J.P. Morgan Public Finance Transportation & Utility .
J.P. Morgan Public FinanceTransportation & Utility Investor ForumAmy PotterChief Financial OfficerMarch 16, 201603 16 16 TCA Investor Presentation
TCA History/Background103 16 16 TCA Investor Presentation
Highlights Restructurings in 2013 and 2014 put the Agencies on solidfinancial footing Traffic and revenue are growing steadily, supported by astrong economy and a congested network of freeways andmajor arterial roads As you’ll see, credit quality is improving; neither agency isa speculative credit203 16 16 TCA Investor Presentation
ThreeRoads, Two Agencies, One StaffTCA StructureTransportation Corridor Agencies Governance– Joint Powers Authorities– Formed in 1986– 18 cities and threeCounty Supervisor Districts The two JPAs are separatelegal entities with separatefinance structures (one staff)San Joaquin HillsToll RoadFoothill Toll RoadSan Joaquin HillsBoard of Directors Authority to collect tolls obtainedfrom State legislature in 1987Eastern Toll RoadFoothill/EasternBoard of DirectorsTCA Staff Toll revenue for each Agency can onlybe spent on operating costs, debtservice and system improvements303 16 16 TCA Investor Presentation
TCA Toll Roads provide Vital Links in the OCand Regional Transportation Network The Foothill/Eastern System and SanJoaquin Hills System comprise a 51-miletolled highway network– 20 percent of OC highway system– 290,000 trips on a typical weekday– 300 million annual toll revenue– All drivers pay electronically– 780,000 accounts– 1 million transponders– Built parallel to OC’s congestedI-5, I-405 and SR-55 freeways– System provides predictable accessto commercial centers and Airport03 16 16 TCA Investor Presentation4
1990California Toll FacilitiesGolden Gate Bridge17-Mile DriveAntioch BridgeBenicia-Martinez BridgeCarquinez BridgeDumbarton BridgeRichmond-San Rafael BridgeSan Francisco-Oakland Bay BridgeSan Mateo-Hayward BridgeCoronado Bridge07 2014 WideScreen Template5
2016California Toll FacilitiesI-680 Express Lanes (SB)I-580 Express LanesGolden Gate Bridge17-Mile DriveAntioch BridgeBenicia-Martinez BridgeCarquinez BridgeDumbarton BridgeRichmond-San Rafael BridgeSan Francisco-Oakland Bay BridgeSan Mateo-Hayward BridgeSR 73 Toll RoadSR 133, SR 241, SR 261 Toll RoadsI-10 Express LanesI-110 Express LanesSR-237 Express LanesI-880 Express Lanes07 2014 WideScreen TemplateSR-91 Express LanesI-15 Express LanesSR-125Coronado Bridge(now free)6
California Toll Facilities2016 PlannedI-80 Express LanesCONTRA COSTAtransportationauthorityI-680 Express LanesGolden Gate BridgeAntioch BridgeBenicia-Martinez BridgeCarquinez BridgeDumbarton BridgeRichmond-San Rafael BridgeSan Francisco-Oakland Bay BridgeSan Mateo-Hayward BridgeSR-237 Express Lanes ExtensionI-880 Express Lanes ExtensionSR-85 Express LanesUS 101 Express Lanes07 2014 WideScreen TemplateUS 101 Express Lanes17-Mile DriveI-680 Express Lanes (SB NB)I-580 Express Lanes880 Express Lanes ExtensionI-880US 101 HOT LanesI-10 Express LanesI-15 Express LanesHigh Desert CorridorSR-91 Express LanesI-15 Express LanesSR 73 Toll RoadSR 133, SR 261 Toll Roads,SR 241 Extension/I-5 Connector,SR 241/91 Connector,I-10 Express LanesI-110 Express LanesHigh Desert CorridorI-5 Express LanesI-405 Express LanesSR-710 BypassSR-156 Toll RoadCoronado Bridge(now free)SR-91 Express LanesI-405 Express LanesI-15 Express LanesSR-125SR-11/Otay MesaI-805 Managed LanesI-5 Managed Lanes7
Orange County and RegionalEconomic Update803 16 16 TCA Investor Presentation
Orange County Economic Indicators ContinuePositive TrendsUnemployment Rate as of January 20161Population as of January 201525-Year Avg. Growth Rate: 0.91%5.8%4.0%Median Home Price as of January 20163Residential Building Permits (Units)4Actuals through September 2015 Positive trends in each of these four indicators are also observed in Riverside and San Diego CountiesSources: (1) State of California Employment Development Department; (2) US Census Bureau, California DOF;(3) California Association of Realtors; (4) US Census Bureau03 16 16 TCA Investor Presentation9
