the governor 
The Georgia Ports Authority has proudly served as Georgia's ambassador to the maritime industry for 59 years. As the Ports Authority has increased its reach to every corner of the world, Georgia's products and services have become a vital part of the global economy. 
 
With the state's proactive support of the ports, we are seeing new corporate citizens, additional cargo and increased recognition as one of the premier Atlantic gateways for global trade and investment. Dr. Jeff Humphreys, Director of the Selig Center for Economic Growth at the University of Georgia's Terry College of Business, summed up this win-win approach, "Even in tough economic times, continued emphasis on the ports as a pillar of the state's economy translates into jobs, higher incomes, greater production of goods and services and revenue collections for government." Today, many major corporations call Georgia home. Companies such as Coca-Cola, Georgia Pacific, Ford Motor Company, UPS, Claxton Poultry, Shaw Industries, Inc., Goldkist, Rayonier and General Motors employ tens of thousands of Georgians and rely on our ports 
 
every day. Local manufacturers, farmers, truckers, mechanics, service providers and consumers all benefit from the strength of our ports. Georgia's ports serve as magnets for international trade, enriching the state's economy to benefit Georgians in communities across this state. 
To put the impact of the Georgia Ports Authority into perspective, port operations, together with private sector port-related operations, account for more than 275,000 full and part-time jobs across Georgia, $35.4 billion in sales, $17.1 billion in gross state product and $10.8 billion in annual income. 
Through a commitment to excellence and loyalty to the best interests of our state, the Georgia Ports Authority continues to serve Georgia well. 
 
Sonny Purdue 
Governor 
 
 the chairperson 
 
These are exciting times for Georgia's ports. Fiscal Year 2004 was no exception to the growth we have come to expect from the Georgia Ports Authority. Georgia's deepwater ports in Savannah and Brunswick, together with inland barge operations in Bainbridge and Columbus, have achieved 17 years of combined, consecutive growth. In fact, during Fiscal Year 2004, the Authority's statewide operations moved 16,428,401 tons of cargo, up 7.3 percent from the previous year. 
 
The Georgia Ports Authority has been able to stay ahead of this incredible growth curve with long-term strategic planning initiatives, aggressive expansion projects and improved efficiency and productivity of existing facilities. Our efforts to expand and grow this business have been supported by the Governor and the state legislature over the years helping us to provide Georgia's citizens with a proactive and clear vision of the future for Georgia's ports. These efforts have resulted in jobs for 275,968 Georgians. We're very proud to point out that Savannah is home to the fifth largest container port in the nation and the largest single container facility on the East and Gulf Coasts. Fifteen weekly all-water Asian carrier services, working in tandem with the efficiencies of Garden City Terminal's single-terminal design, as well as a wealth of nearby land available for transportation-related development, have proven to be a magnet for retail import distribution centers. Twelve Savannah area 
distribution centers alone cover 
 
over nine million square feet and are responsible for over 350,000 Twenty-foot Equivalent container Units annually. At the Port of Brunswick, automobiles and other roll-on/roll-off cargo (i.e., buses, industrial equipment and farm equipment), as well as Southeast and Midwest agri-product, dominate the port's landscape. The Port of Brunswick, the sixth largest auto port in the United States, handles vehicles at the Colonel's Island Terminal Auto Port Facility for every major auto manufacturer. 
But the Georgia Ports Authority is about far more than concrete, containers and cranes. It's about the people, the great men and women of this Authority who have dedicated their lives to improving and operating our deepwater ports. And the development and retention of our close to 800 employees is an important key to our continued success. Together, we have achieved an impressive record of growth and return for the citizens of Georgia, and with strategic planning, perseverance and dedication, the Georgia Ports Authority will remain on the right track for the foreseeable future. 
 
Albert J. Scott 
Chairperson 
 
   di recto r the executive 
I am proud to report that the Georgia Ports Authority has produced solid increases for Fiscal Year 2004. For the first time ever, Georgia's ports handled over 16 million tons of cargo, an increase of 1.1 million tons over the previous fiscal year. This unprecedented growth has created a surge of new jobs and economic growth throughout the state. 
 
From the thriving poultry and carpet industries of North Georgia, to the bustling interstate, intermodal and air freight hubs of Atlanta; from the Kaolin clay, wood and paper companies in the South of the state to the just-in-time auto suppliers in the West; from the rapidly growing distribution centers to the transportation and logistics based businesses cropping up all over the state - the Georgia Ports Authority is indeed helping to fuel our economic recovery. Over the past two fiscal years, the Georgia Ports Authority has experienced a total of 40 percent growth in its container business. To keep up with this tremendous growth curve, we have focused our efforts on facility upgrades, equipment, new employees, gate and 
 
security enhancement, technology research and development, as well as cost-saving measures. The installation of a silt suspension system and electrification of our ship-to-shore container cranes, just to name two of our initiatives, have saved over $1,300,000 in this last fiscal year alone. The Georgia Ports Authority's success stems from its proven ability to think outside of the gates and beyond the berth to move cargo seamlessly through the terminal. By deploying strategic marketing initiatives, focusing on our customers and investing in improved infrastructure, we are committed to providing an excellent return on Georgia's investment. 
 
Doug J. Marchand 
Executive Director 
 
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FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 
 
Seventeen Years of Growth in Total Tonnage 
 
   The Georgia Ports Authority owns three deepwater terminals at the 
port of brunswick 
- the Colonel's Island Terminal, the Mayor's Point Terminal and the Marine Port Terminal. The Authority operates two of the deepwater terminals - Colonel's Island Terminal and Mayor's Point Terminal. 
 
The Port of Brunswick's emergence as one of America's top auto ports, plus its strategic role in the handling of forest products, agri-bulk and other breakbulk commodities, continues to influence Brunswick's strategic importance to Georgia's ongoing success. With the opening of the Sidney Lanier Bridge in 2003 and the current deepening of the port's harbor to 36 feet at mean low water, the right combination of harborside and landside infrastructure is coming together to further heighten Brunswick's viability as a port of choice. 
For Fiscal Year 2004, the number of auto and machinery units handled continued a dynamic 
upward trend, and total tonnage inaeased at the Port 
of Brunswick by 5.7 percent. With product lines r e ~ virtually every major automotive, farm 
and heavy machinery manufacturer, 
units moved across Brunswick's the fiscal year. In 2004, Glovis America, lidated its Southeastern auto processing on behalf of Hyundai and Kia at Colonel's , scheduling 130,000 autos through the fadlity 
for the year, with further inaeases expected over the next flve years. All told, payrolls created and 
ned from this consolidation amount to $21.75 
ditionally, Porsche Cars North America 
 
handle close to 600 Carrera GTs, valued at $440,000 each, over the next three years. 
As the South Atlantic's premier agri-bulk complex, Colonel's Island Terminal is capable of accommodating 64,800 short tons of agri-product in combined flat and vertical storage at any one time. The agri-bulk business at the Port of Brunswick has increased ten-fold in the last ten years, and the terminal handled more than one million tons of bulk cargo during FY04. 
Mayor's Point Terminal, located on the upper reach channel of the East River in Brunswick, is a secured, dedicated breakbulk facility specializing in the rapid and effident handling of traditional exports such as woodpulp, plywood and paper products. The 22-aae terminal features more than 1,700 linear feet of berthing, 35,500 square feet of covered intransit space, 2,000 feet of covered rail siding and 7.9 acres of open, versatile storage. 
Typical commodities handled through the Port of Brunswick terminals include general cargo such as autos, machinery, lumber and linerboard. Bulk cargo includes gypsum, limestone, perlite and agri-bulk commodities such as soybeans, corn and animal feed. Total tonnage handled by the Port of 
 
   Strategically located in Georgia's heartland, the Authority's 
 
are valuable resources for the agricultural community of middle Georgia. 
 
