Annual report fiscal year 2013 [2013]

GPA
ANNUAL REPORT
GEORGIA PORTS AUTHORITY FY2013
STRENGTH IN NUMBERS

"The collaborative teamwork we have with Georgia Ports means it's a strategic partner, not just a service provider."
-- Ed O'Neil, Manufacturing Logistics Services Manager, Caterpillar Logistic Services
"Their customer service and port leadership teams have reached out to understand our business, adapting their operations to meet our needs. "
-- Rick Gabrielson, Director of International Transportation, Target

LEADE GEORGIA PORTS AUTHORIT

In Georgia, the private sector and government are working together to ensure opportunities for success, for the state's workforce and for those who choose to do business here.
"Our state is uniquely equipped to help manufacturers compete globally and efficiently meet the needs of their customers," said Georgia Gov. Nathan Deal. "Expanding the Savannah Harbor is vital to our renewed economic growth and plays an integral role in helping make our state the No. 1 place in the nation in which to do business."
This year, Georgia won that No. 1 position in the annual ranking by Site Selection magazine because of its low tax burden, innovative workforce training and world-class logistics network.

GPA Board Chairman Robert Jepson said the ports extend the reach of domestic industries to international markets from Caterpillar tractors built in Peoria, Ill., to the farm and forest products grown in Georgia.
"By collaborating with our regional partners, Georgia delivers American-made goods to the world, while also fulfilling the needs of domestic consumers," he said.
GPA Executive Director Curtis Foltz said leadership sets Georgia apart.
"Our economic development team, elected officials, chambers of commerce and CEOs are working toward a shared vision for Georgia's future," Foltz said. "We all understand the importance of the port deepening and of Georgia's deepwater ports in general to our region's economic health."
The Port of Savannah is the nation's fourth busiest port -- while its sister port in Brunswick is second

ETYRSHIP

only to New York/New Jersey for the movement of new vehicles. The ports' success fuels business development.
"Georgia's dynamic business climate and superior transportation infrastructure are ideal for the needs of logistics-based companies," Jepson said. "In turn, their payroll and workers have a broad, powerful impact on the state's economy."
By providing reliable, cost-effective transportation solutions, Georgia's ports have also become the load centers for trade in the U.S. Southeast.
"During fiscal year 2013, the GPA moved a record-setting 27.23 million tons of cargo across all terminals. And, for the second year in a row, the GPA moved a record total for auto and machinery units," said Foltz.
Terminals in Brunswick and Savannah achieved an 11.7 percent improvement in Ro/Ro cargo for FY2013, moving 636,942 units an increase of 66,958.

"Volume improvements are thanks in part to new business from customers including Nissan, Subaru and Toyota," Foltz said. "Other factors include heavy machinery exports from companies like John Deere and JCB, contributing to a 127,830-ton increase in breakbulk at the Colonel's Island terminal."
With a core mission of promoting international trade, economic development and job growth in Georgia, the GPA's economic impact extends well beyond state lines. As the U.S. Southeast population grows, efficient access to world markets through Georgia's ports will become even more vital to businesses serving the region.

"The GPA is a bridge to the world. We export to over 100 countries and can reach all of them, and more importantly, our customers, through the Savannah Port."
-- CHRIS SWARTZ, AJC International Director of Global Transportation and Logistics Services

TEAMW

MWORK ECONOMICIMPACT

The Georgia Ports Authority is an invaluable team member for business serving the Southeast and Central U.S. At our terminals in Savannah and Brunswick, port workers and the operations they support deliver the speed, reliability and flexibility that keep commerce moving. Port customers have found that our people -- combined with our geographic and logistical advantages -- give them a competitive edge.
According to Travis Torre, director of logistics for medical products supplier Dukal, the company's new central distribution center in Savannah provides closer proximity to customers at reduced distribution costs.
Arnold Kamler is CEO of Kent International, which is moving 1.3 million bicycles per year through the Port of Savannah. "We have been warehousing solely in Los Angeles and were looking for a strategic location for our second distribution point," he said, "and Savannah worked out with the best metrics."

