Slide 1

Thank you all for attending today and showing your great support for the Port of Tampa. This annual luncheon provides a proper forum for us to review and celebrate the achievements of the last year, to acknowledge the challenges we still face, and to look forward to the many opportunities that lie ahead.

Slide 2

All of you in this audience today – political leaders, port authority employees, tenants, importers and exporters, vessel operators, stevedores, pilots, the Coast Guard, our law enforcement partners and first responders, environmental representatives, and the hundreds of other service providers that form our immense port community -- all of you – are the reason the Port of Tampa is the largest, most diversified and financially solid port in the state of Florida.

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You are the reason the Port of Tampa – in good times and in difficult times – remains a beacon in our community contributing to the creation of nearly 100,000 jobs and pumping billions of dollars through our region’s economy. You should be proud of your accomplishments and your contributions to the quality of life we enjoy throughout west/central Florida.

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More broadly, our port is a key component of Florida’s domestic and international trading system that represents the state’s most dynamic and proven catalyst for economic growth. Even in these difficult economic times, the flow of exports and imports through Florida’s seaports has outperformed the national averages. Trade now accounts for almost 20% of Florida’s economy and this pattern is expected to continue long term as the importance of trade for our state continues to grow.

For Florida to reap the full benefits from the global trade opportunities, our political leaders and the citizens of our state must recognize the increasing importance of trade for economic development and job creation, and we must focus sufficient resources on trade and transportation development to ensure Florida’s ports are able to compete successfully with ports in neighboring states and countries. In this regard, I ask all of you to help spread the message that our state can no longer rely on the traditional economic drivers, that we are in a highly competitive and changing world, and we must develop a state wide approach to expand Florida’s global trade capabilities to include more funding for port infrastructure and related transportation systems.

Slide 5

A year ago I told you that 2009 would be another year of decline for the national economy, for our state and our ports. That prophesy proved true on all accounts. The FY 2009 business and financial environment was even more challenging than in the prior year for Florida’s seaports as the global recession intensified, international trade declined for the third straight year and the state economy continued to struggle. Special and creative efforts were required by the Tampa Port Authority (TPA) to assist the port community and achieve our operational and financial objectives. Under such adverse conditions, I am extremely pleased with our port’s performance and very proud of our employees. TPA employees rose to my challenge to double their efforts to enhance productivity and minimize expenses, while working closely with port tenants and users during these difficult times.

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TPA financial results provide clear evidence of the success of our efforts. Operating revenues for FY 2009 were very close to all time levels.

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Operating expenses were held well below budget targets, despite increases in security costs driven in part by new State requirements. Net income is near the highest levels ever achieved by the TPA. The impressive financial performance was accomplished during a recession year, while keeping rates charged to our customers at very competitive levels. There were no increases to commodity rates (wharfage) and no implementation of across the board security assessments as many other ports have done. We intend to hold to this pattern during 2010 as well.

The TPA financial performance was recognized by Fitch Rating Agency when they again rated our outstanding debt at an “A” with a stable outlook. This comes at a time when many ports and organizations have had their ratings reduced. Additionally, for the ninth consecutive year TPA’s Comprehensive Annual Financial Report received the National Certificate of Excellence in Financial Reporting award.

Slide 8

We are clearly not yet out of the woods. Nationally, unemployment in terms of lost jobs is by far the highest in the past 60 years and the unemployment rate has continued to rise. And there remains huge uncertainty over when and to what extent consumer demand – which accounts for over 70% of our country’s GDP – will really bounce back.

Here in Florida the economic malaise has been even worse. Our state entered the recession well before the rest the country, the contraction has been much steeper, the rate of job loss 75% greater than the nation’s, the number of unemployed has soared beyond 1,000,000 and the best outlook is for very slow and modest improvement in 2010.

Slide 9

The economic downturn has significantly impacted global trade. Trade volumes have fallen worldwide for an unprecedented 3^rd straight year. Much of the industry is in the worse situation economically and financially than ever before in the post World War II period. Nationwide total US trade tonnage is down some 15% in 2009 and container volumes at large US ports like Los Angeles and Long Beach have fallen over 20%, New York 15% and -- closer to home-- almost 20% at Port Everglades and 3% in Miami.

Slide 10

Overall maritime activity at the Port of Tampa also declined in 2009 as measured by cargo tonnage; nevertheless, the port fared better than most ports in this state and around the nation, and new business continues to be attracted that should benefit the port in coming years.

Cargo tonnage, led by declines in our core bulk businesses – petroleum, phosphates and fertilizers, and building materials – fell 11% port-wide and 8% across TPA docks. But there were a number of bright spots in a generally dismal environment for bulk trades. There are signs that our core petroleum and fertilizer trades may be improving with reduced rates of declines in the second half of the year.

Slide 11

A new lease with Cutrale, the world’s largest orange juice producer, will result in some $30 million in new investment and over 200 thousand tons of bulk orange juice shipments annually when the facilities are in operation.