For nearly 50 years, the Georgia Ports Authority's Bainbridge Terminal has been an integral part of Georgia's inland cargo transportation system. The terminal comprises 107 acres with 93,000 square feet of transit shed and warehouse space to accommodate various types of bulk cargo. Although water levels of the river system have restricted the use of barges, Bainbridge Terminal remains busy with domestic bulk cargo. 
Throughout Fiscal Year 2004, the terminal handled a total of 56,602 tons via rail and truck traffic. From feed grains to fertilizer, bulk commodities handled by the Bainbridge Terminal benefit agricultural and dairy communities in southwest Georgia. At 20,911 tons, gypsum, which is used by local peanut farmers, was the largest 
bulk cargo handled by the terminal in Fiscal Year 2004. Other fertilizers to transit the terminal include the world's most widely traded phosphate 
 
fertilizer, diamommonium phosphate (commonly referred to as DAP); K-Mag, which is composed primarily of potassium and magnesium; potash, a source of soluble potassium; and urea, which is 46 percent nitrogen. Together, these other fertilizers totaled over 49,000 tons of inbound and outbound bulk cargo for the terminal during the fiscal year. 
Other key bulk commodities handled by the terminal during Fiscal Year 2004 include feed grains such as Dried Distiller's Grain (called DDG) and hominy. Together, these agri-products used by local feed mills and dairies produced over 3,500 tons of bulk cargo for the terminal. Additionally, cotton seed processed from local cotton growers and distributed to dairies and oil mills comprised over 3,700 tons of cargo during Fiscal Year 2004. 
Columbus Terminal, located at Mile Post 154.5 on the Chattahoochee River, is used as a storage and distribution facility for caustic soda and petroleum products. The terminal is leased to ST Services. 
 
  The Georgia Ports Authority takes a proactive approach to 
 
preparing for the future by creating the right conditions for 
 
change and growth. From major upgrades and continuous 
 
expansion to protecting the environment and helping the 
 
community, the Georgia Ports Authority is keeping an 
 
eye on 
 
future. 
 
Thanks to a strong commitment by its many partners across the State of Georgia, the Authority has stayed ahead of a tremendous growth curve. Record volumes of cargo continue to flow through G~ia's ports. Since 1995, total tonnage moving through the Georgia Ports Authority has increased by 73 percent and container operations have grown by 148 percent. Given the ever-increasing need for goods to move more rapidly, the Georgia Ports Authority has coupled practicality with 
innovation to expedite the handling of cargo. The Authority takes pride in 
 
leading the maritime industry in new concepts and practices, like its Client Relations Center and the Maritime Logistics Innovation Center, bringing fresh approaches to the movement of cargo. At the same time, the Georgia Ports Authority continues to champion best practices to protect the environment and be a good corporate neighbor for the 'State. As Georgia becomes the gateway to the global marketplace, the Georgia Ports Authority will be rea<b'. Strategic planning, dedicated employees, supportive partners and commitment to the environment have enabled the Georgia Ports Authority to 
 
  Georgia's strategic geographic advantage allows shippers and ocean carriers to reach 70 percent of the United States' consumer market. To prepare for future growth and opportunities, the Georgia Ports Authority is stepping up to the plate and 
pOSsibilities. 
 
Building new facilities and improvements to the infrastructure have taken center stage. Construction has already begun on Container Berth 8, a $109 million expansion project at the Port of Savannah's Garden City Terminal, which will add 2,100 linear feet of berthing space. Eventually, 100 additional acres of container storage and handling area will also be added to what is already the largest single container facility on the East and Gulf Coasts. When Container Berth 8 is complete in January 2006, Garden City Terminal will have more than 9,800 linear feet in berthing space. The project is also expected to bring an additional 11,000 jobs to Georgia. Additionally, a five-year, $33-million program to convert the Port of Savannah's Garden City Terminal to a total stacked operation is well underway. Major upgrades to Garden City 
Terminal's Container Berths 1, 2 and 3 are nearin~ 
 
completion. The completed work has enabled the Authority to significantly increase capacity. 
Another project undertaken at the Port of Savannah has been the improvement to the Gate 3 interchange complex at Garden City Terminal. The seven-month project allows the Authority to now increase the total gate capacity by more than 50 percent, enhance truck turn times, reduce air emissions and prepare for future growth. 
At the Port of Brunswick, which is currently the sixth largest auto port for imports in the United States, an aggressive expansion program is also underway. Funding is now in place to construct the State Route 17 Flyover Bridge. When complete, the new bridge will allow the Georgia Ports Authority to fully develop and utilize the south side of the Port of Brunswick's Colonel's Island Terminal. 
At the GPA, today's achievements are measured by tomorrow's challenges. 
 
 The Georgia Ports Authority is an extremely large, complex operation where thousands of people come to work every day 
and millions of tons of cargo are handled each year. Securing 
the future 
means putting the safety and security of employees, facilities and users first. By effectively using multiple tiers of technology and implementing sound operational security procedures, the Authority is joining with ports across the world to provide safer harbors, supply chains and work environments. 
 
As part of the Georgia Ports Authority's unified and comprehensive approach to port security, the Authority has taken measures to enhance perimeter fencing, improve lighting, install intrusion detection devices and locate security surveillance cameras throughout all of the Ports' facilities. Additionally, an Access Control Security Management System has been implemented. As part of the system, persons who have a legitimate need to enter property owned and controlled by the Georgia Ports Authority are required to possess and display authorized identification credentials. To date, over 10,800 identification badges have been issued to persons who regularly access the Authority's terminals. 
For over 50 years, the Authority has employed 
 
its own police force, a highly trained and accredited group which has grown by 20 percent since September 11, 2001. 
The Georgia Ports Authority was one of the first commercial marine operators to enroll in the Customs-Trade Partnership Against Terrorism, a program designed to protect global commerce. The Authority has also continued to build upon interagency relationships by hosting and participating in security planning sessions with the military, federal regulatory agencies, regional law enforcement organizations, and city and county governments. 
By implementing a layered and balanced approach to port security, the Authority and its federal, state and local partners are strengthening Georgia's maritime system simultaneously protecting its citizens and the economy from terrorism. 
 
   Location, land and labor together are meaningless without proper intermodal links to facilitate cargo movement. Excellent intermodal handling capability is but one reason among many that shippers and carriers choose the Georgia Ports Authority for 
theright moves. 
 
With on-terminal service provided by CSX Transportation and Norfolk Southern Railway Company, Georgia's ports provide an efficient means for cargo to reach its destination by rail. And, with the advent of the James D. Mason lntermodal Container Transfer facility at the Port of Savannah's Garden City Terminal, the movement of containerized freight is seamless. 
Opened in 2001, the facility features four 2,500-foot tangent rail tracks to transfer import, export and domestic containers to and from rail cars; a 2,500-foot by-pass track, three 2,500-foot storage tracks and trackside truck queuing for expedited transfer of containers between rail and motor carrier. 
In Fiscal Year 2004, this intermodal container transfer facility experienced a 22 percent increase 
 
over the previous year. The Mason lntermodal Container Transfer Facility allows the Georgia Ports Authority to accommodate the growing volume of containerized cargo imported and exported via the Garden City Terminal. 
The Port of Savannah offers a flexible operating environment with overnight service to Atlanta, the fastest of any North American port. Expedited rail service is offered to key hubs throughout the Southeast, Midwest and Gulf, with delivery schedules ranging from one to three days. 
From traditional rail service to seamless intermodal handling, the Port of Savannah provides shippers and carriers with the very best rail transportation system service available. 
 
 The Georgia Ports Authority is at the forefront of the world's ports when it comes to fresh ideas and 
innovation. 
 
The Georgia Ports Authority's Client Relations Center, the first of its kind in the United States port industry, serves as the first point of contact for client issues and questions. Staff formerly serving in information technology, pricing, operations and finance have been brought together into a single division with the goal of better service to Georgia Ports Authority customers. As a department, staff members are equipped to provide quicker resolution to client concerns and can supervise the process through assistance from other Authority divisions to tackle more difficult issues. 
The Georgia Ports Authority is proud to be part of the Maritime Logistics Innovation Center, a unique partnership between federal and state agencies, private industry and academia. Launched by Georgia Governor Sonny Perdue, the Center's focus is to promote research, training and education in the maritime industry; develop innovative maritime logistics applications; and facilitate the transfer of useful knowledge to commercial applications. The Maritime Logistics Innovation Center brings together the Georgia Ports Authority, the University System of Georgia and the Georgia Department of Economic Development. 
 