Larry Monaghan, senior VP of administration for appliance maker Haier, noted that GPA is poised for expansion.
"Our projected growth pattern coincides with the already approved work on deepening the Savannah port and the opening of the new Panama Canal," Monaghan said. "Once both of these major projects are completed, we believe that Savannah will become the destination port for distribution into the Eastern U.S."
Mark Ferzacca, assistant VP of sales for third-party service provider Matson Logistics -- a recent addition to Savannah -- also noted the importance of the port's location.
"Our new operation expands on our ability to move retail goods in through the Port of Savannah," Ferzacca said. "More companies are using East Coast distribution centers to have their product closer to a rapidly growing regional market."
In the refrigerated cargo market, the Port of Savannah saw major private investment in cold storage by companies like Nordic and Gulf States Cold Storage.
"Our facility is located at I-95 and Jimmy DeLoach Parkway, only six miles from the Port of Savannah, and provides our customers convenient access to the port and interstate highways," said Don Schoenl, Nordic CEO.

Besides the booming poultry industry 38 percent of all U.S. poultry exports move through the Port of Savannah the new chilled cargo distribution centers also support new GPA customers such as Giumarra International Berry. The company moves blueberries to the U.S. from South America after the domestic growing season comes to a close.
"Saving money going north and west is the reason we are here. The Port of Savannah has a streamlined flow which is very fast and efficient, and it's only five minutes from I-95," said Alan Abe, Giumarra's East Coast general manager. "Also, the Georgia Ports Authority gives us a high level of customer service."
Meanwhile, the Port of Brunswick is gaining increasing notice as the only auto port in the nation with world-class service and 600 acres available for expansion.
Larry Strug, U.S. transportation manager for Subaru said the carmaker chose Brunswick as its gateway into the

Southeast because of the services available there. "We accessorize our vehicles and put certain options
on them at ports," Strug said. "We think it gives us an advantage in the marketplace for customers to be able to somewhat customize their vehicles."
A central focus on providing better customer service and better links to the dynamic Southeastern U.S. market is one way Georgia's deepwater ports in Savannah and Brunswick support more than 352,000 jobs across the state. Port operations also support higher incomes, and a healthy agricultural and manufacturing base, while fostering growth in the state's warehousing and transportation sectors.
Businesses across the U.S. Southeast rely on Georgia's ports to provide efficient gateways to international markets. By encouraging development across a wide array of industries, the GPA is fulfilling its central mission to deliver jobs and prosperity to the state and nation.

BREAKBULK Autos Machinery Iron & Steel Woodpulp Linerboard Rubber Plywood Clay Lumber Boats Other TOTAL Source: GPA Marketing

TONS 1,163,760
432,289 419,229 198,891 142,204 108,041
11,229 11,101
8,750 3,208 5,623 2,504,625

BULK Soybean Meal Vegetable Oils Wood Pellets Corn Caustic Soda Perlite Chemicals Urea, Liquid Animal Feed Peanut Pellets Other TOTAL Source: GPA Marketing

TONS 797,954 425,877 331,464 148,712 113,623 112,440
84,960 82,618 62,779 50,339 314,382 2,525,148

"Having multiple options with container and breakbulk carriers at the Georgia Ports Authority is very important to us. It helps us deliver that perfect order to our customers. On time. Right quantity. Right quality."
-- RYAN HUTCHERSON, Georgia-Pacific Director of Supply Chain

EFFICIE PORT OF SAVANNAH

The Port of Savannah features the 1,200-acre Garden City container terminal, as well as Ocean Terminal, which handles autos and machinery, outsized project cargo, and other breakbulk cargo.
As the single largest terminal in the country, owned and operated by the GPA, our Garden City Terminal provides greater scheduling flexibility for shipping lines and quicker turn times for trucks. Savannah also offers more efficient transfer to our two on-terminal, Class I railroads and direct connections to Interstates 95 and 16 both of which mean improved speed to market across the Southeast.
As the No. 2 export facility in the nation, the Port of Savannah contributes significantly to promoting American businesses in the global marketplace.

The Port of Savannah moved 2.95 million twenty-foot equivalent container units (TEUs) in FY2013. Of the total container volume, a record number, 314,623 containers, were moved by rail. This constitutes a 4,600-container increase over FY2012, itself a record year.
Counting all cargo, Savannah moved 24 million tons over the fiscal year-- an increase of 651,250 tons or 2.4 percent -- contributing to the GPA's record total of 27.2 million tons of cargo moved across all docks.
Businesses in the Southeastern U.S. rely on Georgia's deepwater ports to provide efficient gateways to international markets. It is therefore imperative that the Savannah Harbor Expansion Project (SHEP) remains on schedule. In FY2013, the GPA received final approval for its harbor deepening, which will allow the Port of Savannah to more efficiently serve Post-Panamax vessels and lower shipping costs for containerized trade by $213 million a year.

