Panama Canal Annual Report 2012

MESSAGE FROM THE CHAIRMAN OF
THE BOARD OF DIRECTORS 2

MESSAGE FROM THE ADMINISTRATOR 6
VISION Y MISSION
Our Work
11
Content
OPERATING RESULTS 12
EXPANSION, FIVE YEARS LATER 24
Our Commitment
ENVIRONMENT 36
HUMAN CAPITAL 48
COMMUNITY AND CORPORATE VOLUNTEER 54
Our Results
FINANCE 60
FINANCIAL STATEMENTS 68
Chairman of the Board of Directors
Roberto Roy
Chairman of the Board of Directors
Message
During this period, the Canal has tackled a new and significant challenge, the designation of
the team that will lead the organization towards the Canal expansion. The appointment of the
Administrator and the Deputy Administrator defined the message of the Canal Authority to the
Panamanian people, clients and stakeholders, of assuring that the management of the waterway
will maintain its vision of offering quality and excellence in the services rendered to customers,
while providing economic well-being to the country and benefits to the world’s economy, and
ensuring best practices for environmental protection. The selection is representative of a certain
institutional continuity that shows the Board of Directors commitment to achieving high standards
for which this waterway has been recognized.
In addition, we identified the need to align the organizational structure of the Panama Canal
Authority to suit our customers and clients evolving needs, prepare to manage an expanded
Canal, and reflect best business practices. As adaptability to change has always been a
characteristic of the interoceanic waterway, we have intensified the efforts to diversify our
services,and simultaneously strengthen the core business of the organization.
The execution of the Expansion Program, which is almost midway of its completion, is only one
of the projects that are currently underway to continue providing better services every day.
The Panama Canal has also continued to implement an aggressive modernization program,
comprised of projects aimed at increasing the present Canal capacity, through the widening
and dredging of the entrances. These works are currently in progress and will also contribute to the
operation of the expanded Canal. This complementarity shows the Canal’s high professionalism
standards in carrying out two parallel functions, the successful operation of the existing Canal, and
the development of a flagship mega-project in the engineering field, as was clearly validated by
the Panama Canal 2012 International Engineering and Infrastructure Congress.
The financial results for this period have been outstanding. Despite the global economic outlook,
the efforts of the Panama Canal Authority to improve the services our route offers resulted in
greater throughput during this fiscal year, setting a new tonnage record for total revenues,
while maintaining high standards of service. These results reflect the tireless efforts of a workforce
committed to the development of the organization and the growth of our country.
Board of Directors
Roberto Roy
President
Adolfo Ahumada Alfredo Ramírez

Director Director
Eduardo A. Quirós B. Norberto R. Delgado D.

Director Director
Ricardo De La Espriella T. Guillermo O. Chapman, Jr.
Director Director
Rafael E. Bárcenas P. Nicolás Corcione

Director Director
José A. Sosa A. Marco A, Ameglio S.

Director Director
Administrator of the Panama Canal
Jorge L. Quijano
Administrator of the Panama Canal
Message
I am proud to present the Annual Report of the Panama Canal Authority (ACP) for fiscal year 2012. As required by our
practices of transparency and accountability, we have made every effort to accurately reflect how the Panama Canal
fulfills its mission of contributing to the sustainable development of the country, while expanding its leading role in the
world’s maritime trade.
At the end of fiscal year 2012, for a second consecutive year, the Panama Canal has set a new tonnage record of 333.7
million Panama Canal/Universal Measurement System (PC/UMS) tons. Beyond its historical significance and the fact that
it represents an operational indicator, this record demonstrates the country’s sustained effort and reiterated commitment
to keep its most strategic resource, its geographical position, at a competitive edge and at the forefront of progress.
It is important to emphasize these operating results are the outcome of the determination of 10,000 men and women
who are aware of the responsibility that we embody, not only in managing and operating the Canal in an efficient, cost
effective and safe manner, but also our responsibility with the environment, our social environment, our customers, our
users and Panama.
Together with the new tonnage record, other indicators show that the Panama Canal provides quality service and it
is reflected in the tonnage percentage and a reduction in Canal Waters Time. Direct contributions to the country also
maintained a positive rate for a second year in a row exceeding B/. 1,000 million for a total of B/. 1,032.3, which surpassed
by 8.6 percent the amount budgeted for fiscal year 2012.
While the Panama Canal implements operational actions that result in the efficient administration of the Canal, our
organization also prioritizes its environmental and social management. Specifically this report, documents the many
education, water quality, reforestation, sustainable development and other projects that aim to have an impact on the
quality of life of the residents of the Panama Canal Watershed, as we work together to preserve it.
Sustainability also has a significant role in ACP’s human capital management and labor relations, pursuing to maintain
high equity and well-being standards for the Canal´s most valuable resource, its people. For instance, during this fiscal
year over 8,000 employees were trained.
Parallel to the effort to maximize the benefits of our geographical position, we continue to reaffirm our commitment
to support the principles of the United Nations’ Global Compact through various activities and examples of our daily
activities. Examples of this are contained in this document as are our responsibility towards each of our stakeholders, our
environmental commitment, the community relations programs, the visitors centers- and I want emphasize the opening
of the new Center of Observation of the Canal Expansion on the Atlantic side– as well as the communication strategies
aimed at our shareholders.
In the course of 2012, five years of work in the Expansion Program have gone by and the progress and milestones are
included in this annual report. In abidance of Law 28 of July 17, 2006, which approvest the proposal for the construction of
a third set of locks in the Panama Canal, key steps have been taken to build a new bridge over the Canal on the Atlantic
side and the construction will begin next year.
As expected, the impact of the Panama Canal Expansion already transcends national boundaries. For Panama the
results are tangible. There is still a way to go, and a lot of potential to consolidate the Panama Canal in the development
of Panama.
I would like to highlight the administration of three distinguished Panamanians who contributed to the Canal’s history
and strengthened the pillars of this great Panamanian organization. They are Dr. Rómulo Roux, Engineer Alberto Alemán
Zubieta and Engineer Jose Barrios Ng. Thanks to their work at the Panama Canal during great part of this fiscal year,
we managed to exceed the goals and achieve a transparent and seamless transition to a new administration. The
organization and all its employees owe them our deepest gratitude.
Along this path, I hereby commit to the promise of all Panama Canal workers to continue working in compliance with the
highest standards of excellence, discipline and passion for our country.
Administration
Jorge L. Quijano Manuel Benítez

Administrator Deputy Administrator
Francisco Loaiza B. Ilya Marotta

Human Resources Engineering and Program
Management
Luis Alfaro Álvaro A. Cabal

Engineering General Counsel
Esteban G. Sáenz Francisco J. Miguez P.
Operations Administration and Finance
Rodolfo Sabonge Carlos Vargas

Planning and Environment, Water and Energy
Business Development
Ana María P. de Chiquilani Manuel Domínguez

Corporate Affairs Corporate Communications
Company Profile
For five centuries the route through Panama has been an important path for global
trade and transportation. Currently, the railroad, airports, highways, the pipeline, optic
fiber communication cables, international techno parks, ports and the Panama Canal
jointly comprise the key infrastructure that interdependently and complementarily,
simultaneously exploit the unique geographical position of the Panamanian isthmus.
On December 31, 1999, after 85 years of U.S. administration, the Republic of Panama
assumed full administration, operation and maintenance of the Canal, in compliance
with the 1977 Torrijos-Carter treaties.
The waterway is now managed by the Panama Canal Authority (ACP), an autonomous
government institution with a constitutional mandate that makes the Canal an efficient
and cost effective entity that provides continuous and efficient services to world
maritime trade.
The more than 10,000 highly skilled employees that work in the Canal constitute the driving
force behind the Canal’s excellence. The Panama Canal is an inalienable patrimony
of the Panamanian nation and; therefore, it may not be sold, assigned, mortgaged
or otherwise encumbered or transferred. By law, after covering operating, investment,
modernization and expansion costs, surplus funds are awarded to the National Treasury.
During the 13 years of Panamanian management, direct contributions have exceeded
B/.7,609 million.
The Canal is a shortcut water passage to reduce shipping distances, and save time and
cost in the transportation of all types of goods. With about 80 kilometers in length, the
waterway connects the Atlantic and Pacific oceans at one of the narrowest points of
the American continent.
The Panama Canal, a two-way canal, operates three sets of locks that work as water
elevators that lift the ships to the level of Gatun Lake 26 meters above sea level to cross
the Central Mountain Range, and later lower them again to sea level on the other side
of the Isthmus of Panama.
The Canal’s three sets of locks, have two lanes, operate as water lifts to elevate ships 26
meters above sea level to the level of Gatun Lake, In their transit of the channel across
the Continental Divide, and the lower them back on the opposite side of the Isthmus.
Since its opening in 1914, more than one million vessels from around the world that reach
more than 80 countries through 144 maritime routes, have transited the waterway.
The Third Set of Locks, currently under construction as part of the Panama Canal
Expansion Program, will be ready by the year 2014. This project will double the
waterway’s capacity to meet the growing demand of world trade and to maintain the
Canal as the route of choice for international trade.
Vision
WORLD LEADER in services to the maritime industry and in sustainable development for the
conservation of the Panama Canal watershed.
CORNERSTONE of the global transportation system and driving force for the progress, development
and growth of Panama.
MODEL of excellence, integrity and transparency in our conduct; committed to the integral
development of our human resource team.
Mission
Producir en forma sostenible el máximo beneficio de nuestra posición geográfica.
OUR BUSINESS - This enterprise is charged with operating, maintaining and improving the Panama
Canal so that it remains the route of choice for our customers.
OUR COUNTRY - We bring wealth to Panama and contribute with our efforts to the nation’s welfare,
its development and its progress, and to an improved standard of living for all Panamanians.
OUR CUSTOMERS - We build lasting relationships with our customers, understanding and anticipating
their needs, adding value and offering quality service.
OUR PEOPLE - We recognize that the Canal employee is the most important resource in achieving
service excellence. We recruit and promote the very best.
Estrategic Objectives
Objective 1 - To increase profitability in a sustainable manner for the benefit of the country.
Objective 2 - To expand the range of services and products in order to exploit market
opportunities.
Objective 3 - To implement business practices that enhance good corporate governance.
Objective 4 - To efficiently manage the volume and quality of the water resources of the Panama
Canal Watershed.
l
Objective 5 - To increase productivity through excellence in performance and the wellbeing of

human resources.
l
Corporate Values
Honesty / Transparency / Competitivenes / Loyalty / Responsibility / Reliability
Information Request
During fiscal year 2012, the Office of General Counsel has received 660 information
requests.
In the category of alimony, 178 were received, out of which 176 have been resolved and
two are in process for revision.
In the general requests category (which encloses unions, employees, government

entities, and general public) 482 were received. Of these, 456 have been resolved and
26 are in process, waiting for information to answer requesters.
Operaciones
Operations
ANNUAL REPORT 2012 13
Operating Results which culminated in a decline of the increase

projections by the Chinese government, from
The Panama Canal reached a new PC/UMS (Panama Canal 8.5 per cent to 7.5 per cent.Regardless of the
Universal Measurement System) tonnage record during fiscal year
measures taken by the Chinese government
2012, when it reached 333.7 million PC/UMS tons. This historic
to stimulate its economy, such as more liberal
milestone was the result of the determined effort of all Canal
credit policies and the development of massive
employees, the effective management of its operations, and the
construction projects, their sustainability may be
important role the route through Panama plays in international
put to test if European and American economies
maritime global trade by always providing world-class services to
do not improve. Nevertheless, China remained an
its users.
important player in the maritime flow through the
Canal during fiscal year 2012. If there is a recovery
The year 2012 was characterized by a global economic slow
in world trade in 2013, it is expected that China’s
down consequential of fiscal adjustments made by advanced
increase projections will be revitalized and the
economies, financial system’s instability and the economic
transportation of cargo through the Canal will rise.
uncertainty triggered by the crisis in Europe. At the same time, a
reduction in the demand in the leading economies affected the
The Panama Canal ended fiscal year 2012 with
emerging markets through a reduction in international trade.
14,544 transits, a 0.95 per cent decrease from the
previous year. Panamax vessel transits were 7,241,
The economy of the United States, the main user of the Canal,
56.3 per cent of oceangoing vessels The PC/UMS
showed signs of improvement, but at a less-than-optimal level.
tonnage at the end of fiscal year 2012 was 333.7
Retail and vehicle sales, as well as exports have improved
million, a 3.6 per cent increase compared to fiscal
significantly; however, the 7.8 unemployment rate recorded in
year 2011. The total cargo through the Canal
September keeps the economy increase from developing to
registered at 218.1 million long tons, a slight 1.9 per
desired levels.
cent decrease compared to the previous year.
On the other hand, China, the second most important user of the Toll revenues reached a record B/.1,852.4 million,
Panama Canal and the world’s foremost exporter, is affected by a 7.1 per cent increase, as a result of larger vessel
Europe and the United States’ low demand for imports. From the transits.
beginning of 2012, economic indicators show a downward trend,

14 ANNUAL REPORT 2012
Full Container Vessel

Segment
The full container vessels segment performed well during fiscal year
2012, showing an increase in traffic figures as compared for fiscal
year 2011.A total of 3,331 container ships transited the Canal, with
a volume of 119.9 million PC/UMS tons and 12.2 million TEU (twenty
foot equivalent unit) invoiced. These figures reflect a 2.9 percent
increase in transits, a 5.4 percent increase in tons and a 5.6 percent
increase in TEU volumes as compared to the previous year. Of
the total transits, 74 percent are in the 100 feet or more in beam
category; and vessels with over 900 feet overall length accounted
for 47.3 percent. which contributed positively to increase cargo
volumes transits. Likewise, the global demand for

During fiscal year 2012, the full container vessels segment containerized cargo grew 3.4 percent in 2012.
accounted for B/.960.1 million in toll revenues. From this total, 93.9
percent correspond to TEU capacity and 6.1 percent to 7.4 million The number of liner services in the route through
loaded TEUs which transited effectively. It is noteworthy that this Panama remained fairly consistent, with 33
segment comprised 51.8 percent of the total Canal toll revenues services at the end of fiscal year 2012, a one
in fiscal year 2012. service increase from the previous year. However,
the average deployed vessel size increased from

Containerized cargo imports at major ports on the East Coast of 3,952 TEUs in 2011, to 4,078 TEUs in fiscal year 2012,
the United States, the main country of origin and/or destination leading to an increase in TEU capacity, and thus
of containerized cargo that transits through the Panama Canal, higher revenues.
increased in fiscal year 2012 compared to the previous year,
Reefer Vessels Segment

In fiscal year 2012, the reefer vessel segment
registered 1,116 transits, which represent 9.9
million PC/UMS tons and B/.50.6 million in revenues
from tolls. Transits, tonnage and tolls were down
24.5 percent, 20.8 percent, and 12.9 percent,
respectively, in comparison with fiscal year 2011.

The main driver for the downward trend is the transition of by vessels of 80 to 90.99 feet or more in beam, which was
cargo transportation from conventional refrigerated cargo reflected in a 27.4 percent PC/UMS tonnage rise and
vessels to refrigerated containers on container vessels. 30.9 percent increment in toll revenues. In addition, the
During 2012, three liner container services were introduced volumes of cargo on board of these vessels also increased
for the transportation of refrigerated cargo from the west 22.4 percent over the previous fiscal year.
coast of South America. These services are ECUMED
service of Maersk Line, as well as MSC’s Ecuador Express Diesel, gasoline and miscellaneous petrochemicals are
and Andean Feeder service, which compete directly for among the main products that account for the increase in
the transportation of bananas in conventional vessels. traffic figures for this segment during fiscal year 2012. Diesel
registered its biggest flows mainly in the routes from the Gulf
Low temperatures in countries like Ecuador and diseases of Mexico to Chile and Ecuador, while gasoline was driven
such as black sigatoka affected the quality of some banana by exports from the Gulf of Mexico to Mexico, Guatemala,
plantations during several months in fiscal year 2012. This Chile, Japan, and Ecuador.
curtailed the supply of exportable bananas, which allowed
countries such as Colombia, Costa Rica and Panama to Chilean diesel imports, mainly from American refineries
increase their share in consumer markets. located in the Gulf of Mexico, continued their remarkable
increase. This trade increased by 45.7 percent compared
Liquid Bulk Segment to fiscal year 2011, which was already a record year
Fiscal year 2012 was an excellent year for the liquid bulk for Chilean imports of this product. Chile continued to
segment. This segment registered 2,478 transits, 51.6 million endure hydroelectric generation problems due to a
PC/UMS tons and B/.212.2 million in toll revenues, which lengthy drought, which along with the economic increase
amount to increases of 6.7 percent in transits, 5.4 percent prompted the increase in diesel imports to supply for the
in PC/UMS tonnage, and 8.1 percent in toll revenues over rising electric generation demand.
fiscal year 2011.
Regarding the supply of distillate products such as diesel
These results are due to a 30.2 percent increase in transits and gasoline, American refineries, mainly located in the
Transit by Vessel Types

(in thousands of transits)
Dry-Bulk Carriers
Full Containership
Tanker
Miscellaneous
Refrigerated Cargo
General Cargo
Vehicle Carrier
Container/Break-Bulk Vessel
Liquid-Gas Carrier
Fishing Vessel
Passenger Ship
Roll-on/Roll-off
0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

2010 2011 2012
Gulf of Mexico, maintain large commercial inventories as a result Drybulk Carrier Segment
of a decrease in the demand and prices of these products in that
During fiscal year 2012, the drybulk carriers
country. This situation allowed setting attractive export prices;
segment recorded 83.4 million PC/UMS tons, the
countries such as Chile and Ecuador took advantage of this
highest level in vessel capacity tonnage since
circumstance.
fiscal year 1996. PC/UMS tonnage increased 4.2
per cent compared to 80.0 million tons of fiscal
On the other hand, gas carrier ships, despite being a small sub
segment, registered good traffic indicators-41 additional transits- year 2011. For the third consecutive year, dry bulk
22.0 percent over fiscal year 2011. In addition, this segment carriers recorded the highest number of transits
was above the previous fiscal year in PC/UMS tonnage and toll of all vessel types transiting the waterway, with a
revenues, recording increases of 16.3 percent and 19.0 percent, total of 3,339 transits.
respectively.
Total toll revenues were B/.337.7 million, an 8.2
Over the last fiscal year, the increment in traffic figures for the percent increase compared to fiscal year 2011,
gas carrier ships was driven by a 62.9 per cent increase in the
mainly as a result of the transiting vessels increased
transit of vessels of 80 to 90.99 feet of beam, which replicated in
PC/UMS tonnage.
a 56.8 percent PC/UMS tonnage increase and 62.4 percent in tolls
revenues. These vessels carried mostly LPG (Liquefied petroleum
gas) and miscellaneous petrochemicals. Cargo tonnage totaled 98.6 million long tons
without greater variations. On the other hand,
The amount of cargo transported by gas carrier ships through the tonnage of in ballast vessel capacity increased 12
Canal during fiscal year 2012 was very similar to the levels of the percent, which contributed to PC/UMS tonnage
previous fiscal year. The 36.8 percent and 32.2 percent increase increase for the period. Vessel transits with beams
in cargo for vessels of less than 80 feet and from 80 to 90.99 feet in over 100 feet accounted for 69 percent of total
beam, respectively, helped offset the 14.3 percent cargo decrease dry bulk transits. In general, the average vessel
transported by vessels with 100 feet or more in beam. size increased 3 percent.
The products which increased over the previous fiscal year were
Grains remained as the top commodity
the ammonium compounds (ammonia) originating in Venezuela
and Trinidad and Tobago with destination to Chile; and LPG from transported in bulk carriers, with 36.0 million long
Trinidad and Tobago bound for El Salvador, transported primarily tons; however, the cargo level was 8.1 percent
on ships with less than 80 feet and from 90 to 90.99 feet in beam. below the 39.1 million long tons recorded in fiscal
year 2011. Exports from Brazil and Argentina increased brands, which had slipped significantly since the Japanese
their participation in the Asian market in the period, with a earthquake, combined to spur the vehicle car carrier
negative impact on U.S. exports, the main source of grain demand.
moving through the Panama Canal.
For the second half of the fiscal year, the high demand
for maritime vehicle transportation, alongside intense
Coal shipments remained stable at 13.9 long tons. The
competition between South Korea and Japan for world
main coal routes were from: Colombia to Chile and from
leadership of vehicle production and sales, were important
the U.S. Gulf of Mexico to Mexico, Chile, and Asia. Iron ore
elements towards global recovery. These optimistic
from Brazil and Venezuela to China also remained flat with
projections were based on a stronger than expected
about 4 million long tons, while the route from the U.S. Gulf
recovery in vehicle demand in the United States. As a
of Mexico to China doubled to 1 million long tons. Strong
result, segment traffic remained dynamic, along with the
shipments of coke were also reported from the U.S. Gulf of rise of vehicle flows in the main maritime trade routes.
Mexico to Asia, as well as iron metal on the same route in
the opposite direction. Passenger Vessels Segment
At the end of the 2011-2012 season, passenger vessel traffic
Vehicle Carriers Segment experienced a downward trend. The decline of this traffic
The main traffic indicators exceeded last fiscal year’s
through the Panama Canal was mainly due to a strategic
figures. Vehicle carrier transits totaled 669 at the closing of
decision by one of the major cruise lines to redeploy some
fiscal year 2012, 5.7 percent over fiscal year 2011. PC/UMS
ships to Europe and Asia, in response to demand in these
tonnage registered 37.7 million, an 8.6 percent increase
destinations.
from the previous year. Consequently, toll revenues
totaled B/.153.9 million, a 12.8 percent increase over fiscal
Passenger vessel transits were 211 at the end of fiscal year
year 2011 for this segment.
2012, a 6.2 percent decrease from the previous year.
The demand for maritime vehicle transportation rose Furthermore, the vessel’s passenger capacity decreased
during the first half of fiscal year 2012, due to the increase to 248,674. In contrast, vessel tonnage was 1.5 million, a
in global car production and the restoration of vehicle 0.3 percent increase over the 2010-2011 cruise season,
inventories in Asia. In addition, vehicle sales in the United as a result of an increase in transits of vessels with beams
States and inventory restocking of Japanese and Korean under 80 feet.
Toll revenues totaled B/.39.8 million, a 13.7 percent decline from the Tolls Revenues and Other
B/.46.1 million in fiscal year 2011. The revenues for billed passenger
Maritime Services
capacity represented 83.7 percent of the amount collected during
Tolls and other maritime services totaled B/.2,248.9
fiscal year 2012.
million, 5.5 percent higher than the revenues
recorded for fiscal year 2011, which were
Throughout this season, ships of the major worldwide cruise lines
B/.2,130.6 million.
fulfilled their navigational itineraries through the Panama Canal. In
turn, smaller vessels also contributed to the Canal traffic statistics;
Revenues for other maritime services (OMS)
in general terms, the itineraries of these ships are of short duration
amounted to B/. 395.4 million, 1.3 percent less
between the Caribbean islands and the east and west coasts of
than fiscal year 2011 (B/.400.72 million), as a result
Central America. It is worth mentioning that as in previous seasons,
of less utilization of the transit reservation system.
the Canal destination maintained its tourist appeal, attracting
vessels with itineraries that included passage through Panama on
their maiden voyages.
Transit Operations Performance