Ultimately, the Center will provide leadership on maritime logistics and security and provide a forum for the demonstration of best practices for both industries. The Maritime Logistics Innovation Center is unique in that there is no other center in the world that addresses the research, education, economic development and policy issues for maritime logistics in the United States. 
In partnership with Navis, LLC, the Georgia Ports Authority also recently implemented a major technology upgrade that not only increases productivity but also prepares the way for future growth. This upgrade has helped the Georgia Ports Authority shorten turn times and increase the flow of vital information. 
Working as a solution provider, the Georgia Ports Authority takes pride in exceeding customer expectations and will continue to install the building blocks for future innovation. 
 
   At the Georgia Ports Authority, the importance of being a good neighbor 
and maintaining the 
right balance 
in the world community is paramount when planning for future growth. Advancements in technology and infrastructure improvements are consistently coupled with concern for the environment. 
 
The Georgia Ports Authority continually looks for innovative ways to maintain an ecological balance without disrupting the quality of customer service. To that end, the Authority has installed a silt suspension system to reduce the need for periodic dredging in the harbor. Prior to receiving the permit from the United States Army Corps of Engineers, the Georgia Ports Authority conducted extensive research, calculation and field testing to ensure the system's viability and sensitivity to the environment. The investigations also revealed that the silt suspension system is safe for protected species. Because of the environmental benefits, the system installed by the Georgia Ports Authority has the full approval and support of the United States Environmental Protection Agency, the United States Fish and Wildlife Service, the Georgia Department of Natural Resources and the National Marine Fisheries Service. 
In another effort to protect aquatic species, the Authority participates on the Southeast Implementation Team for the recovery of the North Atlantic Right Whale, an endangered species with calving grounds on the South Atlantic coast. The Georgia Ports Authority also funds the paging system that provides real-time sighting information to the maritime community as part of a communication network established to prevent vessel strikes of these endangered mammals. 
A plan to deepen the federal navigation channel in Savannah is also underway that sets forth more 
 
environmental protection safeguards than required for any other project of its kind in the nation. Extensive scientific studies and data collection efforts are either nearing completion or have been completed. This work represents the most comprehensive environmental assessment of the Savannah River ecosystem ever undertaken. To further protect valuable wetland habitat in the Savannah River estuary, the Authority has placed 1,056 acres of property under restrictive covenants, permanently protecting the land from development and thereby enhancing habitat for hundreds of estuarine-dependent species in the area. 
Air quality is also of concern to the Georgia Ports Authority. In a proactive effort, the Authority ordered its last four ship-to-shore cranes to be powered solely by electricity and has converted all of its remaining ship-to-shore cranes to electric power. The conversion reduces environmental emissions from the high sulfur diesel fuel by 415,658 pounds per year. The Authority is also reducing the possibility of environmental hazards due to diesel and coolant spills. Additionally, by electrifying the ship-to-shore cranes, the Authority has created a safer workplace for terminal personnel by reducing noise around vessel operations and removing diesel engine exhaust. 
 
 Each year, the Georgia Ports Authority and its employees give thousands of hours and dollars to community organizations that 
support health, education and heritage. By strengthening the 
community 
we are working together to create a better life for everyone. For Fiscal Year 2004, the Authority and its employees gave generously, and: 
 Recognized teachers across Georgia for the WTOC-TV Top Teacher Program 
 Pledged more than $160,000 to the United Way 
 Walked and held fundraisers for the March of Dimes 
 Devised special projects to show support for service members deployed to the Middle East 
 Read to children as part of Communities and Schools 
 Gave blood to the Red Cross 
 Donated gifts for children to Court Appointed Special Advocates 
 Supported Companies and Kids 
t Participated in Earth Day, Coastfest, Georgia on My Mind, the Martin Luther King, Jr. Observance Day activities, and the First Lady's Summit on Children 
 
     GEORGIA PORTS AUTHORITY FINANCIAL REPORT 
JUNE 30, 2004 AND 2003 
 
  GEORGIA PORTS AUTHORITY 
FINANCIAL REPORT JUNE 30, 2004 
TABLE OF CONTENTS 
INDEPENDENT AUDITOR'S REPORT ..................................................................................................................40 MANAGEMENT'S DISCUSSION AND ANALYSIS........................................................................................ 41 - 47 FINANCIAL STATEMENTS 
Statements of Net Assets ...................................................................................................................... 48 - 49 Statements of Revenues, Expenses and Changes in Net Assets ............................................................ 50 Statements of Cash Flows ...................................................................................................................... 51-52 Notes to Financial Statements ................................................................................................................ 53-68 
 
  CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS, LLC 
439 MULBERRY STREET P.O. BOX 1877 MACON , GEORGIA 3 1202-1 877 TELEPHONE (478) 464-8000 FAX (478) 464-805 1 www.mjcpa.com 
INDEPENDENT AUDITOR'S REPORT 
To the Board of Directors Georgia Ports Authority Savannah, Georgia 
We have audited the accompanying financial statements of the Georgia Ports Authority (the Authority), a component unit of the State of Georgia, as of and for the years ended June 30, 2004 and 2003 as listed in the table of contents. These financial statements are the responsibility of the Authority's management. 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 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 includes examining , on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Georgia Ports Authority, a component unit of the State of Georgia, as of June 30, 2004 and 2003, and the changes in financial position and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. 
In accordance with Government Auditing Standards, we have also issued a report dated August 6, 2004 on our consideration of the Georgia Ports Authority's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audits. 
The Management's Discussion and Analysis on pages 2 through 8 is not a required part of the basic financial statements, but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. 
Macon, Georgia August6,2004 
40 
 
 GEORGIA PORTS AUTHORITY 
MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
As management of the Georgia Ports Authority (the "Authority"), we offer readers of the Authority's financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal years ended June 30, 2004 and 2003, with selected comparative information for the year ended June 30, 2002. We encourage readers to consider the information presented here in conjunction with the financial statements and footnotes. All amounts, unless otherwise indicated, are expressed in thousands of dollars. 
Operating Highlights 
The Authority operates deepwater port terminals in Savannah and Brunswick and inland river barge terminals in Bainbridge and Columbus. The Authority handles three basic types of international and domestic cargos: 
 containerized cargo (various types of products that can be placed inside an intermodal container) 
 non-containerized general cargo and rolling stock (products such as steel beams, rolls and bales of various products, autos, tractors, and other heavy equipment) 
 bulk cargo (products such as agri-commodities and various liquid commodities) 
The Authority enjoyed its best performances ever in fiscal years 2004 and 2003, posting significant gains in several important cargo categories and increasing overall tonnage by 23.5% as measured against fiscal year 2002 results. 
During fiscal year 2004, the Authority handled more than 1.5 million TEU's (twenty foot equivalent units) and led the nation as one of the fastest growing container ports. TEU's handled in fiscal year 2004 increased 4.5% to an all time record of 1,572,734, up from fiscal year 2003's total of 1,505,278. 
At the Colonel's Island Terminal in Brunswick during fiscal year 2004, the Authority improved business 2.4% by handling a record 322, 115 auto and machinery units for the year. Agri-bulk products handled at the same terminal decreased 6% to 427,792 tons in fiscal year 2004. Fiscal year 2003 auto and machinery results were up 25.2% over fiscal year 2002 with a total of 314,625 units while agri-bulk products decreased 27% to 454,561 tons in the same period. 
Financial Highlights 
o The Authority's net assets (amount assets exceeded liabilities) were $507,777 at the close of fiscal year 2004, $468,684 at the close of fiscal year 2003 and $441,040 at the close of fiscal year 2002. 
o This resulted in the Authority's total net assets increasing $39,093 and $27,644 during fiscal years 2004 and 2003, respectively. These net changes are further reflected in the Authority's statements of revenues, expenses and changes in net assets. 
41 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
 
Financial Highlights (Continued) 
 
o The Authority's total long-term debt (including current maturities) increased by $6,581 (or approximately 19%) and by $2,362 (or approximately 7%) during fiscal years 2004 and 2003, respectively. The key factors were increased borrowings from draws against the lines of credit and the issuance of new revenue bonds. 
 
o The Authority had record operating revenues of $128,951 for fiscal year 2004 representing an increase of approximately 6% over fiscal year 2003. Operating revenues during fiscal year 2003 were $121,453 representing an increase of 16% over fiscal year 2002. 
 
Overview of the Financial Statements 
 
This discussion and analysis is intended to serve as an introduction of Georgia Ports Authority's basic financial statements. The statements of net assets present information on all of the Authority's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating. 
 
The statements of revenues, expenses and changes in net assets present information showing how the Authority's net assets changed during the fiscal year. All changes in net assets are reported on an accrual basis. 
 