CARGO TYPE Breakbulk Bulk Container TOTAL CARGO Source: AAPPA, includes loads & empties

TONS 2,504,625 2,525,148 22,206,101 27,235,574

% OF TOTAL 9% 9%
82%

"The efficiency that Rayonier sees in the Port of Savannah, through the Georgia Ports Authority, is not one that we see in many ports. It's well run. It's well organized. It's very efficient. The costs are low. When you are a private enterprise, you look for partners that want to operate and do operate like you do."
-- READE KIDD, Home Depot Director of International Logistics
IENCY

EXPAN SAVANNAH HARBOR EXPAN

"Our projected growth pattern coincides with the already approved work on deepening the Savannah port and the opening of the new Panama Canal. Once both of these major projects are completed, we believe that Savannah will become
the destination port for distribution into the Eastern U.S."
-- Larry Monaghan, Haier Senior VP of Administration
NSION NSION PROJECT

The Savannah Harbor Expansion Project has received strong bipartisan support at the highest levels, including a recent visit by Vice President Joe Biden who called for the deepening to be accomplished, "come hell or high water."
In October 2012, the U.S. Army issued its Record of Decision approving the Savannah Harbor Expansion Project. The decision affirms that deepening the harbor from 42 to 47 feet is economically viable, environmentally sustainable, and in the best interests of national and international trade.
The decision was a major milestone that came after 13 years of study and unprecedented collaboration between GPA, U.S. Environmental Protection Agency, the U.S. Fish and Wildlife Service, the National Marine Fisheries Service, and other federal and state agencies, as well as non-governmental stakeholders, to identify and address all concerns. The deepening project

will be carried out with full consideration of the local population, wildlife and environment.
Federal studies show that for every dollar invested, the nation's economy will reap $5.50 in net benefits. Construction is slated to begin this year, a critical step for Georgia as we race to get ready for the much larger ships that will soon sail through an enlarged Panama Canal. Georgia Governor Nathan Deal, working with the Georgia General Assembly, has allocated $231 million toward the project.
The SHEP is necessary to allow the Port of Savannah to more efficiently serve Post-Panamax vessels -- those that are too large to transit the current Panama Canal. The larger vessels are expected to call in greater numbers after the canal's 2015 expansion. Lower prices per container slot on Post-Panamax ships will save U.S. companies shipping goods through Savannah 20 to 40 percent on transportation. This translates into lower costs for the export of goods such as forest products made in the Southeast and grain crops in the Midwest.

INFRAS INVESTMENTS INCREASE SP

The Georgia Ports Authority is making significant terminal investments to increase capacity and improve efficiency, further establishing Georgia as the gateway for trade to the Southeast United States.
New Cranes Among the largest recent investments are four new
ship-to-shore cranes at Garden City Terminal, bringing the number of electric-powered container cranes to 25 the most of any single terminal in the U.S.
The new cranes help prepare Savannah to better accommodate larger container vessels, expected to increase in number after the expanded Panama Canal opens in 2015. They are large enough to handle vessels carrying up to 12,000 twenty-foot equivalent container units (TEUs).

New Roads Also aiding faster cargo movement is the Jimmy
DeLoach Parkway extension, which will provide a direct link between Interstate 95 and the Port of Savannah. The Georgia Department of Transportation has broken ground on the project and expects to complete the 3.1-mile, $72.8 million connector in May 2016.
The project will cut drive times for truck and passenger traffic by 11.35 minutes for vehicles traveling S.R. 21 and the Jimmy DeLoach Connector.
Better connections for surface transport are now in place thanks to a recently completed overpass on Georgia Highway 307 the main truck route into Garden City Terminal. The overpass is one of the final steps in a cargo beltway linking the Port of Savannah to the Southeast, by way of two major interstates I-16 and I-95.
The $22.5 million overpass will expedite traffic into the

"The GPA has done an outstanding job, continuing to expand so we can increase our access to the world."
-- CHRIS SWARTZ, AJC International Director of Global Transportation and Logistics Services

STRUC PEED, CAPACITY

GPA's Garden City Terminal, which handles nearly 8,000 truck moves a day. Through its road and rail connections, the Port of Savannah serves 18 major retail distribution centers encompassing more than 15 million square-feet of space.
Rail Improvements The new overpass increases road and rail efficiency, as
it works in tandem with a $6.5 million six-track rail yard expansion. Norfolk Southern, the state Department of Transportation and the Georgia Ports Authority collaborated on the Highway 307 overpass and the rail expansion projects in order to boost efficiency for both truck and rail transport. The DOT-funded overpass routes trucks above the one previous rail line and the six expanded tracks at Mason ICTF.
CSX Transportation has also made significant investments to improve efficiency, including a $5 million track upgrade, which expedited the movement of containers in and out of the Garden City Terminal.