It has been mentioned that the Panama Canal registered 333.7 Vessel Tonage
million PC/UMS tons in fiscal year 2012, 11.6 million tons more than (in millions of PC/UMS)
for fiscal year 2011. This was accomplished at an operating cost 350 333.7
325 300.8 322.1
of B/.1.22 per ton, less than the established goal of B/.1.29. This is 300
275
the result of the improved quality service rendered to our clients 250
225
in terms of Canal waters time, the appropriate management of 200
175
resources, and the effort and dedication of the more than 10,000 150
125
Panama Canal employees. 100
75
2010
2012
2011
50
25
0
Transit of Oceangoing Vessels

A total of 12,862 oceangoing transits were registered (not including
small vessels), a reduction of 126 vessels or 1 percent compared
to fiscal year 2011 (12,988 transits). From this amount, 8,479 transits
were super-size vessels with a beam equal to or more than 91
feet, 315 more than the previous fiscal year (3.9 percent). Similarly,
4,383 were regular-size vessels with a beam of less than 91 feet,
a reduction of 441 transits (9.1 percent) compared to fiscal year
2011. Small vessels had a slight drop of 14 transits (from 1,696 to
1,682 transits) or 0.8 percent less compared to fiscal year 2011.
Oceangoing Transits
16,000
14,000 12,591 12,989 12,862
56.3 percent of oceangoing transits, compared to
12,000 53.3 percent in fiscal year 2011. Similarly, Panamax
10,000
vessels with overall length equal or more than 900
8,000
6,000
feet totaled 1,658, an increase of 114 (7.4 percent)
4,000 when compared to fiscal year 2011 (1,544). These
2010
2012
2011
2,000
vessels represent 12.9 percent of oceangoing
0
transits, compared to 11.9 percentof the previous
Transits of Panamax Vessels fiscal year. Panamax vessels, especially those with
overall length more than 900 feet, require more
In fiscal year 2012, a total of 7,241 transits of Panamax vessels were
time and resources. Despite the increase in the
recorded (beam equal to or more than 100 feet), an increase of
complexity of the operations this represents, there
323 transits (4.7 percent) compared to fiscal year 2011 (6,918).This
was an improvement in the service level provided
increase is mainly perceived in the container ships (+147), dry bulk
to our customers.
(+88), and tankers (+56) segments. Panamax vessels represented
Panamax Vessel Transits

9,000
8,000 7,241
7,000 6,918
6,231
6,000
5,000
4,000
3,000
2,000
2012
2010
2011
1,000
0
Service Rendering Performance Canal Water Time (CWT)

The service level rendered, measured based on PC/UMS Monthly Average and Cumulative
tons that transited within the time expectations for Canal
Average
Waters Time (CWT), was 86.28 percent, higher than the
results for fiscal year 2011 (85.2 percent). This reduction is 36.0 33.87
32.00
mainly due to improved processes and, in a lesser extent, 30.21
29.77
30.0 29.13 28.88
28.26
to a reduction in the average arrival of vessels and a 27.32
28.48 28.06
27.40 27.27 26.70 26.79 26.74
27.09 26.81 26.20
Hours
25.63 26.41 25.93 25.98
reduced backlog, which allowed accomplishing transits in 24.0 25.66
23.72
less time than programmed.

18.0
Percentaje of CP/SUAB Tons

12.0
Oct. Nov. Dic. Jan. Feb. Mar. Apr. May. Jun. Jul. Ago. Sep.
CWT Monthly 2012 CWT Cumulative 2012 CWT Monthly 2011 CWT Cumulative 2011
with Good Service Level

95% of 4.0 percent compared to fiscal year 2011 (26.74 hours).
90% 89.78%
This is the result of an improvement in our transit processes,
which allowed us to reduce both waiting and transit times.
86.28%
85.56% 85.73% 85.68%
84.47% 84.85%
85%
Percentage
83.51% 83.50%
82.74% 80.78%81.36% 85.10% 84.85% 85.20%
84.38%
83.91%
82.70%
82.30%
80% 81.39% 82.19% 81.09%
79.08%
80.60%
The average CWT for booked vessels was 14.97 hours,
75% while for non-booked vessels this average was 34.49 hours.
70% In fiscal year 2011 these results were 15.20 and 39.02 hours,
Oct. Nov. Dic. Jan. Feb. Mar. Apr. May. Jun. Jul. Ago. Sep.
Accumulated 2011 Accumulated 2012 respectively.
Canal Waters Time and In The average In Transit Time (ITT), the time elapsed since the
Transit Time ship arrives to the first lock until its departure from the last
Canal Waters Time (CWT), the time elapsed since a vessel lock, recorded 10.70 hours by the end of fiscal year 2012, a
arrives at Canal waters, averaged 25.66 hours, a reduction
1.33 percent increase over fiscal year 2011 results of 10.56

hours.
This cumulative average was slightly affected by the

increased number of larger ships (Super and Panamax),
especially those with overall length of more than 900 feet,
in addition to the programmed maintenance performed
at the locks, which required closing lanes in Gatun and
Miraflores locks.
In Transit Time (ITT) Monthly made to improve customer service and promote a change
Average and Cumulative Average in our organizational culture in customer satisfaction

matters.
12.0
11.41
11.49
We are conducting a survey among the Ship Masters
11.5
11.23
11.13 10.90
10.83 10.78
after each transit to gather their impressions on the service
11.0 10.69
10.71 10.68 10.69 10.70
received as well as their suggestions for improvement. We
11.25 10.72 10.68 10.71
11.05 10.95
10.5 10.71
10.61 10.58
have also improved the process for handling complaints,
10.52 10.56 10.56
Hours
10.0
resulting in a more expedited response.
9.5
9.0
8.5
Oct. Nov. Dic. Ene. Feb. Mar. Abr. May. Jun. Jul. Ago. Sep.
Maintenance Management
ITT Monthly 2012
ITT Cumulative 2011
ITT Monthly 2011 ITT Cumulative 2012
Performance
As part of the Expansion Program, 98 deliverables (sections
Customer Satisfaction inside the navigational channel) were completed in the

Culebra Cut. This represents an execution of 140 percent
At the end of this fiscal year, the customer satisfaction
compared to the programmed goal. This success was
index was registered at 97.82 percent, 1.22 percent above
the result of a combined strategy of working concurrent
last fiscal year results (96.6 percent). Several efforts were
Dredging Operations Progress
Report (Expansion Works) FY2012
18 140.0%
150%
134.8% 140%
16 140.0%
124.6% 130%
% of Progress to Date and Annual
118.2% 127.1%
111.8% 114.3% 120%
14 104.7% 105.9%
100.0% 100.0% 100.0% 110%
108.6%
12 100%
84.2%
91.4% 90%
Deliverables
10 80%
77.1% 70%
8
64.3% 60%
6 54.3% 50%
42.9% 40%
4 38.6% 30%
22.9% 20%
2 18.6%
10%
8.6%
0 0%
Oct-10 Nov-10 Dic-10 Ene-11 Feb-11 Mar-11 Abr-11 May-11 Jun-11 Jul-11 Agt.11 Sept.11
Percentage of Progress Annual Goal FY2012 Percentage of Progress to Date

drilling and blasting and dredging activities, followed by shoal Specific Tasks Program
removal (small areas above design level) to finish the deliverables.
A high level committee was created to identify
The inclusion of dredge “Quibián I” and the utilization of chartered
dredge Cornelius in the removal of shoals helped to achieve these and follow up on specific tasks required to operate
results. the expanded canal.
The Dredging Division excavated 1.189 million cubic meters, of an Some of the tasks completed by the end of fiscal
estimated total of one million cubic meters 118.9 percent of the
year 2012 include establishing restrictions and
expected results, as part of the works under the Modernization
requirements for vessels to transit through the
Program.
new set of locks, based on the results of lockage
This outcome was due to the high production of chartered dredge tests without locomotives and comments from
Cornelius, and the work of dredge Rialto M. Christensen, which pilot unions and tug officers. The risk analysis for
was working at the limits of the Expansion Program and was able the operation of the expanded canal was also
to remove material for both projects.
completed and presented to the Advisory Board,
and we continue following up on the identified
In September 2012 the new backhoe dredge was baptized with
the name of Alberto Alemán Zubieta. This ceremony was held at mitigation measures.
NMC in Niew Lekkerland Shipyard, Holland, and it is estimated that
it will be arriving at the port of Cristobal in Panama on January A contract is being prepared for the extraction of
2013. Initial tests will begin in February to formally put it into service
submerged logs from Gatun Lake to expand the
in late March 2013.
anchorage area, which will be reduced by the
crossing of the navigational channel to the new
Preparation for the Operation of the Atlantic locks.
Expanded Canal
Seventy three pilots (104.3 percent) and 28 tug captains (127.3
Human resources needs and structures
percent), which together represent 109.78 percent out of
the established goal of 92 employees, have been trained in requirements (docks, workers waiting areas,
maneuvering Post-panamax vessels at the SIDMAR Simulation landings, equipment, and power plants) are
Center. As part of the preparation for this training, negotiation being analyzed to handle the operations for the
was undertaken with the Pilots Union and a variety of tests were expanded canal and to meet maintenance and
placed in the simulator with the different types of vessels, which fuel supply requirements for floating equipment.
were validated for the pilot and tug captain training.
On the other hand, we are analyzing the infrastructure required

for the Maritime Traffic Control Center as well as transit processes
in order to improve the maritime services management, based on
a Service Oriented Architecture (SOA). We are also evaluating the
implementation of new transit support technologies.
With regards to dredging, we are developing a plan for the

day to day maintenance and improvement of the navigational
channels, and to tackle the sedimentation accumulated during
the expansion program.
Regarding safety, we are assessing the capacity required to respond

to emergencies, considering the new hydrocarbons that will transit
through the Panama Canal and the requirements to be ready for
a Tier-2 in the new facilities. We are also analyzing the safety tariffs on information from the demand model for the
for the new Post-Panamax vessels, based on the increasing spill risk current, as well as for the expanded Canal.
factor, and a new tariff required for hazard materials. We are also
working in the changes required to provide fire protection firemen This model will allow analyzing the Canal´s
response for facilities, equipment and systems, and as identifying operational capacity in different demand
the resources needed to respond to new hazardous materials scenarios, the infrastructure configuration and
(LNG). navigation rules for both the present, as well as for
the expanded Canal.
Capacity Model for the Expanded

Beginning September, 2012, we proceeded with
Canal Phase II of the project, which will include the
We continue developing a capacity model for the present
simulation of tugs, launches, line handlers, lane
and the expanded Canal through a contract with Paragon
outages, and full convoy scheduling mode (all
Consultoría Ltda., from Brazil. Phase I of the model was completed
ships going in one direction and in the opposite
and it included the development of a scenario manager and a
direction the following day).
scheduling model for the operation and vessel scheduling based
ANNUAL REPORT 2012
Expansion
Five Years Later three levels and three water saving basins. This
Skills, knowledge, challenges, commitment, and achievements are project has a 33 percent progress rate. Grupo
just some of the many day-to-day factors that make the Panama Unidos por el Canal S.A. (GUPCSA), the consortium
Canal Expansion Program possible. The teamwork between in charge of this activity, has focused its efforts on
contractors and ACP workers is a key element that together fabricating electromechanical components such
with the design, construction, excavation, dredging, quality as valves and gates; conducting excavation and
assurance, good environmental management, documentation, dredging activities in the areas where the locks
and occupational safety have made it possible to get to this point
are built; and, just as important, developing and
meeting with world-class quality standards in all of the Program’s
obtaining approval for concrete mix designs and
work fronts.
placement. During this period, the contractor
met all design requirements for the locks,
In its fifth year, the Expansion Program, with over 12,000 active
employees’ working day and night shifts, reached a 47 gates, and valves, and obtained the necessary
percent progress rate at the end of fiscal year 2012. Significant certifications to start fabrication. This enabled
accomplishments that were achieved during this year include GUPCSA’s subcontractors Hyundai Samho
awarding 96 percent of the contracts; removing 42 of the 49 Heavy Industries Company Ltd. in South Korea
million cubic meters through dry excavation for the Pacific Access and Cimolai S.p.A. in Italy to proceed with the
Channel; and dredging 46 out of 53 million cubic meters from the fabrication of lock valves and gates, respectively.
navigational channels. With regards to the combined excavated
Hyundai for instance, has manufactured 47 valve
and dredged total volume of 33 million cubic meters of the
bodies and conducted factory acceptance
projected 47.5 in the Pacific and Atlantic sides for the construction
tests on 34 culvert valves; while Cimolai makes
of the new set of locks; structural concrete placements added
progress welding and assembling blocks for
up to 1.2 of the 4.2 million cubic meters; and 115 tons out of the
foreseen 197 tons of rebar have been received. the 16 gates now in process. These fabrication
activities are monitored by GUPCSA’s resident
Post-Panamax Locks inspection services subcontractor SGS S.A. and
This component comprises the construction of two locks complexes, by ACP´s Program Administration consultant,
one on the Pacific and another on the Atlantic side; each with CH2M Hill Panamá S. de R.L., which carries out this
task through its subcontractor, NDE Associates Inc. Meanwhile,

Design and Construction of the
Hyundai subcontracted Bosch-Rexroth AG to fabricate hydraulic
Third Set of Locks
cylinders for the valves.
Dredging and Excavation Volumes –
Actual vs Programmed through September 2012
Another major effort by GUPCSA is the excavation and dredging 50
45
activity. On the Pacific sector, the contractor reported the
Accumulated Volume (Mm3)

40
removal of a cumulative volume of approximately 15.9 million 35

33 Mm3
30
cubic meters from the area for the three lock chambers; lock 25
20
heads 1, 3, and 4; the middle and lower water saving basins; 15
the north wing walls and approach channel; and the dams. 10
5
The cumulative volume removed from the main excavation on 0
Jan. 10
Mar. 10
May. 10
Jul. 10
Sep. 10
Nov. 10
Jan. 11
Mar. 11
May. 11
Jul. 11
Sep. 11
Nov. 11
Jan. 12
Mar. 12
May. 12
Jul. 12
Sep. 12
Nov. 12
Jan. 13
Mar. 13
May. 13
Jul. 13
Sep. 13
Nov. 13
Jan.14
Mar. 14
May. 14
Jul. 14
the Atlantic sector is about 14.8 million cubic meters and the
Programmed Accumulated Actual Accumulated
cumulative volume reported for the Atlantic entrance channel
As part of the measures to improve its performance,
is nearly 2.3 million. These activities are conducted at the lock’s
GUPCSA hired the Consorcio Borinquen S.A.to
footprint where they are about to conclude- the lower and
build three dams and excavate the north Pacific
middle water saving basins and at the Atlantic entrance channel.
approach channel. This consortium completed
the excavation for the first dam to the west as well
No doubt one of the contractor’s main tasks has been pouring
as the mapping; and cleaning of its foundation.
structural concrete, with a total of 580,000 cubic meters poured
It also started the treatment of the exposed
on the Pacific site. By the end of the fiscal year GUPCSA had
foundation and applied dental concrete and
submitted and ACP approved two new structural marine concrete
backfill, based on its geological features. On
mixes. For the Atlantic sector, this activity reported a cumulative
the second dam to the east, the consortium is
volume of about 652,000 cubic meters. The placement of lean
conducting dewatering activities and remove
concrete as foundation treatment on the Atlantic site is nearly
overburden material to reach the design
complete, with only small sections remaining.
excavation level for the foundation.
Another important task is the transportation of

aggregates from the Pacific to supply the Atlantic
site, where it is processed to obtain the fine
aggregates required to prepare concrete. By the
end of the fiscal year, the contractor has mobilized
a cumulative volume of 2.8 million cubic meters.
Likewise, the reinforcing steel supplier contracted
by GUPCSA, Mexican company ArcelorMittal,
has delivered a total of approximately 67,000 tons
to the Pacific site and about 48,000 to the Atlantic
site.
The quality assurance, environmental

management, and occupational safety efforts
have continued without interruptions by means of work have been completed successfully; and the fourth
audits, inspections, regular meetings, and a constant phase reflected a 67 percent progress rate at the end of
presence on both the Pacific and Atlantic construction fiscal year 2012. As part of this last phase, several major
sites. In order to keep Expansion Program’s historical structures have been built, including a 1.8 km-long cellular
documentation at the forefront of technology, this year cofferdam and two cut-off walls, which consist of a 500
a remote control axial recording system was used while meter-long cement-bentonite structure and a 144 meter-
flying over construction worksites to record progress on long jet grouting wall, to reduce potential see page from
high-definition video as if viewed from the helicopter Gatun and Miraflores Lakes, respectively. The purpose of
pilot’s viewpoint. This recording system was fabricated these structures is to allow dry excavation works for the
by Canal specialists, who put their resourcefulness channel and the construction of a dam.
and determination to test in order to manufacture the
device. The Panama Canal has held high level meetings Pacific Access Channel (CAP4)
with senior management of the companies form the Excavation Volumes – Actual vs Programmed through
September 2012
consortium responsible for this project to follow up on
28
its performance, always stressing the importance of 26

24
22
complying with contract requirements and encouraging 20
18
19.3 Mm3
the contractor to take any and all appropriate corrective 16
14
actions. GUPCSA submitted a schedule that estimates 12
10
the contract completion date in April 2015 (six months 8
6
after the contractual completion date), and they are 4

2
working to reduce delays. 0

Apr. 10
May. 10
Jun. 10
Jul. 10
Ago. 10
Sep. 10
Oct. 10
Nov. 10
Dic. 10
Jan. 11
Feb. 11
Mar. 11
Apr. 11
May. 11
Jun. 11
Jul. 11
Ago. 11
Sep. 11
Oct. 11
Nov.11
Dic. 11
Jan. 12
Feb. 12
Mar. 12
Apr. 12
May. 12
Jun. 12
Jul. 12
Ago.12
Sep. 12
Oct. 12
Nov. 12
Dic. 12
Jan. 13
Feb. 13
Mar. 13
Apr. 13
May. 13
Pacific Access Channel Programmed Accumulated Actual Accumulated
A dry excavation is underway to connect the Pacific Locks

with the Culebra Cut through a new 6.1 km-long access During this fiscal year, the contractor responsible for
channel. Three of the four phases to accomplish this these works, the consortium ICA-FCC-Meco, comprised
of Ingenieros Civiles Asociados S.A. de C.V. (ICA), Fomentos de