Fund Financial Statements 
 
Net Assets: The following table reflects the overall financial condition of the Authority as of the last three fiscal years ended June 30, 2004, 2003 and 2002, respectively. 
 
Current assets Restricted assets Capital assets Other long-term assets 
Total Assets 
Current liabilities Long-term debt Other noncurrent liabilities 
Total Liabilities 
Invested in capital assets, net of related debt Restricted Unrestricted 
Total Net Assets 
 
2004 
 
$ 
 
45,976 
 
. 934 
 
503,328 14,332 
564,570 
 
12,854 38,512 
5,427 56,793 
 
473,468 
934 33,375 
$ so1,m 
 
2003 
 
$ 
 
46,151 $ 
 
517 
 
468,668 
 
14,558 
 
529,894 
 
25,281 32,145 
3,784 61,210 
 
442,520 517 
25,647 $ 468,684 $ 
 
2002 
52,616 6,368 
407,165 21 ,326 
487,475 
13,165 29,797 
3,473 46,435 
380,736 6,368 
53,936 441,040 
 
42 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS {In Thousands) 
Fund Financial Statements {Continued) 
The Authority's total current assets decreased by $175 and $6,465 during fiscal years 2004 and 2003, respectively. Elements to consider related to this change include: 
 Cash and cash equivalents increased from $22,833 to $23,381 in fiscal year 2004 and decreased from $26,456 to $22,833 in fiscal year 2003. This results in a net decrease of approximately $3,075 over the two years. 
 Accounts receivable - trade increased by $382 and $356 in fiscal years 2004 and 2003, respectively, due to increased business activity. 
 Accounts receivable - non-trade decreased by $1,205 and $3,562 in fiscal years 2004 and 2003, respectively, due to decreases in the amounts due from the State of Georgia on G.O. Bond related projects and from the Federal Government on Homeland Security related projects. 
 Inventories increased from $3,516 to $3,930 in fiscal year 2004. This results in a net change of approximately $414 and is due to the purchase of spare parts (engines and gear boxes) for the new container cranes for Container Berth 8. During fiscal year 2003, inventories remained relatively unchanged from the balance of $3,288 in the prior year. 
 Prepaid expenses decreased by $266 and increased by $419 in fiscal years 2004 and 2003, respectively. This results in a net change of approximately $153 over the two year period. 
Restricted assets reflect cash balances required to be segregated from operating cash accounts. The overall amount in this caption increased to $934 at June 30, 2004 from $517 at June 30, 2003. This increase relates primarily to restricted proceeds remaining from the Revenue bonds (Series 2003). Restricted assets at the end of fiscal year 2003 decreased to $517 from $6,368 at the end of fiscal year 2002. This decrease is substantially related to the use of proceeds available from the Revenue bonds (Series 2002). 
Overall, the total of unrestricted and restricted cash as reflected separately on the statement of net assets increased by approximately $965 during the year ended June 30, 2004. The total of unrestricted and restricted cash decreased by approximately $9,474 during the fiscal year ended June 30, 2003. 
43 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
Fund Financial Statements (Continued) 
Long-term assets include certain investments (GEAP investments and insurance contracts) , notes receivable, and capital assets. The Authority's capital and other long-term assets increased by $34,434 and $54,735 in fiscal years 2004 and 2003, respectively. Elements to consider related to this change include: 
 Long-term investments increased by $508 and $71 in fiscal years 2004 and 2003, respectively. This resulted in an overall increase of $579 in GEAP investments and insurance contracts during this two year period . 
 Other non-current assets decreased by $734 and $769 in fiscal years 2004 and 2003, respectively. This decrease is primarily due to an increase in annual pension cost of the employee pension plan. 
 Capital assets increased by $34,660 and $61,503 in fiscal years 2004 and 2003, respectively. Included in the increase during fiscal years 2004 and 2003 was the purchase of capital assets in the amount of $128,700, net of disposals. Depreciation expense of $36,721 was incurred during these two years, which offset the overall increase in capital assets. 
The Authority's total current liabilities decreased by $12,427 and increased by $12,116 during fiscal years 2004 and 2003, respectively. Elements to consider related to this change include: 
 Current portion of long-term debts (notes and revenue bonds) increased by $214 in fiscal year 2004 and remained relatively level for fiscal year 2003. The change in fiscal year 2004 is primarily due to the issuance of the Revenue bonds (Series 2003) during fiscal year 2004. 
 Accounts and contracts payable decreased by $12,766 and increased by $12,306 during fiscal years 2004 and 2003, respectively. This decrease during fiscal year 2004 is due primarily to reimbursement to the State of Georgia Department of Transportation in accordance with a Memorandum of Agreement and the increase during fiscal year 2003 is due primarily to several ongoing construction projects of the Authority not fully completed as of the end of the year. 
 Accrued liabilities increased by $125 and decreased by $204 during fiscal years 2004 and 2003, respectively. 
The Authority's long-term debt increased by $8,715 over the last two fiscal years with balances of $38,512 in fiscal year 2004, $32, 145 in fiscal year 2003 and $29,797 in fiscal year 2002. The primary reason for this increase was the issuance in fiscal year 2004 of Revenue bonds (Series 2003) and draws made during fiscal year 2003 and fiscal year 2004 against the Lines of Credit. Also during this time period, the Authority experienced an increase in the net pension benefits obligation. 
44 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
 
Fund Financial Statements (Continued) 
The Authority's net asset position increased $66,737 over the last two fiscal years with balances of $507,777 in fiscal year 2004, $468,684 in fiscal year 2003 and $441,040 in fiscal year 2002. The increase is attributable to amounts received primarily from the State of Georgia for contribution of capital assets and the resulting change in net assets generated by the Authority. 
 
Revenues, Expenses and Changes in Net Assets: The following table illustrates the history of revenues, expenses and changes in net assets for the past three years ended June 30, 2004, 2003, and 2002, respectively. 
 
Operating revenues: Container cargo General cargo Liquid and dry bulk Railroad Operating revenues 
 
2003 
 
2002 
 
$ 
 
88,434 $ 
 
83,385 $ 
 
66,508 
 
31,172 
 
29,501 
 
28,792 
 
5,718 
 
5,443 
 
6,315 
 
3,627 
 
3,124 
 
3,053 
 
128,951 
 
121,453 
 
104,668 
 
Operating expenses: Operation and maintenance of facilities General administration Depreciation Operating expenses 
 
61,941 27,633 18,963 108,537 
 
60,343 23,497 17,758 101,598 
 
50,076 22,415 19,884 92,375 
 
Gain on sale of capital assets 
 
48 
 
58 
 
3,091 
 
Operating income 
 
20,462 
 
19,913 
 
15,384 
 
Nonoperating income (expense) Interest income Interest expense Noncapital contributions Noncapital port development expenses Other Nonoperating income (expense), net 
 
324 (600) 1,505 (4,208) 298 (2,681) 
 
708 (785) 
0 (4,477) 
907 (3,647) 
 
1,431 (534) 
0 (3,986) 
(38) (3,127) 
 
Capital contributions 
 
21,312 
 
11,378 
 
12,219 
 
Change in Net Assets 
 
$ 
 
39,093 $ 
 
27,644 $ 
 
24,476 
 
Total fiscal year 2004 operating revenues of the Authority are $128,951 or 6% greater than fiscal year 2003 revenue of $121,453. Fiscal year 2003 operating revenues are 16% greater than fiscal year 2002's revenue of $104,668. The revenue increase during the past two years is primarily attributable to an increase in container volumes. 
 
