Miami Intermodal Center

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Miami Intermodal Center

• Briefing for Rating Agencies
• October 2003

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Agenda

• Introductions
• Program Updates
• Major Program Elements
• Comparative Program Schedule
• MIA Passenger Forecast
• Consensus Transaction Day Forecast
• Revised Program Sources and Uses of Funds
• Proposed RCF TIFIA Credit Structure
• Next Steps

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Program UpdatesMajor Program Elements

• Briefing for Rating Agencies
• October 2003

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Rental Car FacilityConstruction Phasing Options
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MIC Joint Development ProgramProposed
Development Program

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MIC Joint Development ProgramStatus of
Procurement Process

• RFP advertised 12/1/02
• Pre-proposal meeting 1/15/03
• Single proposal received 3/3/03
• Initial feasibility determination 5/28/03
• Final evaluation and selection 10/03

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MIA MOVER
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MIA Mover DBOM Schedule
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Program UpdatesComparative Program Schedule

• Briefing for Rating Agencies
• October 2003

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Construction Proposed Lettings
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Program UpdatesMIA Passenger Forecast

• Briefing for Rating Agencies
• October 2003

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Passenger Traffic ForecastPrepared for May 2003
Bond Issue(for the 12 months ended September 30)
Enplaned Passengers in Thousands
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Passenger Traffic Forecast as Prepared in May
2003Enplaned Passengers in Thousands

• Sources Miami-Dade Aviation Department, for
  enplanement statistics DOT, Air Passenger
  Origin-Destination Survey,reconciled to Schedules
  T-100 and 298C T-1 John F. Brown Company, Inc.

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Program UpdatesConsensus Transaction Day Forecast

• Briefing for Rating Agencies
• October 2003

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Miami International AirportRental Car
FacilityTraffic and Revenue Study
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Rental Car Demand Forecasts Reviewed by Unison

• UNISON-MAXIMUS, Inc. (Unison) reviewed the
  following forecast documents and files from the
  John F. Brown Company (JFB)
• Report of the Traffic Engineers, Feasibility
  Report for the Consolidated Rental Car Facility
  at the Miami Intermodal Center, Miami-Dade
  County, Florida, December 24, 2000 (the
  December 2000 JFB Report)
• Revised transaction day forecasts completed in
  July 2002 and contained in an Excel file (the
  July 2002 JFB Forecast File)
• Miami International Airport Consolidated Rental
  Car Facility Revised Transaction Day Forecast and
  Project Capacity Estimate, May 14, 2003 (the
  May 2003 JFB Report)

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Unisons Forecast Methodology

• The multivariate regression modeling approach
• Combines econometric modeling techniques with
  knowledge of the MIA rental car market.
• Provides a systematic framework for summarizing
  historical trends, quantifying economic
  relationships, and linking the forecasts to
  projected changes in market factors that
  influence MIA rental car activity.
• Unison developed a three-equation model
• The number of transactions modeled as a function
  of OD domestic and international enplanements at
  MIA and the average daily rental rate with and
  without a CFC.
• The average transaction duration modeled as a
  function of the average daily rental rate.
• The number of transaction days equals the number
  of transactions multiplied by the average
  transaction duration.

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Unisons Forecast Methodology (Continued)

• Multivariate regression model relates transaction
  days to
• OD domestic and international enplanements
• Average daily rental rate
• Downward shift in rental activity subsequent to
  9/11/01 and
• Seasonality in rental demand

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Unisons Transaction Day Forecast

• Adjustments to raw historical rental car data
• Transaction days for 10 companies (estimated to
  represent 95 of market, per JFB) grossed up to
  100
• Estimate of entire market reduced by 10 for
  audit findings
• Base case scenario Assumes that decrease in
  average contract duration observed in 2001 and
  2002 was transitory contract duration will
  recover during forecast period
• Low case scenario Assumes that decrease in
  average contract duration in 2001 and 2002 will
  persist throughout forecast period

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Unisons Transaction Day Forecast
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JFB and Unison Transaction Day Forecasts
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Comparison of JFB and Unison Base Case
Transaction Day Forecasts
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Consensus Transaction Day Projection

• Unison base case forecast and JFB base case
  projection differ by no more than 3.7 in any
  year in forecast period
• Unison and JFB mutually developed a consensus
  projection
• Base case consensus projection developed based
  on weighted average of Sept. 2003 JFB base case
  projection and Unison base case forecast
• FY 2004 FY 2010 JFB projection and Unison
  forecast weighted equally (50)
• FY 2011 FY 2015 JFB projection weighted 25
  Unison forecast weighted 75

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Consensus Transaction Day Projection (continued)

• Stress case consensus projection developed
  based on growth rates incorporated into forecast
  developed by Fitch in August 2002
• FY 2003 FY 2005 Average annual Fitch growth
  rate for FY 2003 FY 2005 applied evenly in each
  of those fiscal years
• FY 2006 FY 2015 Same rate of growth as used
  by Fitch was applied each year