Navigational Channel
Construcciones y Contratas S.A. (FCC), and Constructora Meco
Improvements
S.A., removed a total of 7.8 million cubic meters of unclassified
With the purpose of providing Post-Panamax
material, for a cumulative volume of 19.3 million from the start of
vessels the necessary draft to transit safely, another
the project. This volume represents a 74 percent progress rate.
component was included in the Expansion
The material was excavated from the access channel and the
Program, which encompasses the widening and
footprint of the first dam to the east.
deepening of the existing navigational channels
in Gatun Lake and in the Pacific and Atlantic
The contractor’s most demanding task has been the construction
entrances, as well as the deepening of Culebra
of the previously mentioned dam. The contractor is focused
Cut. The work in Gatun Lake and Culebra Cut
on dewatering the area and the underground water level was
includes dredging operations to remove 26.5
lowered in several areas of the dam footprint preparing the
cubic meters of material and 8.7 million from
foundation; placing rock fill in the inboard dam shell; placing
the Pacific entrance; whereas about 17.9 million
backfill concrete in areas requiring leveling; and the stockpiling
cubic meters must be dredged and excavated
and processing of rock from the project’s excavations to produce
for the Atlantic entrance.
filters, chimney drains, and blanket filters for the dam, among
others. Further dam-related tasks included the construction of a 3
Gatun Lake and Culebra Cut
meter-deep concrete cut-off wall at the dam’s axis, of which 1,100
These works have been assigned to the Panama
square meters have been completed, and grout-jetting works to
Canal’s Dredging Division and contractors, who
create a curtain below the dam to prevent seepage.
have joined in the effort to reach the design depth
required to meet the Program´s objectives. The
On the other hand, construction works have concluded for the
ACP has removed nearly 12.5 million cubic meters
support operations building located west of Pedro Miguel Locks,
from the beginning of the project with cutter-
as well as the construction of additional drainage systems and the
paving of the existing ones west of the access channel. These suction dredges Mindi and Quibian I, dipper
contracts lie on the main excavation’s footprint, making their dredge Rialto M. Christensen, and the chartered
execution relevant to the project. backhoe dredge Cornelius. These works have
resulted in the completion of the Culebra and Chagres entrance of the Pacific access channel, where about
Crossing reaches, both located in the Culebra Cut. On 3.2 million cubic meters of material have been removed.
the other hand, in March 2012, Dredging International de In this way, the Panama Canal’s and its contractor´s
Panamá S.A. concluded its contract to dredge Gatun combined production reached a cumulative volume of
Lake’s northern reaches according to schedule. 20.2 million cumulative cubic metersof removed material
volume, a 78 per cent progress rate by the end of fiscal
This work included dredging the Bohio, Buena Vista, year 2012.
Gatun, Peña Blanca and Balsa reaches, where a
cumulative volume of 4.0 million cubic meters were Pacific Entrance
removed with cutter-suction dredge D’Artagnan. Close to 300,000 cubic meters are left to be dredged at
the sea entrance on the Pacific side. Dredging operations
Gatun Lake Deepening

and Widening and Culebra Cut
Deepening
Dredging and Dry Excavation Volumes –
Actual vs Programmed through September 2012 Pacific Entrance Deepening
28 and Widening
26
24
Dredging Volume - Actual vs Programmed through
September 2012
Volume Accumula (Mm3)
22
20.2 Mm3
20
18 10
16
9 8.4 Mm3
14
12 8
10 7
8
6
6
4 5
2 4
0
3
Feb. 07
May. 07
Ago. 07
Nov. 07
Feb. 08
May. 08
Ago. 08
Nov. 08
Feb. 09
May. 09
Ago. 09
Nov. 09
Feb.10
May. 10
Ago. 10
Nov. 10
Feb. 11
May. 11
Ago. 11
Nov. 11
Feb. 12
May. 12
Ago. 12
Nov. 12
Feb. 13
May. 13
Ago. 13
Nov. 13
2
Programmed Accumulated Actual Accumulated 1
0
In the meantime, Jan De Nul n.v.continues with the
Ago. 08
Oct. 08
Dic. 08
Feb. 09
Apr. 09
Jun. 09
Ago. 09
Oct. 09
Dic. 09
Feb. 10
Apr. 10
Jun. 10
Ago. 10
Oct. 10
Dic. 10
Feb. 11
Apr. 11
Jun. 11
Ago. 11
Oct. 11
Dic. 11
Feb. 12
Abr. 12
Jun. 12
Ago. 12
Oct. 12
Dic. 12
dredging operations under its contract at the northern Programmed Accumulated Actual Accumulated
by Dredging International de Panamá S.A., covered around 11

Atlantic Entrance Deepening
km of the navigational channels;1.8 km north of the Bridge of
and Widening
the Americas; and the first kilometer of the new access channel Dredging and Dry Excavation Volumes -
Actual vs Programmed through September 2012
to the third set of locks. All dredging works were performed with
dredge D’Artagnan, upon completion of its assignment in Gatun 20
18
17.4 Mm3
Lake’s northern reaches. The project has reached a 95 percent
Accumulated Volume (m3)

16
progress rate with the conclusion of the widening and deepening 14
12
of control sector 7, that of sector 2A at design depth, plus the 10
8
extensive completion of sector 6, and the beginning of dredging
6
activities in sector 4. 4
Atlantic Entrance
Feb. 10
Abr. 10
Jun. 10
Ago.10
Oct. 10
Dic. 10
Feb.11
Abr. 11
Jun. 11
Ago. 11
Oct. 11
Dic. 11
Feb. 12
Abr. 12
Jun. 12
Ago. 12
Oct. 12
Dic. 12
Feb. 13
Abr. 13
Programmed Accumulated Actual Accumulated
Jan De Nul n.v., a Belgian company in charge of dredging
operations at the sea entrance on the Atlantic side, ended Raising Gatun Lake’s
operations in control sectors 3A, 4A, 2B, 3B, and 5B with support Maximum Operational Level
from the Filippo Brunelleschi, Charles Darwin and Al Idrisi hopper With a view to guarantee an adequate water
dredges. All sectors were delivered prior to established contract supply for human consumption, as well as for the
expanded waterway, this Program component
date on the project’s schedule. Significant progress has also
consists in raising Gatun Lake’s maximum
been made in the removal of the remaining volume in sector 3C.
operational level 45 centimeters. The works
This project registered a cumulative volume of nearly 17.4 million
required to accomplish this goal continued
cubic meters of removed material, for a 98 percent progress rate. during this period and increased the project’s
progress rate to 9 percent.
One of the most significant activities under this project, which and inspection services in South Korea and Italy
is performed by the Panama Canal,focused on extending the during the fabrication of the lock valves and
Gatun spillway gates, completing 13 of the 14 gates. Review gates, respectively. With regard to legal advisory
and final adjustment works were also completed on two new services for international contracts, Mayer Brown
gates fabricated by the ACP with the required dimensions. The LLP provided guidance on several topics related
to the locks contract. Other contractors, such as
spillway has 14 gates, but the project includes a total of 16 so
Shearman & Sterling, Willis Limited, Consorcio Post
as to have 2 additional gates available for maintenance and
Panamax, and URS Holding Inc., also provided
emergency purposes. Additionally, raising Gatun Lake’s level
the respective project management support on
requires other modifications to structures in Pedro Miguel Locks
financial legal issues; risk management; technical
as well as Gatun’s upper chambers. For this reason, proposals
consultancy on geotechnical aspects, dams,
for the acquisition of 32 submersible hydraulic cylinders are
and concrete mixes; as well as dam construction.
being evaluated; designs have been made to modify other
components such as the conductor-slot drainage system, miter

The five credit facility lenders that provide
gates, and yoke seal, among others; and specifications for new part of the funds required to execute the
water level sensors are being prepared. Expansion Program continued receiving financial,
operational, environmental, and progress reports,
Administration and Financing as established in the common terms agreement.
The program management effort continued as planned with the Meanwhile, the ACP complied with its payment
support of international experts in various areas. For instance, commitments and debt service fees in November
CH2M Hill Panama R. de S.L., the program management services 2011 and May 2012, respectively. Pursuant
consultant, worked jointly with the ACP on all construction aspects to the agreement, in February 2012 a visit to
for the new locks. Additionally, they continued providing supervision Expansion Program sites by credit facility lenders
representatives was prepared and coordinated. In June Level” was carried out. Another effort of the occupational
2012, the ACP requested a B/.100 million disbursement safety projects team was a workshop to promote
from the Interamerican Development Bank. accident-prevention innovations. As a result from this
event, new initiatives were taken such as the visible
Projects Occupational Safety participation of senior management in health and safety
With the responsibility shouldered from the beginning, activities, and regular workshops for ACP employees
for occupational safety management sets the norm to and contractors to promote benchmarking between
keep work areas free of accidents, injuries, and diseases. ACP and contractor personnel on the subject. The ACP
Monitoring contractor activities in the implementation of continues to permanently stress the consideration that
safety and hygiene measures at work sites–such as the should be given to this component in order to preserve
use of personal protection equipment; fall protection; the health and life of each and every worker playing a
unhealthy (noise, dust) work conditions control; and part in the Program’sexecution.
ergonomic risk evaluations, among others, is the constant
of these efforts. This task also includes reviewing safe
The Panama Canal Expansion Program received Spain’s
work procedures and plans, as well as specific audits.
Consejo General de Relaciones Industriales y Licenciados
en Ciencias del Trabajo “Prever” 2011 Award under their
To support this commitment, and as a corporate initiative,
international category; an award that highlights labor
the Program management consultant launched the
risk-prevention initiatives.
“Don’t Walk By” campaign to raise workers’ awareness
regarding the need not to ignore or walk by an evident
risk without correcting or reporting it. On the other
Environmental Management
“Relentless”would be the appropriate term to describe
hand, in an effort to draw attention to the importance
the effort that goes into environmental management.
of occupational safety among ACP and contractor
Follow-up on the mitigation measures included in the
employees, the second annual seminar under the slogan
environmental impact study and the resolution issued
“Excellency in Safety Management at the Executive
by the National Environmental Authority (ANAM for its effort also involves rescuing and relocating wild life from
acronym in Spanish) which approved it, entails several areas where the vegetation has been removed during
components, such as monitoring water and air quality, the waterway’s expansion works.
and noise; managing solid wastes and hazardous
materials in work areas; working conditions; erosion The independent consultant for this component,
control; siltation migration; secondary containments for Environmental Resources Management Panamá S.A.,
fuel and lubricant storage; wildlife care and protection; made two scheduled semi-annual visits to project sites
and ecological compensation, among others. and reforestation areas; and prepared the respective
reports on the verification of the implementation, and the
The reforestation program is executed in coordination effectiveness of mitigation and social and environmental
with ANAM and the Authority for Aquatic Resources follow-up measures. These reports render account to the
(ARAP for its acronym in Spanish) in the provinces of credit facility lenders and ANAM.
Colon, Panama, Cocle, Herrera,and Chiriqui. At the end
of this fiscal year, the mangrove of the Chiriqui Viejo River Paleontological and
was included in the reforested areas, which amounted Archaeological Studies
to 565 planted hectares, 515 hectares of forest and 50 As a result of the required excavation and dredging
hectares of mangrove. All Expansion Program plantations activities during the Program’s execution, some areas and
have been established and are in their maintenance part shave become exposed that would not be visible
phase, which requires a 4 year period and includes yearly otherwise. This allows for performing paleontological
cleanups, fire protection, and replanting; among many rescues, and evaluating artifacts and other identified
other activities. A new contract was awarded in February cultural remains.
2012 for the reforestation of 61 hectares of land within
the Tapagra hydrological protection zone, in Chepo, The required paleontological evaluations are a service
Panama, with a reported 45 percent progress by the end provided by personnel from the Smithsonian Institute for
of the period. As it is generally known, the environmental Tropical Research, who inspected throughout the year
a number of areas on the Atlantic and Pacific sectors, and in of the Borinquen dam, among others. Other
the Culebra Cut.For example, they observed the stratigraphy findings took place in one of the Pacific locks
of sediments in the exposed rock and found a fish and mollusk project’s disposal sites, where there were four
deposit where excavations for the locks are underway on the World War II concrete bunkers; a number of mid-
Atlantic sector. Additionally, marine fossils have been recovered twentieth century bottles; a 1912-1913 stone-lined
at different locations, and a Culebra formation rock layer full trench; an aluminum helmet; an iron ashtray; 12
of organic matter found in a particular area in the excavations glass bottles; 2 caskets; and an iron pick. An
for the construction of the Pacific locks. This area also had crab archaeological evaluation performed at Dock
remains and fossilized leaves, a rare finding that requires specific 45 on the Atlantic sector reported finding a 5
research. A layer of freshwater mollusks and bivalve fossils feet-long Decauville wagon wheel axis with its
was found at Culebra Cut, in a Cucaracha formation. This is a gear box, from the time of the French Canal. An
major scientific discovery, as it will help reconstruct the isthmus’ inspection conducted in the old Emperador Town
environmental conditions during the Middle Miocene Era. Other resulted in the recovery of several archaeological
discoveries in the Cut included mammal and reptile fossils found cultural remains belonging to town residents,
in the area of Lirio; teeth and bones of mammals were recovered such as industrial implements, ceramic, glass
at Hodges; and turtle shells and crocodile teeth were found in the bottles, and metallic artifacts; as well as in the
area of the Centennial Bridge. In addition to recovering remains, identification of 13 iron crosses in the cemetery
scientists also analyze, evaluate, categorize, and document area, which date back to the French Canal Era
each finding for their preservation. (1880-1903).
Archaeological inspections were also conducted in different Public Relations,

Program areas, albeit less than before, given that at most Communication, and
work fronts dredging and excavation design levels have Historical Documentation
been reached. A metallic remains deposit with railroad track If the field work doesn’t relent, communication
fragments, iron wheels with varying diameters, and an iron chain and historic documentation of Expansion
were found in the construction site for the first dam to the east Program progress don’t stop either. The task
of informing about the development of this major Program Duarte, Amalia Tapia, and Roberto Vergara.
has become the permanent trend of those who generate all
sorts of communication instruments, such as brochures, fliers, Honoring the commitment to document the
leaflets, writings, reports, presentations, photos, videos, and evolution of this remarkable initiative, the ACP
recordings, among others. The preservation of documents for published a second volume of the book titled
future generations is another tremendous effort, one that requires “The Panama Canal Expansion: Portraits of
technical know-how and long-term vision to figure out how the a Historic Undertaking 2010-2011.” This book
images and documents prepared today will be interpreted, so as compiles photos of the work sites, contractor
to ensure that they stand the test of time. activities and equipment, and the Panamanian
workforce who contribute with their daily effort
During an assessment of the communication activity from the to meet the goal and turn over this project, which
beginning of the Expansion, over 37,000 persons have received will render tangible benefits and place Panama
assistance, including visits to the new locks construction sites and in a leading international maritime trade position.
to dredging and excavation areas on the Pacific and Atlantic
sectors; speeches and presentations to different international
and national audiences on the progress of the Program; fulfilling
requests from foreign and local media; responding the toll free
customer care line, 800-0714; and replying to emails received at
ampliacion@pancanal.com.
Art goes hand-in-hand with the Canal Expansion as it advances.

Various engineering activities have been depicted in oil and
watercolor paintings featuring the movement of heavy equipment
and Expansion workers, by the hands of local artists such as
George Scribner, Carlos Gonzalez Palomino, Jose Inocente
Environment
Environmental Management planning criteria. The year 2012 consolidated the

participatory process in the management of the
Environmental management refers to how we interact with nature
Watershed, for the eastern and western sectors of
through instruments keen to making our actions sustainable. In this
Gatun Lake, which facilitated the strengthening
respect, thinking of sustainability is thinking of life. This represents,
of local and organizational capabilities, resulting
managing responsibly with balance between human activities,
in the development of annual action plans.
social equality and environmental protection at different levels.
Part of the process and with the participation of

The Constitution of the Republic of Panama gives the Panama
all interested stakeholders, a 25 year vision master
Canal Authority (ACP) a mandate to shift from concept to action,
plan was approved in the year 2007. It facilitates
mainly to protect Panama Canal Watershed resources through an
a set of organized and concerted actions called
integrated management approach. Water is a critical resource for
Sustainable Development Plan and Integrated
the sustainability of the business of the Panama Canal; therefore
Management of the Water Resources in the
the effort of the Panamanian society as a whole is required to
Panama Canal Watershed (DSGIRH Plan for its
preserve its quality and quantity. The Interinstitutional Commission
acronym in Spanish).
for the Panama Canal Watershed (CICH for its acronym in Spanish),
created in the year 2000, is responsible through close coordination
The results of the plan´s implementation have
with State entities to integrate efforts, initiatives and resources for
been satisfactory from its formulation. For fiscal
the Watershed’s conservation and management and to promote
year 2012, it has facilitated the execution of
its sustainable development. Strategic alliances are made through
54 projects with an active participation of the
the CICH and a community participative framework is established
community and different government and
for the water governance, building a sustainability culture.
non-governmental institutions. The greatest
investment has been concentrated in community
The Panama Canal´s water governance approach is based
infrastructure projects that improve the quality of
on a community structure of 6 Regional Advisory Councils and
life of the Watershed population.
30 Local Committees in 23 sub basins is organized under hydric
Education for Sustainable Development encounters, as well as camps, and activities.
The Environmental Conservation and Work Training Program More than 10,000 students and 900 teachers from
is carried out under a strategic partnership with the National 110 schools participated in the activities. We may
Institute for Human Development (INADEH), and the Ministry of conclude that during the 2012 period we had
Education (MEDUCA). This program facilitates the insertion of the the participation of more than 50,000 students,
Watershed population in the national labor market, and at the 2,500 teachers for elementary, premiddle, and
same time it develops modules for good environmental practices middle levels, from 153 schools located within the
and community awareness. In the 2012 period, this program Panama Canal Watershed.
was implemented in 65 educational and community centers in

training areas such as functional English, electricity, masonry, and
Panama Canal Watershed
information technology. During six years of execution more than
Conservation
For consideration purposes, we have divided
5,300 youngsters have graduated and 10,368 certificates have
the 339 thousand hectares of the Panama
been issued.
Canal Watershed territory into eight work regions
established under hydric criteria. The Panama
It also notes the development of the annual missions and
Canal Watershed is one of the most important
environmental projects in programs such as Our Canal and its
areas for the Republic of Panama. It consists
Watershed (NUCA), Adequate Management of Solid Waste, and
of 42 corregimientos located in 7 districts of the
Water Quality Assessment focused on 4th, 5th, and 6th graders,
provinces of Panama and Colon. The Watershed
respectively, in which more than 35,000 students and 1200
is an area defined by its sub basins that drain their
teachers actively participated. The capacity building approach
water to the Alhajuela, Gatun and Miraflores lakes.
has reinforced the education of children and adults this year 2012.
Six protected areas occupy 38.5 percent of
This is the best guarantee of a sustainable future.
the Panama Canal Watershed territory on
natural elements, vegetable cover and the rich
During the Environmental Workdays, which is an annual program
ecosystems which make up the Watershed.
for the participation and interaction of students and teachers,
The Panama Canal in close collaboration with
there were environmental contests, regional and interregional
competent authorities focuses its conservation and the Panama Canal in association with the communities
environmental restoration programs. and local authorities. This joint participative and
integrated management approach with stakeholders
Watershed Vegetable Cover and has played an important role in the conservation of the
Soil Use Program environment and in the protection of water sources.
In general terms, the forest cover of the Panama Canal
Watershed has shown a favorable tendency during During the year 2012, the mature and secondary forest
the 2008-2012 period, and despitethe extreme natural cover was mainly reduced in the Chagres National
climatic phenomena that contributed to the cover’s Park, at the margins of the interoceanic route and the
reduction, there is natural regeneration and a positive headwaters of the Ciri Grande and Trinidad rivers.
impact as a result of reforestation activities performed by This was mainly due to the high precipitation during
Vegetable Cover and Soil Use in the Watershed, 2008 and 2012
Cover Surface (ha) 2012 2012% Surface (ha) 2008 2008%
Mature Forest 84,082.2 24.3 85,609.2 24.80
Secondary Forest 82,217.9 23.8 82,941.9 24.00
Bushes and Stubble 31,279.2 9.1 31,213.6 9.00
Reforestation 8,212.8 2.4 6,330.5 1.80
White grassland 6,474.8 1.9 6,946.8 2.00
Crops 3,218.4 0.9 1,996.4 0.60
Grassland 75,823.7 22.0 77,874.7 22.60
Bare soil 1,461.2 0.4 406.6 0.10
Population 10,397.2 3.0 10,218.7 3.00
Mining 859.3 0.2 488.3 0.10
Water 41,292.6 12.0 41,292.6 12.00
TOTAL 345,319.3 100.0 345,319.3 100.0
the climatic phenomenon “La Purisima” in the year 2010 and pesticides, cyanobacteria, protozoa and other
the strong rains in the year 2011, as well as the construction of biological indicators. In addition, wastewater
infrastructure in the Transisthmian Corridor during the last five quality was followed up on by participating in
years. The 2009-2012 period showed a deforestation rate of -0.27 the characterization and monitoring of different
in comparison with the 2003-2008 period. sewage discharges generated in the operations
of the Canal.
Water Quality and Quantity
The Panama Canal, as the water resources administrator for
Production of Drinking Water
the Panama Canal Watershed, is responsible for ensuring the
The water resources of the Panama Canal
quality and availability of water for human consumption as well
Watershed are the source for the water used by
as for the operation of the Panama Canal by means of complex
the treatment plants managed by the Canal,
forecasting systems, together with water quality monitoring and
flood control and prevention programs. benefiting approximately more than half a million
people in the cities of Arraijan, Colon, La Chorrera
Water Quality and surrounding areas; as well as Panama City,
The Water Quality Surveillance and Monitoring Program in the the district of San Miguelito and the Transisthmian
Panama Canal Watershed comprises natural water at stations Corridor towns. The Mendoza Treatment Plant,
located on tributary rivers and reservoirs in Gatun, Miraflores and with a production capacity of 40 million gallons
Alhajuela. This generates the water resources physico chemical per day, produces 31 million gallons supplying
and biological conditions data for better decision-making water to 125,000 recipients who have lived for
regarding policies, programs, and projects that contribute to more than 15 years without continuous access to
sustainable use and efficient water management. With regards to safe drinking water.
the monitoring of drinking water quality, samples were analyzed

for daily, monthly and quarterly assessments of processes with Climate Change
products of the three water treatment plants managed by the Recently the Republic of Panama has experienced
Panama Canal, Miraflores, Mendoza and Monte Esperanza. These some extreme climate events related to the
included, among others, testing for metals, organic compounds, climate change that our planet lives today.An
example of this was the climatic event that took place