Orange County Driving TrendsA Typical Weekday Commute132California Gas Prices are Near Five-Year Lows241Selected Freeway Segments3Freeflow Travel TimePeak Travel TimeAverage Speed DuringPeakWorst Day/Hour1. I-405 SB From MacArthur to Jeffrey Rd (4.6 mi)4 minutes8 minutes34 mph2. I-405 NB From CA-55 to Brookhurst (7.0 mi)6 minutes15 minutes29 mphFri 17:003. CA-55 NB From I-405 to Irvine Blvd (6.4 mi)6 minutes13 minutes30 mphThu 17:004. I-5 NB From CA 133 to 17th St. (8.4 mi)8 minutes17 minutes30 mphThu 17:00Wed 17:00Sources: (1) http://maps.google.com accessed 6:00 PM December 3, 2015; (2) U.S. Energy Information Administration, Weekly California All Grades ReformulatedRetail Gasoline Prices (March 7, 2016); (3) Inrix 2014 Urban Mobility Scorecard Annual Report03 16 16 TCA Investor Presentation10
Foothill/Eastern TCAFinancial Update1103 16 16 TCA Investor Presentation
Transactions Transactions are on pace for threeconsecutive years of growthTransactions and Average Toll Rate– FY 2016 Budget assumed 1.4%transaction growth; 9.3% growth observedto date– One-year transaction growth rate iscurrently at its highest level since FY 2001– Transactions outpaced the 2013 TrafficStudy by 5.2% inFY 2014 and 5.9% in FY 2015 78.0% of transactions are processed onthe mainline toll plazas Weekend/non-commute and ramp usageis increasing Toll increases in five consecutive years; 2.0% FasTrak rate increase was effectiveJuly 1, 2015 (while maintaining the 1.00increment above the FasTrak rate for nonFasTrak transactions)Foothill/Eastern TCA03 16 16 TCA Investor PresentationToll Increases:Annual TransactionsTransactions(Millions)Transactions Growth200767.56 56.16-0.4%201256.170.0%201355.39-1.4%201456.64 2.3%201558.42 3.1%2016 **41.37 9.3%Fiscal Year* 52-week moving average** Through February; growth rate versus same period in FY 201512
Toll RevenuesToll Revenue and Average Toll Rate Toll revenues for the first eight months of FY2016 are up 12.5% versus the prior year– FY 2016 Budget assumed 3.4% revenuegrowth (2.0% from toll increase) Compound average annual growth– FY 2001 to FY 2015: 4.0%– FY 2009 to FY 2015: 5.1%Toll Increases:– Debt service growth rate through FY 2038:3.75% Revenue breakdown by transaction type in FY2015 (excluding violations)Annual Toll RevenuesFiscal YearToll Revenues(Millions)Toll RevenuesGrowth– FasTrak: 87.9%2007 106.40 9.6%– ExpressAccount (license plate tollingaccount): 7.3%2008 102.32-3.8%2009 94.08-8.1%2010 99.68 6.0%– One-Time-Toll (license plate tolling with noaccount): 4.9%2011 100.14 0.5%2012 107.15 7.0%2013 111.73 4.3%2014 119.41 6.9%2015 126.47 5.9% 92.16 12.5%Foothill/Eastern TCA03 16 16 TCA Investor Presentation2016 *** 52-week moving average** Through February; growth rate versus same period in FY 201513
F/ETCA Performance Relative to Traffic Studies Transactional toll revenues averaged 105.7%of the 1999 Stantec study during the period2000 through 2007 Transactional toll revenues are averaging108.5% of the 2013 Stantec study in theperiod FY 2014 through FY 2016 (projected) 2013 Stantec study toll rate increases average2.5%-3.0%; inflation assumption: 2.5% Average actual toll rate increases have been2.0% per year since the 2013 refinancing Average annual growth rateover T&R study period:–1999 Stantec Study: 5.4%–2013 Stantec Study: 4.5%–Restructured Debt: 3.75% Restructured debt profile was created duringthe post-recession low point in the revenuecycleFoothill/Eastern TCA03 16 16 TCA Investor PresentationF/ETCA Transactional Toll Revenue* FY 2016 Transactional Toll Revenues as projected by the Agency based onactual results through November 30th, 201614
