Puerto Rico

Ports Authority

Álvaro Pilar Vilagrán

Executive Director

February 26, 2010

Disclaimer

Today’s presentation includes certain statements that are not historical in nature

but reflect forecasts and “forward-looking statements,” for example, statements

regarding anticipated future financial and operating performance and results,

including estimates for growth. Actual results may differ materially from those

expressed or implied by such forward-looking statements. These statements are

based on the Puerto Rico Ports Authority’s current beliefs regarding future

events, and are based upon a number of estimates and assumptions that are

subject to significant uncertainties, many of which are outside the control of the

Puerto Rico Ports Authority, Government Development Bank for Puerto Rico, the

Government of Puerto Rico and its agencies and instrumentalities.

This presentation is not an Official Statement and does not constitute an offer to

sell or to purchase bonds, nor a solicitation of an offer to sell or to purchase

bonds in the Commonwealth of Puerto Rico, the United States, or in any

jurisdiction where such offer, solicitation or sale may be unlawful. This

presentation has been prepared solely for informational purposes, and should

not be construed as a recommendation to buy or sell any security or to

participate in any particular trading.

Agenda

1 Overview

2 Financial Performance

3 Major Projects / Initiatives

11 Airports

– North: Arecibo (ABO), Isla Grande (SIG) and Carolina (SJU)

– South: Ponce (PSE)

– East: Fajardo (FAJ), Humacao (HUC), Vieques (VQS), Culebra (CPX) and Ceiba (RVR)

– West: Mayaguez (MAZ), Aguadilla (BQN)

9 Maritime Ports

– North: Arecibo and San Juan

– South: Guánica, Guayanilla, Guayama, and Yabucoa

– East: Fajardo, Vieques and Culebra

Strategically located facilities

SJU is the main operation for both

commercial and cargo movement

Total commercial passengers:

– FY 2008: 11.5 million

– FY 2009: 9.4 million

– 88% through the Luis Muñoz Marín International Airport (SJU)

Annual air cargo moved through the airports:

– FY 2008: 380,000 tons

– FY 2009: 322,500 tons

– 69% at SJU

Source: Puerto Rico Ports Authority

Airport market demand highly sensitive

to major local and global events

Historical Annual Enplaned Passengers San Juan—Luis Muñoz

Marín International Airport (for fiscal years ended June 30)

0

2

4

6

8

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Passen

gers

(m

illio

ns) Airline

Dereg.

(1978)

Economic

Recession

(1981-1983)

AA & Eagle

Service

Buildup

(1985-1990)

Terrorist

Attacks

(Sep. 11,

2001)

Hurricane

Georges; AA

Pilot Strike

(1999)

Iraq War,

SARS

Outbreak

(2003)Economic

Recession

(2001)

Economic

Recession

(1990-1991)

Eastern & PanAm

bankruptcies and

sale of routes

(1989-1991)

Economic

Recession

(1990-1991)

Economic

Crisis

(2007-2009)

Oil Price

Spike

(2007)

Economic

Crisis

(2007-2009)

Source: Historical – Puerto Rico Ports Authority; Projected – Jacobs Consultants

Change in Departing Seats

San Juan—Luis Muñoz Marín International Airport (by month)

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

Ja

nF

eb

Ma

rA

pr

Ma

yJu

nJu

lA

ug

Se

pO

ct

No

vD

ec

Ja

nF

eb

Ma

rA

pr

Ma

yJu

nJu

lA

ug

Se

pO

ct

No

vD

ec

Ja

nF

eb

Ma

rA

pr

Ma

yJu

nJu

lA

ug

Se

p

2008 2009 2010

Pe

rce

nta

ge

Ch

an

ge

Historical Projected

AA Flight

Cancellation

Enplanements trending positive (+ 10%

Sept. thru Jan. 2010 v. 2009)

JetBlue and Spirit have increased capacity and are offering new and

additional services

Actual results exceed our forecast

Change in Departing Seats San Juan

Luis Muñoz Marín International Airport (Year over year - by month)