The Green Route: The Route
in December 2010, “La Purisima”, caused by the 2010-
through Panama
2011La Niña phenomenon, which brought heavy rainfall
In a green economy framework, we are implementing a
for more than 21 days, causing harm to human and natural
comprehensive carbon management plan that includes
systems, related to the loss of human lives, millionaire losses
the development of a greenhouse gases baseline (GHG)
in agricultural production, infrastructure, and a reduction
for our operations and the establishment of a strategy for
in drinking water production for the provinces of Panama
the reduction and compensation of these emissions. We
and Colon.
are trying to mitigate the impact of our activities and to
reduce its carbon footprint in a proactive way, through
The Panama Canal has started looking for alternatives
the execution of reforestation projects and recovering
to face the challenges and opportunities of climate
degraded areas.
change through an integrating vision regarding social,
economic and environmental matters, including financial
The route through Panama is considered the green
mechanisms to implement actions that facilitate the
maritime route of the world, because of its contribution
application of mid to long term adaptation measures
to fuel use reduction per transported cargo unit by the
based on a sustainability culture oriented towards risk
vessels that transit through the Canal in comparison with
prevention.
other immediate alternative routes, reducing in this way
the CO2 emissions of the world maritime sector. With the
Under this approach, the Canal is bound to reduce the
Panama Canal Expansion, we expect to have twice the
Watershed’s social and natural systems vulnerability, the
cargo that transits today avoiding the emission of more
adverse impact of climate change and other risks related
than 160 million tons of CO2 during the first 10 years of the
to global warming, in order to increase the population’s
new set of locks, between the years 2015 and 2025. The
adaptation capacity to those events. The Green Route
Panama Canal offers the maritime industry a valuable
Program includes concrete actions implemented by the
alternative for the transportation of great volumes of
Panama Canal in the adaptation and mitigation of the
cargo through an all water route, with safety, low costs
effects of global climate change.
and effective Canal waters time, in addition to reducing CO2 promotes good production practices through
emissions and contributing with the international efforts to reduce the development of sustainable development
global warming. businesses.
As a goal, for the year 2012, we have certified our reforestation More than 800 farmers have already benefited
program and sustainable production models under voluntary by increasing their production performance to
carbon standard, set in the. The carbon standard combines plan their estates under sustainable livestock
the actions taken to improve the quality of life of Environmental and agriculture patterns. After four years of
Economic Incentives Program (EEIP) the communities, the implementation, the EEIP has benefited 2,180
conservation of biodiversity in the watershed and the mitigation people in 50 communities in the Panama Canal
of GHG emissions. It is expected to monitor and commercialize Watershed with a positive transformation of their
the emission reduction units or carbon credits in the voluntary environment.
market, which may be additional resources to replicate the
model in other watershed areas. These markets represent In addition, the program provides the recipients
an opportunity to market the captured CO2 through Canal the land titling administrative process, while
environmental initiatives and add value to the Panama route, creating legal security conditions and promoting
framed within the Panama Canal Green Route Strategy. the welfare of the inhabitants of the area. To
date, more than 2,250 farmers and watershed
Environmental Economic Incentives residents have received their land titles through
Program the National Land Management Authority
During a five year period, the EEIP, which is a very important (ANATI) and cadaster has covered 16,000
part of The Green Route Program, will recover and preserve 20 hectares in the district of El Cacao; 5,095 acres
thousand hectares in the Panama Canal Watershed, in degraded in Cirí Grande; 2,800 hectares in Santa Rosa; and
production areas and in the existent forests. This program 700 hectares in Cirí de Los Sotos.
Environmental Economic the sub basin of the Ciri Grande and Trinidad
Incentives Program 2012 rivers and includes a population of 200 producers
Modality Hectares
2009
Hectares
2010
Hectares
2011
Hectares
2012
Hectares
2013*
Total
(Has.)
in this zone.
Continuous areas 185 250 50 - - 485

The project’s overall objective is to promote
Agroforestry 300 320 400 400 400 1,820
coffee production improvement through
Silvopastoral 162 499 600 600 600 2,461
organizational support for producers and
Commercial - 609 111 - 380 1,100
Natural
establishing a sustainable and replicable
regeneration - - - 250 729 979
marketing model. Together with the direct
Forest enrichment
reforestation - 155 - - - 155 benefits to the families and local economy, the
Panama Canal anticipates the validation process
Subtotal (has.) 647 1,833 1,161 1,250 2,109 7,000
and voluntary international certification of the
*Projected
environmental benefits of carbon sequestration
The design and implementation of a program offering (CO2) stored in the vegetation and forest cover
environmental incentives to residents of the Panama Canal of these farms
Watershed is based on scheme implementation focused on

green production models, with the purpose of fostering a green Once the validation process of carbon credits has
economy in the Watershed. These schemes include agroforestry concluded, the marketing process will begin for
models, mostly shaded coffee production, which has restored the absorbed carbon units to be consolidated by
vegetation and increased crop yields, as well as improving 2013, by means of which ACP will facilitate the use
farmers’ income and quality of life. of market instruments that allow the economic
value allocation to environmental services
As part of this model, the Panama Canal and producers have provided by natural resources and ecosystems.
undertaken the strengthening and training of farmers in marketing This program would mitigate millions of tons of
of their products. This project comprises the low–middle part of CO2 by incorporating the agroforestry activities
described before. Further more, the integration of other The EPI has six components: (i) quality of effluents,
compensation mechanisms are being considered, like the (ii) emissions from stationary and mobile sources, (iii)
protection of forest areas through carbon schemes such as energy efficiency, (iv) carbon footprint (v) hydrocarbon
Reducing Emissions from Deforestation and Degradation management and regulatory compliance, and (vi)
(REDD). waste. By the year 2012, the EPI was of 73.14 percent. The
same was the result of evaluating the level of contribution
This system is expected to be of economic benefit for of each of these components to the environmental
the tons of CO2 absorbed in areas with forest cover in quality of the organization. The individual value of each
the Panama Canal Watershed. This would also protect of these components is explained below. For the EPI
thousands of acres of wooded sites located primarily monitoring was performed for effluent quality in 49 points
in the Chagres, Campana, Soberanía, and Camino de and determined that the discharged water quality meets
Cruces national parks. the limits set in Standard 2610-EAC-111, for ACP effluents
discharge.
Corporate Environmental
Performance The contribution of components of the emissions of
The Panama Canal established a Corporate stationary and mobile sources of EPI represented a measure
Environmental Performance Index (EPI) as a measure of of 83 percent of the vehicle fleet (100 operated with
the organization’s efforts to implement best practices, diesel and 400 with gasoline). These results indicate that
actions, regulations and environmental improvement 93 percent of the monitored fleet complies with the limits
to its overall activity, and henceforth operates under established in Standard 2610-EAC-112. On the other hand,
the cleaner production concept while maintaining an samples were taken of the emissions of the Miraflores
efficient environmentally friendly operation. Thermoelectric Plant in compliance with Standard
2610-EAC-112 and it was determined that they comply
with the established limits. Finally, emission measurements were strengthen processes for resource recovery and
conducted on 36 out of 66 reported vessels. The measurement ensure proper disposal of waste that cannot
results comply with what is stipulated in Annex VI of MARPOL. be exploited.Samples of effluents were taken
in 49 points as part of the EPI monitoring and it
In terms of energy efficiency, the traffic of cargo varied from was determined that effluents meet the quality
efficient to acceptable between consecutives periods, while standards set in 2610-EAC-111, for ACP effluents
diminished energy intensity in water sales improved from discharge.
acceptable to efficient in a consecutive period. The reduction
of the carbon footprint contributed significantly to the EPI, so the
Clean and Sustainable Energy
Another main objective of the Canal is to ensure
expected results were obtained according to the projections
the reliability of the power supply for its facilities
established for the fiscal year. The hydrocarbon management
and infrastructure and generate it in a more
component and normative compliance reflected a whole year
economical way and with environmentally
without reportable hydrocarbon spills that yielded a value perfect
friendly technology. Therefore, ACP has chosen
in this concept, while the value of compliance states that there
to replace the two steam turbines in the Miraflores
are areas that can be improved.
Thermal Power Plant for 39.34MW two stroke
engines. This was the chosen alternative because
The contribution of the EPI Waste component was 18.76 percent.
this engine generation has higher performance /
The municipal waste sent by ACP to Cerro Patacon and Mount
efficiency than four-stroke engines, gas turbines
Hope landfills was measured. This waste comprises a mixture
and steam turbines. This technology also
of domestic and organic waste, packing materials, paper
prevailed over the option of a power plant that
products and cardboard, scrap wood, plastic, and glass waste.
will use coal even though the latter represents
The objective of this measure is to promote the efficient use of
lower operating costs by using cheaper fuel,
inputs and materials to achieve a reduction in waste generation,
because it had the least environmental impact.
Solar and Wind Power Generation at and historical climatological statistics of wind
Mendoza potential of the area to determine if it is profitable
Currently, the Panama Canal is conducting a study of a 1.5kW to invest in the measurement of more accurate
pilot solar plant located in the Mendoza Water Treatment Plant. wind data in Mendoza.
This study involves the collection of immediate and cumulative

measurements recorded by a Shark 100 power meter with LAN Wind Measurement Tower at
connection. The data recorded by this meter is then analyzed Toro Point
and used to determine whether it is feasible or not to increase the During fiscal year 2012, ACP installed an 80
scale of the existing solar plant. To date, the solar plant at Mendoza meter high tower with its own speed and wind
has contributed with 2.5MW to the plant electric network. direction measuring equipment with the intention
of determining the precise wind resource present
The Panama Canal also intends to initiate an assessment of the at Toro Point. This information is of paramount
potential of wind energy production in Mendoza. In this sense, on importance considering that a good design for
October 5, 2012, a tender was put out for a study with satellite data the location of the meteorological equipment
and their proper installation on the measurement
Solar Generation at Mendoza
tower are essential to calculate the potential
350 3000
energy yield. If from these measurements it is
300 2400 2500 concluded that there is significant potential
2240
2116.13
250 19.37.34 for wind generation, the Panama Canal will
1817.43 2000
1668.02 perform a study to determine the feasibility for
KWh
200
1440.42
1500
1151.78 the installation of a wind energy park, which
150
863.74 1000 will include the capacity of the park in MW,
100
555.72
the estimated annual generation, generation
381.97 500
50
209.5
143 equipment costs, maintenance and operation
143 66.5 172.47 173.75 308.02 288.04 288.64 227.5 149.41 119.91 178.79 123.87 160
0 0
costs, and an estimated revenue from the sale of
r
ber
ber
ary
ary
April
May
June
July
st
r
mbe
mbe
mbe
Marc
Augu
Janu
Febru
Octo
m
Septe
Nove
Dece
Septe
this energy.
Month
Monthly Generation Cumulative Generation
Indicators
Panama Canal Watershed Conservation
Indicator Executed Performed Goal Frequency
2009-2012 2012 2013
(Hectares) (Hectares) (Hectares)
Total number of hectares reforested

in the Environmental Economic Incentive
Program (EEIP) 4,891 1,250 7,000 Yearly
Vegetation Cover and Use of Soil

Indicator Goal Goal Goal Frequency
FY12 FY13 FY15
Forest Vegetation Cover [1] ≥ 49% ≥49.5% ≥50% Five years
Water Governance
Indicator AF00/ REALIZADO META Frequency
AF12 AF12 AF15
Number of Established Local Committees 31 31 33 Yearly
Number of Established Consultative Committees[2] 6 6 7 Yearly
Panama Canal Watershed Sustainability

FY12 FY13 FY15
Panama Canal Watershed
Sustainable Index[3] ≥ 0.74 0.74 ≥ 0.75 Five years
Corporate Environmental Performance Index
FY12 FY12 FY15
Corporate Environmental
Performance Index [4] 73% 73% 74% Yearly
Water Quality
FY12 FY12 FY13
Water Quality Index (WQI)[5] ≥ 85 86 ≥ 85 Five years
[1] The indicator incorporates the following categories (i) mature forest; (ii) secondary forest; (iii) brushwood and stubble; (vi) crops, (vii) grassland, (viii) bare soil, (ix) villages and (x)
mining. The presence of forests according to the land use provisions of the above categories must be greater than 30% to be considered a well-preserved forest and productive. The
Panama Canal Basin has more than 48% of its territory with well-preserved forests and also can establish a favorable trend in the increase of vegetation cover. (iv)reforestation ; (v)
white grass; (vi)crops; (vii)pasture; (viii) bare soil; (ix) settlement; (x)mining. To be considered a well-preserved and productive forest, the rate should be higher than 30% depending
on the above mentioned categories. Over 48% of the Panama Canal Watershed territory has well-preserved forests and, in addition, there is a favorable tendency to increase the
vegetation cover.
[2] Local Committees per sub- watershed are autonomous bodies that coordinate with the ACP the socio-environmental management of the Panama Canal Watershed, Local
Committees are composed of local authorities; the health committee; church representatives; sports committees; parents associations; the local board; agricultural organizations;
housewives; and the water committee, among others. The Watershed Regional Consultative Boards are consultative and collaboration bodies that involve all sectors and social
groups present or with interest in the watershed. These boards, in conjunction with the governmental institutions, are in charge of developing actions, programs, and projects
to comply with the environmental and sustainable development standards per region and, hence in the Watershed. These participative community bodies, together with the
institutional intervention, contribute to build sustainable processes and awareness about the environmental situation of communities and the region, and how water resources are
being affected by human activities that are conducted within the Watershed.
[3] The Panama Canal Watershed Sustainable Index (WSI) is a composite indicator that measures the condition of the watershed in the following terms: (i) quality of water; (ii)
vegetation cover; (iii) environmental policies, and (iv)human development. The sustainability index of the Panama Canal Watershed is higher than 0.74, which indicates its sustainable
management. Through this index, the sustainability of a watershed in present and future scenarios can be forecasted.
[4] EPI includes the following components: training, regulatory compliance, environmental investments, emissions, effluents, water quality, and forest cover. This index is under
construction and all the measurement criteria should have been defined in accordance with their applicability within the operations of the Panama Canal for the year 2012.
[5] The Canal Watershed 2012 Water Quality Index reports an overall WQI value of 86. This value determines that the quality of water ranges from good to excellent (range 71-90).
Human Capital
Human Capital competitive advantages. This vision includes
In the Panama Canal Authority we are very demanding with all people with disabilities, of different gender,
aspects of our operation, a complex undertaking that would not be culture, race, and ages.
possible without the solid base of a qualified workforce committed
with their daily task of providing a continuous, efficient, and safe While the gender indicator has few variations, it
service. can be observed that there is an increasing trend
over time for women working in Non-traditional
For this reason, the human capital is highly valued by the Panama positions, which affirms the importance of equal
Canal Authority, which has human management practices opportunities in the participation of both men and
focused on building and strengthening close ties of mutual women in the development of canal operation
loyalty and commitment by establishing relationships and working activities.
conditions that encourage knowledge, efficiency, innovation,
communication, and responsible performance. This results in
a work environment that contributes to the sustainability of the Employees by Gender
2010 2011 2012
company and country and allows for employees to fully develop
Men 8,478 (87%) 8,724 (87%) 8,933 (87%)
personal, professional and family life projects.
Women 1,281 (13%) 1,330 (13%) 1,329 (13%)
The ACP is committed to continuous training, a vision of a long

term career, skills development, and supporting a great team with
benefits that enable employees to balance work and personal life. The Panama Canal Authority provides all qualified
The Panama Canal has been recognized as one of the best rated individuals equal employment opportunities in
companies in the country. accordance with all applicable laws. The ACP
is committed to administer policies, programs
Team Profile, Equality and personnel practices in a non-discriminatory
and Integration manner in all the aspects of employment, including
By managing the diversity of the Canal workforce, it has been recruitment, hiring, work assignments, promotions,
possible to turn the different views, opinions, and personalities of transfers, terminations, salary administration, and
the people in the organization, which have into one of our greatest selections for training.
Distribution of Men and Women

by Supervisory Position
Year Level of Supervision Men Women Total
2010 Executives/Managers 82 26 108
Supervisors/Leaders 948 120 1068
Non-Supervisory 7448 1135 8583
Subtotal 8478 1281 9759