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Consensus Transaction Day Projection (continued)
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Transaction Day Forecasts Comparison
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Finance Plan Update

• Briefing for Rating Agencies
• October 2003

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MIC Uses of Funds by Program Element
7-03(1,000s)
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MIC Uses of Funds by Activity 7-03(1,000s)
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MIC Sources of Funds 7-03(1,000s)
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Notes to MIC Sources and Uses of Funds
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Proposed RCF TIFIA Credit Structure

• Briefing for Rating Agencies
• October 2003

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Proposed RCF TIFIA Credit Structure

• Ultimate Recovery Approach
• Allows flexibility for uncertainty in forecast
  and cyclicality of the rental car market
• Automatically accelerates pay-outs when revenues
  exceed targets
• Minimum Payment of current interest maintained
  during lean periods and subject to rate covenant
• TIFIA is the Senior Debt
• 95 million FDOT land reimbursement (at zero
  interest) is subordinate to TIFIA obligation
• Future debt may be incurred to expand RCF to full
  design potential, but will be subordinate to TIFIA

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Key Features of Ultimate Recovery Proposal

• Interest capitalized during construction and
  start-up
• No capitalized interest after Oct 1, 2010
• First principal payment due Oct 1, 2010
• Stress Case triggers long term rate covenant
• Target Payment if forecast costs, revenues and
  completion schedule are met
• Minimum Payment if targets not achieved and
  reserves fall below agreed level
• Minimum Payment triggers short term rate covenant
• All TIFIA Principal due Oct 1, 2040 35 year
  maximum
• Variable FDOT Land Payment cannot exceed
  principal payment made each Oct 1 to USDOT
• Adequate reserves debt service, operating
  expenses, 10 million rate stabilization,
  facility expansion

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Comparison ofRecent Transaction Day Forecasts

• Changes Since 7-02
• 10 Haircut based upon MDAD Audit
• Continued market weakness

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October 2003 Consensus ForecastsJ.F. Brown and
Unison(1000s of Transaction Days)
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Structural Security Features

• Subordination of 95 Million FDOT Land Payment
• Cash Reserve of One Year OM Following Year
  Interest Due (Minimum Payment)
• Accumulation of OM and Debt Service buckets
• Two-Tiered Rate Covenant
• Short Term Cyclical Events - 10 million rate
  stabilization reserve minimum
• Long Term Structural Imbalance Stress Case
  triggers contingent rent and modified pay-out
  ratio
• Contingent Rent
• Equal to following years budgeted facility OM
• Use of FDOT Cash Flow Intermediation to Extend
  Early Collection Period
• 3.25 CFC during early collections, 4.00 on
  opening, 25 increase every five years

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Target Payment is Variable

• Percentage of funds in Secondary Reserve after
  filling reserves and cash flow buckets
• 30 of Secondary Reserve balance paid to USDOT
  for principal Oct 1 and 30 to FDOT for land
  April 1
• 10 Million minimum balance in Secondary Reserve
  for rate stabilization
• Principal and land repayments accelerate if
  revenue forecast exceeded, but reserve balances
  are also higher permitting facility expansion if
  needed
• Base Case allows retirement of principal and
  capitalized interest Oct 1, 2029 compared to Oct
  1, 2040 Maturity Date
• Full build-out possible from surplus reserves
  and/or Facility Expansion Fund (created after
  FDOT land repaid)

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Minimum Payment is Interest Due

• Interest Due on October 1
• FDOT land repayments subordinate to Minimum
  Payment
• Minimum Payment triggers Short Term rate covenant
• Trend toward Stress Case triggers Long Term rate
  covenant and changes percentage payout ratios
  (50 of Secondary Reserve to USDOT for principal
  and 25 to FDOT for land repayment)
• During first ten years interest can be
  capitalized with approval of Secretary

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Two-Tiered Rate Covenant
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Flow of Funds
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Alternative Scenarios Tested
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Next Steps for Testing Structure

• Agreement on approach with USDOT incorporate
  relevant templates from other TIFIA transactions
  (TTA, SR 125)
• Presentation of Base and Stress Cases to USDOT
  and advisors
• Refinement of tests and financial models
• Rating agency presentations and incorporate
  feedback

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Next Steps

• Finalize concession agreements
• Finalize RCF finance plan
• Reaffirm county funding strategy for people mover
• Obtain investment grade rating
• Negotiate/execute TIFIA loan documents

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For More Information

• Visit the following websites
• Miami Intermodal Center
• http//www.micdot.com/
• Financial Planning Office
• http//www.dot.state.fl.us/financialplanning/mic.h
  tm
• Public Information Office
• http//www.dot.state.fl.us/publicinformationoffice
  /moreDOT/mic.htm
• Lowell R. Clary, CPA
• Assistant Secretary for Transportation Support
• Phone [phone] Fax [phone]