45 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
Fund Financial Statements (Continued) 
Total fiscal year 2004 operating expenses of the Authority are $108,537 or 7% greater than fiscal year 2003's expenses of $101,598. Fiscal year 2003 expenses are 10% greater than fiscal year 2002 expenses of $92,375. The expense increase during the past two years is also primarily attributable to an increase in container volumes. 
Operating incomes of $20,462 and $19,913 for fiscal years 2004 and 2003, respectively, are the result of the different growth rates in revenues and expenses. 
Non-operating income (expense) for fiscal years 2004 and 2003 includes interest income and expense on the Authority's debt as well as an expense in port harbor deepening costs. In fiscal year 2004 there was $1,505 recorded from the State of Georgia for G.O. Bond non-capital contributions. 
Capital contributions during fiscal years 2004 and 2003 include capital contributions from the Federal, State of Georgia, and Local Governments net of any returns of capital contributions. 
Capital Asset and Debt Administration 
Capital Assets: The Authority's investment in capital assets was $503,328 as of June 30, 2004 representing a 7.4% increase for the year and $468,668 as of June 30, 2003 representing a 15.1% increase for the year. These investments in capital assets include land, buildings and systems, improvements, machinery and equipment. 
Major capital events during the past two fiscal years included the following:  New container cranes for Container Berth 8  Paving upgrades and overlays at the Garden City Terminal  Purchase of six rubber tired gantry cranes  Purchase of fifteen new top lifts and three new empty handlers  Construction of silt suspension system  Facility security improvements  Purchase of land for the Garden City Terminal  Mega-site property acquisitions and site development improvements  Container Berth 8  Construction and expansion ofthe Colonel's Island Facility  Gate expansion  Conversion of cranes to electric power 
Additional information on the Authority's capital assets can be found in Note 3 to the financial statements. 
46 
 
 MANAGEMENT'S DISCUSSION AND ANALYSIS (In Thousands) 
Capital Asset and Debt Administration (Continued) 
Debt Administration: As a component unit of the State of Georgia, long-term borrowing by the Authority is provided through general obligation bonds issued by the State of Georgia. The Authority also had total revenue bonds outstanding of $28,552 and $24,573 for fiscal years 2004 and 2003, respectively. Additionally, the Authority had notes payable to financial institutions amounting to $12,361 and $9,759 for fiscal years 2004 and 2003, respectively. The key factors in the increase of debt were the draws on the lines of credit and the issuance of new revenue bonds. 
Currently Known Conditions Affecting Future Operations 
The Authority has agreed with the State of Georgia and the Federal Government to participate as a Cooperating Agency in the study of deepening the Savannah River harbor and channel, responsible for the underpinning scientific study for the project. Additionally, the Authority has agreed with the State of Georgia and the Federal Government to continue the funding for the actual deepening of the harbor and channel of the Brunswick port on behalf of the local sponsor for the project, the Georgia Department of Transportation. The Authority's total estimated costs associated with these projects in this role are projected to amount to approximately $28.2 million as of June 30, 2004 to be funded by the Authority in future years. 
Further Information 
This financial overview is designed to provide readers with a general overview of the Authority's finances, and to show accountability. If you have questions or would like further information about this financial report, you may contact Georgia Ports Authority, Attn: Finance Dept. at P.O. 2406, Savannah, Georgia, 31402. The Authority's street address is 2 North Main Street, Garden City, Georgia 31408. 
47 
 
 GEORGIA PORTS AUTHORITY 
STATEMENTS OF NET ASSETS JUNE 30, 2004 AND 2003 (In Thousands) 
 
ASSETS 
 
2004 
 
2003 
 
Current assets: 
 
Cash and cash equivalents 
 
$ 
 
Short-term investments 
 
Accounts receivable - Trade (less allowance for doubtful accounts 
 
of $513 and $690 for 2004 and 2003, respectively) 
 
Accounts receivable - Non-trade 
 
Current maturities of notes receivable 
 
Inventories of materials and supplies, at average cost 
 
Prepaid expenses 
 
23,381 $ 
16,226 2,009 
32 3,930 
398 
 
22,833 50 
15,844 3,214 30 3,516 664 
 
Total current assets 
 
45,976 
 
46,151 
 
Restricted assets: Cash in construction fund Cash in escrow funds Cash - federal grants Investments in escrow funds 
Total restricted assets 
Long-term investments Long-term portion of notes receivable Other non-current assets Capital assets: 
Non-depreciable Depreciable, net of accumulated depreciation 
 
465 169 
300 
934 
14,129 10 
193 
210,392 292,936 
 
4 168 45 300 
517 
13,621 42 
895 
177,366 291,302 
 
Total assets 
 
517,660 
 
483,226 
 
$ 
 
564,570 $ 
 
529,894 
 
See Notes to Financial Statements. 
 
48 
 
 LIABILITIES Current liabilities: 
Current portion of notes payable, bank Current portion of revenue bonds Accounts and contracts payable Accrued liabilities 
Total current liabilities 
Unearned rentals Long-term portion of notes payable, bank Long-term portion of revenue bonds Other non-current liabilities 
Total liabilities 
Net assets: Invested in capital assets, net of related debt Restricted Unrestricted Total net assets 
 
2004 
 
$ 
 
301 
 
2,100 
 
6,980 
 
3,473 
 
12,854 
 
2003 
 
$ 
 
287 
 
1,900 
 
19,746 
 
3,348 
 
25,281 
 
106 12,060 26,452 
5,321 43,939 
56,793 
 
50 9,472 22,673 3,734 35,929 
61,210 
 
473,468 934 
33,375 
 
442,520 517 
25,647 
 
$ 
 
507,777 
 
$ 468,684 
 
49 
 
 GEORGIA PORTS AUTHORITY 
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS 
FOR THE YEARS ENDED JUNE 30, 2004 AND 2003 (In Thousands) 
 
Operating revenues Container cargo General cargo Liquid and dry bulk Railroad Operating revenues 
Operating expenses Operation and maintenance of facilities General and administrative Depreciation Operating expenses 
Gain on sale of capital assets 
Operating income 
Non-operating income (expense) Interest income Interest expense Non-capital contributions Non-capital port development expense Other Non-operating expense, net 
Capital contributions 
Change in net assets 
Total net assets, beginning of year 
Total net assets, end of year 
 
2004 
 
$ 
 
88,434 
 
31,172 
 
5,718 
 
3,627 
 
128,951 
 
2003 
 
$ 
 
83,385 
 
29,501 
 
5,443 
 
3,124 
 
121,453 
 
61,941 27,633 18,963 108,537 
48 
20,462 
 
60,343 23,497 17,758 101,598 
58 
19,913 
 
324 (600) 1,505 (4,208) 298 (2,681) 
 
21,312 
 
39,093 
 
468,684 
 
$ 
 
507,777 
 
708 (785) 
(4,477) 907 
(3,647) 
11,378 
27,644 
441,040 
$ 468,684 
 
See Notes to Financial Statements. 
50 
 
 GEORGIA PORTS AUTHORITY 
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2004 AND 2003 
(In Thousands) 
 
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users Payments to suppliers Payments to employees Net cash provided by operating activities 
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from maturities of investments Purchases of investments Interest received Net cash provided by investing activities 
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Other non-operating expense Non-capital contributions Net cash used in non-capital financing activities 
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchases of capital assets Proceeds from the sale of capital assets Payments on revolving credit agreements Borrowings on revolving credit agreements Proceeds from issuance of revenue bonds Principal payments on long-term borrowings Interest paid on long-term borrowings Principal payments received on notes receivable Capital contributions Net cash used in capital and related financing activities 
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents: 
Beginning Ending Classified as: Cash and cash equivalents Cash in construction fund Cash in escrow funds Cash - federal grants 
51 
 
2004 
 
2003 
 
$ 
 
129,271 
 
$ 
 
121,794 
 
(71,126) 
 
(41,719) 
 
{30,032} 
 
(31,076} 
 
28,113 
 
48,999 
 
50 (262) 516 304 
 
1,050 (603) 661 
1,108 
 
(3,910) 1,505 {2,405} 
 
(3,570) (3,570} 
 
(53,754) 179 
2,889 5,900 (2,208) 
(600) 30 
22,517 {25,047} 
965 
 
(73,106) 250 
(13,434) 17,966 
(2,170) (785) 28 
14,940 (56,311} 
(9,774) 
 
23,050 
 
32,824 
 
$ 
 
24,015 
 
$ 
 
23,050 
 
$ 
 
23,381 
 
$ 
 
22,833 
 
465 
 
4 
 
169 
 
168 
 
45 
 
$ 
 
24,015 
 
$ 
 
23,050 
 
 GEORGIA PORTS AUTHORITY 
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2004 AND 2003 
(In Thousands) 
 
CASH FLOWS FROM OPERATING ACTIVITIES Operating income Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation Provision for doubtful accounts Gain on sale of capital assets Increase in value of insurance contracts Changes in assets and liabilities: Increase in accounts receivable - trade Increase in inventories (Increase) decrease in prepaid expenses Decrease in other non-current assets Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in unearned rentals Increase in other non-current liabilities Net cash provided by operating activities 
See Notes to Financial Statements. 
 
