Terminal operators evaluate the value of terminals such as T18 based not only on near-term profitability, but also in terms of the terminal's ability to help an operation meet long-term objectives for both profitability and growth. One indicator of whether a private company could withstand short-term shortfalls is the total cumulative net revenue for the terminal. As shown in Exhibit 5, the cumulative net cash flow, before income driven taxes and operator corporate overhead, is projected to remain positive in all years and is projected to grow in each year of the Forecast Period.
Exhibit 5: Terminal Cash Flow - Low Case
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) Before income driven taxes and operator corporate overhead.
The High Forecast incorporates slightly higher growth rates and market share, but also includes a potential new customer or service in 2001 with a throughput equal to 50,000 TEUs per year. The Port has identified at least two potential new services/customers with an annual volume of 50,000-100,000 TEUs each. Based on the potential for such new services, it is reasonable to expect that the Lessee will be able to increase its annual volume by at least 50,000 TEUs beginning in 2002, as assumed in the High Forecast.
Exhibit 6 presents assumed results of the High Container Forecast. The assumed use of on-dock rail facilities is the same as the Base Case. As shown, the increased volume results in an increase in total revenues, as well as an increase in total expenses because certain costs are directly related to volume. The resulting annual net cash flow, before income driven taxes and corporate overhead increases over the Base Case in all years.
