1. Everglades Land Acquisition Project Water Resources Advisory Commission December 3, 2008

2.  Overlays  Environmental Needs/ Preliminary Findings  Due Diligence Results Appraisals Environmental Assessments Engineering Assessments  Acquisition Agreement Purchase & Sale Contract Lease  Financing  Next Steps Everglades Land Acquisition Project Presentation Overview

3. OverlaysOverlays Kenneth G. Ammon, P.E. Deputy Executive Director, Everglades Restoration

4. USSC Land Holdings Lake Okeechobee

5. City and County Boundaries Palm Beach Glades Hendry Martin Clewiston South Bay Belle Glade Pahokee Moore Haven Communities USSC Land Communities USSC Land

6. USSC Sugar Cane Fields USSC Cane Land USSC Land USSC Cane Land USSC Land Lake Okeechobee

7. USSC Citrus USSC Citrus Land USSC Land USSC Citrus Land USSC Land Lake Okeechobee

8. USSC Mining Acreage USSC Land Mining Leases USSC Land Mining Leases Lake Okeechobee Vulcan Mine Stuart Mine

9. Conceptual Project Configurations Existing Designed or Constructed Stormwater Treatment Areas (STAs) Wildlife Management Areas Talisman Lands Lake Okeechobee Existing Features

10. Adjusted to Address Land Constraints Conceptual Project Configurations SFWMD Land USSC Land USSC Footprint Land Non-USSC Footprint Land SFWMD Land USSC Land USSC Footprint Land Non-USSC Footprint Land Lake Okeechobee

11. Conceptual Project Configurations Located Within USSC Lands SFWMD Land USSC Land USSC Footprint Land SFWMD Land USSC Land USSC Footprint Land Lake Okeechobee

12. Environmental Needs & Preliminary Findings Kenneth G. Ammon, P.E. Deputy Executive Director, Everglades Restoration

13.  Lake Okeechobee- Managing the lake within the desirable ecological range Improving the quality of water flowing into and within the lake Eliminate ‘Backpumping’ to Lake Okeechobee Recognizing the limitations of the Herbert Hoover Dike Environmental Needs

14.  St. Lucie and Caloosahatchee Estuaries Reduce high volume, long duration regulatory discharges Maintaining desirable salinity ranges within the estuaries Improving the quality of water flowing into the estuaries Environmental Needs

15.  Everglades and Florida Bay Restoring pre-drainage flow volumes through the Water Conservation Areas and Everglades National Park to Florida Bay Improving dry period water flows and depths Improving water quality flowing into the Everglades Improving timing and distribution Environmental Needs Natural Ridge & Slough Landscape Altered Ridge & Slough Landscape

16. Conceptual Project Configurations  Basic ‘Water Budget’ analysis 41 year period of record (1965-2005)  Considers a range of natural system flows for the Everglades  Flows of the necessary magnitude require that the major water budget elements are considered as a system Preliminary Hydrologic Analysis Northern Everglades Storage & Trt. C-44 Storage & Treatment C-43 Storage & Treatment EAA Storage New EAA Treatment Water Conservation Area 3A Lake Okeechobee

17. Reservoir Sizing and Operations Screening (RESOPS) Model  Provides rapid screening-level testing of the integrated effects of alternative reservoir sizes and proposed operating rules for… Lake Okeechobee, Northern Everglades Storage EAA Storage C-43 Storage C-44 Storage Flows to the Everglades Water Conservation Areas.  250,000 individual scenarios in 60 days Northern Everglades Storage EAA Storage EAA Treatment Everglades needs Lake Okeechobee C-44 C-43

18. Reservoir Sizing and Operations Screening (RESOPS) Model

19. Preliminary Findings  Increasing the storage size in the EAA generally improves system performance for most of the key performance measures  There is generally a range of diminishing returns where additional increases in EAA storage capacity does not result in large performance improvements Exceptions include low Lake stages and dry year flows to the Everglades

20. Preliminary Findings Water Quality  Additional treatment area beyond currently planned STA capacities is required when providing increased flows to the Everglades Based on a range of 100 to 200 ppb inflow concentrations and assuming a flow volume of approximately 1 million acre-feet per year, additional treatment area between 12,000 and 45,000 acres may be required.  Evapotranspiration losses in a wetted treatment area can significantly impact the ability to achieve system objectives New treatment area design and operational concepts may be needed to optimize water usage for facilities at this scale.