2004 
 
$ 
 
20,462 
 
2003 
$ 19,913 
 
18,963 (177) (48) (438) 
 
(205) (414) 266 702 
 
(12,641) 
 
56 
 
1,587 
 
$ 
 
28,113 
 
17,758 (330) (58) (721) 
(26) (228) (419) 
697 
12,102 (175) 486 
$ 48,999 
 
52 
 
 GEORGIA PORTS AUTHORITY 
NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 1. 
 
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES 
Organization: 
The Georgia Ports Authority (the "Authority") is an instrumentality of the State of Georgia and a public corporation created in 1945 by an Act of the General Assembly of Georgia for the general purpose of developing, promoting, constructing, maintaining and operating harbors, seaports and riverports within the State. The Authority owns and is responsible for the operations of terminals in Bainbridge, Brunswick, Columbus, Garden City, Savannah and Colonel's Island. These facilities handle import and export containerized, bulk and general cargos. The Authority is considered a component unit of the State of Georgia for financial reporting purposes as defined in Government Accounting Standards Board Statement 14, "The Financial Reporting Entity." 
The Authority operates primarily as a self-supporting governmental enterprise and uses the accrual basis of accounting applicable to governmental enterprise funds. The Authority has no stockholders or equity holders and is directed by a thirteen member governing board (the Georgia Ports Authority Board of Directors), whose members are appointed by the Governor of Georgia for original terms not exceeding four years; members may be re-appointed for successive terms. 
Significant Accounting Policies: 
Basis of Accounting: 
The accompanying financial statements are prepared on the accrual basis of accounting, under which revenues are recognized when earned and measurable and expenses are recognized when they are incurred, if measurable. In accounting and reporting for its operations, the Authority applies all Governmental Accounting Standards Board (GASB) pronouncements, and applies all Financial Accounting Standards Board (FASB) pronouncements and interpretations issued on or before November 30, 1989. Such FASB pronouncements are applied unless they conflict with or contradict GASB pronouncements. The Authority's financial statements include provisions of Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - For State and Local Governments; Statement No. 37, Basic Financial Statementsand Management's Discussion and Analysis - for State and Local Governments: Omnibus; and Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements. The financial statements include a Management Discussion and Analysis (MD&A) section providing an analysis of the Authority's overall financial position and results of operations. 
 
53 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 1. 
 
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) 
Significant Accounting Policies: (Continued) 
Management Estimates: 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of certain assets and liabilities and disclosures of contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 
Budgets and Budgetary Accounting: 
The Authority adopts an annual budget for its operations. The budget is formally reviewed and approved by the Authority. The Executive Director has the responsibility for administering these programs in accordance with the policies and the annual budget as adopted by the Authority. Budgets are prepared on the accrual basis. 
Revenue Recognition: 
The Authority recognizes revenue when earned and measurable. The Authority has sole jurisdiction to set rates for the services rendered to customers. These rates are not currently subject to regulation by any Federal , State of Georgia or similar agency. 
Reserves for doubtful accounts, allowances and rebates are maintained based on historical results adjusted to reflect current conditions. 
Concentrations of Credit Risk: 
The Authority provides services and facilities usage for companies located throughout the world . Substantially all of the Authority's accounts receivable are from shipping lines, exporters and importers. The Authority performs ongoing credit evaluations of its customers and generally operates under international laws, which may provide for a maritime lien on vessels in the event of default on credit terms. The Authority maintains reserves for potential credit losses. 
 
54 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 1. 
 
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) 
Significant Accounting Policies: (Continued) 
Cash and Cash Equivalents: 
For the purposes of the statement of cash flows, the Authority considers all demand deposits and short-term investments (including funds held by the State Treasurer in the Georgia Fund 1, and restricted funds) purchased with an initial maturity of three months or less to be cash equivalents. Additionally, the Authority does not consider investments maintained in the Georgia Extended Asset Pool (GEAP) to be cash equivalents due to the nature of the investments and their maturities. 
Investments: 
The policy of the Authority requires all funds which are idle for any period of time to be invested. These investments are to be made in federal or state government instruments or repurchase agreements which are insured or collateralized according to state statutes. State statutes require all deposits and investments (other than federal or state government instruments) to be collateralized by depository insurance, obligations of the U.S. government, or bonds of public authorities, counties, or municipalities. The collateral pledged by the banks' trust departments in the Authority's name is composed of various obligations of the U.S. Government. 
The Authority has implemented GASS Statement No. 31 , "Accounting and Financial Reporting for Certain Investments and for External Investment Pools." As a governmental proprietary entity other than an external investment pool, and in accordance with GASS Statement No. 31 , the Authority's investments are stated at fair value. In applying GASS Statement No. 31 , the Authority utilized the following methods and assumptions as of June 30, 2004 and 2003: 
 Fair value is based on quoted market prices as of the valuation date;  The portfolio did not hold investments in the following : 
 Items required to be reported at amortized cost,  Items in external investment pools that are not SEC-registered,  Items subject to involuntary participation in an external pool,  Items associated with a fund other than the fund to which the income is assigned;  The gain or loss resulting from valuation will be reported in the Authority's statement 
of revenues, expenses and changes in net assets. 
 
55 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 1. 
 
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued) 
Significant Accounting Policies: (Continued) 
Investments: (Continued) 
The Authority's policy is to hold investments until maturity, or until fair values equal or exceed amortized cost. 
Accounts Receivable: 
Trade accounts receivable include billed but uncollected amounts and unbilled receivables based upon subsequent monthly billings. Allowances for doubtful accounts are maintained based on historical results adjusted to reflect current conditions. 
Inventories: 
Inventories consist principally of maintenance parts and supplies valued at the lower of weighted average cost or market. 
Restricted Assets: 
Certain cash and investment amounts are classified as restricted assets on the statement of net assets because their use is limited by applicable bond covenants or escrow arrangements. 
Capital Assets: 
Capital assets constructed or purchased are stated at cost. Expenditures for maintenance, repairs and minor renewals and betterments are expensed as incurred. Major renewals and betterments are treated as property additions. Maintenance and repairs of capital assets are charged to operations and major improvements are capitalized. Upon retirement, sale or other disposition of capital assets, the cost and accumulated depreciation is eliminated from the accounts and gain or loss is recognized. 
 
56 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 2. 
 
DEPOSITS AND INVESTMENTS (Continued) 
 
Investments: (Continued) 
 
The Authority's carrying values and fair values of investments are categorized as follows for the years ended June 30, 2004 and 2003: 
 
Investments not subject to categorization: Investment contract with insurance company Georgia Fund 1 Georgia Extended Asset Pool 
 
2004 
Amortized Cost 
 
Fair Value 
 
$ 
 
4,469 $ 
 
12,718 
 
9,830 
 
$ 27,017 $ 
 
4,469 12,718 
9,660 26,847 
 
Investments not subject to categorization : Investment contract with insurance company Georgia Fund 1 Georgia Extended Asset Pool 
 
2003 
Amortized Cost 
 
Fair Value 
 
$ 
 
4,031 $ 
 
16,995 
 
9,568 
 
$ 30,594 $ 
 
4,031 16,995 
9,590 30,616 
 
A reconciliation of cash and investments per this footnote to the amounts disclosed on the statement of net assets is as follows: 
 
Cash and investments per footnote: Cash per above: Demand deposits Certificates of deposit Total cash per footnote Investments per footnote Total 
Statement of net assets captions: Cash and cash equivalents Short-term investments Cash in construction fund Cash in escrowed funds Cash - federal grants Investments in escrow funds Long-term investments Total per statement of net assets 
 
2004 
$ 11,297 300 
11,597 26,847 $ 38,444 
 
2003 
 
$ 
 
6,055 
 
350 
 
6,405 
 
30,616 
 
$ 
 
37,021 
 
$ 23,381 $ 
465 169 
300 14,129 
$ 38,444 $ 
 
22 ,833 50 4 
168 45 
300 13,621 37,021 
 
59 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 3. CAPITAL ASSETS 
 
Capital asset activity for the year ended June 30, 2004 is as follows: 
 
Beginning Balance 
 
Increases Decreases Transfers 
 
Ending Balance 
 
Capital assets, not 
 
being depreciated: 
 
