐5.5%

‐7.0%

‐10.5%

‐12.1%

1.3% 4.7%

‐1.1%

‐3.2%

‐1.0%

0.5%

‐4.3%

‐1.8%

0.4% 3.4%

1.0% 5.2%

2.4%

‐1.8%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

1Q15

2Q15

3Q15

4Q15

Average Ca

rrier O

peratin

g Margin

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Source: Alphaliner.   Average of APL, CMA CGM (fr 2010), CSCL, EMC, Hanjin, Hapag‐Lloyd (incl CSAV to 2014),HMM, KL, Maersk, MOL, NYK, WHL, YML, Zim.  

We are entering an era of low‐growth and intense competition Shipping lines are struggling through the worst slump on record Developments are driving fundamental behavioral changes 

Carriers Are Ordering Larger Ships

CMA CGM Benjamin Franklin exceeds 

year 2025 international 

emissions standards

A 14,000 TEU vessel costs up to 60% less per slot than a 4,800 

TEU vessel.

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Scale is theway to cut

costs

Scale is theway to cut

costs

14,000 TEU     60% Less/Slot

8,000 TEU     47% Less/Slot

4,800

Growth In Ships Calling at POLA

2M25 megaships in service, 26 on order

Ocean 37 megaships in service, 7 on order 

CKYHE22 megaships on order

G616 megaships on order

Composition of Shipping Alliances Will Continue to Evolve

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POLA Is Responding to Changing Industry Dynamics

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Deeper joint‐port collaboration

o Expanded FMC agreement approved in February 2015 allows SP Bay ports to jointly address concerns relative to congestion and supply chain issues, jointly market the gateway, jointly advocate for favorable funding and legislation, and continue joint efforts on environmental and safety initiatives

Dialogue with Supply Chain Stakeholders and develop efficiency programs that help improve cargo flow

Develop performance metrics that are embraced by Supply Chain Stakeholders

Restore customer confidence in San Pedro Bay

3. CARGO VOLUMES

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Total loaded, unloaded and empty containers.  Sources: Port operator websites

POLA continues to lead North American container ports in terms of volume

POLA Remains Top North American Port ‐ CY 2015

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8.2

7.2

6.4

3.7 3.53.1

2.5 2.3 2.1

‐

1

2

3

4

5

6

7

8

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POLA POLB NY/NJ Savannah NorthwestSeaportAlliance

Vancouver Virginia Oakland Houston

Millions TEU

s

Cargo Growth Continues to Rebound Since Recession 

POLA remains primarily an import port ‐ comprised mainly of furniture, apparel, auto parts, electronic products, and footwear

Exports comprised mainly of wastepaper, scrap metal, animal feeds, cotton, and resins

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(TEU

s)

Source: POLA Website 

4,067 4,093 3,977 4,270 4,1592,713 2,910

2,109 2,043 1,921 1,932 1,657

1,199 1,086

173 117 134 160120

92 84

1,591 1,825 1,8371,978 2,224

1,316 1,595

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 Jul‐Feb2015

Jul‐Feb2016

In Loaded Out Loaded In Empty Out Empty

7,940 8,078 7,869 8,340 8,160

5,3205,675

POLA’s Top Trading Partners Remain Stable  

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Exports(% of Total TEUs) 

Imports(% of Total TEUs) 

Calendar Year 2015

Source: Piers 

China38.9%

Japan16.1%

South Korea10.0%

Taiwan9.7%

Hong Kong3.2%

Vietnam2.9%

Thailand2.1%

Indonesia2.0%

Singapore1.9%

United Arab Emirates1.5%

All Others11.7%

China59.2%

Japan7.4%

Taiwan5.6%

Vietnam5.1%

South Korea4.4%

Thailand4.0%

Indonesia2.4%

Hong Kong2.3%

Malaysia1.5%

India1.2%

All Others6.9%

4. CAPITAL IMPROVEMENT PROGRAM

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Terminal Projects52%

Transportation Projects

7%

Security Projects< 1%

Public Access/Environmental Enhancements

21%

Maritime Services20%

$803 MillionFiscal Years 2016-2020

CIP Projects – Revenue Producing & Targeted to Improve POLA’s Competitive Position 

• CIP supports strategic goal of safe, secure and sustainable supply chain • POLA expects to fund the CIP with cash, grants and commercial paper 

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Source: POLA 

Key CIP Projects Support GrowthTerminal Projects1. TRAPAC: Most advanced container terminal with 

advanced technology for new backland and rail yard ~$470M

2. Yang Ming: Reconstruction of existing container berth and expansion of existing rail yard ~$135M

3. Everport Redevelopment: Upgraded wharf and backland ~$60M

4. Cruise Terminal: AMP system expansion ~$17M5. YTI: Upgraded wharf and expansion of TICTF ~$85M6. APL: Multiple expansion elements for existing 

container terminal ~$250MNon‐Terminal Projects7. AltaSea Development: Urban marine research and 

innovation center ~$58M committedMarine Oil Terminal Engineering & Maintenance Standards Implementation: Liquid bulk wharves upgraded/replaced at various locations ~$180MLA Waterfront Development: ~$100M committed over the next five years

Transportation ProjectsA. I‐110 Connector Improvement Projects ~$104M 

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12

3

5

6

4

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5. FINANCIAL POSITION 

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Historical Debt Service Coverage(Fiscal Years Ending June 30th)

($000s) 2012 2013 2014 2015

Available Revenues** $435,291 $416,974 $446,910 $460,364

Operating Expenses 199,806 205,169 205,354 234,250

Net Revenues 235,485 211,805 241,556 226,114

Debt Service 71,609 72,401 65,488 69,988

Debt Service Coverage 3.3x 2.9x 3.7x 3.2xSource: POLA**Available Revenues include investment and interest income

Annual results are well above POLA’s financial policy of 2.0x

Strong Debt Service Coverage

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Consistent and Conservative Financial Policies and Practices

Annual review and approval by the Board

Current financial policies include:o Minimum $207 million of general reserves

o Minimum debt service coverage of 2.0x versus indenture requirement of 1.25x

FY2015 debt service coverage of 3.2x

o Variable rate exposure limited to 20% of long‐term debt

High liquidity as evidenced by strong days cash on hand

History of responsible expense control

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POLA currently has $951 million in senior lien fixed rate outstanding debt rated AA  Available $200 million Commercial Paper Program with no notes outstanding  POLA will have a potential refunding of its 2006 bonds and possibly certain 

maturities of 2009 bonds for interest savings this summer 

Debt Service Profile

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 ‐

 10

 20

 30

 40

 50

 60

 70

 80

 90

 100

2016* 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044

$ in m

illions

Fiscal Year

POLA: A Sound Investment POLA’s Competitive Advantages: Strategic world position, deepwater draft, strong intermodal connections, and a local market of over 20M consumers

Strong Financial Position: High debt service coverage and healthy cash balances 

Experienced Management: Strategic direction and capital investment

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Contact Information Port of Los Angeles Website: www.portoflosangeles.org

TEU statistics:  http://www.portoflosangeles.org/maritime/stats.asp Financial information:  

• Audited statements: http://www.portoflosangeles.org/finance/financial_statements.asp

• Bond disclosures:  http://www.portoflosangeles.org/finance/bond_disclosure.asp

Strategic plan:https://www.portoflosangeles.org/business/strategic_plan_update.asp

Marla Bleavins, Deputy Executive Director & Chief Financial Officer:  310-732-7706, mbleavins@portla.org

Soheila Sajadian, Director of Debt & Treasury:  

310-732-3756, ssajadian@portla.org

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