On-terminal facilities allow shippers direct access to rail, elimimating costly drays to distribution centers or other destinations, and moving cargo directly.
Deeper Water The infrastructure upgrade with the greatest impact,
however, is the Savannah Harbor Expansion Project, which recently garnered full federal approval. The project will increase harbor depth from 42 feet to 47 feet.
U.S. Army Corps of Engineers studies show that Post-Panamax vessels more efficiently served by a deeper harbor in Savannah will lower shipping costs for containerized trade by $213 million a year over the next 50 years, for a total economic benefit of $10.65 billion during that span. Decreased costs per container will lower the bottom line for the more than 21,000 U.S. businesses, and thousands of international businesses shipping via the Port of Savannah.

BRUNS PORT OF BRUNSWICK

The Port of Brunswick's three terminals made significant strides in business and infrastructure in fiscal year 2013. Total tonnage for Brunswick was 3.1 million tons (up 47 percent) along with a record 622,700 auto and machinery units (up 12.5 percent) and 1.75 million tons of bulk cargo (up 104 percent.)

In FY2013, the Port of Brunswick won a major import client in Subaru, which picked Georgia as its gateway into the Southeast. On the export side, Toyota started moving American-made Venzas through Brunswick to Russia and the Ukraine. The five on-site auto processors in Brunswick handle roll-on/roll-off cargo for about two dozen automakers and eight heavy equipment builders, including Caterpillar, John Deere and JCB.

"Anytime that we have needed Georgia Ports Authority they have been able to respond immediately. They are only a phone call away. Everyone is passionate about the quality of customer service that they give and it shows."
-- Mercedes Hernandez Garner, Kia Manager of Logistics and Compliance

SWICK

As far as physical improvements for the Brunswick terminals, the GPA has invested more than $24.2 million in infrastructure projects in FY2012-14, including:
Mooring dolphins providing extended points for securing larger vessels.
Auto facility upgrades for handling heavy machinery and equipment. Improvements include upgraded roads, bridges, staging areas and rail loading/offloading areas that make all three Colonel's Island berths capable of handling super-sized cargo.
A new security center on Colonel's Island. A hard car unloader to expedite the unloading of dried distillers grain. Improvements made to Marine Port Terminals include a new conveyance system for bulk products such as wood pellets, as well as warehouse and dock upgrades. For harbor maintenance, the U.S. Army Corps of Engineers received close to $3 million in FY2014 for maintenance dredging. The GPA is working with our

Georgia delegation to Washington to see more funds dedicated to this annual task, so that the harbor can be maintained at its approved depth of 36 feet. In addition, the GPA board has approved $3 million to complement and federal funds allocated to maintenance dredging. The president's FY2014 budget includes $5.3 million for Brunswick operation and maintenance funding, which awaits congressional action. In addition, the GPA board has approved $3 million to complement any federal funds allocated to maintenance dredging.
Current and future enhancements will build on Brunswick's strengths. Among these are immediate access to I-95, which puts 44 percent of the U.S. population within a one- to two-day drive. The terminals also offer expedited rail service to the major population centers of Atlanta, Birmingham, Charlotte, Memphis and Orlando. On-site rail facilities mean more choices for reaching the hinterlands through Brunswick's deepwater terminals.

MID-ATLANTIC/SOUTHERN AUTO TRADE FY2013 IMPORT (TONS)

Brunswick Baltimore NY/NJ Jacksonville Norfolk Charleston Miami Boston Savannah Wilmington Port Everglades
Source: U.S. Census Bureau: Foreign Trade Division