Land 
 
$ 
 
Construction in 
 
progress 
 
Total 
 
Capital assets, being depreciated: 
 
Land improvements Wharves, piers, and 
containerized yard 
 
Railroad tracks and crossings 
Building and structures Machinery and equipment Furniture and fixtures 
Total 
 
138,095 $ 
39,271 177,366 
138,246 
123,167 
18,250 122,596 152,443 
5,910 560,612 
 
10,730 $ 
39,833 50,563 
3,023 74 
3,097 
 
(64) $ 
{64} 
(11) (3) 
(688) (463} {1,165} 
 
-$ 
{17,473} {17,473} 
3,251 442 
5,875 7,905 17,473 
 
148,761 
61,631 210,392 
141,486 
123,606 
18,250 127,783 162,908 
5,984 580,017 
 
Less accumulated depreciation for: Land improvements Wharves, piers, and containerized yard Railroad tracks and crossings Building and structures Machinery and equipment Furniture and fixtures Total 
 
Total capital assets, being depreciated, net 
 
Total capital assets, net 
 
$ 
 
(69,767) 
(48,424) 
(7,619) (68,476) (71,997} 
{3,027} (269,310} 
291 ,302 
468,668 $ 
 
(4,881) 
(2,898) 
(475) (3,147) . (6,934} 
(525} {18,860} 
(15,763} 
34,800 $ 
 
4 
688 397 1,089 (76} 
(140} $ 
 
(74,644) 
(51 ,322} 
(8,094) (70,935) (78,534) 
(3,552} (287,081} 
 
17,473 
-$ 
 
292,936 503,328 
 
60 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 3. 
 
CAPITAL ASSETS 
Capital asset activity for the year ended June 30, 2003 is as follows: 
 
Beginning Balance 
 
Increases Decreases Transfers 
 
Ending Balance 
 
Capital assets, not 
 
being depreciated: 
 
Land 
 
$ 
 
Construction in 
 
progress 
 
Total 
 
Capital assets, being depreciated: Land improvements Wharves , piers, and containerized yard Railroad tracks and crossings Building and structures Machinery and equipment Furniture and fixtures Total 
 
110,759 $ 
31 ,796 142,555 
125,904 
119,055 
18,266 114,869 135,123 
5,937 519,154 
 
27,362 $ 
47,850 75 ,212 
5,227 112 
5,339 
 
(26) $ 
{26} 
(6) 
(25) (1,356) (2,730) 
{139} {4,256} 
 
-$ 
{40 ,375} {40 ,375} 
12,348 4,112 9 9,083 
14,823 40,375 
 
138,095 
39 ,271 177,366 
138,246 
123,167 
18,250 122,596 152,443 
5,910 560,612 
 
Less accumulated depreciation for: Land improvements Wharves, piers, and containerized yard Railroad tracks and crossings Building and structures Machinery and equipment Furniture and fixtures Total 
Total capital assets, being depreciated, net 
 
(64,365) 
(45,731) 
(7 ,161) (66,218) (68,431) 
{2,638} {254,544} 
264,610 
 
(5 ;405) 
(2 ,693) 
(476) (3,474) (6,065) 
{526} {18 ,639} 
{13 ,300} 
 
3 
18 1,216 2,499 
137 3,873 
{383} 
 
40,375 
 
(69,767) 
(48,424) 
(7 ,619) (68,476) (71,997) 
{3 ,027} {269 ,310} 
291,302 
 
Total capital assets, net 
 
$ 407,165 $ 61,912 $ 
 
{409} $ 
 
- $ 468,668 
 
61 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 4. 
 
LEASES 
 
Operating Leases, as Lessor: 
 
The Authority, as lessor, leases certain of its facilities to tenants for terms generally varying from 1 to 50 years under leases accounted for as operating leases. Revenues are recorded when earned and, where appropriate, depreciation is provided. Capital assets, including facilities leased to others, are summarized as follows at June 30, 2004 and 2003: 
 
Land and buildings Accumulated depreciation 
 
2004 
 
2003 
 
$ 
 
65,739 $ 57,844 
 
(25,937) 
 
(23,631) 
 
$ 
 
39,802 :$::::::::::=3=4=,=2=13== 
 
Minimum future rentals to be received under operating leases are as follows: 
 
2005 2006 2007 2008 2009 Thereafter 
 
$ 
 
8,748 
 
7,636 
 
6,833 
 
6,347 
 
5,135 
 
38 ,995 
 
$ 73,694 
 
NOTE 5. 
 
LONG-TERM DEBT 
 
Long-term debt activity for the year ended June 30, 2004 is as follows : 
 
Beginning 
 
Ending 
 
Balance Additions Reductions Balance 
 
Due Within One Year 
 
Revenue bonds 
 
$ 
 
Less unamortized discounts 
 
Revenue bonds, net 
 
Notes payable 
 
Line of credit 
 
24,600 $ (27) 
24 ,573 1,547 8,212 
 
5,900 $ {23) 
5,877 
2,889 
 
(1 ,900) $ 2 
(1 ,898) (287) 
 
28,600 $ (48) 
28 ,552 1,260 
11 ,101 
 
2,100 301 
 
Total long-term liabilities 
 
$ 34,332 $ 8,766 $ (2,185) $ 40,913 $ 2,401 
 
62 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 5. 
 
LONG-TERM DEBT (Continued) 
 
Long-term debt activity for the year ended June 30, 2003 is as follows: 
 
Beginning Balance Additions Reductions 
 
Ending Balance 
 
Due Within One Year 
 
Revenue bonds 
 
$ 
 
Less unamortized discounts 
 
Revenue bonds, net 
 
Notes payable 
 
Line of credit 
 
26,500 $ 
 
- $ (1,900) $ 
 
{28} 
 
1 
 
26,472 
 
(1,899) 
 
1,820 
 
(273) 
 
3,679 
 
17,966 
 
(13,433} 
 
24,600 $ 
{27} 24,573 
1,547 8,212 
 
1,900 287 
 
Total long-term liabilities 
 
$ 31,971 $ 17,966 $ (15,605} $ 34,332 $ 2,187 
 
Revenue Bonds: 
 
The Authority has issued revenue bonds with variable interest rates (1 .13% to 1.22% at June 30, 2004) to finance the acquisition, construction and equipping of dock and wharf facilities. All revenue bonds are collateralized by a bank letter of credit. 
 
Aggregate maturities required on revenue bonds outstanding, including interest at current rates, as of June 30, 2004 are as follows: 
 
2005 2006 2007 2008 2009 2010-2014 2015-2019 2020-2023 
 
Principal 
 
$ 
 
2,100 
 
1,900 
 
2,100 
 
2,100 
 
2,000 
 
9,700 
 
6,300 
 
2,400 
 
$ 
 
281600 
 
Interest 
 
$ 
 
278 
 
267 
 
234 
 
221 
 
190 
 
652 
 
217 
 
35 
 
$ 
 
21094 
 
Total 
 
$ 
 
2,378 
 
2,167 
 
2,334 
 
2,321 
 
2,190 
 
10,352 
 
6,517 
 
2,435 
 
$ 
 
301694 
 
63 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 5. 
 
LONG-TERM DEBT (Continued) 
 
Notes Payable: 
 
Notes payable to banks are due in monthly installments through 2008 with an interest rate of 5.0%. Aggregate maturities required on outstanding notes payable to banks, including interest, as of June 30, 2004 are as follows: 
 
2005 2006 2007 2008 
 
Principal 
 
$ 
 
301 
 
317 
 
333 
 
309 
 
$ 
 
11260 
 
Interest 
 
$ 
 
56 
 
41 
 
25 
 
7 
 
$ 
 
129 
 
Total 
 
$ 
 
357 
 
358 
 
358 
 
316 
 
$ 
 
11389 
 
Line of Credit: 
The Authority maintains, with a financial institution, an uncollateralized revolving line of credit in the amount of $30,000. As of June 30, 2004 and 2003, $11,101 and $8,212 was outstanding on this line of credit. The interest rate is a variable rate of 59% of prime (2.36% at June 30, 2004 and 2003) . This revolving line of credit expires on December 31, 2007. 
 
NOTE 6. 
 
