Exhibit 2: Summary of Forecast Terminal Revenues
Pro forma Analysis of T18 Operations
Calendar year ending December 31
(in thousands)
The forecasts presented in this exhibit were prepared using information from the sources indicated and assumption provided by,or reviewed with and agreed to by,Port management,as described in the accompanying text inevitably,some of the assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore,there are likely to be differences between the forecast and actual results,and those differences may be material.
(a) Under the Railroad Agreement, railroads will not be assessed rail facility charges or rail container charges.
(b) Allowance for dockage fees. Such fees are assessed only to vessels not actively loading or unloading.
Assumes existing practices will continue. Total assumed to escalate at general inflation of 3%/year.
(c) Estimated revenue from container repair and maintenance activities at T18. Assumes existing practices will continue.
Total revenue assumed to escalate at general inflation at 3%/year.
Based on a Memorandum of Agreement between BNSF and UP railroads (together, the "Railroads"), and the Port, the Railroads will not be charged for on-dock rail activities in the future. However, the operator is required, under the Terminal 18 Lease, to continue to pay the Port an amount equal to 50 percent of the Rail Facility Charge ($10 per container). The operator will recover such costs through revenues received from the throughput charge. Therefore, for the purposes of this analysis, we have assumed that the operator will receive no revenues from these sources in the future.
b) Dockage Fees
Another source of revenue for the operator is dockage fees, which are assessed only to ships that are not actively loading or unloading. The costs of providing dockage privileges to container ships while unloading or loading are recovered in the form of throughput charge. Dockage for other vessels is very limited, and the revenue from this service amounts to only approximately $100,000 per year. An allowance of $100,000 in 1999 dollars, escalating at an annual inflation rate of 3.0 percent, has been included as revenue derived from this source.
c) Container Maintenance and Repair
The operator receives revenue from providing container maintenance and repair at T18. Approximately $5 million per year (1999 dollars) is earned through this activity. It is assumed that this activity will continue at the current level. A 3.O percent annual inflation rate has been assumed in estimating future revenues from container repair and maintenance.
d) Container Storage
Like many terminals along the West Coast, the fee schedule of T18 includes a tariff for containers stored in the container yard. However, this tariff is seldom, if ever enforced. Therefore, no revenue from storage charges has been included in the forecast.