21. Preliminary Findings Lake Okeechobee  Increasing regional water flow to the south from Lake Okeechobee tends to increase the frequency and duration of low Lake stages  Northern Everglades storage is effective in improving Lake Okeechobee lower stage envelope performance Allows water to be released to Lake Okeechobee to offset low stages in dry periods  Lake Okeechobee Regulation Schedule modifications need to take into consideration storage added to the system

22. Preliminary Findings Estuaries  Significant reduction in Lake-triggered high discharge events are observed with additional storage/treatment  Estuary performance is highly sensitive to Everglades needs Larger Everglades needs = better estuary performance Larger Everglades needs lead to more storage facility releases from the EAA to the Everglades Storage in the EAA has larger available capacity to receive Lake releases Fewer Lake Okeechobee regulatory releases to estuaries are needed  Both North and South storage can be used to effectively meet estuary objectives

23. Preliminary Findings Everglades  Specific environmental water needs are generally uncertain and can heavily influence storage capacity  Flows to the Everglades can be substantially increased with the addition of EAA storage and treatment.  Timing of flows to the Everglades improves with additional storage  Year-to-Year (Inter-annual) variability of flows to the Everglades is likely to increase with additional storage  Meeting dry period needs of the Everglades increases the need for storage

24. Summary  Based on the analysis to-date, the proposed acquisition can facilitate additional storage and treatment capacities to provide significant benefits to Lake Okeechobee, the Caloosahatchee and St. Lucie estuaries and the Everglades  Careful future consideration must be given to potential issues of treatment area management and water depths in the Water Conservation Areas  The optimal size, capacity, configuration and costs of facilities and the associated operations will be developed through a subsequent open, public planning process

25. Due Diligence Ruth Clements Director, Land Acquisition

26. Everglades Land Acquisition Project Due Diligence  Provides data, analysis and information for deliberation of large acquisition  Includes: Four independent appraisals Land surveys and title work Engineering assessments of all assets Environmental assessment of 187,000 acres of land Cultural resources study Independent “Fairness Opinion”

27. AppraisalsAppraisals Ruth Clements Director, Land Acquisition

28. Due Diligence Land Appraisals  Anderson & Carr, Inc and Sewell, Valentich, Tillis and Associates retained to conduct independent appraisals  Designated Members of the Appraisal Institute (MAI) for more than 25 years  More than 1,000 pages of appraisal reports submitted, providing complete analysis  Reports met all appraisal standards; reviewed by District and DEP

29. Due Diligence Land Appraisals  Two independent real estate appraisal reports: Described property Analyzed market data and comparable sales Reviewed soil surveys Studied land use potential Combined all data collected to conclude a market value estimate, based on highest and best use

30. What was appraised? Sugarcane Land - Nearly 150,000 acres

31. What was appraised? Citrus Groves - More than 32,000 Acres

32. Not included in Land Only Appraisals Southern Gardens Citrus Plant

33. Not included in Land Only Appraisals US Sugar Corporation Offices

34. Not included in Land Only Appraisals Gilchrist County Citrus Nursery

35. Not included in Land Only Appraisals SCFE and USSC Railroads

36. Not included in Land Only Appraisals Clewiston Sugar Mill and Refinery

37. Included in Land Only Appraisals Approximately 182,500 Acres

38. Appraisal Results Agricultural Land Values Banting’s Appraised Values Land TypeAcres$ / AcreIndicated Value Sugarcane Land 108,908.00$4,500$490,086,000 Transition Lands 27,997.00$9,909$277,410,000 Mining Acreage 12,964.93$27,500$356,535,575 Agricultural Land Subtotal 149,869.93$7,500$1,124,031,575 Citrus Groves 32,604.00$5,367$175,000,000 Total - All Land 182,473.93 $1,299,031,575 Indicated Land Value Rounded$7,124$1,300,000,000

39. Appraisal Results Agricultural Land Values Sewell’s Appraised Values Land TypeAcres$ / AcreIndicated Value Sugarcane Land 130,640.87$6,255$817,173,000 Transition Lands 6,273.59$15,288$95,909,000 Mining Acreage 12,964.93$20,000$259,298,600 Agricultural Land Subtotal 149,879.39$7,822$1,172,380,600 Citrus Groves Subtotal 32,603.00$6,073$198,000,000 Total - All Land 182,482.39 1,370,380,600 Indicated Land Value Rounded$7,508$1,370,000,000

40. Appraisal Results Comparison of All Appraised Values Value Conclusions - Land AppraiserAppraised Value Robert Banting$ 1,300,000,000 Larry Sewell$1,370,000,000 Difference5.4% Value Conclusions - All Assets AppraiserAppraised Value Robert Banting$1,725,000,000 John Gillott$1,923,000,000 Difference11.5%