BENEFIT PLANS 
The Retirement Plan for Employees of Georgia Ports Authority (the "Plan") is a single-employer contributory group annuity defined benefit pension plan covering all full-time employees. The Plan is administered by the Aetna Life Insurance Company. The ~Ian provides pension benefits to plan members and beneficiaries. 
The Plan is subject to minimum funding standards of the Public Retirement Systems Standards Law (Georgia Code Section 47-20-10). 
 
64 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 6. 
 
BENEFIT PLANS (Continued) 
 
The contribution requirements of plan members and the Authority are established by the Authority's Board and may be amended at any time. Plan members are required to contribute 1% of the first $9 thousand earned and 1.5% of any wages in excess of $9 thousand . The Authority is requi red to contribute at an actuarially determined rate ; the current rate is 12.93% of covered payroll. The recommended contribution meets the guidelines for calculating an annual required contribution set forth in Paragraphs 9-10 of Statement No. 27. These contributions are determined under the entry age normal with FIL actuarial cost method and the market valuation method for developing the actuarial value of assets. The unfunded actuarial accrued liability is being amortized using the level dollar method on a closed basis. The remaining amortization period at July 1, 2003 was 21 years . 
 
For the fiscal year ended June 30, 2004, the Authority's annual pension contribution of $1,861 was lower than the Authority's annual required contribution of $4,058 and the annual pension cost of $4,035 (the annual pension cost was determined by subtracting $79 in interest earnings and adding an adjustment of $56 to the annual required contribution). The _required contribution represented 12.93% of covered payroll. The total payroll for employees covered by the plan was $31 ,378. 
 
SCHEDULE OF PENSION COST AND CONTRIBUTIONS 
 
Fiscal Year Ending 
 
Annual Pension Cost (APC) 
 
Employer Contributions 
 
Percentage ofAPC 
Contributed 
 
Net Pension Obligation (Asset) 
 
6/30/02 6/30/03 6/30/04 
 
$ 
 
1,141 $ 
 
2,326 
 
4,035 
 
1,510 1,709 1,861 
 
132.3 % $ 73.5 46.1 
 
(1,449) (833) 1,342 
 
The significant actuarial assumptions used to compute the actuarial accrued liability and the annual recommended contribution of the plan meet the Actuarial Standard of Practice No. 4, Measuring Pension Obligations, establishing generally accepted actuarial principles and practices. 
 
The significant actuarial assumptions used in the current valuation are: 
Rate of return on investment Projected salary increases Post-retirement benefit increases 
 
9.5% per year 4.0% per year 4.0% per year 
 
65 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 6. 
 
BENEFIT PLANS (Continued) 
 
Actuarial valuation date 
 
SCHEDULE OF FUNDING PROGRESS 
 
July 1, 
 
July 1, 
 
2001 
 
2002 
 
July 1, 2003 
 
Actuarial value of assets 
 
$ 59,656 $ 57,220 $ 57,241 
 
Actuarial accrued liability 
 
$ 66,575 $ 63,567 $ 69,172 
 
Total (funded) unfunded actuarial liability 
 
$ 
 
6,919 $ 6,347 $ 11 ,931 
 
Funded ratio 
 
89.61% 
 
90.02% 
 
82.75% 
 
Annual covered payroll 
 
$ 25,937 $ 27,087 $ 31 ,378 
 
Ratio of unfunded actuarial liability to annual covered payroll 
 
26.68% 
 
23.43% 
 
38 .02% 
 
The Georgia Ports Authority supplemental retirement plan is a single-employer defined benefit pension plan providing supplemental benefits to plan members and beneficiaries. There are no contribution requirements of the plan members or the Authority. The Authority contributes on a pay-as-you-go method. These contributions are determined under the projected unit credit actuarial cost method and the market valuation method for developing the actuarial value of assets. The unfunded actuarial accrued liability is being amortized using the level dollar method on an open basis. The remaining amortization period at July 1, 2003 was 40 years. 
 
For the fiscal year ended June 30, 2004, the Authority's annual pension contribution of $555 was lower than the Authority's required annual pension cost of $953. 
 
SCHEDULE OF PENSION COST AND CONTRIBUTIONS 
 
Fiscal Year Ending 
 
Annual Pension Cost (APC) 
 
Employer Contributions 
 
Percentage of APC 
Contributed 
 
Net Pension Obligation (Asset) 
 
6/30/02 
 
$ 
 
6/30/03 
 
6/30/04 
 
793 $ 848 953 
 
426 
 
53.72 % $ 
 
2,786 
 
443 
 
52 .24 
 
3,190 
 
555 
 
58.24 
 
3,589 
 
66 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 6. 
 
BENEFIT PLANS (Continued) . 
 
The significant actuarial assumptions used in the current valuation are: 
 
Rate of return on investment Projected salary increases Post-retirement benefit increases 
 
9.5% per year 4.0% per year 3.0% per year 
 
A schedule of Funding Progress is not applicable due to this plan being a nonqualified arrangement with no formal funding requirements. 
 
NOTE 7. 
 
COMMITMENTS AND CONTINGENCIES 
At June 30, 2004 and 2003, the Authority had commitments for construction projects of approximately $21 .63 and $2.62 million, respectively. Additionally, the Authority has entered into a Memorandum of Agreement with the State of Georgia Department of Transportation (GDOT) to reimburse GDOT for a total amount of $24 million upon the completion of a construction project on a portion of the Authority's acquired properties. As of June 30, 2004, the Authority has recognized a liability for $222 thousand of which the remaining amount of the commitment is $1.6 million. 
The Authority has agreed with the State of Georgia and the Federal Government to participate as a Cooperating Agency in the study of deepening the Savannah River harbor and channel, responsible for the underpinning scientific study for the project. Additionally, the Authority has agreed with the State of Georgia and the Federal Government to continue the funding for the actual deepening of the harbor and channel of the Brunswick port on behalf of the local sponsor for the project, the Georgia Department of Transportation. The Authority's total estimated costs associated with these projects in this role are projected to amount to approximately $28.2 million to be funded by the Authority in future years. 
The Authority is a defendant in various other lawsuits incidental to its business. Management believes that any liability that may result from such lawsuits will not have a material adverse effect on its operations or financial position. 
In addition to the above mentioned commitments and contingencies, the Authority is responsible for certain environmental remediation costs relative to its Bainbridge, Georgia terminal and other similar operations. The environmental clean up costs have been estimated by the Authority's Environmental Engineers and are considered by management to be immaterial to the financial statements. Consequently, no amounts have been accrued as of June 30, 2004 and 2003. 
 
67 
 
 NOTES TO FINANCIAL STATEMENTS (In Thousands) 
 
NOTE 8. 
 
RISK MANAGEMENT 
The Authority is self-insured tor its employee health benefit (major medical and dental) claims up to a calendar year aggregate basis per individual of $150 tor major medical, and approximately $3 for dental. Excess major medical insurance coverage is provided through a private insurance policy tor the amounts in excess of $150 and through aggregate stop loss coverage. Group medical has a lifetime maximum of $1,000 per covered individual. 
The basis for estimating the liabilities for unpaid claims is an incurred, but not reported , calculation. The Authority has provided for amounts, which are considered to be outstanding and unpaid as of June 30, 2004 and 2003, and such amounts are included in the financial statements tor the years ended June 30, 2004 and 2003. 
 
Changes in the balances of medical claims liabilities during the years ended June 30, 2004 and 2003 are as follows: 
 
Unpaid claims, beginning of fiscal year Claims paid Claims reimbursed from reinsurers Incurred claims Unpaid claims, end of year 
 
2004 
 
$ 
 
500 
 
(4,961) 
 
222 
 
4,789 
 
$ 
 
550 
 
2003 
 
$ 
 
500 
 
(3,309) 
 
3,309 
 
$ 
 
500 
 
The Authority is exposed to various risks of loss related to: torts; theft of assets; damage to and destruction of assets; errors and omissions; and natural disasters. These exposures are addressed through an insurance program including a mix of policies procured from the State of Georgia and insurance companies found in traditional commercial markets. Limits of coverage for liability exposures include an underlying limit of $1,000 with an excess bumpershoot policy providing up to $100,000 in protection. Coverage for Georgia Ports Authority property and equipment is scheduled on a replacement cost basis. 
There have been no significant reductions of insurance coverage, and settlement amounts have not exceeded insurance coverage tor the current or the three prior years. 
 
68 
 
 eor~Ports Autliority 
www.gaports.com