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Jun Jul Aug Sep Oct Nov Dec Jan

2009 2010

Pe

rce

nt

Ch

an

ge

June 2009 Forecast

Actual seats through Jan 2010

Source: Official Airline Guide, accessed June 19, 2009 and Feb 22, 2010

Nov, Dec & Jan

actual schedules

above initial forecast

Quarterly Performance of Puerto

Rico Airports – Departing Seats

Source: Official Airline Guide, accessed February 22, 2010

Quarterly performance relative to the corresponding QTR of prior fiscal year

Comparative Index of Departing Seats

Puerto Rico - San Juan and Aguadilla

(2007 = 100)

60

80

100

120

140

160

180

200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

SJU

BQN

Puerto Rico main airport recovering

at a faster pace than competitors

Source: Official Airline Guide, accessed Feb 22, 2010

Quarterly performance relative to the corresponding QTR of prior fiscal year

Comparative Index of Departing Seats

San Juan vs. Honolulu and Las Vegas

(2007 = 100)

60

65

70

75

80

85

90

95

100

105

110

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

SJU

HNL

LAS

Comparative Index of Departing Seats

San Juan vs. Key Florida Markets

(2007 = 100)

60

70

80

90

100

110

120

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 Fiscal 2008 Fiscal 2009 Fiscal 2010

SJU

TPA

FLL

MCO

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007 2008 2009 FY2010

0

200

400

600

800

1,000

1,200

1,400

1,600

(Th

ou

san

ds)

Cruise Passengers Vessel Movement

Source: Puerto Rico Ports Authority

Cruise ship passenger volume

showing stabilization

Total Cruise Passengers during FY 2008: 1,496,853; FY 2009: 1,236,121;

Forecast 2010: 1,217,600

Number of cruise companies served: 13

Public hearings in March 2010 to amend the maritime tariffs

Unique aviation assets that support hub growth

Agenda

1 Overview

2 Financial Performance

3 Major Projects / Initiatives

Improved airport revenue due to tariff

and traffic shift

-

20,000

40,000

60,000

80,000

100,000

2006 2007 2008 2009* FY2010

Projection

Landing Fees Passenger Revenues Space Rentals Utilities & Others

Airport Operations FY2006 FY2007 FY2008 FY2009 FY2010Projection

Landing Fees 26,747 30,435 26,908 22,437 29,879

Passenger Revenues 11,058 10,026 12,534 14,274 12,370

Space Rentals 43,438 44,223 42,679 42,432 41,681

Utilities and Others 3,740 2,734 1,681 1,696 4,264

Total Aviation Revenues 84,983 87,418 83,802 80,838 88,195

Growth % 3% (4%) (4)% 9%

Maritime Operations FY2006 FY2007 FY2008 FY2009 FY2010Projection

Wharfage, dockage and port services

34,047 34,094 33,416 30,415 31,184

Equipment and property rentals 11,549 12,231 13,150 15,186 15,104

Tourist ship fees 15,855 17,004 18,413 15,386 16,133

Demurrage, utilities and other 3,587 2,846 2,965 1,845 1,569

Total Maritime Revenues 65,037 66,176 67,943 62,833 63,991

Growth % 2% 3% (8)% 2%

0

10,00020,000

30,00040,000

50,000

60,00070,000

80,00090,000

100,000

2006 2007 2008 2009 FY2010

Projection

Wharfage Equip & Rental Tourist Fees Demurrage

Maritime revenue improving even

under economic pressure

Fiscal controls showing positive results

FY 2006* FY 2007* FY 2008* FY 2009*

Projected

FY 2010

NET INCOME AVAILABLE FOR DEBT SERVICE

Operating Revenues

Total Maritime Operations 65,037 66,176 67,943 62,833 63,991

Total Aviation Operations 84,983 87,418 83,802 80,838 88,195

Total Operating Revenues 150,020 153,594 151,745 143,671 152,186

Less: Provision for Doubtful Accounts 6,622 9,000 15,332 1,735 4,566

Less: Incentive Fee 1,783 2,360 1,825 2,223 1,499

141,616 142,234 134,588 139,713 146,121

Operating Expenses (excluding depreciation) 126,449 127,530 131,636 138,304 125,515