41. Recent Economic Impacts on Value Highest and Best Use of Land  Agricultural land values not impacted by same fluctuations as housing and commercial markets  Commodities such as sugarcane have a history of minimum value changes due to highest and best use being agricultural for the long term

42. Environmental Assessments Ruth Clements Director, Land Acquisition

43. Due Diligence Environmental Assessments  Ten firms led by Professional Services, Inc.  Hired to conduct both Phase I and Phase II environmental audit for all 292 square miles of property under consideration for acquisition  Conducted with and according to ecological risk assessment protocols approved by U.S. Fish & Wildlife and Department of Environmental Protection

44. Due Diligence Environmental Assessments  Report compiled using: Data from sediment, soil and water samples Extensive aerial and ground reconnaissance Review of historical and company records Assistance from state and federal experts

45. Due Diligence Environmental Assessments  Investigation included: Assessment of 193 remote point sources (e.g. fuel storage areas, pump stations, citrus burn piles) Assessment of 187,000 acres of land Collection of more than 500 water samples and 12,500 soil samples

46. Due Diligence Environmental Assessments  Excluded Assets 44 rail sidings SCFE Rail Yard 120 miles Railroad Track and Right of Way Cross tie stockpiles Clewiston Sugar Mill and Refinery Complex Bryant Sugar Mill Southern Gardens Juice Processing Plant Executive Office Complex Gilchrist County Citrus Nursery Hookers Point Migrant Housing

47. Due Diligence Environmental Assessments  Key report details: Pollutant concentrations below commercial criteria on 95% of acreage; no remediation required U.S. Sugar required to conduct corrective action on 5% of acreage exceeding commercial standards Estimated cost $16.5 million

48. Lands in Red would require cleanup by USSC under the proposed acquisition agreement.

49. Due Diligence Environmental Assessments  Key report details: Ecological risk is primary concern for proposed use of property as a water resources project Detected chemicals are typical for agricultural property Highest contaminant concentrations generally track high organic content soils and former vegetable farming areas Very few impacts measured in citrus groves or areas where sand predominates Approximately 52% of acreage determined to pose no significant ecological risk Final remediation necessary for achieving ecological standards dependent on location of restoration project

50.  Project located within U.S. Sugar lands only Eco-Risk Category 2 ~15,340 acres Eco-Risk Category 3 ~ 22,680 acres Additional sampling may reduce hatched blocks Environmental Assessments Conceptual Project Configurations Significantly Exceeds Ecological Thresholds Marginally Exceeds Ecological Thresholds Facilities Footprint Significantly Exceeds Ecological Thresholds Marginally Exceeds Ecological Thresholds Facilities Footprint

51.  Project adjusted to address land constraints Eco-Risk Category 2 ~6,790 acres Eco-Risk Category 3 ~ 5,650 acres Additional sampling may reduce hatched blocks Not sampled ~63,000 acres (Non-U.S. Sugar ownership) Environmental Assessments Conceptual Project Configurations Significantly Exceeds Ecological Thresholds Marginally Exceeds Ecological Thresholds Facilities Footprint Significantly Exceeds Ecological Thresholds Marginally Exceeds Ecological Thresholds Facilities Footprint

52.  Soil inversion  Fill and cap onsite canals and ditches  Cap with onsite borrow  Remove and dress levees/impoundments  Stockpile  Remove and dispose offsite center  Avoid and modify project design Environmental Assessments Restoration Construction Techniques

53. CORRECTIVE ACTION CONSTRUCTION METHOD ~ SORTED BY COSTCOST PER ACRE Soil Inversion $ 1,471 Capping Onsite Borrow ~ Contractor Direct Cost Pushing Material From Adjacent Area ~ No Hauling No Liner $ 14,668 Remove and Stockpile Onsite ~ No Cap Material $ 19,339 Remove and Stockpile Offsite ~ Contractor Direct Cost ~ No Cap Material $ 37,719 Capping Offsite Borrow ~ Contractor Direct Cost Pushing Material From Adjacent Area ~ No Liner $ 96,490 Remove and Disposal at Offsite Disposal Center ~ Contractor Direct Cost ~ T&D Landfill $ 247,915

54. Environmental Assessments Restoration Construction Techniques  Soil Inversion Pilot project results due mid-December Initial visual results of inversion techniques look promising Concept Located Within USSC Lands (38,020 acres) ~ $56,247,420 Concept Adjusted for Land Constraints (12,440 acres) ~$18,299,240