Subtotal 8724 1330 10054

Subtotal 8933 1329 10262
Managers and supervisors are responsible for maintaining to encourage and support new student generations to
a work environment that is free of discrimination and for develop technical and professional careers in the field
promptly identifying and resolving any issues related to of science. The program has an estimated duration
equal employment opportunities. of 6 to 12 months and 70 applicants were selected for
internships in different industrial and technical areas of the
Managing Team Knowledge Panama Canal. It included orientation training on safety,
ACP fulfills its commitment with the overall development
corporate values and also practical supervised work by
of its workforce through various programs that facilitate
field personnel with vast experience. The program focuses
employees´ performance in their everyday duties to
on technical areas of interest to the Canal, such as
generate excellent results.
electricity, electronics, telecommunications, mechanics,
and metalworking. The students are from different areas
The Supervisory Development Program continued
of the country, such as Colon, La Chorrera, Penonome,
successfully throughout fiscal year 2012, and a total of
Chitre, Las Tablas, Santiago and David, in addition to
87 supervisors completed the program, adding up to
Panama City.
461 supervisors in the operational areas. Similarly, the
Technical and Craft Development Program and the
One year after having initiated, the Canal Executive
Upward Mobility Program had 85, 53 and 32 participants,
Leadership Program (PLEC), which is designed to develop
respectively, which concentrated on the trades for
and strengthen the visionary and strategic leadership
Electricians, Pipefitters, Industrial Equipment Mechanics,
of the current and next generation of executives in the
Machinists, Dredge Mate Trainees, Crane Operators,
Panama Canal, 22 participants completed the training.
Electrical Equipment Repairers, Welders, Roofers,
Rigging Workers, Asphalt Workers, Firefighter (Trainees),
For seven consecutive years, the Academic Excellence
Heavy Mobile Equipment Mechanics, Shipwrights, and
Program has provided and continues to provide
Locomotive Operators.
an opportunity to students with excellent academic
performance to have contact with the reality of
The Towboat Master Development Program had 24
professional practice. There were 16 participants in fiscal
participants. Also, a new program for college students,
year 2012, for a total of 226 during the last 7 years.
“Panama Crece” (Panama Grows), began which aims
Within the framework of the management of Corporate Social North Carolina State University, in the United
Responsibility, the ACP continues to offer training opportunities States of America; another for a Masters degree in
to employees with incomplete secondary education. To help Automation and Controls at Newcastle University,
employees to obtain higher levels of education, the Programa in the UK; and a third one for a Masters degree in
Maestro en Casa (The Home Teacher Program) helps 18 participants Mechanical Engineering with a major in Turbofluids
to obtain a middle school diploma and Tecnoeducame or Turbomachinery at Purdue University, in the
(Technoeducateme), a program designed to obtain a basic high United States.
school degree, had 158 participants for a total of 388 in the past
two years. Labor Relations and
Collective Bargaining
The ACP is participating in an educational cooperation agreement The Panama Canal respects the freedom of
between SENACYT, IFARHU and ACP to allow employees to apply association and recognizes the right to collective
for scholarships to pursue graduate education at the Master´s bargaining. Evidence of this is that by the end
level, so that upon their return this will benefit their work area. of the year 2012, 91.2 percent of the workforce
During fiscal year 2012, 3 employees were granted scholarships, belongs to one of the 6 bargaining units
recognized by the Panama Canal Authority. The
one to study a Masters in Geographic Information Systems at
distribution of the 9,253 employees who belong to
the bargaining units is as follows:
Training Instances by Training Areas
Area FY-10 FY-11 FY-12
Members of the Percentage of
Maritime Training 2,253 2,357 2,863 BU (up to October Workers Covered
2012) by BU
Industrial and Safety
Training 11,398 13,011 8,796* Firefighters 68 0.7%
Professional Development Towboat Captains and
Training 17,552 19,877 18,613 Towboat Masters 227 2.2%
** There is a decrease in the training instances in the industrial and safety areas, as currently resources Marine Engineers 186 1.8%
are being devoted primarily to the Technical Development Program, where the training is aimed at
a smaller group of participants, having an impact on the number of instances, but nevertheless, Non Professional 8306 81.9%
increasing the number of hours of training.
Professional 181 1.8%
** The professional training area remains within the natural range of instances, as it must be Pilots 285 2.8%
understood that it has a linear growth, where the Program of Values and the Ethics courses which
mostly affect the number of training instances, have a similar annual range every year, but within Total 9253 91.2%
the range.
Based on the central tenet of labor relations in the Canal, The Board of Labor Relations, consisting of five members,
which encourages teamwork and cooperation in the was established by the Organic Law of the Panama Canal
resolution of conflicts, in 2012 the Corporate Labor Relations Authority for the purpose of promoting cooperation and
Section focused on the instances of orientation, training, understanding in good labor-management relations and
and presence in the areas, and continued to encourage to resolve any labor-management disputes under its
dialogue and agreement between the parties, as well exclusive jurisdiction.
as the use of alternative methods for conflict resolution.
This resulted in the resolution of 28 attempts of unfair labor Success and Recognition
practices, 6 unfair labor practices, 39 informal complaints At the beginning of each fiscal year, 100 percent of the
and 9 formal grievances, in addition to 16 requests for workforce are informed of their performance expectations
intermediate negotiation which did not escalate to and are evaluated on a yearly basis, to facilitate their
negotiability disputes. continuous improvement and development within the
company.
Moreover, the continuing and tireless work of the
collaboration forums, such as the Employer-Labor Similarly, through various recognition programs, the ACP
Council and the input from technical committees, as is promotes a culture of respect and recognition for those
the case of the Industrial Training which is supported by achievements that exceed everyday expectations. For
the Administration and the workforce, have contributed fiscal year 2012, 7,416 recognitions were granted.
significantly in the exchange of ideas on topics of general
interest regarding work environment, training, and safety. Support for Workers Who Retire
As recognition for their work in the Canal, the Panama
As a joint effort between the Exclusive Representatives and Canal Authority has established an integral program to
the Panama Canal Authority, the nomination process and benefit workers by providing on a mid and long term basis
training of candidates as members of the Labor Relations the opportunity to plan for their retirement and to maintain
Board was successfully completed this year. their quality of life during that stage. The program creates
greater mobility and development opportunities; and
promotes a savings culture.
Indicators
Human Capital
2010 2011 2012

Permanent 8.175 8.404 8564
Temporary 1.584 1.650 1698
Total 9.759 10,054 10,262

Fiscal Year FY-09 FY-10 FY-11 FY-12
Turnover Rate 2,50% 3,00% 2,60% 1,90%

Average Age of Permanent Employees 47
Average Age of Temporary Employees 36

Women Men Total
Employees by Level of Education 1329 8933 10262
Less than High School 3 955 958
High School or Vocational Education 139 4360 4499
Tertiary Education 150 730 880
Undergraduate Education 490 2079 2569
Graduate Education 539 794 1333
Doctorate or Professional Degree 8 15 23
Women in Non-Traditional Positions
Year No. of Women Increase

2007 97 8
2008 123 26
2009 124 1
2010 126 2
2011 141 15
2012 155 14
Community and Volunteering
Gettin Closer... in David (Chiriqui), Santiago (Veraguas), Las Tablas

(Los Santos), Chitre (Herrera), Aguadulce (Cocle),
with the Community Panama City, and for the first time, the Panama
This is how thousands of Panamanians who participated in the
Eastern region, known as the “24 de Diciembre”
various programs and projects organized by the Panama Canal sector.
feel today. These activities are carried out by the ACP as part of
its commitment and outreach efforts to bring the waterway to the “La décima del diablico”, a popular traditional
population. poetic piece produced specially for the
Cultural Summer Program, and the concert
During fiscal year 2012, the Panama Canal launched a new given by Rubén Blades on the staircase of the
Administration Building and in Chitre, was another
educational project that left its footprint on more than 40,000
way in which the Panama Canal contributed to
students from 34 public and private schools in the provinces of
the development of the country.
Panama (East, West and San Miguelito), Colon, Cocle, Herrera, Los
Santos, Veraguas and Chiriqui. Due to the growing interest of the population
in learning more about the waterway, and the
With the support of the Ministry of Education, the project “Reto Panama Canal’s commitment to providing
Canal de Todos” became, in its first pilot phase, the means information on progress made by the Expansion
by which the Panama Canal became the discussion topic of Program, the Observation Center of the Expansion
on the Atlantic side was inaugurated this year.
thousands of youngsters, especially students from 7th, 8th and 9th
This is a new visitors’ site where the Panamanian
grade, who tested their knowledge of the waterway through a
people and the general public can witness the
dynamic contest.
historic construction of the new Panama Canal
locks.
The project’s impact is evident in the testimonies of students who
participated in the “Reto Canal de Todos”, and transited the Located in a place with a magnificent view,
Miraflores Locks aboard the training vessel Atlas, as a reward for the new center complements the experience
being winners in their respective schools. of learning first-hand about the Panama Canal
together with the Miraflores Locks Visitors
Center (CVM), which also underwent significant
Another project that helped the Panama Canal “connect” with
enhancements such as the new exhibition hall
generations of Panamanians from different regions of the country
and technological innovations such as the first 3D
was the Cultural Summer Program, which this year brought together movie of the waterway.
some 50,000 people who enjoyed artistic and cultural presentations
Both the Miraflores Locks Visitors Center and the Gatun awards of contracts and purchases of construction works,
Observation Center received more than 800,000 people goods, and services 24 hours a day, from any part in the
who came to visit the Panama Canal in fiscal year 2012. world. On fiscal year 2012, the Panama Canal:
Direct contact with the Panamanian people is evident in • Posted approximately 9,800 purchases, received
the 15 Information Centers the Panama Canal operates in 27,000 offers, and awarded 8,400 contracts.
several provinces in the country. These Infocenters were • Administered B/.631 million in investment projects,
visited by approximately 155,000 people, of which most awarded 127 new investment contracts for a total
of them were students who use the computers with free amount of B/. 31.4 million, reaching a cost performance
Internet access, or the facility as a study area, as well as indicator (CPI) of 1.02 and a Schedule performance
hundreds of adults who attend training courses or seminars Indicator (SPI) of 1.0.
at these Infocenters. • Processed more than 2,000 centralized purchase
actions for B/.495 million and 17,871 decentralized
Hand in hand with technological innovations, the Panama purchase actions for B/.29 million.
Canal remains an active voice in social networks. Almost
50,000 friends follow their Facebook, Twitter and Instagram The Panama Canal, as part of its transparency and
accounts. This has created a dynamic community that
accountability system, has a simple protest system that
shares and talks directly with the Canal.
can be easily used by vendors to protest and file claims for
the list of requirements of the tender documents, contract
With Our Suppliers and the award acts, and the disqualification of vendors. During the
Transparency last two years there have only been claims for 0.23 percent
The contracting system for the acquisition of works, goods of the awards, as proof of the trust that vendors have on
and services necessary for the functioning, maintenance,
the system. Almost 35 percent of these protests were
preservation, modernization, and expansion of the Panama
solved in favor of those that used the tool, showing that
Canal communicates and promotes the Panama Canal´s
it brings forth the effective revision and reconsideration of
corporate values, particularly transparency and honesty.
the facts that motivated the protest.
The online tender system is the portal used by the Panama

Canal to make public all information related to purchases, Fair business practices in the value chain begin with ACP’s
to receive offers and inform the general public about the Organic Law, which states that contracting is based
on promoting full competition, reasonable flexibility in designs in favor of better education for students in official
and specifications in order to promote contractor participation, schools in the Panama Canal Watershed (PCW)
impartial decisions and equity in the relations with contractors. In benefiting more than 500 students. Identified with
compliance with these guidelines, the Panama Canal Acquisition this goal, more than 100 volunteers joined the
Regulations establish the obligations for suppliers and contractors, initiative to rehabilitate the existing infrastructure
and determines the rights the ACP is obliged to respect. of the General Basic Education Centers (CEGB)
in Boqueron Abajo and Boqueron Arriba, both
The Canal accepts that contractor employees frequently located in the province of Colon. During several
need protection, for this reason contractual clauses have been weekends the volunteers worked side by side with
established in order to protect them, such as a mandatory parents and teachers to carry out the activities
minimum wage, the requisite of presenting a good standing planned. These included painting the schools
certification from the Social Security, and the commitment to and classrooms, in addition to wiring and installing
make as an integral part of its strategy and operations looking after lamps for classrooms, refurbishing kitchens and
and promoting its among suppliers and contractors the principles existing bathrooms.
of the UN Global Compact. This compact commits the Panama
Canal to disseminate its principles and protect the worker’s rights.
As part of the efforts carried out in the communities
of the PCW, corporate volunteers assumed the risk
With our Corporate Volunteer Program of making a dream come true: to light the school
The Panama Canal volunteers are the “multiplying force” of the
of the community of La Tranquilla, located in the
Corporate Social Responsibility Program. Aligning their efforts
Chagres National Park, with solar panels. Because
with the goals set by the Administration, their activities during
of its location, this community does not have
this period were clearly committed to education. The objectives
access to traditional electricity, which affected
of the Volunteering Program are oriented to transforming the
the quality of education provided in this school.
communities in which they are involved by improving the conditions
They assumed the challenge, obtained a donation
of school facilities, while promoting the welfare of collaborators
of a solar power plant for the school and all the
and their families through seminars and advocacy campaigns that
necessary items in order to provide the school with
strengthen and promote social awareness.
electricity. After transporting all the equipment in
canoes to the site, the installation and wiring of
More than 3,500 hours were dedicated to corporate volunteering
the plant took a weekend. This event changed
activities during this period, contributing their time, work and talent
forever the way that children who were benefited will receive their All these renovations were made thanks to the
classes. To ensure sustainability of the project, volunteers trained contribution of the Panama Maritime Chamber,
teachers and parents to safeguard and maintain the equipment which granted funds for the purchase of
installed. Another community school which benefited from the construction materials.
volunteer projects during this period was the community of Santa
Librada, located on the banks of the Boquerón River in Colon. The Furthermore, at the end of the reporting period,
rehabilitation of existing infrastructure of this community school we concluded the comprehensive rehabilitation
was a challenge for the corporate volunteers who participated of the Palmas Bellas de Tortí CEBG located in
the District of Chepo. This was one of the goals
during a weekend of hard work. Co-workers from different fields
of the Corporate Volunteering Program in fiscal
worked together with the community and shared basic knowledge
year 12, which involved the construction of four
on construction, masonry and electrical wiring works. Taking
classrooms, a library, a laboratory, bathrooms
advantage of the recent donation of solar panels to the school,
and a kitchen; in addition to the rehabilitation of
volunteers wired and installed electric lights in the dining room, the
existing basic infrastructure. This project included
kitchen and the classroom. They also rebuilt the foundation of the the participation of more than 250 corporate
classroom floor, toilets and painted all the school. volunteers, an investment of 38,946 voluntary
hours and financial support of Club Activo 20-30
Other educational centers of the PCW such as the CEBG John F. for the purchase of construction materials.
Kennedy and the schools at La Florida and Nueva Arenosa also
benefitted from the volunteers’ work. Some of the works that were This year the Panama Canal joined efforts to
carried out in these schools included electrical works, painting and strengthen its commitment to Panamanian
rehabilitation of the existing classrooms, parks and recreational education with the participation of 201 children,
areas. more than 20 teachers and parents from schools
located in remote places of all the provinces of
the country. The Children to the Canal Camp
These school renovation efforts in the PCW were complemented
Program takes place once a year and it is the
with a visit to the Panama Canal by students from the schools
activity which gathers the largest number of
that had received assistance. These students learned about the
corporate volunteers. The main objective of the
Canal’s history, operation and progress of the Expansion Program.
camp is to offer the little guests knowledge and
tools to set their own goals and achieve their
personal development.
This year workshops were delivered using recyclable awareness on general interest topics. This year it supported
materials in which children were taught the value of the the Pink Ribbon Campaign of Fundacáncer, the Relay for
resources they have at hand. These activities included Life of the Foundation of Friends of Children with Leukemia
a painting workshop where they had the opportunity to and Cancer, the Hour of the Planet, the Special Olympics,
explore their artistic talents. The renowned Panamanian Teleton 20-30 and the cleanup of beaches, coastlines
painter, Olga Sinclair, gave a master class; the Mini and rivers. A total of 170 volunteers invested 705 hours of
Olympics, where the volunteers of each department volunteer work supporting these efforts.
sponsored a particular game and the children tested
their physical and intellectual abilities, and encouraged Under the new slogan “Reduce Your Impact”,
them to continue growing on the path of excellence the Recycling Program received support from 91
and recognized their participation with a medal of merit. environmental ambassadors who were volunteers and
Additionally, they had an artistic and cultural evening; spokespersons of the awareness message which is part
and toured the Miraflores visitors center, the Smithsonian of the 3Rs Program: Reduce, Reuse and Recycle. During
Exhibition Center, “Explora” and different highlights in this period, the program collected cardboard items, glass,
Panama City. All these activities represented a total of plastic, newspapers, tetra packs, amounting to more than
4,639 hours of voluntary work and participation of 268 35 tons of recyclable material. Simultaneously, workshops
volunteers. and competitions were organized to raise awareness and
teach about best practice recycling to both Panama
The Panama Canal volunteers also dedicate their efforts Canal employees and PCW teachers and students.
to help their co-workers in activities such as the Family
Seminar, which was held in the Atlantic Side during this The Social Responsibility Team is proud to have the support
period. With over 200 participants, this seminar provided of a growing number of corporate volunteers as part of
Canal employees and their families with tools to achieve this network. During fiscal year 12, it increased to 1,800
a work-life balance through entertaining lectures by volunteers, including employees, dependents and retirees
corporate volunteers. A total of 32 volunteers spent 344 that dedicate their time, effort and talent to the projects
hours in the preparation and execution of this seminar. undertaken. A total of 52,475 hours of volunteer work were
invested during the reporting period, showing a level of
The Volunteer Network also supported Non-Governmental commitment that surpassed the expectations of hours
Organizations (NGO) initiatives targeted at raising social accumulated this year.
Finance
Financial Management which added up to B/.1,852.4 million, some

B/.122.5 million or 7.1 percent more than fiscal
At the end of fiscal year 2012, the Panama Canal Authority (ACP)
year 2011, resulting from the combined effect of a
once again excedes its tonnage, revenues, and direct contribution 3.6 percent increase in the PC/UMS tons, and the
to the National Treasury goals. This reaffirms Panama’s ability to impact of the toll rates implemented in January
manage the Canal with high levels of productivity, safety and 2011.
reliability in its operations, as well as prudence in the administration Revenues
of risk and expenses, and full utilization of its installed capacity, (in millions of balboas)
while maintaining a competitive and sustainable position at the 3,000
service of world maritime trade. 2,500 2,319 2,411
1,962
2,000 1,852
1,730
The budget approved by the National Assembly for 2012 fiscal

1,482
1,500
period, from October 1, 2011 to September 30, 2012, projected 1,000

395
332.5 million PC/UMS tons (Panama Canal Universal Measurement
401
500 320 163
170 188
System), with total revenues of B/.2,398.9 million and B/.950.7 0

2010 2011 2012
Fiscal Year
million in direct contributions to the National Treasury. Toll Revenues Transit Related Service
Other Revenues Total Revenues
Fiscal year 2012 ended with a new historic record of 333.7 million The full container vessels, the dry bulk carriers,
liquid bulk carriers, and vehicle carrier segments
PC/UMS tons, a total revenue of B/. 2,410.8 million, 1.2 million tons
increased in fiscal year 2012, with percentile
and B/. 11.9 million more than what had been estimated in the
increments exceeding 4 percent.
budget. Total direct contributions to the National Treasury were
B/. 1,015 million, exceeding by 6.7 percent the amount budgeted. Tons Distribution
PC/UMS by Vessel Segment
This extraordinary financial and operational performance was the
Var. vs
3% 3% 3% 4%
result of excellent resource management, regardless of the weak SEGMENT PC/UMS FY2011
11%
recovery of the economy and world commerce. Container 119.9 5.4%
Dry bulk 83.4 4.2%
15% Liquid bulk 51.7 5.4%
Revenues and Expenses Vehicle Carriers 37.7

Refrigerated Cargo 10.2
8.6%
20.7%
The Canal ended fiscal year 2012 with total revenues of B/.92.4 Passengers 9.1 16.5%
General Cargo 9.2 0.3%
million or 4.0 percent more than fiscal year 2011. This revenue 36% Others 12.6 7.3%
growing performance has been driven mainly by tolls revenues, 25%

Revenue from transit related services represents 16.4 percent of the

total revenue, representing B/.395.5 million, a slight 1.3 decrease
with respect to what was invoiced during fiscal year 2011. This
was mainly the result of a minor reduction in the number of transit
reservations due to customers adapted their operations to the
weak recovery of global trade.
The Canal generated during fiscal year 2012 other revenue that is
not related to the transiting of vessels for a total amount of B/.163.0
million, which represents a 15.4 percent increase with respect to
the this fiscal year’s budget.
Other Revenue
Energy, Water, Interests, Miscellaneous
140
125
120 113
100
97 ACP’s management of liquidity generated with
Millollion of Balboas
80
B/.22.8 million as interest earned on time deposits
60
and investments in securities, which represented
40 an increment of B/.0.6 million or 2.6 percent
23 26 26
20
20 15 22 15 23 17 with respect to fiscal year 2011, as a result of
0 an increase in profitability due to investments
2010 2011 2012
Fiscal Year made with better return on investment rates.
Sale of Electricity Water Sales
Interests Earned Miscellaneous Finally, miscellaneous income resulting from the
The income for the sale of surplus electric power reached B/.97.1 occasional or recurring commercialization of
million, 22.5 percent less than fiscal year 2011, resulting from a 21.7 technology, infrastructure, installed capacity,
percent energy production due to a reduced participation in the from the sale of excess property, the concession
national electric sector. On the other hand, the sale of potable over land or space, among others, generated
water contributed B/.26.5 million, an increase of 3.8 percent B/.16.6 million, at the end of fiscal year 2012 which
with respect to fiscal year 2011, supported by an increase of the reflects a 12.6 percent increment with relation to
production at the Mount Hope Plant due an increment in the the previous year.
consumption of Colon City, and due to a greater demand in the
production of the Mendoza water treatment plant after the IDAAN The total operating expenses for fiscal year
increased its distribution network capacity. 2012 equal to 28.3 percent of the total income,
Income vs expenses
3,000
2,411
2,500 2,318
1,972
Million of balboas
2,000
1,500
1,000
589 640 683
500
0
2010 2011 2012
Fiscal Year
Income Expenses
adding up to B/.682.6 million, 2.8 percent under the expenses and rights per ton budgeted due to the efficient
amount budgeted for fiscal year 2012 as a result of the and responsible management of resources.
efficient administration of resources and savings achieved
mainly in: non-personal services contracts (B/.34.3 million), The net profit of B/.1.2585 million exceeded by B/.29.0
materials and supplies (B/.5.3 million), fuel (B/.3.6 million), million or 2.4 percent that of fiscal year 2011. Based on this,
and insurance (B/.2.2 million). the Board of Directors establishes the necessary reserves to
fund the capital and equity reserves investment programs.
The increase of the total revenue and expenses, in Net Income
comparison with fiscal year 2011, is related with a higher (in millions of balboas)
rate of activity of the transit business, driven by the net 1,400 1,229 1,258
tonnage volume that transitted through the Canal. The 1,200 964 624
92.4 million revenue increase between fiscal years 2011 1,000 555
800 493
and 2012 is just a little more than twice the increment of 600
the expenses for the same period, which is 42.4 million. 400 674 635
200 471
Operating Profit
0
2010 2011 2012
Fiscal Year
The profit before taxes, depreciation and amortization Reserve for Suplus Distribution
(EBITDA) for fiscal year 2012 was B/.1.345 million, a B/.28.9 Unappropriated Retained Earnings
Net(Loss) Income
million increase or 2.2 percent more than the budget
Of the capital investment programs, we can point out
approved for this fiscal year, as a result of B/.12.0 million
that the Expansion Program reached a 47 percent
more in the operating income and B/.16.9 million less in the progress at the end of fiscal year 2012 and it has had a
EBITDA substantial increment in the intensity of the execution of
1,600
the construction works of the new locks, specifically the
1,400 1,309
1,345 pouring of concrete.
1,200
1,039
Together with the Expansion Program, the Canal keeps
Millions of balboas
1,000
800
making capital investments in different areas of its
600
operation, maintenance of the navigational channel,
400
equipment and machinery modernization, as well as
200
information technology systems, in order to increase
0
reliability and respond to the market’s demands. In this
2010 2011
Fiscal Year
2012 regard, ACP executes investment projects approved for
fiscal year 2012 for B/. 396.9 million are part of a portfolio of
*Considering fees per net ton and public services as expenses.
multi-year projects in the order of B/.1,7426 million.
The Canal is transformed as the capital investment