Slide 12

And, Separation Technologies announced plans to ship 170 thousand tons of fly-ash (an additive to strengthen cement) from Tampa to Panama. The first shipment of 8,000 tons, loaded just a week ago, went flawlessly and another 20 shipments will follow over coming months.

Slide 13

General cargo including our important steel and scrap trades also declined sharply. I know this has a particularly adverse impact on our terminal operator and our stevedores. Accordingly, both Ports America and the TPA have stepped up our marketing operations in an effort to attract any possible general cargoes to our port with a particular focus on heavy lift and project cargoes. To date we have had some limited success with two examples shown in this slide: bridge sections sent from Tampa to New York and a number of huge generators weighing 465 tons each brought in from Canada for Progress Energy.

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We were also pleased by a 4^th straight year of growth in our fledgling container business, which rose 11% over the prior year.

Slide 15

The container business should be boosted this year by the addition of Horizon Lines’ new container service from Tampa to Puerto Rico which was inaugurated just this past October and by increases in containers carried by our global container operator Zim Integrated Shipping.

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And on the cruise side of the business, passengers embarking and disembarking Tampa were up 5% to over 800 thousand to the highest levels since 2006, when Hurricane Katrina temporarily diverted an additional cruise ship to Tampa.

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Significantly, Royal Caribbean announced plans to deploy a larger ship, Radiance of the Seas, in Tampa in 2010 with an expanded season, increasing sailings from 28 to 44. This larger vessel and additional sailings are expected to add another 75 thousand passengers on an annual basis.

Slide 18

Additionally, the Port of Tampa’s important ship repair industry received a boost when we concluded a number of significant lease amendments and assignments during the year. A lease amendment with Gulf Marine Ship Building has already resulted in their investing millions of dollars in facility expansion and another with International Ship Repair provides them with long term use of port land. And, during the year an assignment of the lease to operate Tampa Bay Ship Building to Louisiana based Edison Chouest brought in a new, highly successful company who is already investing millions of dollars to modernize that ship yard and create more jobs. We also supported all three shipyards with requests for stimulus funds which resulted in $8.7 million in Federal grants.

Slide 19

During the year, we aggressively expanded and accelerated our own capital investment program both to prepare the Port for future growth and to do our part to stimulate and support our regional economy. We streamlined processes and moved projects forward more quickly than ever, resulting in record investments exceeding $81 million being approved by our Board of Commissioners in FY2009. This amount was more than twice the annual average of the last 5 years. Funding was augmented by our successful efforts over the last two years advocating for grants with State and Federal officials. Grant revenue of over $13 million was utilized during the year and we recently received another $2.2 million of federal funds for renovation of the port’s major energy terminal known as REK. We continue to pursue another $20 million in TIGER funds for that important project. And, we plan to invest another $50-60 million in key projects during the current year.

Slide 20

Significant projects completed or begun during the past year included considerable work expanding and improving berths, channels, road and rail connections, including work at Port Redwing constructing berths 300-301,

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major dredging in East Bay preparing for future developments in that area of the port and

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expansion of berths in Port Sutton.

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We also began work on the critical renovation of the REK Petroleum pier, a project that will be completed over the next year at a total cost of $30 million. This facility is the primary energy gateway for jet fuel for Orlando airport and much of the gasoline used in our region.

Slide 24

Most visible to our community is the new $14 million garage expansion at Channelside. Work on this 720 space parking facility is well underway and is scheduled for completion by next summer. In designing this garage we worked very closely with our local community to ensure the facility fits in well with the area. The design has in fact already been recognized with two prestigious architectural awards.

Slide 25

Perhaps most importantly for the future expansion and growth of our Port is the ongoing development of our container facilities. This past year, we awarded contracts totaling over $31 million for container facilities expansion and improvements, to include the expansion of the terminal from 25 to 40 acres, new crane rails, additional refrigerated capacity and a new Gottwald mobile harbor crane.

Slide 26

Looking forward, together with our partner Ports America, we have additional phased expansion planned to increase the terminal size to160 acres with investments of at least another $75 million.

Slide 27

The phased expansion will be accomplished as market demand for container services in this region grows with a special eye on the Panama Canal expansion project which will be completed by 2014.

Slide 28

That $6 billion Canal expansion will add a third lane of locks large enough to transit containerships three times the size of those now able to pass through the Canal locks. The result will be a much larger share of the Asia-US container business taking the route through Panama into US East and Gulf ports, instead of entering through West Coast ports and being railed across the country and trucked down into Florida as is now the case for a large share of the trade.

Slide 29

As port business grows, bringing more and more truck traffic, the efficiency of the highway and rail systems connecting our port to the hinterland becomes increasingly critical. Accordingly, over the past year the TPA took a lead role in advocating for the I-4 Crosstown Connector and to seek Federal stimulus money for this project. In December 2008 FDOT announced that, due to budget constraints, start of that nearly $600 million project, critical to the future growth of the Port and important for our community, would be deferred to a future work program. The TPA, the Tampa Bay Partnership, local Chambers of Commerce and the port community stepped up, garnered the support of our political leadership, advocated hard for stimulus money and encouraged FDOT to rethink the project construction timetable and financing. The result was $105 million in stimulus money, a new financing approach by FDOT with award of the project this past September. Construction should start in the next few months with project completion now expected by early 2013. We are impressed by and very much appreciate the good work done by our District 7 FDOT partners to move this huge and important project forward.