55. Engineering Evaluation Kenneth G. Ammon, P.E. Deputy Executive Director, Everglades Restoration

56. Due Diligence Engineering Evaluation  Shaw Report includes 4 business categories: Crop Area Lands Facilities in Crop Areas Airstrips Non-Process Buildings  Original Report included Sugar Mill/Refinery, Citrus Plant, Railroads and Vehicle Fleet Categories. (These categories have been removed for the land-only purchase)

57. Due Diligence Engineering Evaluation  Crop Area Lands Report Includes the following items for both Citrus and Sugar Farmland: Planting Practices Harvesting Soil Conditions Field Leveling Fertilization Herbicide & Pesticide Application

58. Due Diligence Engineering Evaluation  Key Findings There are approximately 22,240 acres in active citrus farming and 128,650 acres in active sugarcane farming Overall functionality reflects a professional farming operation yielding high levels of cane and fruit production Citrus Greening and Canker has destroyed ~20% (7,130 acres) of the total citrus groves

59. Due Diligence Engineering Evaluation  Facilities in Crop Areas Report Includes the following features: Canals (1,130 miles of major canals and 3,200 miles of local irrigation and drainage ditches) Roads (1,945 miles of unpaved roadways) Bridges (11 roadway bridges) Levees (330 miles of impoundment levees) Pump Stations (365 total pump station sites) Control Structures and Culverts (a representative sample of 1,500 interconnects assessed)

60. Due Diligence Engineering Evaluation  Key Findings Facilities condition is typical of most South Florida agricultural operations Canals are maintained and cleaned on a regular basis Repairs are completed on an “as-needed” basis

61. Due Diligence Engineering Evaluation  Key Findings (cont.) Pumping Facilities: 51% in good to fair condition Levees: 25% in good condition; 67% in fair condition, requiring minor repairs & maintenance Canals: 70% in good to fair condition; 29% require minor maintenance such as cleaning Control Structures: Overall condition considered fair; most appeared functional and able to convey water as intended; 10% in need of repairs or replacement Roads: 83% in good to fair condition; 14% require minor repairs and maintenance; 3% require major repairs Bridges: 3 require safety-related repairs; 6 require less critical repairs; 2 in good condition.

62. Proposed Purchase Contract & Lease Agreement Ruth Clements Director, Land Acquisition

63. Proposed Purchase Contract & Lease Agreement Overview  U.S. Sugar has agreed to sell land holdings under proposed Purchase and Sale Agreement  Separate assignable Lease provides U.S. Sugar with option to continue agriculture operations  U.S. Sugar to retain business assets, including railroad, sugar and citrus operations  Both agreements subject to review and approval by U.S. Sugar Board of Directors and District Governing Board

64. Everglades Land Acquisition Project Proposed Purchase Agreement  Minimum of 180,000 acres of land with improvements, including water conveyance infrastructure  $1,340,000,000 purchase price  Seller to deliver executed agreement by December 15; Buyer has until December 16 to accept and execute

65. Proposed Purchase Agreement Closing  Closing to occur 90 days after bond validation, but no later than September 25, 2009  Closing is subject to District obtaining bond validation and financing acceptable to District  Seller to initiate transfer of permits and other approvals

66. Proposed Purchase Agreement Escrow Fund  U.S. Sugar to provide “Evergreen” $10M Escrow U.S. Sugar must replenish Escrow within 15 days after any draw to maintain fund at $10M  Escrow to secure: U.S. Sugar’s obligation to remediate any newly discovered old and new environmental contamination located after the Effective Date U.S. Sugar’s performance under the Lease  U.S. Sugar must maintain $10M in Escrow for three years after closing

67. Proposed Purchase Agreement Other Provisions Survival:  Most provisions survive closing for two years  Environmental provisions survive for three years

68. Proposed Purchase Agreement Special Clauses  District inspection period continues through January 15, 2009; District may terminate without penalty if inspection matters are unacceptable  District has right to relocate or abandon portions of the railroad within any proposed footprint  District has right of first refusal to purchase sugar mill/refinery and railroad for one year after Closing

69. Proposed Purchase Agreement Environmental Provisions  U.S Sugar responsible for clean- up of pollutants to achieve commercial standards Total cost to remediate contaminants discovered during District due diligence estimated at $16.5M U.S. Sugar will pay District $21.5M (130% of total costs) District will perform cleanup  District is responsible for remediation to achieve ecological standards