Regular Investment Program* Budget
Multi-Year
Project
Projects FY2012 Total Amount
projects advance. At the closing of fiscal year
Bridge proposed at the Atlantic end of the Canal 263.9 325.0 2012, B/.2,338.2 million or 47 percent of the fixed
Straightening / Widening of Culebra Cut 52.3 249.9
Replacement of Operations Department assets correspond to construction in process (CIP)
Fuel Barges 12.5 12.7 associated with the Expansion Program works that
Improvements and Repairs of the Embankments in Gatun Lake 9.5 40.7
Construction of the Building for the Operations Department in West construct the Third Set of Locks.
Corozal 6.8 17.2
Expansion of the Launch and Towboat Landing in Paraiso 4.9 5.1
Replacement of Vehicles 3.0 32.2 The Canal equipment constitutes 17 percent of the
Panama Canal Watershed Environmental Economic Incentives
Program 2.3 20.0
fixed assets, out of which 55 percent are floating
Other Projects (97) 41.7 1,039.8 equipment (dredges, drillboats, tugs, cranes and
Total B/. 396.9 B/. 1,742.6
*Excluding Expansion Program
boats), 14 percent are locomotives and the rest
correspond to mobile equipment, information
Assets technology equipment, and others.
As of September 31, 2012, the Canal closed its fiscal year with total
assets of B/.8,435 million, distributed in: B/.2,815 million in current
assets or 33 percent of the total assets; and B/.5,620 million in non- Fixed Assets Composition
current assets or 67 percent of the total assets, out of which B/.5,022 Property, Plant and Equipment 20%
million correspond to property, plant and equipment.
20%
Assets Distribution 17% 47%

(in millions of balboas)
14%
2%
0 100
4,499 5,620
Buildings Infraestructures Equipment Lands CIP-Expansion
3,474
2,815
The navigational channel and the landings equal
2,797 3,165
to 56 percent of all the structures and the rest
2010 2011 2012
consists of the locks, dams, spillways, and other
Fiscal Year structures.
Total of the Current Assets Total of the Non-Current Assets
Financial Indicators turnover. This result was expected during the execution
The Panama Canal´s financial performance indicators period of the Expansion Program once the Third Set of
remain at robust levels. In fiscal year 2012, 0.52 cents of Locks is working, once the project is completed.
net profit were generated for each balboa of income.

This profit margin confirms the Canal´s wealth generating The equity multiplier or assets leverage demonstrates the
capacity, even while under weak upturn of world trade Canal’s capacity of financing investments mainly with its
and the substantial capital investment being made. own resources. For fiscal year 2012, you can observe a
1 percentage point increase when compared with the
A 28.6 percent turnover of assets demonstrates a 2 previous year, as a result of the long term B/.100 million
percentage points reduction in comparison with fiscal disbursement for the financing of the Expansion Program.
year 2011, mainly for the 29.3 percent increase of the fixed
assets resulting from the construction works related to the A return on equity of 18.7 percent demonstrates the
Expansion Program. efficient administration of ACP’s capital investment,

validating its capacity of generating income and value in
The return on total assets had a 1 percentage point a sustainable manner.
reduction in 2012, in line with a decrement in the asset
Return on Sales (ROS)

Dupont Analysis
53% 52%
49%
Return on Assets (ROA)
2010 2011 2012 16%

15% 15%
Return on Equity (ROE)

Asset Turnover 2010 2011 2012
20%
18% 19%
31% 30%
29%
Equity Multiplier 2010 2011 2012

2010 2011 2012
20% 1.15% 1.24% 1.26%
20% 2010 2011 2012
47%
Contributions to the National Treasury Fee per Net Ton and

Direct Contributions Public Services
The Canal generated surplus for B/.634.8 for fiscal year 2012, which Actual vs Budget
represents an increase of 11.4 percent with relation to what was 390 383 381
approved in the budget for fiscal year 2012, which was B/.569.9 380
369
370
million. This surplus exceed by 136 percent the minimum established
Millions of balboas
360
by Law 28 of July 17, 2006. 350 344
343 345
Surplus 340
330
Actual vs Budget 320
2010 2011 2012
800
Fiscal Year
700 674 Actual Budget
635
600 570
Millions of balboas
471 494
500
411
400
200
Law 28 Minimum Surplus B/. 269 M
100
0
2010 2011 2012
Fiscal Year
Total Direct Contributions
to the National Treasury
Actual Surplus Budget Minimum Surplus
The total fee per PC/UMS tons and the rate for public services
Actual vs Budget
was B/.383.3 million, exceeding by B/.2.5 million the amount
1,200
budgeted. In 2012, the direct contribution to the National Treasury 1,043
839
1,018
951
1,000
was B/.1,0147 million, exceeding the budget by B/.63.9 million and 815
Millions of balboas
800 754
B/.450.1 million or 78.6 percent, which is the minimum required by 600

Law 28 Minimum Level B/. 568 M
Law 28 of July 17, 2006. 400
200
0
From the beginning of the Canal Expansion Program in 2007 to 2010 2011 2012
date, the total contributions to the National Treasury add up to Fiscal Year
Actual Surplus Budget Minimum Level

B/.5,218.4 million, which equal to B/.1,501.5 million or 40.4 percent
more than what has been projected in the Panama Canal Master
Plan for this period.
Total Direct Contributions to Indirect Contributions and

the National Treasury Other Contributions to the
Actual vs Master Plan - FY 2007 to FY 2012
1,600 Actual Contributions: B/.5,204.1 millones National Economy
Master Plan Contributions: B/.3,716.9 millones
1,400
In addition to the direct contributions, the Canal
1,200
1,043 1,018
contributed indirectly to the State by means of
Millions of balboas
1,000
847 780 815
727
800
556
701
575 595 619 645 income tax, social security, and educational
600
400 insurance for B/.137.2 million. Other contributions

200
to the national economy include the payment of
0
2007 2008 2009 2010 2011 2012 net wages in the order of B/.689.1 million and the
Fiscal Year
Actual Contributions Master plan procurement of goods and services from local
suppliers.
Total Direct Contributions to Indirect Contributions to the National Treasury

the National Treasury
Actual vs Master Plan Income Tax B/. 52.6
Accumulated Totals from FY 2007 to FY 2012 Social Security 75.5
6,000 Educational Insurance 9.1

5,204
5,000 Total B/.137.2
Millions of balboas
4,186
4,000 3,717
3,143
3,000 2,990
2,328 2,345
2,000 1,725
1,131
847 1,546 Other Contributions to the Economy
1,000
556
0
Net Salaries Paid to Panamanian
2007 2008 2009 2010 2011 2012 Employees B/.294.5
Fiscal Year
Actual Contributions Master plan

Purchase of Goods and
Services to Local Vendors 394.6
Total B/.689.1
Financial Statements
(Translation of financial statements originally issued in Spanish)
Autoridad del Canal de Panamá

Financial Statements
CONTENTS
Independent Auditors’ Report 1
Statement of Financial Position 2
Income Statement 3
Statement of Comprehensive Income 4
Statement of Changes in Equity 5
Statement of Cash Flows 6
Notes to Financial Statements 7 - 38

Ernst & Young Limited Corp. Informe de los Auditores Independientes y
Estados Financieros al 30 de septiembre de 2012
Office One Building Floor 15-16
50th Street - 58th, Obarrio Contenido Páginas
P.O. Box 0812-1575 W.T.C. Informe de los Auditores Independientes 1
Panama, Republic of Panama Estado de Situación Financiera 2

Estado de Resultados 3
Estado de Resultado Integral 4
Tel.: (507) 208-0100 Estado de Cambios en el Patrimonio 5
Fax: (507) 214-4301 Estado de Flujos de Efectivo 6
www.ey.com/centroamerica Notas a los Estados Financieros 7 - 43
INDEPENDENT AUDITORS’ REPORT TO THE BOARD OF DIRECTORS

OF AUTORIDAD DEL CANAL DE PANAMÁ
(Translation of independent auditors’ report originally issued in Spanish)
(See explanation in the notes to the financial statements)
We have audited the accompanying financial statements of the Autoridad del Canal de Panamá, which
comprise the statement of financial position as of September 30, 2012, and the income statement, the
statement of comprehensive income, the statement of changes in equity, and the statement of cash flows
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that
we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Autoridad del Canal de Panamá as of September 30, 2012, and its financial performance and cash flows
for the year then ended in accordance with International Financial Reporting Standards.
November 27, 2012

Panama, Republic of Panama
1 A member firm of Ernst & Young Global Limited

1
Autoridaddel
Autoridad delCanal
CanaldedePanamá
Panamá
State mentofofFinancial
Statement FinancialPosition
Position
Septe mber30,
September 30,2012
2012
(In thousands
(In thousandsofofbalboas
balboasB/.)
B/.)
Notes 2012 2011

Assets:
Non-current assets:
5, 11 Properties, plant, and equipment, net B/. 2,326,406 B/. 2,315,592
5 Construction in progress 2,695,222 1,569,299
Total properties, plant, and equipment 5,021,628 3,884,891
6 Accounts receivable 598,628 614,275
Total non-current assets 5,620,256 4,499,166
Current assets:
7 Inventories, net 73,001 68,623
6, 23 Trade and other receivables 42,991 46,796
8 Other financial assets 423,443 738,254
9 Accrued interest receivable and other assets 15,526 25,373
10 Cash and bank deposits 2,259,770 2,285,946
Total current assets 2,814,731 3,164,992
Total assets B/. 8,434,987 B/. 7,664,158
Equity and liabilities:
Equity:
11 Contributed capital B/. 1,904,473 B/. 1,904,473
12 Contributions for investment programs 3,769,045 3,167,137
12 Reserves 621,503 613,947
13, 22 Other equity accounts – cash flow hedge (227,770) (197,242)
14 Unappropriated retained earnings 648,991 674,292
Total equity 6,716,242 6,162,607
Non-current liabilities:
15 Borrowings 1,000,000 900,000
17, 23 Trade and other payables 32,456 29,818
16, 22 Other financial liabilities 227,770 202,773
Total non-current liabilities 1,260,226 1,132,591
Current liabilities:
17, 23 Trade and other payables 303,069 231,943
18 Provision for marine accident claims 20,235 18,492
Accrued salaries and vacation payable 113,954 102,213
16 Other financial liabilities 12,076 12,941
19 Other liabilities 9,185 3,371
Total current liabilities 458,519 368,960
Total equity and liabilities B/. 8,434,987 B/. 7,664,158
The accompanying notes are an integral part of these financial statements.

2

Income Statement
Income State ment
For the year ended September 30, 2012
For the year ende d Se pte mber 30, 2012
(In thousands of balboas B/.)
Notes 2012 2011

Revenues:
Toll revenues B/. 1,852,379 B/. 1,729,910
Other Canal transit services 395,498 400,722
2,247,877 2,130,632
Other revenues:
Electric power sales 97,092 125,325
23 Potable water sales 26,486 25,520
Interest earned 22,787 22,213
Miscellaneous 16,639 14,783
Total other revenues 163,004 187,841
Total revenues 2,410,881 2,318,473
Expenses:
Salaries and wages 453,643 425,913
23 Employee benefits 60,204 58,418
Materials and supplies 51,590 53,301
Fuel 101,289 106,541
Transportation and allowances 2,600 2,182
Contracted services and fees 60,768 47,544
Insurance 10,176 9,971
18 Provision for marine accidents 3,626 (764)
7 Provision for obsolete inventory 144 1,637
5 Depreciation 86,525 79,991
Other expenses 13,165 11,698
843,730 796,432
20 Labor, materials, and other capitalized costs (74,652) (76,286)
Total expenses 769,078 720,146
Income before fees 1,641,803 1,598,327
14, 17, 23 Fees per net ton (381,130) (366,987)

14, 23 Panamanian Treasury (Tesoro Nacional) - public service fees (2,218) (1,906)
Net income B/. 1,258,455 B/. 1,229,434
The accompanying
The accompanying notes are annotes
integralare
partan
of integral partstatements.
these financial of these financial statements.
3
3
Statement of Comprehensive Income
State ment of Comprehensive Income
For the year ende d Se pte mber 30, 2012
Note 2012 2011
Net income B/. 1,258,455 B/. 1,229,434
Other comprehensive income:

13 Net change on cash flow hedges (30,528) (47,016)
Total comprehensive income for the year B/. 1,227,927 B/. 1,182,418
This statement of comprehensive income is included in compliance with the revised IAS 1, which
requires presenting what would have been the net income of the period in the hypothetical event
that the ACP liquidated those hedge instruments at the end of the fiscal year and at the market rate
of the moment.
TheThe accompanying
accompanying notes
notes are are anpart
an integral integral
of thesepart of these
financial financial
statements. statements.
4
4

Statement of Changes in Equity
State ment of Changes in Equity
(Inthe
For thousands
year ende d of balboas
Se pte mber 30,B/.)
2012
Contribution for Other equity

Contributed investment accounts - cash Unappropriatedr
capital programs Reserves flow hedge etained earnings Total equity
Notes Balance as of September 30, 2010 B/. 1,904,473 B/. 2,591,020 B/. 634,922 B/. (150,226) B/. 470,603 B/. 5,450,792
Net income 1,229,434 1,229,434

13 Other comprehensive income:
Cash flow hedge - - - (47,016) - (47,016)
Comprehensive income of the year - - - (47,016) 1,229,434 1,182,418
14 Transfer to Panamanian Treasury - - - - (470,603) (470,603)

12 Contributions to the investment program - 576,117 - - (576,117) -
12 Net decrease in equity reserves - - (20,975) - 20,975 -
Balance as of September 30, 2011 1,904,473 3,167,137 613,947 (197,242) 674,292 6,162,607
Net income 1,258,455 1,258,455

13 Other comprehensive income:
Cash flow hedge - - - (30,528) - (30,528)
Comprehensive income of the year - - - (30,528) 1,258,455 1,227,927
14 Transfer to Panamanian Treasury - - - - (674,292) (674,292)

12 Contributions to the investment program - 601,908 - - (601,908) -
12 Net decrease in equity reserves - - 7,556 - (7,556) -
Balance as of September 30, 2012 B/. 1,904,473 B/. 3,769,045 B/. 621,503 B/. (227,770) B/. 648,991 B/. 6,716,242

5
Statement
Autoridadof del
Cash Flows
Canal de Panamá
ForState ment of CashSeptember
the year ended Flow s 30, 2012
(InFor
thousands
the yearofende
balboas B/.)mber 30, 2012
d Se pte
Notes 2012 2011

Cash flows from operating activities:
Net income B/. 1,258,455 B/. 1,229,434
5 Depreciation 83,584 78,031
Loss on disposal of fixed asset 519 1,167
7 Provision for obsolete inventory 144 1,637
18 Provision for marine accidents 3,626 (764)
Changes in working capital:
Decrease (increase) in trade and other receivables 3,805 (13,320)
Increase in inventories (4,522) (9,218)
Decrease (increase) in accrued interest receivable and other assets 9,847 (2,756)
Increase in trade and other payables 73,764 40,417
18 Payments of marine accident claims (1,883) (13,437)
Increase (decrease) in accrued salaries and vacation payable 11,741 (5,705)
(Decrease) increase in other current financial liabilities (865) 9,885
Increase (decrease) in other liabilities 5,814 (1,757)
Net cash provided by operating activities 1,444,029 1,313,614
Cash flows from investing activities:

Net increase of fixed assets (1,220,840) (890,237)
Decrease (increase) in other financial assets 309,280 (172,107)
6 Decrease (increase) in non-current assets 15,646 (213,794)
Decrease (increase) in time deposits, over 90 days 352,685 (83,369)
Net cash used in investing activities (543,229) (1,359,507)
Cash flows from financing activities:

15 Increase in long-term borrowings 100,000 600,000
14 Transfer to Panamanian Treasury (674,292) (470,603)
Net cash used in (provided by) financing activities (574,292) 129,397
Net increase in cash and cash equivalents 326,508 83,504

Cash and cash equivalents at beginning of the year 276,449 192,945
10 Cash and cash equivalents at end of the year B/. 602,957 B/. 276,449
Investing activities that did not represent cash outflows:

5, 20 Fixed assets - capitalized depreciation B/. (2,941) B/. (1,960)
Interests:
Received B/. 48,809 B/. 51,849
Paid B/. 52,444 B/. 28,808