Development Impact Fee Program The Development Impact Fee (DIF) Program collects fees atthe time of building permit approval in proportion to projectedtraffic demand attributable to the new residential andcommercial developmentDevelopment Impact Fees Accrued Development Impact Fees in excess of 2.5 million for eachsix month period are pledged under the 2013 MasterIndenture Over the life of the DIF program, Foothill/Eastern TCA hascollected 462.7 million of DIFs In 2013, PB Consult forecasted F/ETCA DIF revenues through 2035; F/ETCA has significantlyoutperformed these forecasts for each the past three fiscal years DIF revenue is not included in coverage in annual TCA Budgets or TCA’s long-term financialprojectionsForecast DIF RevenuesActual DIF RevenuesDifferenceFiscal Year1 FYFoothill/Eastern TCA03 16 16 TCA Investor Presentation( 000)( 000)(As % of Forecast)2013 9,271 11,794 27.2%201411,88519,813 66.7%201513,40724,901 85.7%201614,83614,8751-2016 actual receipts as of January 31, 201615
Near-Corridor Development Update Tustin Legacy: 3,200 homes & apartmentsbuilt to date; 3,600 planned in next decadewith new sales resumed in mid-2015 Great Park: 1,000 homes sold out; 10,700total homes planned The 2,379-home & 50,000 sq. ft.commercial use Baker Ranch developmentcommenced sales in early 2015Los PatronesParkway(Under Construction) Rancho Mission Viejo: 1,200-home Phase 1sold out in 2014-15; 2,800-home Phase-2for sale Q3 2015; total planned community:14,000 homesSources:City of Lake ForestOrange County Register1603 16 16 TCA Investor Presentation
Net Toll Revenues DetailCategoryRevenues ( Millions)Transactional Toll RevenuesViolations / Non Revenue1Violation Penalty Revenue(Toll Component)2Net Collectible TollsViolation Penalty Revenue(Violation Component)2Acct. Maintenance FeesOther RevenueInterest EarningsTotal RevenuesCurrent ExpensesAdj. Net Toll RevenuesDevelopment Impact FeesSenior Net Debt ServiceAggregate Net Debt ServiceSurplus RevenueCoverage RatiosEnhanced Senior (Incl. DIFs)5Enhanced Aggregate (Incl. DIFs)5SeniorAggregate1.2.3.4.5.FY 2014ActualFY 2015ActualFY 2016Budget 119.4( 5.1)- 126.5( 9.1) 4.8 129.2( 9.8) 4.3 114.3 13.2 122.2 14.9 123.7 14.3 9.8 1.6 2.2 141.1( 23.3) 117.8 19.8( 48.2)3( 55.1)3 36.44 11.1 1.7 1.5 151.4( 22.3) 129.1 24.9( 85.2)( 98.0) 51.1 11.5 1.5 1.6 152.6( 26.3) 126.2 15.0( 88.9)( 101.6) 42x1.24x Increasing debt servicecoverage and DIFs areproducing increasedmargin and SurplusRevenues Unlike most toll roads,TCA does not payO&M for the system FY 2016 CurrentExpenses reflectvariable costsassociated withincreasing transactionsIncludes violations, non-revenue users, unprocessable images and account accrualsThrough FY 2014 the Agency included in Violation Penalty Revenue toll revenue associated with violations, as it was not material; as a result of the conversion to AET and the resultingshift in payment patterns, this violation toll revenue portion is more significant and it has been recorded as a component of Net Collectible Tolls for FY 2015 and laterBased on partial year due to FY 2014 restructuring transactionBased on partial year due to FY 2014 restructuring transaction, and includes 19.8 in Development Impact FeesEnhanced coverage includes pledged DIFs, which are equal to total DIF collections less 5.0 million1703 16 16 TCA Investor Presentation
Foothill/Eastern TCACapital Improvement Plan1803 16 16 TCA Investor Presentation
Capital Improvement Program Update1 241/91 Connector: Additional connection between tolled OCTA 91 Express Lanes and SR241 (SR 91 general purpose lane connector exists); completion in 2019– Project approval and Environmental Documents over next two years; 180 million cost tobe shared with OCTA1– Connector is likely to include a new tolling facility with potential to generate toll revenues Tesoro Extension: provides a 5.5-mile extension south of Oso Parkway2– F/ETCA and Rancho Mission Viejo (developer) have been working on parallel paths– RMV is moving forward with arterial project as a requirement of their environmentaldocument under terms defined in the Major Thoroughfare and Bridge Fee Ordinance– Project increases traffic and revenue to the 241 system– Ultimate disposition of the segment is dependent on the on-going stakeholder process todefine the connection of the 241 Toll Road to the I-5 freeway SR 241 Long Range Planning: Regional planning efforts to date demonstrate the need foradditional transportation improvements to relieve existing and future congestion on I-5 andlocal arterials in south Orange County32– F/ETCA is evaluating regional mobility needs to identify an acceptable solution– Long Range Planning efforts are currently in the community outreach stage, which isexpected to continue through FY2017Foothill/Eastern TCA03 16 16 TCA Investor Presentation319