28.64% 25.11% 24.94% 14.12%
2.64% 1.80% 1.57% 1.48% 1.04% 0.19% 0.02%

RESPON

ONSIBLE SUSTAINABILITY

The GPA takes a proactive stance on sustainability issues. While our central focus is on supporting economic growth, we are committed to going about our business in an environmentally conscious way.
Doing so is not only better for natural ecosystems; it yields economic benefits, as well.
For instance, at the Port of Savannah, the GPA has introduced mobile electric rubber-tired gantry cranes, a first for North America. While the cranes shift from shore power to generators to move around the terminal, this equipment reduces diesel consumption by 95 percent per crane.
Our newest ship-to-shore cranes will not only accommodate the largest ships calling on the U.S. East Coast,

but their integral systems actually capture energy while lowering boxes producing enough electricity to power themselves for 18 minutes of every operating hour.
Our ports are also cutting emissions through electric refrigerated container racks, which help the GPA avoid the use of 4.5 million gallons of diesel annually.
A new lighting control system and new container yard light fixtures have reduced light pollution and cut energy consumption by 30 percent.
Other initiatives include protecting trees on Garden City Terminal that are more than 200 years old -- some as old as 360 years.
Meanwhile, at the Port of Brunswick, careful timing and new dredging techniques have safeguarded turtle populations during maintenance dredging.

"Your strategies have involved operations throughout the port, and show both a strong commitment by the Georgia Ports Authority to the environment and your desire as a leading U.S. port to use best practices that increase efficiency and save time and money."
-- STAN MEIBURG, EPA Acting Southeast Regional Administrator

FINAN GEORGIA PORTS AUTHORIT

AS OF JUNE 30, 2013, 2012, AND 2011
GEORGIA PORTS AUTHORITY CONDENSED STATEMENTS OF NET POSITION



2013

2012

2011

ASSETS:

Current Assets

$136,213

$127,719

$126,426

Capital Assets

908,609

888,672

836,386

Other Long-Term Assets

80,250 ___________

59,158 ___________

48,128 ___________

T otal Assets

_$_1_,_1_2_5_,_0_7_2_

_$_1_,_0_7_5_,_5_4_9_

_$_1_,_0_1_0_,_9_4_0_



LIABILITIES:

Current Liabilities

$21,004

$30,660

$31,429

Long-Term Debt

36,457

45,688

59,830

Other Non-Current Liabilities

46,009 ___________

11,252 ___________

10,488 ___________

T otal Liabilities

___$_1_0_3_,_4_7_0_

____$_8_7_,_6_0_0_

___$_1_0_1_,_7_4_7_



NET POSITION:

Net Investment in Capital Assets

$872,152

$831,229

$759,996

Unrestricted149,450



___________

Tota l Net Position

_$_1_,_0_2_1_,_6_0_2_

156,720 ___________
___$_9_8_7_,_9_4_9_

149,197 ___________
___$_9_0_9_,_1_9_3_

NTYCIALS

FOR THE YEARS ENDED JUNE 30, 2013, 2012, AND 2011
GEORGIA PORTS AUTHORITY CONDENSED STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION


Operating Revenues
Operating Expenses
Operating Income

2013
$292,583
214,285 ___________
78,298

2012 $283,538
205,385 ___________
78,153

2011 $266,514
194,604 ___________
71,910

Non-Operating (Expense)

(36,483)

(1,751)

(11,371)

Capital Contributions Repaid to State of Georgia

(20,044)

(7,344)

(30,576)

Capital Contributions

11,882 ___________

9,698 ___________

7,251 ___________

C han ge in Net Position

____$_3_3_,_6_5_3_

____$_7_8_,_7_5_6_

____$_3_7_,_2_1_4_



CONDENSED STATEMENTS OF CASH FLOWS

Cash Flows from Operating Activities

$105,775

$122,944

$106,403

Cash Flows from Investing Activities

229

(9,775)

321

Cash Flows from Non-Capital Financing Activities

(1,706)

(2,169)

(3,303)

Cash Flows from Capital and Related Financing Activities

(96,491) ___________

(111,731) ___________

(105,696) ___________

Net Increase (Decrease) in Cash and Cash Equivalents

7,807

(731)

(2,275)

Balances - Beginning of the Year
B ALA NCES - END OF THE YEAR


81,125 ___________
____$_8_8_,_9_3_2_

81,856 ___________
____$_8_1_,_1_2_5_

84,131 ___________
____$_8_1_,_8_5_6_

"The Georgia Ports Authority has the same core values as Kia Motors, when it comes to customer service. One reason our relationship is so strong is that both parties believe the same thing."
-- Mercedes Hernandez Garner, Manager of Logistics and Compliance, Kia
"Our export moves are very efficient through Savannah, where we have better options and equipment availability."
-- Ryan Hutcherson, Director of Import/Export Logistics, Georgia Pacific

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