Operating Income 15,167 14,704 2,952 1,409 20,606

Non Operating Revenues (expenses)

Fuel flowage fees 3,400 3,220 3,101 2,471 2,900

Interest Income 1,017 2,151 1,745 1,672 100

Other Income 3,218 1,633 2,467 629 679

7,635 7,004 7,313 4,772 3,679

Net Income before Debt Service 22,802$ 21,708$ 10,265$ 6,180$ 24,285$

* Includes restatement of prior years audited Financial Statements

Our road to increased profitability…

Changes to Net Income Before Debt Service 2009-2010

$24.3 $2.8

$1.4$2.2$1.4$4.8

$7.4

$1.5$2.0$7.4

$6.2

$-

$5

$10

$15

$20

$25

$30

$35

2009 In

com

e B

efo

re D

S

Landin

g F

ees

Park

ing G

as

& O

ther

Oth

er R

eve

nue

Incr

ease

sA

dm

in E

xpense

sS

ala

ries

& B

enefit

sO

ther E

xpense

s

Spac

e R

enta

lsO

ther Fee R

eve

nue

sD

oubtful A

ccou

nts

2010 In

com

e b

efo

re D

S

Millio

ns

Increasing Revenues Decreasing Expenses Decreasing Revenues Increasing Expenses

Strong management team, with turn-around experience,

implementing expense reduction and revenue enhancement

initiatives

– Private enterprise approach to Authority’s operations

– Strict fiscal management

– Open communication with all creditors and fiscal agencies

– Personnel reduction

– Information technology revamping for timely financial and

statistics reporting

Management reinventing the Authority’s business

– Partnership with the private sector by implementing P3

alternatives

– Redevelopment of Ceiba and Aguadilla Airports will

redistribute the Island’s aviation activity and extend the useful

life of SJU

Blueprint for a new PRPA

SJU’s new tariff became effective on July 1, 2009

– Due to changes in traffic patterns, the expected effect of the

new tariff is an increase of $7.5 million for FY2010

– Actual July thru December 2009: $3.7 million

New Air Service Incentive Program

– 3-year incentive program for increases in domestic and

international air service

Tariff and Operating Agreements with Airlines

– Negotiations will start in March 2010, for SJU and regional

airports, to become effective July 1, 2010

Multiple initiatives to reach fiscal

strength

Increase revenues through continued enhancement of non-airline

revenues.– Additional concession space at SJU – new shopping area to open in Terminal D in

February 2010 (25,000 square ft.) and commercial area in Terminal A in June 2010

(20,000 sq. ft.).

• Targeting an estimate of $1.8 MM in additional annual revenue

• To implement parking fees at regional airports that currently do not have a parking

concession.

Maximize the capture of maritime and aviation revenue byimplementing the DSMS and AMOS system.

100% Cargo Scanning Inspection: May 2010

Transfer Ceiba’s maritime port facilities to PRPA

Expected increase in maritime space rental fee and watersurcharge: April 2010

Multiple initiatives to reach fiscal

strength

Headcount reduction

– Quarter ended September 30th: 2008 v. 2009 = $1.8 million

Time keeping automation

Decrease O&M expenses by controlling cleaning andsecurity services ($2M; 18% - 2009 v. 2008 calendar year)

Decrease in legal and professional contracted services($3.4M; 23% - 2009 v. 2008 calendar year)

Collective bargaining agreement (HEO) – renegotiation ofeconomic clauses still in process.

Multiple initiatives to reach fiscal

strength

Controlling expenses through new budget tracking system.

Decrease discount % to Maritime invoices from 5% to 2% (April

2010).