241/91 Express Lanes Connector Median-to-median connector― Structure over 241/SR-91north-west direct connector andthe SR-91 Gypsum Canyon I/C― Provides direct access into theSR-91 Express Lanes― 180M project cost Enhances regional connectivitybetween toll systems Provides relief for existing freeways by improving mobility and traffic flow Reduces emissions by increasing movement through corridor Enhances safety by reducing weaving across general purpose lanes Maintains SR 91 Express Lanes operational performance levels03 16 16 TCA Investor Presentation20
241 Connection to I-5 TCA is engaging key stakeholdersin the region on the broader longterm regional mobility challenges Completed communityascertainment study Jan. 2016 Deliberative multi-step stakeholderoutreach leading to new federaland state environmentaldocuments and permits2103 16 16 TCA Investor Presentation
San Joaquin Hills TCAFinancial Update2203 16 16 TCA Investor Presentation
SJHTCA Continues to Provide Access to Key RegionalEconomic Drivers, Job Centers and Residential Areas South CoastPlaza RetailDistrict Irvine Company SpectrumBusiness and Residential Centers John WayneAirport / IrvineBusinessComplex Vantis HousingDevelopment Laguna NiguelGatewayCommercialComplex Costa MesaResidential Center Newport CenterCommercialDistrictSan Joaquin Hills TCA03 16 16 TCA Investor Presentation Fashion IslandRetail District Newport BeachResidential Center Laguna NiguelResidential Center23
TransactionsTransactions and Average Toll Rate Transactions are on pace for threeconsecutive years of growth in excess of 5%per year– FY 2016 Budget assumed 1.3%transaction growth; 10.7% growthobserved to date In FY 2015, transactions exceeded the 2014Traffic Study projection by 9.1%Toll Increases: 70.1% of transactions are processed onthe mainline Catalina View toll plaza Weekend/non-commute and ramp usageis increasing Toll increases in five consecutive years; 2.0% FasTrak rate increase was effectiveJuly 1, 2015 (while maintaining the 1.00increment above the FasTrak rate for nonFasTrak transactions)San Joaquin Hills TCA03 16 16 TCA Investor PresentationAnnual th200731.10 125.45 0.6%201225.42-0.1%201324.98-1.7%201426.46 5.9%201527.97 5.7%2016 **20.01 10.7%Fiscal Year* 52-week moving average** Through February; growth rate versus same period in FY 201524
Toll RevenuesToll Revenue and Average Toll Rate Toll revenues for the first eight months of FY2016 are up 13.6% versus the prior year– FY 2016 Budget assumed 3.1% revenuegrowth Compound average growth rates– FY 2001 to FY 2015: 7.0%– FY 2009 to FY 2015: 7.3%Toll Increases:– Debt service growth rate through FY2040: 2.3% Revenue breakdown by transaction type inFY 2015 (excluding violations)Annual Toll RevenuesFiscal YearToll Revenues(Millions)Toll RevenuesGrowth– FasTrak: 87.3%2007 89.06 8.7%2008 91.43 2.7%– ExpressAccount (license plate tollingaccount): 6.4%2009 86.42-5.5% 87.10 0.8%2011 88.10 1.2%– One-Time-Toll (license plate tolling withno account): 6.3%2012 92.97 5.5%2013 100.53 8.1%2014 117.14 16.5%2015 131.56 12.3% 96.55 13.6%San Joaquin Hills TCA03 16 16 TCA Investor Presentation20102016 *** 52-week moving average** Through February; growth rate versus same period in FY 201525