The community effort to advance the I-4 connector project is just one example of our successful efforts to enhance communication and work collectively with stakeholders, business and political leaders and our community in general.

Slide 30

Evidence of the success of our efforts abounds including the considerable number of positive press releases and stories about the Port in local and national publications, the much improved working relationship with key maritime organizations, including the Port of Tampa Maritime Industries Association (PTMIA) and the Propeller Club and a real reduction in stakeholder complaints. Additionally, we broadened outreach to community and business groups around our region and the state, and to small business enterprises and educational institutions through more presentations, meetings, e-mail communications and upgrades to our websites.

Slide 31

And, we hosted many visiting VIPs and events during the year such as the 20^th Annual Steel Conference, the 2^nd Annual Global Trade and Panama Canal Expansion Conference, the 2^nd Annual Distribution Center Opportunities Workshop, numerous business and trade forums with senior public officials, including a forum with US Senator Mel Martinez, another one with US commerce Secretary Gary Locke, visits by Governor Crist and Senator Bill Nelson and a recent Economic Summit attended by numerous state and local elected officials.

Slide 32

One area where we have worked very closely with the port community has been to address issues related to port security. The TPA is charged with protecting some of Florida’s most critical infrastructure, and we make security and safety of our facilities, port workers and nearby residential areas a top priority. The Tampa Port Authority is compliant with existing Federal and state laws, and works continuously with local, state and Federal partners to ensure the security of our port, while remaining sensitive to the needs of the port community.

Changes to Florida Statute 311 during the 2009 legislative session presented new challenges to the Tampa Port Authority this year. The Authority recognized early in the session that proposed changes could have a negative impact on our port users and we worked closely with port community leaders like PTMIA President Tim Shusta and Tad Humphreys to mitigate the unintended consequences of the law. The authority remained strong in our position after the session and joined other Florida ports in a united voice regarding certain aspects of the law that simply were not workable here, or in other ports. We also worked closely with key elected officials and agency heads to assure that our concerns were addressed. Especially important to our efforts is the support of Congresswoman Kathy Castor, who has been a strong advocate for reasonable port security legislation. The TPA is presently engaged in on going discussions with the State of Florida in our continuing effort to avoid the implementation of protocols that have negative consequences for our port community.

The cost of security remains a challenge, and the TPA is constantly looking for ways to provide efficient and effective security for Florida’s largest port while holding the line on security fee charges to individual port users. With eight distinct security access points and thousands of acres containing critical infrastructure that is vital to the Central Florida economy, there are plenty of security challenges. We appreciate our community’s continued partnership in making our port safe and secure.

Slide 33

Together with terminal operator Ports America, we have also worked successfully to promote innovate outreach related to customer business and safety. Two initiatives, the Quality Total Evaluation and Assessment Management Program (QTeam) and the Tampa Cooperative Safety initiative have resulted in more efficient operation, greater safety performance and fewer customer complaints.

Slide 34

The Tampa Port Authority has significant responsibility for the environmental quality of Tampa Bay and oversees the permitting processes required by residential and commercial interests that plan to build or modify waterfront facilities. The Port Authority must also permit projects that affect submerged lands and other properties over which we have jurisdiction. During the past year, the TPA entered into an interlocal agreement with the Hillsborough County Environmental Protection Commission (EPC) which transferred all residential and small commercial permitting processes from the Port Authority to the EPC. The transfer is a win-win for the port and the community by creating “one-stop shopping” for residential waterfront permitting needs, and enabling the Port Authority to focus more of its expertise on large, job-creating industrial marine projects and the administration of the nearly 5,000 acres that make the Port of Tampa Florida’s largest, most diverse port.

We are committed to continuing to work closely with our many environmental partners to ensure the compatibility of our important cargo operations with the equally important responsibility we share to protect the environmental quality of Tampa Bay. Many of our partners are represented in this room today and I thank you all for your good work in this important area.

Slide 35

In closing, I would again like to emphasize that your port remains a beacon in a turbulent sea, but beyond 2010, I see many opportunities and we are preparing for them. We serve a huge regional market -- 8 million consumers within 100 miles of the port. We will remain the energy gateway for all of west central Florida. Our business will be boosted by the Panama Canal expansion. Cuba offers real opportunities in the medium term. And, Tampa is well positioned to serve expected trade growth with emerging economies throughout this hemisphere.

Slide 36

The TPA is financially solid and will continue to invest aggressively in all the infrastructure additions and improvements necessary to efficiently serve future trade in our region and beyond. In the near term, we shall continue to work with tenants and customers to do our part to help them emerge from this down economy.

Thank you for your friendship and your support for the great Port of Tampa. All of us at the Tampa Port Authority wish you a very Happy Holiday season and a much more prosperous New Year.

For the State of the Port Presentation, Click PDF below.