The accompanying notes are an integral part of these
6 financial statements.
6

Notes to Financial Statements
September 30, 2012
Explanation Added for Translation into English 3. Basis of presentation of the financial statements
The accompanying financial statements have been translated The financial statements have been prepared on a historical cost
from Spanish into English for international use. These financial
basis, except for hedging instruments which have been measured
statements are presented in accordance with International
Financial Reporting Standards issued by the International at fair value.
Accounting Standards Board. Certain accounting practices
applied by Autoridad del Canal de Panama which are in Functional currency
conformity with International Financial Reporting Standards
may differ from accounting principles generally accepted in The ACP maintains its accounting records in balboas (B/.), which
some countries where the financial statements may be used.
is its monetary unit, and the financial statements are stated in this
1. General information currency. The balboa, monetary unit of the Republic of Panama,
is at par and of free exchange with the U.S. dollar. The Republic
The Autoridad del Canal de Panamá (ACP) is an autonomous of Panama does not issue paper currency and instead uses the
agency established in conformity with Article 316 of the Political U.S. dollar as legal tender.
Constitution of the Republic of Panama. The ACP is responsible
for the administration, operation, conservation, maintenance,
Foreign currency
modernization, and other related activities of the Panama Canal
(the Canal), that are necessary to ensure the safe, uninterrupted,
efficient and profitable operation of the Canal in accordance In preparing the financial statements, transactions in currencies
with the constitutional and legal regulations in effect. The ACP other than the entity’s functional currency (balboas B/.) are
has its own patrimony and the right to manage. The ACP was recorded using the exchange rates prevailing at the dates of
organized under Law No.19 of June 11, 1997 (Organic Law). transactions are conducted. At the end of each reporting period,
monetary items denominated in foreign currencies are converted
The ACP, in coordination with government entities designated
at the exchange rates prevailing at that time.
by law, is also responsible for the management, maintenance, use
and conservation of the water resources of the Canal watershed,
including lakes and their tributary streams. Exchange rate differences are recognized in the profit or loss
of the period, except for differences as a result of transactions
With the expiration of the 1977 Torrijos-Carter Treaty at noon on related to hedge of the exchange rate risk.
December 31, 1999, the Panama Canal reverted to the Republic
of Panama free of debts and liens, becoming an inalienable
patrimony of the Republic of Panama, open to the peaceful and
uninterrupted transit of vessels of all nations and whose use will 4. Significant accounting policies
be subject to the requirements and conditions established by the
Political Constitution of Panama, the Organic Law of the ACP Revenue recognition
and its management.
Revenue is recognized to the extent that it is probable that future
The main ACP offices are located at the Administration Building
economic benefits will flow to the ACP and the revenue can
No. 101, Balboa, Republic of Panama.
be reliably measured, regardless of when the payment is being
2. Statement of compliance received. The specific recognition criteria described below must
also be met before revenue is recognized:
The financial statements of Autoridad del Canal de Panamá,
including the comparative figures, have been prepared in
accordance with the International Financial Reporting Standards
(IFRS), disseminated by the International Accounting Standards
Board (IASB).
7
September 30, 2012
4. Significant accounting policies (continued) Borrowing cost
Toll revenue Borrowing costs directly attributable to the acquisition,

construction or production of qualifying assets, which are assets
Toll revenue is recognized once vessels complete their transits that necessarily take a substantial period of time to get ready for
through the Canal. their intended use or sale, are capitalized as part of the cost of
the assets, until such time as the assets are substantially ready
Electric power sales revenue for their intended use or sale. All other borrowing costs are
recognized as expenses when incurred. Borrowing costs consist
Electricity sales revenue is recognized based on contractual of interest and other costs that ACP incurs in connection with the
and physical delivery of energy and installed capacity valued borrowing of funds.
at contractual rates or at prevailing spot market rates. Revenue
includes unbilled amounts for electricity sales and installed Properties, plant, and equipment
capacity supplied but not liquidated at the end of each period
which are recorded at contractual rates or at estimated prices in Properties, plant, and equipment held for use in the production
the spot market at the end of each period. or supply of goods or services, or for administrative purposes,
are presented in the statement of financial position at their
Potable water sales revenue acquisition cost or production cost, net of accumulated
depreciation and impairment, if any.
Potable water sales revenue is recognized when treated water
is delivered based on prices contracted with the National Replacements and improvements of complete elements that
Institute of Pipelines and Sewerage (Instituto de Acueductos y increase the useful life of the asset or its economic capacity are
Alcantarillados Nacionales). accounted for as an increase in the cost of the properties, plant,
and equipment, with the respective retirement of any replaced
Services rendered element. Parts of properties, plant, and equipment, with different
useful lives, are accounted separately.
Revenues from other services are recognized when such services
are rendered. Periodic maintenance, preservation and repair costs are expensed
as incurred, based on the accrual method.
Interests
Depreciation is calculated, using the straight-line method,
For all financial instruments measured at amortized cost, interest over the useful life of the assets, with the understanding that
income is recognized using the effective interest rate, which is the land on which buildings and other constructions are settled
the rate that exactly discounts the estimated future cash payments have an indefinite useful life and, therefore, are not subject to
or receipts through the expected life of the financial instrument depreciation.
to the carrying amount of the financial asset or liability. Interest
income is included in a separate line in the income statement.
8

September 30, 2012
4. Significant accounting policies (continued) could be incurred when they are sold or disposed. For cash
flows purposes, ACP presents the cash and cash equivalent net
Properties, plant, and equipment (continued) of overdrafts, if any.
Construction in progress includes all direct charges for materials, Inventories

labor, research, equipment, professional fees and indirect costs
related to the expansion work. Once these works are concluded,
Inventories of materials, operating supplies, and fuel are valued
the construction value will become part of the properties, plant,
at the lower of cost or net realizable value. Inventories are
and equipment and its depreciation will begin.
valued using the average cost method based on purchase cost,
net of allowance for obsolescence.
An item of property, plant and equipment is derecognized upon
disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition Provisions
of the asset (calculated as the difference between the disposal
proceeds and carrying amount of the asset) is included in the Provisions are recognized when the ACP has a present obligation,
income statement when the asset is derecognized. either legal or constructive in nature, as a result of a past event,
it is probable that an outflow of resources embodying economic
Impairment of non-financial assets benefits will be required to settle the obligation, and a reliable
estimate can be made of the obligation amount.
The ACP assesses, at each reporting period date, whether there
is an indication that an asset may be impaired. If any indication The amount recognized as a provision is the best estimate of the
exists, the ACP estimates the asset’s recoverable amount,
disbursement required to settle the present obligation at the end
defined as the higher of an asset’s fair value less costs to sell and
of the reporting period, taking into account the corresponding
its value in use. When the asset´s carrying amount exceeds its
risks and uncertainties. When a provision is measured using
recoverable value, the asset is consider impair and it is adjusted
estimated cash flow to settle the present obligation, its carrying
to its recoverable value. In assessing value in use, the estimated
amount is the present value of such cash flow.
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risk specific to the asset. When the reimbursement of some or all economic benefits
Impairment losses are recognized in the income statement in the required to cancel a provision is expected, an account receivable
year they are determined. is recognized as an asset, but only when the reimbursement is
virtually certain.
Cash and cash equivalent
Provision for marine accidents and other claims
Cash and cash equivalent comprises cash and highly liquid
short term investments which their maturity are equal or less The ACP recognizes a provision for marine accidents and
than three months since the acquisition date as of the date of contract claims as soon as a known probable economic obligation
the financial position. These financial assets are valuated at
is derived from any particular incident.
fair value with changes in operating results as of the date of
the financial position, without deducting transaction costs that
9
September 30, 2012
4. Significant accounting policies (continued) Financial assets
Provisions (continued) Financial assets are classified in the following categories: held-
to-maturity investments and receivables. Classification depends
Provision for marine accidents and other claims (continued) on the nature and purpose of the financial asset and is determined
at initial recognition.
For marine accident claims, the ACP performs a detailed
investigation to determine the cause of the accident. Based on the Trade and other receivables
results of the investigation, if applicable, a provision is initially
recorded based on the estimated cost of items such as permanent Trade and other receivables are financial assets with fixed or
or temporary repairs, that the Administration considered to be determinable payments that are not quoted in an active market.
ACP’s responsibility. The amount of the provision is reviewed Trade and other receivables are measured at amortized cost
at each reporting date, and if necessary, adjusted to reflect the using the effective interest method, less any impairment.
best estimate at that time.
Held-to-maturity investments
For contractor claims that arise during contract execution, as a
result of contract interpretation or termination, the contracting Investments in commercial paper and debt instruments with
officer first determines whether the claim has merit. If so, the fixed maturities are classified as held-to-maturity when the
contracting officer estimates ACP liability and tries to reach a ACP has the intention and ability to hold to maturity. After
settlement with the contractor. If unsuccessful, the contracting initial measurement, held-to-maturity investments are measured
officer documents the circumstances, recognizes a provision for at amortized cost using the effective interest method less any
the estimated amount of the claim and the parties initiate the impairment. The amortized cost is calculated taking into
administrative resolution procedure established in the contract. account any premium or discount at the time of purchase and the
Certain contracts include arbitration in the dispute resolution wages or fees that belong to the effective interest rate.
procedure.
Derecognition of financial assets
The ACP will pay for claims that are properly supported and
approved by ACP, in its administrative stage or judicial stage, The ACP derecognizes a financial asset only when the contractual
according to Article 69 of the Organic Law or pursuant to a rights to receive the cash flows from the asset have expired; or
final ruling by the maritime tribunal. In those cases where the when the ACP has transferred substantially all the risks and
ACP may be liable as a result of a claim of a contract, if the rewards of ownership of the financial asset to another entity. If
contract contains an arbitration clause, the claim will be heard the ACP neither transfers nor retains substantially all the risks
by the Conciliation and Arbitration Center of the Chamber of and rewards of ownership of the financial asset but keeps control
Commerce, Industries and Agriculture of Panama (Centro de of the transferred asset, the ACP recognizes retained interest
Conciliación y Arbitraje de la Cámara de Comercio, Industrias y in the asset as well a liability for the amounts it may have to
Agricultura de Panamá). If there is no arbitration clause, the case pay. If the ACP retains substantially all the risks and rewards of
will be resolved by the Third Chamber of the Supreme Court. ownership of the financial asset transferred, the ACP continues
10

September 30, 2012
4. Significant accounting policies (continued) Trade and other payables
Derecognition of financial assets (continued) Accounts payable do not earn interest and are booked at their
face value. The ACP does not make payments or transfers of
to recognize the financial asset and also recognizes a liability funds to any legal or natural person, whether public or private,
secured by the amount received.
except for services contracted by the ACP, for property it may
acquire, or for an obligation it has legally contracted. The ACP
Impairment of financial assets
is exempt from the payment of any national or municipal levy,
tax, duty, fee, rate, charge or contribution, with the exemption
The ACP assesses whether there is objective evidence that a
of Social Security payments, educational insurance, workmen’s
financial asset is impaired at each reporting date. A financial
asset is impaired if there is evidence that as a result of one or compensation, and fees for public services.
more events that occurred after the initial recognition of the
asset, there has been a negative impact on the estimated future Other financial liabilities
cash flows of the financial asset.
The ACP subscribes to a variety of financial instruments to
Recognition manage its exposure to the interest rate risk, foreign currency
risk and commodity price risk.
The ACP utilizes the liquidation date for the recognition of
financial assets transactions. Financial instruments are initially recognized at fair value at
the date the hedge contract is entered into, and are subsequently
Financial liabilities
measured to their fair value at each reporting date. The resulting
gain or loss is recognized in profit or loss immediately, except
The ACP, at initial recognition, measures its financial liabilities
for the effective portion of a hedging instrument for which the
at fair value in addition to the direct transaction costs. After
timing of the recognition in profit or loss depends on the nature
initial recognition, the financial liabilities are measured at
of the hedge relationship. The ACP designates certain financial
amortized cost using the effective interest rate method. The
ACP recognizes the profit or loss in the income statement instruments as hedges of the exposure to changes in fair value
when a financial liability is derecognized as well as through the of a recognized asset or liability or a previously unrecognized
amortization process. firm commitment (fair value hedge) or hedges of the exposure to
variability in cash flows that is either attributable to a particular
The ACP financial liabilities include borrowings, trade and other risk associated with a recognized asset or liability, or a highly
payables, and other financial liabilities. probable forecast transactions, or the foreign currency risk of
firm commitments (cash flow hedge).
Borrowings
A financial instrument with a positive fair value is recognized as
Borrowings are initially recognized at fair value at their a financial asset, while a financial instrument with a negative fair
respective contractual dates, including the costs attributable
value is recognized as a financial liability. A financial instrument
to the transaction. After its initial recognition, these financial
liabilities are measured at amortized cost using the effective
interest rate method.
11
September 30, 2012
4. Significant accounting policies (continued) Amounts previously recognized in other comprehensive income
and accumulated in equity are reclassified to profit or loss in the
Financial liabilities (continued) periods when the hedged item is recognized in profit or loss,
within the same line of the income statement as the recognized
Other financial liabilities (continued) hedged item. However, when the forecast transaction that is
hedged results in the recognition of a non-financial asset or a non-
is presented as a non-current asset or a non-current liability if
financial liability, the gains and losses previously accumulated
the remaining maturity of the instrument is more than 12 months
in equity are transferred from equity and included in the initial
and it is not expected to be realized or settled within 12 months.
measurement of the cost of the non-financial asset or the non-
Other financial instruments are presented as current assets or
financial liability.
current liabilities.
Hedge accounting The ACP discontinues hedge accounting, when the hedging
instrument expires or is sold, terminated, or exercised, or
The ACP designates certain financial instruments as either fair when it no longer qualifies for hedge accounting. Any gain
value hedges or cash flow hedges. Hedges of foreign exchange or loss accumulated in equity at that time remains in equity
on firm commitments are accounted for as cash flow hedges. and is recognized when the forecast transaction is ultimately
recognized in profit or loss. When a forecast transaction is no
At inception date of the hedge, the ACP documents the hedging longer expected to occur, the gain or loss accumulated in equity
relationship and the objective and risk management strategy to is recognized immediately in profit or loss.
undertake the hedging transaction. At inception of the hedge, and
ongoing basis, the documentation shall include the identification
Derecognition of financial liabilities
of the hedge instrument, the transaction or instrument covered,
the nature of the risk covered and the manner in which the
The ACP derecognizes financial liability when they are expired,
ACP would measure the effectiveness of the hedge instrument
cancelled, or met ACP’s obligations.
to compensate the exposure to changes in the fair value of the
item covered or the changes in the cash flows of the covered
risk. These hedges are expected to be highly effective in order New International Financial Reporting Standards (IFRS)
to mitigate changes in cash flows of the hedged item and are and Interpretations not adopted
periodically evaluated to determine if they had been highly
effective during the financial reporting periods for which they Standards issued but not yet in effect
were designated.
Standards and interpretations issued but not yet in effect at the
Cash flow hedges date of issuance of the financial statements are detailed below.
ACP expects that these standards and interpretations could have
The effective portion of changes in the fair value of financial an impact on the reported disclosures, the financial position
instruments that are designated and qualified as cash flow hedges or the results when applied in a future date. The ACP has the
is recognized in other comprehensive income. The gain or loss
intention to adopt these standards when they are entered into
relating to the ineffective portion is recognized immediately in
effect:
profit or loss.
12

September 30, 2012
4. Significant accounting policies (continued) IFRS 7 Disclosures Offsetting Financial Assets and Financial
Liabilities – Amendments to IFRS 7
New International Financial Reporting Standards (IFRS)
and Interpretations not adopted (continued) These amendments require an entity to disclose information
about rights to set-off and related arrangements (e.g., collateral
Standards issued but not yet in effect (continued) agreements). The disclosures would provide users with
information that is useful in evaluating the effect of netting
IAS 1 Presentation of Financial Statements - Presentation of arrangements on an entity’s financial position. The new
items of other comprehensive income disclosures are required for all recognized financial instruments
that are set off in accordance with IAS 32 Financial Instruments:
Presentation. The disclosures also apply to recognized financial
The amendment to IAS 1 change the grouping of items
instruments that are subject to an enforceable mastering
presented in other comprehensive income. Items that could be
arrangement or similar agreement, irrespective of whether they
reclassified to profit or loss at a future point in time (for example,
are set off in accordance with IAS 32. These amendments will
derecognition or settlement) would be presented separately from
not impact the ACP´s financial position or performance and
items that will never be reclassified. The amendment affects
become effective for annual periods beginning on or after 1
presentation only and has no impact on the ACP’s financial
January 2013.
position or performance. The amendment becomes effective for
annual periods beginning on or after July 1, 2012.
IFRS 9 Financial Instruments: Classification and
Measurement
IAS 19 Employee Benefits (Amendment)
IFRS 9 as issued reflects the first phase of the IASBs work on
The IASB has issued numerous amendments to IAS 19. These the replacement of IAS 39 and applies to classification and
range from fundamental changes such as removing the corridor measurement of financial assets as defined in IAS 39. The
mechanism and the concept of expected returns on plan assets to standard is effective for annual periods beginning on or after
simple clarifications and re-wording. The amendment becomes January 1, 2013 but an amendment issued in December 2011,
effective for periods beginning on or after January 1, 2013. moved the mandatory effective date to January 1, 2015. In
The ACP is currently evaluating the possible impact of this subsequent phases, the IASB will address hedge accounting and
amendment. impairment of financial assets. The adoption of the first phase of
IFRS 9 will have an effect on the classification and measurement
IAS 32-Offsetting Financial Assets and Financial Liabilities – of the ACP’s financial assets. The ACP will quantify the effect
Amendments to IAS 32 in conjunction with other phases, when issued, to present a
comprehensive picture.
These amendments clarify the meaning of “currently has a
legally enforceable right to set-off”. The amendments also clarify IFRS 10 Consolidated Financial Statements
the application of the IAS 32 offsetting criteria to settlement
systems (such as central clearing house systems) which apply IFRS 10 establishes the principles for the preparation and
gross settlement mechanisms that are not simultaneous. These presentation of the consolidated financial statements when
amendments are not expected to impact the ACP’s financial the entity controls one or more entities. IFRS 10 replaces
position or performance and become effective for annual periods consolidation requirements of SIC-12 Consolidation – Special
beginning on or after 1 January 2014. purpose entities and IAS 27 Separate financial statements, and
becomes effective for annual periods beginning on or after

January 1, 2013.
13
September 30, 2012
4. Significant accounting policies (continued) required or permitted. This standard becomes effective for
annual periods beginning on or after January 1, 2013. The ACP
New International Financial Reporting Standards (IFRS) is currently assessing the impact that this standard will have on
and Interpretations not adopted (continued) the financial position and performance.
Standards issued but not yet in effect (continued) Improvements to IFRSs
IFRS 11 Joint Arrangements Improvements to IFRSs (issued in May 2012)
IFRS 11 replaces IAS 31 Interests in joint ventures and SIC- The IASB issued a series of improvements to IFRS. The
13 Jointly controlled entities – Non-monetary contributions amendments have not been adopted as they become effective for
by ventures. IFRS 11 provides a more realistic judgment on annual periods beginning on January 1, 2013, however, the ACP
joint arrangements, focusing on the arrangement’s rights and expects no impact from the adoption of the amendments on its
obligations instead of on the jurisdiction form. It becomes financial position or performance.
effective for annual periods beginning on or after January 1,
2013. Currently, the ACP does not have this type of investments. IFRS 1 First-time Adoption of International Financial
Reporting Standards
IFRS 12 Disclosure of Involvement with Other Entities
This improvement clarifies that an entity that stopped applying
IFRS 12 is a new standard on disclosure requirements in all IFRS in the past and chooses, or is required, to apply IFRS, has
types of participation in other entities, including subsidiaries, the option to re-apply IFRS 1. If IFRS 1 is not re-applied, an
joint arrangements, associates and non-consolidated structured entity must retrospectively restate its financial statements as if it
entities. It includes all disclosures that were previously in IAS had never stopped applying IFRS.
27 related to consolidated financial statements, as well as all of
the disclosures that were previously in IAS 31 and IAS 28, as IAS 1 Presentation of Financial Statements
well as new disclosure requirements. This standard becomes
effective for annual periods beginning on or after January 1, This improvement clarifies the difference between voluntary
2013. Currently, the ACP does not have this type of investments. additional comparative information and the minimum required
comparative information. Generally, the minimum required
IFRS 13 Fair Value Measurement comparative information is the previous period.
IFRS 13 establishes a single source of guidance under IFRS for IAS 16 Property, Plant and Equipment
all fair value measurements. IFRS 13 does not change when an
entity is required to use fair value, but rather provides guidance This improvement clarifies that major spare parts and servicing
on how to measure fair value under IFRS when fair value is equipment that meet the definition of property, plant and
equipment are not inventory.
14

September 30, 2012
4. Significant accounting policies (continued)
New International Financial Reporting Standards (IFRS) and Interpretations not adopted (continued)
Improvements to IFRSs (continued)
Improvements to IFRSs (issued in May 2012) (continued)
IAS 32 Financial Instruments, Presentation
This improvement clarifies that income taxes arising from distributions to equity holders are accounted for in accordance with IAS
12 Income Taxes.
Critical accounting judgments and key sources of estimation uncertainty

Aut orida d del Canal de Pana má
Notes t o Financial
These financial S tate
statements are ment
prepared s
in conformity with IFRS which require management to make estimates and assumptions
Septe mber
that affect 30, 2012
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial
(In thousands
statements, of balboas
and the reported amountsB/.)
of revenues and expenses during the reporting period. Future actual results could differ from
those estimates. Significant estimates for these financial statements include the determination of the useful life of fixed assets (note
5), fair value of financial instruments (note 23), and the estimates for the provision for marine accident claims and contingencies
(notesProperties,
5. 18 and 25, respectively).
plant and equipment
5. Properties, plant and equipment
Property, plant and equipment are detailed as follows:
Property, plant and equipment are detailed as follows:
Construction in
Cost Buildings Structures Equipments Land progress Total
Balance as of October 1, 2010 B/. 91,132 B/. 753,515 B/. 917,923 B/. 1,022,228 B/. 931,608 B/. 3,716,406
Additions 2,782 17,286 234,438 - 637,691 892,197
Adjustments:
Loss recognition on asset retirements - - (335) - - (335)
Reclassifications - 210 (210) - - -
Retirements (105) (4) (7,902) - - (8,011)
Balance as of September 30, 2011 93,809 771,007 1,143,914 1,022,228 1,569,299 4,600,257
Additions 950 533 96,376 - 1,125,923 1,223,782

Adjustments:
Loss recognition on asset retirements - - (46) - - (46)
Retirements (695) (9) (3,344) - - (4,048)
Balance as of September 30, 2012 B/. 94,064 B/. 771,531 B/. 1,236,900 B/. 1,022,228 B/. 2,695,222 B/. 5,819,945
Construction in
Accumulated Depreciation Buildings Structures Equipments Land progress Total
Balance as of October 1, 2010 B/. (31,661) B/. (205,212) B/. (405,680) B/. - B/. - B/. (642,553)
Depreciation (2,011) (26,861) (51,119) - - (79,991)
Retirements 40 4 7,134 - - 7,178
Balance as of September 30, 2011 (33,632) (232,069) (449,665) - - (715,366)
Depreciation (2,023) (27,202) (57,300) - - (86,525)