Net Toll Revenues DetailCategoryRevenues ( Millions)Transactional Toll RevenuesViolations / Non Revenue1Violation Penalty Revenue(Toll Component)2Net Collectible TollsViolation Penalty Revenue(Violation Component)2Acct. Maintenance FeesOther RevenueInterest EarningsTotal RevenuesCurrent ExpensesAdj. Net Toll RevenuesDevelopment Impact FeesSenior Net Debt ServiceAggregate Net Debt ServiceSurplus RevenueCoverage RatiosEnhanced Senior (Incl. DIFs)4Enhanced Aggregate (Incl. DIFs)4SeniorAggregateFY 2014ActualFY 2015ActualFY 2016Budget 117.1( 6.4)Note 3 131.6( 15.5) 8.3 134.1( 15.9) 7.7 110.7 14.5 124.4 19.3 125.9 18.8 3.0 0.9 2.2 131.3( 12.1) 119.2 3.8( 94.8) 2.5 3.2 0.8 1.1 148.8( 12.9) 135.9 3.5( 38.0)( 48.7) 37.13 3.3 0.8 0.2 149.0( 14.0) 135.0 3.5( 91.4)( 106.9) 32.5--1.26x5-2.38x61.86x61.48x1.26x FY 2016 revenues throughNovember are ahead ofBudget and Stantec forecast Increasing debt servicecoverage is producingincreased margin andSurplus Revenues Unlike most toll roads, TCAdoes not pay O&M for thesystem FY 2016 Current Expensesreflect variable costsassociated with increasingtransactions1. Includes violations, non-revenue users, unprocessable images and account accruals2. Through FY 2014 the Agency included in Violation Penalty Revenue toll revenue associated with violations, as it was not material; as a result of the conversion to AET and the resulting shift inpayment patterns, this violation toll revenue portion is more significant and it has been recorded as a component of Net Collectible Tolls for FY 2015 and later3. Based on partial year due to FY 2015 restructuring transaction; includes 3.5 million of DIFs and 16.8 million deposited to the Supplemental Reserve Fund4. Enhanced coverage includes pledged DIFs, which are equal to total DIF collections less 5.0 million5. Does not include Toll Stabilization Funds utilized to pay debt service6. Based on partial year due to FY 2015 restructuring transaction2603 16 16 TCA Investor Presentation
Debt Portfolio Information2703 16 16 TCA Investor Presentation
Current F/ETCA Debt Structure Refinance resulted in decreased debtservice growth rate, substantially lowerMADS and is now based on averageinflation assumptions 1995 Bond refunding in February 2015resulted in savings of 33.5 millionwhich was deposited into a project fund These refinancing transactionsenhance the Agency’s credit ratingupgrade strategy 500Series 2013 Senior Debt ServiceSeries 2013 Junior Debt Service mm 2013 Bond Refinance greatly improveddebt service coverage margins andability to withstand future economicdownturnsSeries 2015A Senior Debt ServiceAdjusted Net Toll Revenues 400Series 2015A Bonds refundedthe 1995 Bonds, creating over 33 million in PV savings/upfront proceeds 300 200 100 0201520202025203020352040204520502803 16 16 TCA Investor Presentation
SJHTCA 2014 Restructuring Establishes StrongFinancial Foundation for the Agency Refunded all callable bonds with Series 2014 bonds. Low interest rates, the successful tender of 914 million in maturity value of the non-callableSeries 1997A CABs and the successful exchange of all the Series 1997A CCABs created PVsavings and further reduced debt service growth rate and peak paymentRestructured Debt Profile300Series 2014A (Sr.)Series 2014B (Jr.)Prior Debt ServiceSignificantly Lower PeakDebt Payment 186 million (vs 269million prior peak)Lower Debt ServiceGrowth ProducesGreater Excess CashFlow & IncreasedCushion250 MillionsUntendered Non-Callable Series 1997A Bonds20015010050020162021Projected Net TollRevenues 1.3xSenior Lien Debt20262031All Series 2014Bonds Can Be CalledOn or After 2025Without Penalty* Projection based on Stantec’s base case toll revenue forecast203620412046Debt ServiceGrowth Endsin 204129
For More InformationAmy Potter949-754-3498apotter@thetollroads.com3003 16 16 TCA Investor Presentation
03_16_16_TCA_Investor_Presentation Toll Revenues Toll Revenue and Average Toll Rate * 52-week moving average ** Through February; growth rate versus same period in FY 2015 Annual Toll Revenues Fiscal Year Toll Revenues (Millions) Toll Revenues Growth 2007 106.40 9.6%– 2008 102.32 -3.8
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