70. Proposed Purchase Agreement No Personal Liability  Employees, shareholders, directors and other agents of both the District and U.S. Sugar shall not be personally liable in connection with the Agreement

71. Proposed Purchase Agreement Other Provisions  Under “Go Shop” provision, U.S. Sugar may entertain other offers for the land up until bond validation District would get $40.2 Million Termination Fee in the event U.S. Sugar gets a Superior proposal and District elects not to match it  Permitted Reorganization allows U.S. Sugar to undertake a corporate reorganization following execution of agreement

72. Everglades Land Acquisition Project Lease Agreement  U.S. Sugar will continue historical agricultural operations  Seven year Lease  Expires June 30, 2016  Rent of $50 per acre for first six years  No cost for year seven

73. Lease Agreement Use of Premises  U.S. Sugar required to: Pay all property taxes and assessments Control exotic and invasive plants Implement and comply with Best Management Practices  U.S. Sugar allowed to retain rents paid by tenants

74. Lease Agreement Right to Terminate  U.S. Sugar may terminate after third year  Either party may terminate after 15 day notice and cure period if the other party fails to fulfill a material obligation

75. Lease Agreement Release of Lands  District may release certain portions of premises under Lease  Allows for release of first 10,000 acres to the District with appropriate notice 12 months written notice at the end of the next harvest season In 2,000-acre parcels of contiguous land

76. Lease Agreement Release of Lands Additional 30,000 acres may be released in year six, on or after December 30, 2015 In 10,000-acre or more parcels of contiguous lands  Allows for release of up to 3,000 acres in connection with transfers to municipalities or other governmental entities

77. Release of Lands Community Land Requests Belle Glade Clewiston Pahokee South Bay Lake Okeechobee MAP 7

78. Lease Agreement Subletting  U.S. Sugar may: Sublease all or a portion of the premises for agriculture production, consistent with past practices, without District consent Assign Lease to entity with financial capacity and operational capability with District’s consent

79. Lease Agreement Indemnification and Risk Allocation  U.S. Sugar shall indemnify District for all claims, losses or damage, except in the event of District’s gross negligence or willful misconduct.  District has no responsibility for U.S. Sugar’s personal property and equipment.  U.S. Sugar is responsible for all costs and expenses associated with its operation.

80. Lease Agreement U.S. Sugar Insurance Options  General Liability insurance obligations self-insured in the amount of $1M; to be secured by Letter of Credit  Maintain $50M General Liability umbrella  $5M Letter of Credit to satisfy third-party environmental impairment obligations

81. Lease Agreement Liens  U.S. Sugar may not place any lien on the premises  U.S. Sugar may grant its lenders a security interest in the crops  In the event of a loan default, U.S. Sugar’s lenders may enter the premises to complete the harvest of the current growing season

82. Lease Agreement Escrow Fund  $10 M General Escrow Fund provided by U.S. Sugar secures all of its obligations, including environmental, under the Lease  This is the same “Evergreen” fund that secures U.S. Sugar’s environmental obligations under the Purchase and Sale Agreement  U.S. Sugar has 15 days after a draw on escrow to replenish

83. Financing Paul Dumars Chief Financial Officer

84. Financing Plan  $1.34B in Certificates of Participation  COPs are a revenue bond that government agencies may issue to finance the undertaking of any capital, land acquisition or other project for purposes permitted by the Florida Constitution and Florida Statutes  Supported by participation through ownership of a “share” of debt service payments made by a government agency  Requires court validation

85. Financing Team 85 As Needed Appraisers, Title Insurer, Feasibility Consultant, Etc SFWMD Senior Manager Co- Managers Underwriters SFWMD Staff – Legal, Financial & Engineering Financial Advisor All Financings Trustee, Rating Agencies, Bond Insurers & Banks Institutional (Funds, Banks & Corporations) Retail (Individuals & Investment Advisors Investors Private Placements Bond/Disclosure Counsel

86. Financing Timetable  September Reviewed COPs Legal documents and Resolutions  October Approved COPs Legal documents and Resolutions (Governing Board and Not for Profit Leasing Corporation) Approved Debt Policy Amendment (Governing Board) Filed for Validation  November Supplementary resolution to allow for “land-only” acquisition  December COPs validation hearing  2009 Closing (pending court validation of the COPs, market conditions)

87. Next Steps Carol Wehle Executive Director

88. Everglades Land Acquisition Project Next Steps  Governing Board briefings to continue reviewing transaction  Financial analysis  Market lease analysis  December 15 & 16 Board meetings  Board direction and/or action

89. Questions?Questions?