Reduction in materials and office supply expenses. Contract

negotiations to acquire cost reducing multifunctional units.

Closure of regional airports of Fajardo and Patillas.

Reduce bad debt expense through aggressive collectionefforts.

Reduce Ponce and Aguadilla Airports from category C to B.

Multiple initiatives to reach fiscal

strength

– Level annual debt

service of $6.7mm

– Final principal payment

in 2023

Mismanagement created an over

leveraged situation

Senior lien general revenue

bonds (~$55.6 million)

Subordinate lien obligations

(~$712 million)

– Lines of credit and

notes

– Requirements for

principal repayment

vary

– Substantial amount of

subordinate lien

obligations are

guaranteed by GDB

Continuous commitment to the future…

2010-2014AIRPORTS SYSTEM

FUNDING

FF PRPA PFC

PRIVATE

SOURCE TOTAL

LMM 59,726 42,560 64,851 - 167,137

ISLA GRANDE 6,994 70 - - 7,064

ARECIBO 1,484 78 - - 1,562

AGUADILLA 12,015 1,327 - - 13,342

VIEQUES 550 29 - - 579

PONCE 7,775 1,730 - - 9,505

CULEBRA 1,691 114 - - 1,805

Ceiba 12,694 663 - 125,000 138,357

TOTAL $102,929 $46,571 $64,851 $125,000 $339,351

2010-2014

Continuous commitment to the future…

MARITIME SYSTEM

FUNDING

FF PRPA PFC

PRIVATE

SOURCE TOTAL

SAN JUAN - 27,158 - 24,500 51,658

GOLDEN TRIANGLE - - - 75,148 75,148

PUERTO NUEVO - 11,501 - 40,000 51,501

ISLA GRANDE - 4,330 - 10,000 14,330

YABUCOA - 100 - 2,202 2,302

GUAYANILLA - 2,331 - - 2,331

GUANICA - 1,650 - - 1,650

CATAÑO 8,835 - - 16,333 25,168

GENERAL - 138 - - 138

SECURITY 12,716 2,625 - 1,614 16,955

CEIBA PORT - - - 94,968 94,968

TOTAL $21,551 $49,833 $0 $264,765 $336,149

Agenda

1 Overview

2 Financial Performance

3 Major Projects / Initiatives

Objective Long-term concession of the Luis Muñoz Marin International Airport

(SJU) to a private developer for the operation, maintenance,

facilities and commercial development of the Airport (including

parking and cargo facilities)

Repayment of Debt

P3

Partnership

The Authority’s preliminary application to the FAA was approved on

December 22, 2009. This approval enables PRPA to enter into a P3

partnership process that would exempt SJU and the private partners

from:

– repayment of federal grants,

– return of property acquired with federal funds,

– and the use of proceeds from the airport’s sale or lease to be

used exclusively for airport purposes

SJU P3 will potentially solve PRPA financial

challenges

Re-position Puerto Rico as the best tourist and business destination in the Caribbean

Increase number of passengers and carriers, which increases jobs and visitors’

consumer spending

Higher infrastructure investment in airport facilities

Improved airport amenities and general accommodations for passengers and visitors

Improved airport critical customer services such as safety and emergency medical

response

Increase operating efficiency and higher airport revenues

Reduction of operating expenses for PRPA

Potential to receive sizable upfront payment to reduce debt and invest in other strategic

infrastructure projects outside the airport

Likely to improve credit ratings of the PRPA (currently BBB-)

Increase tax-revenue streams for state and local governments

Reduced risk of developing airport uneconomic projects

SJU P3 will provide multiple measurable benefits to Puerto Rico

An asset with significant upside potential

SJU is the busiest airport in the Caribbean

based on passenger movement and one of the

most modern in amenities and security

The Airport has two runways of 10,000 ft and

8,016 ft each

– Runways have instrument landing and

VASI visual glide slope approach

indicator systems

SJU currently has four concourses with 36

gates of which 17 are used by American

Airlines, SJU’s largest carrier

In addition to international and U.S. mainland

routes, SJU also serves other local destination

such as Aguadilla, Culebra, Mayaguez, Ponce

and Vieques

Construction of the new Terminal A is currently

underway with an expected completion in

Summer 2010

The new terminal, with an additional 7 gates,

will serve expanded Delta and US Airways

operations at the airport

Runway SpecificationsPrimary Runway 10,000 by 200 ft (rebuilt in 1974)

