House Appropriations Committee Overview of Virginia International Terminals (VIT) October 15, 2012 Ms. Charlotte P. Herndon, CPA Chairman of the Board Virginia International Terminals, Inc. 1
VIT RESULTS VIT operates the 6 th largest port in the U.S. and 3 rd largest port on the U.S. East Coast. VIT is ranked #2 within the Signal Mutual portfolio, the premier insurance mutual for maritime industry, specifically amongst the Stevedore category, with regard to Lost Time Incident Rate. VIT is ranked #2 for Intermodal Market share at 40%, just behind New York at 41%. 1,400,000 1,200,000 1,000,000 Container Volume Growth Virginia International Terminals, Inc. 1983-2012 Container Growth since 1983: 141,892 to 1,130,999 in 2012, an 8 fold increase. Gross Revenues per year since 1983: $28 Million to $299 million in 2012, a 10 fold increase. 800,000 600,000 400,000 200,000 Net Income per year since 1983: $4.5 million to $93.3 million in 2012, a 20 fold increase. 0 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2
Container Volumes Virginia International Terminals, Inc. 1,034,386 1,091,620 1,130,999 834,973 811,318 2008 2009 2010 2011 2012 3
VIT INNOVATIONS Virginia Inland Port developed to reach into the Baltimore market while creating economic benefit to Virginia s Frederick and Warren Counties. $100,000,000 Post Panamax Cranes first port on $90,000,000 the US East Coast to deploy in anticipation of larger vessels. $80,000,000 HRCP 2 Chassis Pool widely $70,000,000 recognized as the first Port-wide and most efficiently run common user $60,000,000 chassis pool. $50,000,000 Portsmouth & Norfolk Container Yards removing congestion from area $40,000,000 highways and the Marine Terminals while allowing the Motor Carrier $30,000,000 community to become more efficient. $20,000,000 Operation Port Plus a comprehensive, port wide project to $10,000,000 develop best in class practices for all facets of maritime activities. $0 Cash Transfers to the VPA Virginia International Terminals, Inc. 1997-2012 Total Transfer Amount = $819,000,000 (2012 Dollars) 4
Cash Transfers to the VPA Virginia International Terminals (Figures shown in millions) $82,919 $89,415 $72,856 $49,947 $47,224 2008 2009 2010 2011 2012 5
Virginia International Terminals 5 Year Performance 1,200,000 1,034,386 1,091,620 1,130,999 1,000,000 834,973 811,318 800,000 600,000 Containers Break Bulk Tons Rail Containers 400,000 283,146 323,451 224,127 254,848 181,946 236,606 256,340 304,731 298,331 350,060 200,000-2008 2009 2010 2011 2012 6
Norfolk International Terminals 5 Year Performance 800,000 714,081 700,000 601,252 589,317 610,462 655,185 600,000 500,000 400,000 Containers Break Bulk Tons 300,000 200,000 170,827 100,000 74,496 19,808 4,850 47,530-2008 2009 2010 2011 2012 7
Portsmouth Marine Terminal/ APM Terminals Virginia 5 Year Performance 500,000 480,850 475,696 450,000 400,000 350,000 290,639 300,000 250,000 227,646 221,869 Containers Break Bulk Tons 200,000 150,000 100,000 50,000 69,973 56,457 45,462 33,122 650-2008 2009 2010 2011 2012 8
180,000 Newport News Marine Terminal 5 Year Performance 175,688 160,000 140,000 138,677 147,862 131,634 126,854 120,000 100,000 80,000 Containers Break Bulk Tons 60,000 40,000 29,666 20,000 6,075 132 308 118-2008 2009 2010 2011 2012 9
Virginia Inland Port 5 Year Performance 40,000 37,415 35,000 32,958 33,917 30,000 26,899 28,203 25,000 20,000 Intermodal Containers 15,000 10,000 5,000-2008 2009 2010 2011 2012 10
Total Rail Containers (including Virginia Inland Port) 5 Year Performance 400,000 350,060 350,000 323,451 304,731 300,000 250,000 254,848 236,606 200,000 Total Rail Containers (including VIP) 150,000 100,000 50,000-2008 2009 2010 2011 2012 11
VIT MARKETING HIGHLIGHTS POST RECESSION New Greensboro Rail Service with Norfolk Southern and handled 5,236 TEUs in the first 8 months of operation. Captured 2 last out services and 1 first in, vessel services. Captured 4 new weekly vessel services. Captured 2 vacant trade lane vessel services. Midwest Intermodal freight increased by 15 %. On-Dock trans-load business increased by 39%. Vehicles to the Port of Virginia increased by 11, 224, a 25% increase. Break Bulk cargos increased by 16%. 12
CAPITAL EXPENDITURES 1997 to PRESENT Since 1997, projects and equipment have been funded using only Terminal Revenues and the Commonwealth Transportation Trust Fund (TTF) allocations. No General Fund revenue has been used by the Virginia Port Authority. 13
The Future VIT & The Commonwealth of Virginia 14
VIT VALUE VIT s sole duty is to the citizens of the Commonwealth of Virginia. A private operator s duty is to its shareholders. VIT promotes only Virginia. A private operator will promote alternate areas of its operation when it is financially advantageous to do so. VIT promotes private firms so they may thrive within the terminals operating structure, such as the private stevedores, maintenance, and repair companies. VIT presents the lowest risk option to the Commonwealth. VIT s policies have enabled entrepreneurial ventures to succeed, such as the 64 Express Richmond Barge operation and Cross Globe Inc., bringing innovative ideas, commerce, and jobs to the Commonwealth. VIT has had a more than significant role in creating: 343,000 Virginia Jobs 41.1 billion in revenue 13.5 billion in employee compensation 1.2 billion in tax revenue Virginia International Terminals Future Cash Transfers to the VPA $13 Billion (Net of APMT Rents) (48 year period commencing 2013) 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 - VIT SERVES VIRGINIA AND VIRGINIA ONLY, NOT ANOTHER REGION, STATE, PORT, OR CITIZENRY. NET PRESENT VALUE > $3.7 Billion 15
FUTURE CAPITAL EXPENDITURES The anticipated future capital requirements discussed below are consistent with the VPA 20 year Master Plan. All are expressed in 2012 dollars. Total Capital expenditures at VPA s terminals over the next 20 years are estimated to be $906 million. Approximately $241 million of this figure is to accomplish the APMT Phase II expansion. This will be funded from Terminal Revenues. The remaining balance, approximately $665 million, is for terminal maintenance and equipment replacement. These also will be funded from Terminal Revenues. Terminal Revenues are generated by VIT s operations. 16
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
VIRGINIA INTERNATIONAL TERMINALS: THE LOWEST RISK OPTION AVAILABLE PROVIDES FLEXIBILITY TO THE COMMONWEALTH TO REACT TO ECONOMIC CHANGES. WITH A 48 TO 50 YEAR CONCESSION, THAT CONTROL IS LOST, ESSENTIALLY FOR A LIFE TIME. THE COMMONWEALTH OF VIRGINIA IS THE SOLE BENEFICIARY OF ALL MONETARY AND ECONOMIC BENEFITS GENERATED BY VIRGINIA INTERNATIONAL TERMINALS. 18
THANK YOU 19