8/26 Runs parallel to the Atlantic

Secondary

Runway

8,000 by 150 ft (Re-opened in Feb

2008)

10/28 Runs parallel to PR Hwy Rte 26

We have balanced airlines’ market share

Air Tran, 4.2%

Continental, 7.6%

Northwest, 0.5%

United Airlines, 3.1%

Delta Airlines, 7.1%

JetBlue Airways, 12.5%

American Airlines,

33.7%

American Eagle, 12.0%

US Airways, 8.0%

Others*, 11.3%American Airlines

American Eagle

Air Tran

Delta Airlines

Continental

US Airways

United Airlines

Northwest

JetBlue Airways

Others*

Enplanement Market Share of Top 10 Airlines for FY2009

* Includes: Vieques, USA Jet, Miami Air International, Sun Country, Casino Express, Pace, North American, Ryan International, Allegiant

Air, Spirit, Privates and Air Taxis, Iberia, Copa, Liat, Air Canada, Planet Airways, Cape Air

Florida and Dominican Republic are

the main markets served by SJU

NY, 16%

GA, 6%

NJ, 9%

TX, 7%

PA, 6%

USVI, 8%

MA, 5%

IL, 5%NC, 3%

FL, 33% FL NY

GA NJ

TX PA

USVI MA

IL NC

FY 2009 Top 10 Domestic O&D Markets

DR, 39%

BVI, 20%

Antigua, 4%

Dominica, 4%

St Lucia, 3%

Canada, 3%

St Marteen, 6%

Madrid, 6%

Panama, 13%

St Kitts, 3%

DR

BVI

Panama

Madrid

St Marteen

Antigua

Dominica

St Lucia

Canada

St Kitts

2009* Top 10 Int’l O&D Markets

•January to August 2009 figures

•Source: Research and Innovative Technology Administration Bureau of

Transportation Statistics

•Source: Puerto Rico Ports Authority

• Preliminary Application Approval: December 22, 2009

• RFP for potential Procurement Advisor: January 5, 2010

• RFP due date for Consulting Partners: January 29, 2010

• Consulting Partner Selection: 1st Quarter

• Completion Target Date: 1st Half 2011

P3 Status and Next Steps

Public Private Partnership (P3) for:

– Pier 3 Development

– Isla Grande Dry Dock

Sale or commercial development by the Authority of

underutilized real estate not used for aviation or maritime

operations

Maximize federal funds assignment opportunities

Successful completion of Isla Grande’s $6M ARRA project

Others

Disclaimer

Today’s presentation includes certain statements that are not historical in nature

but reflect forecasts and “forward-looking statements,” for example, statements

regarding anticipated future financial and operating performance and results,

including estimates for growth. Actual results may differ materially from those

expressed or implied by such forward-looking statements. These statements are

based on the Puerto Rico Ports Authority’s current beliefs regarding future

events, and are based upon a number of estimates and assumptions that are

subject to significant uncertainties, many of which are outside the control of the

Puerto Rico Ports Authority, Government Development Bank for Puerto Rico, the

Government of Puerto Rico and its agencies and instrumentalities.

This presentation is not an Official Statement and does not constitute an offer to

sell or to purchase bonds, nor a solicitation of an offer to sell or to purchase

bonds in the Commonwealth of Puerto Rico, the United States, or in any

jurisdiction where such offer, solicitation or sale may be unlawful. This

presentation has been prepared solely for informational purposes, and should

not be construed as a recommendation to buy or sell any security or to

participate in any particular trading.