Retirements 271 9 3,294 - - 3,574
Balance as of September 30, 2012 B/. (35,384) B/. (259,262) B/. (503,671) B/. - B/. - B/. (798,317)
Net Book Value

Balance as of September 30, 2012 B/. 58,680 B/. 512,269 B/. 733,229 B/. 1,022,228 B/. 2,695,222 B/. 5,021,628
Balance as of September 30, 2011 B/. 60,177 B/. 538,938 B/. 694,249 B/. 1,022,228 B/. 1,569,299 B/. 3,884,891
15
Notes to Financial State ments ANNUAL REPORT 2012 85
Autoridad
Septe mber del
30, Canal
2012 de Panamá
Notes
(In to Financial
thousands Statements
of balboas B/.)
September 30, 2012
5. Properties, plant and equipment (continued)
5. Properties, plant and equipment (continued)
Construction in progress is detailed as follows:
Construction in progress is detailed as follows:
Investment Investment
Program - Canal Program - Construction in
Expansion Others progress total
Balance as of october 1, 2010 B/. 734,597 B/. 197,011 B/. 931,608
Net change 662,924 (66,167) 596,757

Interests, commissions and other
financing expenses 40,934 - 40,934
Balance as of september 30, 2011 1,438,455 130,844 1,569,299
Net change 846,800 226,163 1,072,963

Interests, commissions and other
financing expenses 52,960 - 52,960
Balance as of september 30, 2012 B/. 2,338,215 B/. 357,007 B/. 2,695,222
During fiscal year 2012, the ACP recorded losses of B/.519 (2011: B/.1,167) as a result of the
derecognition of assets. Main assets derecognized included tape backup system, vehicles, copying
During fiscal year 2012, the ACP recorded losses of B/.519 (2011: B/.1,167) as a result of the derecognition of assets. Main
machine, switch W2 and buildings. During 2011, main assets derecognized included locomotives,
assets derecognized included tape backup system, vehicles, copying machine, switch W2 and buildings. During 2011, main
boat´s diesel motors, vehicles, air compressors, servers, hydro-demolition systems and synthetic
assets derecognized included locomotives, boat´s diesel motors, vehicles, air compressors, servers, hydro-demolition systems and
buoys.
synthetic buoys.
Depreciation of B/.2,941 (2011: B/.1,960) corresponding to equipment used in investment projects
was capitalized
Depreciation as properties,
of B/.2,941 plant and
(2011: B/.1,960) equipment
corresponding to during theused
equipment period.
in investment projects was capitalized as properties,
plant and equipment during the period.
The following estimated useful lives were used to calculate depreciation:
The following estimated useful lives were used to calculate depreciation:
Buildings 25 – 75 years

Structures 25 – 75 years
Buildings
5 – 100 years
Equipment 3 – 75 years
Structures 5 – 100 years
Equipment 3 – 75 years
21
16

September 30, 2012
6. Accounts receivable amendment, that the ACP make an advance payment to cover the
invoices generated by suppliers of key project materials between
Non-current May and December 2012 for a maximum of B/.82,500. As of
September 30, 2012, the amount remitted by ACP to GUPCSA
Non-current accounts receivable are detailed as follows: was B/.23,074. The advance payment will be repaid by the
contractor beginning in January 2013, through 5% deductions
2012 2011
from payments for work performed. This advance will be
Advance payment to contractor B/. 584,926 B/. 591,226 guaranteed by materials delivered on site.
Others 13,702 23,049
B/. 598,628 B/. 614,275 Others:
The contract for the expansion at the Miraflores Thermal Power

Contracts:
Plant was awarded to Hyundai Heavy Industries Co., Ltd., for an
amount of B/.113,898, which includes the incorporation of heat
Advance payments to contractor correspond to the balance of
recovery system of the gas exhaust. The contract establishes
B/.547,958 to Grupo Unidos por el Canal, S.A. (GUPCSA) for
the ACP to advance 20% of the contract value, which represents
mobilization and installation, as interest free interest advance
B/.22,780 paid in August 2011. This receivable is backed
payments. Advances are to be collected by withholdings between
by a performance bond and an irrevocable letter of credit for
10% and 19% from payments made by the ACP to GUPCSA 100% of the value of this advanced payment. According to
for advanced work performed. The advance payment for the contract, this advance will be repaid in 14 months through
mobilization was made for B/.300,000 of which, at September agreed deductions from payments to Hyundai Heavy Industries
30 2012, the ACP has retained B/.52,041 (2011: B/.8,774). The Co., Ltd. for work performed. As of September 30, 2012, the
advance payment for installation was made for B/.300,000, amount retained was B/.9,078.
of which no retentions have been made. These advances are
guaranteed with bank guarantee letters received from two On June 3, 2008, the ACP and Distribución Eléctrica Metro Oeste,
financial institutions with international credit ratings of Moodys S.A. (EDEMET) signed a Construction and Reimbursement of
Aa1 and Standard and Poors AA-, and will be reimbursed to the Timeline Agreement to supply the electricity needed to operate
ACP 45 days before September 30, 2013, and March 31, 2014, the Mendoza´s Potable Water Treatment Plant and Pump Station
(Planta Potabilizadora y Estación de Bombeo de Mendoza)
respectively, unless GUPCSA extends the validity of each letter
owned by the ACP, for an amount of B/.481. The power supply
of credit.
line will be EDEMET´s property, thereby making EDEMET
responsible for its operation and maintenance. As of September
On June 16, 2012, GUPCSA requested a contract amendment
30, 2012, EDEMET reimbursed B/.269 (2011: B/.211), in
to allow a unique advanced payment for the reinforced steel
compliance with the Construction and Reimbursement of
escalating price in the amount of B/.19,632 (120,041 tm), of Timeline Agreement for the Mendoza’s Potable Water Treatment
which the ACP has retained B/.5,738, as of September 30, 2012. Plant.
This advance is backed with a payment bond issued by Barents
Re Reinsurance Company, Inc., due on January 24, 2014.
On July 20, 2012, GUPCSA requested through a contract
17
September 30, 2012
6. Accounts receivable (continued) Change in the provision for obsolete inventory of supplies and
materials is as follows:
Non-current (continued)
2012 2011
Trade and other receivables
Balance at the beginning of the year B/. 4,363 B/. 6,621
Increases 144 1,637
Trade and other current receivables are detailed as follows: Charges 208 (3,895)
Balance at the end of the year B/. 4,715 B/. 4,363
2012 2011

Transit-related services B/. 15,752 B/. 5,735 The amount of material and supplies, recognized in the income
Electric power sales 16,001 31,264 statement during fiscal year 2012, was B/.27,466 (2011:
National Institute of Pipelines and Sewerage B/.27,484)
(Instituto de Acueductos y Alcantarillados Nacionales) 6,129 6,990
Other government entities 1,555 1,426
The amount of fuel, recognized in the income statement during
Other services 3,554 1,381
fiscal year 2012, was B/.88,524 (2011: B/.97,525).
B/. 42,991 B/. 46,796
8. Other financial assets
Aging of past due but not impaired receivables:
Other financial assets are detailed as follows:
2012 2011
2012 2011
60 - 90 days B/. 93 B/. 398
Financial assets measured at amortized
90 - 120 days 132 1,612 cost:
Investments in bonds (i) B/. 423,443 B/. 732,723
B/. 225 B/. 2,010
Financial instruments designated as
hedge as fair value:
7. Inventories, net Commodity swap (ii)
- 5,531

Inventories are detailed as follows:
Total B/. 423,443 B/. 738,254
2012 2011 (i) At September 30, 2012, bonds’ annual interest rate of return
is 1.1541% (2011: 0.9334%) payable at the end of each term
Supplies and materials B/. 71,449 B/. 60,612
with a maximum maturity date of up to one year.
Fuel 6,267 12,374
Provision for obsolete
(ii) At September 30, 2011, the balance of B/.5,531 shown in
inventory (4,715) (4,363)
other financial assets corresponds only to the market value of
B/. 73,001 B/. 68,623 the hedge instrument and it results from the forecasted flow
of the swap price of diesel against the fixed price.
18

September 30, 2012
8. Other financial assets ( continued) Cash deposit in bank accounts earns interest based on daily
rates determined by corresponding banks. The investment of
Bonds are measured at amortized cost and were acquired with these resources has the priority to cover all ACP obligations and
the intention to be held to maturity. All ACP’s investments are earn interest rates which vary between 0.15% and 1.44% (2011:
comprised of short-term investment grade instruments. 0.74% and 0.94%).
The Organic Law establishes that the ACP´s funds must be

As of September 30, 2012 and 2011, there were no restrictions
placed in short-term investment grade debt instruments and may
over the balance of cash and bank deposits.
not be used to buy other types of investment instruments issued
by Panamanian or foreign public or private entities, nor to grant
11. Contributed capital
loans to said entities or to the National Government.
9. Accrued interest receivable and other assets Article 316 of the Political Constitution of the Republic of
Panama states that the ACP has its own patrimony and the right
Accrued interest receivable and other assets are detailed as to manage it. Upon the transfer of the Canal to the Republic of
follows: Panama at noon on December 31, 1999, the ACP became the
administrator of all goods and real estate property identified
in the Organic Law of the ACP as the patrimony necessary to
2012 2011 operate and maintain the Canal.

Interest receivable B/. 11,106 B/. 19,536 This patrimony is divided into two groups: the inalienable
Preepayments 4,420 5,837 patrimony, comprised of land, lakes, rivers, dams, locks and
B/. 15,526 B/. 25,373 anchorages, as established in Article 2 of the Organic Law; and
the economic patrimony, comprised of all those installations,
buildings, structures and equipment that support the operation
10. Cash and bank deposits
of the Canal, as established in Article 33 of the same Law.
Cash and bank deposits are comprised of the following:

In compliance with these requirements, the Government
of Panama transferred the related land and buildings: for its
2012 2011 recognition, a conservative method was used to reflect an
Cash on hand B/. 47 B/. 39 estimated fair value for each asset subsequently registered in the
Deposits in current accounts 80,823 29,000
Public Registry.
Deposits in saving accounts 285,163 247,410
Time deposits with original maturities
under 90 days 236,924 -
Total cash and cash
equivalents 602,957 276,449

Time deposits with original maturities
over 90 days not exceeding
one year 1,656,813 2,009,497
B/. 2,259,770 B/. 2,285,946
19
Autoridad
Autoridad del
del Canal
Canal de
de Panamá
Panamá
Notes to Financial State ments
Septe mber 30,
September 30, 2012
2012
(In
(In thousands of balboas
thousands of balboas B/.)
B/.)
12. Reserves and contributions for investment programs

12. Reserves and contributions for investment programs
Changes
Changesininreserves are are
reserves detailed as follows:
detailed as follows:
Increase Increase
2012 (decrease) 2011 (decrease) 2010
Reserves for:
Canal expansion B/. 156,572 B/. 65,266 B/. 91,306 B/. - B/. 91,306
Investment projects - others - - - (49,300) 49,300
Catastrophic risks 36,000 - 36,000 - 36,000
Contingencies and working capital 196,290 7,556 188,734 28,325 160,409
Enterprise capitalization 232,641 (65,266) 297,907 - 297,907
621,503 7,556 613,947 (20,975) 634,922
Contributions for:
Investment programs 3,769,045 601,908 3,167,137 576,117 2,591,020
B/. 4,390,548 B/. 609,464 B/. 3,781,084 B/. 555,142 B/. 3,225,942
Canalexpansion
Canal expansion Contingencies and working capital
The ACP
The ACPmaintains
maintainsananequity
equity reserve
reserve for for
the the construction
construction Theprogram of the an
ACP maintains Panama
equity Canal
reserve third set
for contingencies and
of locks.of the
program ThePanama
fundsCanal
for this
thirdreserve are segregated
set of locks. The funds based on the levels of earnings obtained,
working capital which is calculated based on the ACP’s level
according to the financing needs of the ACP for determined projects during the execution of the
for this reserve are segregated based on the levels of earnings of revenues and is defined as 30 days of average revenues or
program. In fiscal year 2012, an increase was approved for B/.65,266 and in 2011, no changes
obtained, according to the financing needs of the ACP for billing of the Canal. During fiscal year 2012, it was approved
were made to this reserve.
determined projects during the execution of the program. In
to increase this reserve by B/.7,556 (2011: B/.28,325) for a total
fiscal year 2012,
Investment an increase
projects was approved for B/.65,266 and in
-others reserve of B/.196,290 (2011: B/.188,734).
2011, no changes were made to this reserve.
The ACP maintained an equity reserve for the investments programs in the Panama Canal. The
Enterprise capitalization
funds for projects
Investment this reserve
-otherswere segregated based on the levels of profits obtained, in attention to the
financing needs of the ACP for specific projects during the execution of the programs. During
fiscal
The ACPyearmaintained
2011, thisanreserve
equity was for the investments The ACP maintains an equity reserve for capitalization with
eliminated.
reserve
programs in the Panama Canal. The funds for this reserve were the purpose to ensure and facilitate the long-term financial
Catastrophic
segregated basedrisks
on the levels of profits obtained, in attention to projection of the ACP. During fiscal year 2012, it was approved
the financing needs of the ACP for specific projects during the to decrease this reserve for B/.65,266 and in 2011 this reserve
The ACP maintains an equity reserve to cover the deductibles of the catastrophic risks insurance
execution of the programs. During fiscal year 2011, this reserve was not increased.
policies with a maximum amount of B/.36,000.
was eliminated.
Contributions to investment programs
Catastrophic risks
At September 30, 2012, the ACP increased the funds of the
The ACP maintains an equity reserve to cover the deductibles investments programs by B/.601,908 (2011: B/.576,117) for
of the catastrophic risks insurance policies with a maximum
amount of B/.36,000.
27
20

September 30, 2012
12. Reserves and contributions for investment programs Time deposit in euros (dredge contract payment)
(continued)
In March 2008, the ACP signed a € 63.5 million investment
a contributed total of B/.1,142,387 (2011: B/.1,121,380) for contract for the manufacturing of a cutter suction dredge.
the Investment program – others and B/.2,626,658 (2011:
B/.2,045,757) for the Investment program – Canal expansion.
In order to mitigate the euro-dollar exchange rate variability risk,
This reserve includes a contingency amount for regular
in November of 2008 the ACP established a deposit in euros for
investment program, which is set each year; the unused balance
the balance of the contract at that time (€ 38.9 million /USD
is transfer to surplus at end of period.
$60.6 million), eliminating its exposure to the exchange rate
risk in the payments to the contractor. At September 30, 2011,
The Organic Law establishes that, after covering the costs for
operation, investment, modernization, and expansion of the all programmed payments of the contract were made and the
Canal, as well as the necessary reserves provided by the Law accumulated gain in the hedge was reclassified to the dredge´s
and Regulations, any surplus shall be forwarded to the National initial cost.
Treasury in the following fiscal period.
Variability of the interest rates (financing for the Canal
13. Other equity accounts – cash flow hedge expansion program)
Other equity accounts are comprised entirely of the unrealized On December 9, 2008, the ACP signed a loan agreement for USD
gain (loss) from the valuation of cash flow hedge instruments, 2,300,000 with five multilateral agencies to finance a portion of
as required by IAS 39. the Expansion Program, of which USD 500,000, the ACP has
the option to choose either a fixed or a floating rate at the date
Adjustments to other comprehensive income (loss) are as
of each disbursement, and a floating rate for USD 1,800,000. In
follows:
March 2010, the ACP received its first loan disbursement in the
amount of USD 100,000 at a fixed rate, and USD 200,000 at a
floating rate. In October 2010, the ACP received a disbursement
2012 2011
of a floating rate for USD 300,000, USD 300,000 in April 2011

and USD 100,000 in June 2012.
Cash flow hedges:
Income (loss) during the year:
To eliminate the interest rate fluctuation risk on loans obtained
Variability in interest rates B/. (24,733) B/. (55,137)
Variability in diesel prices (5,795) 8,766 at floating rates, the ACP signed an interest rate swap agreement
Time deposit in Euros - 37 in March 2010. This hedge instrument was competitively
Reclassification adjustment of income placed among three specialized entities for the amount of USD
included as part of the suction 800,000. The hedge transaction of USD 800,000 was fixed at a
dredge cost - (682) 5.42% rate for 18.5 years, which is 83 basis points lower than
the 6.25% rate that was originally estimated in the Master Plan
Net changes in cash flows
hedges B/. (30,528) B/. (47,016) for the Expansion Program.
21
September 30, 2012
13. Other equity accounts – cash flow hedge (continued) any surplus shall be remitted to the Panamanian Treasury in
the following fiscal period. Therefore, the ACP should transfer
Variability of diesel prices (Price adjustment in the contract the total amount of B/.648,991 to the Panamanian Treasury
for the design and construction of the locks) which corresponds to the year ended September 30, 2012 (2011:
B/.674,292). (See note 26)
In July 2009, the ACP awarded the contract for the design and
construction of the third set of locks to the consortium “Grupo In compliance with Law 28 of July 17, 2006, during the
Unidos por el Canal, S. A.” The contract includes adjustment construction period of the third set of locks, the ACP will
clauses in the event of fluctuations in the price of the diesel to continue to make increasing payments to the Panamanian
be used during execution. With the purpose of mitigating the Treasury based on Canal tonnage fees and any operational
volatility risk in the price of light diesel agreed in this contract, surplus. Any payments based on an operational surplus shall
in April 2010, the ACP competitively hired the bidder with the not be less than those made to the Panamanian Treasury in 2005
lowest price to provide a hedge instrument to transfer some of for the amount of B/.268,850. The combined payments based
this risk to the financial markets. This transaction guarantees the on Canal tonnage fees and operational surpluses shall not be less
fuel costs in the lock’s contract to the ACP for the first two years than the payments effected in fiscal year 2006 for the amount of
of execution. B/.568,128.
Payments to Panamanian Treasury: 2012 2011
The unrealized loss of B/.264 at the end of the fiscal year
2012, and the unrealized gain of B/.5,531 in fiscal year 2011, Unappropriated retained earnings B/. 648,991 B/. 674,292
correspond exclusively to the hedge instrument’s market value Fee per net ton 381,130 366,987
Public service fees 2,218 1,906
as of September 30 of each year, as a result of the projected cash
Total B/. 1,032,339 B/. 1,043,185
flow exchange of future diesel prices compared to the fixed price
agreed, shown in other equity accounts.
15. Borrowings
The ACP has covered the following forecasted cash flows,
which mainly vary with interest rates and diesel prices. The Financing received for the Canal Expansion Investment
periods in which these cash flows are expected to occur and their Program, presented at amortized cost as of September 30, 2012,
expected impact in the income statement, without considering is detailed as follows:
any hedging adjustment, is shown as follows: 2012 2011

Japan Bank of International
Cooperation (JBIC) B/. 800,000 B/. 800,000
More than 5
European Investment Bank (EIB) 100,000 100,000
Total 1 year 1 - 5 year years
Inter-American Development
2012 Bank (IADB) 100,000 -
Cash flow covered B/. 217,662 B/. 26,368 B/. 31,286 B/. 160,008
Balance at the end of the year B/. 1,000,000 B/. 900,000
2011
Cash flow covered B/. 305,117 B/. 24,922 B/. 49,416 B/. 230,779
Financing from JBIC and IADB was subscribed at a floating
rate (6-month Libor plus margin), with semiannual payments to
14. Unappropriated retained earnings principal beginning on May 15, 2019, and ending in November
2028. Financing from EIB was subscribed at a fixed rate with
The Organic Law establishes that after covering the costs for equal semiannual payments beginning on May 15, 2019, and
the investment program and the reserves detailed in note 12, ending in November 2028.
22

September 30, 2012
15. Borrowings (continued) The balances payable to the Panamanian Treasury correspond to
the fees per net ton pending for payment.
The ACP complies with the semiannual verification of the
financial covenants over this debt related to two debt indicators The Organic Law establishes that the ACP shall annually pay
to be maintained: Total Debt to EBITDA Ratio and the Debt the Panamanian Treasury a fee per net ton, or its equivalent,
Service Coverage Ratio. collected from vessels paying tolls for use of the Canal. This
fee shall be set by the ACP. The total of such fees amounted to
16. Other financial liabilities B/.381,130 (2011: B/.366,987).
Other financial liabilities are detailed as follows: 18. Provision for marine accident claims
2012 2011
Financial instruments designated as hedging
The provision for marine accident claims of B/.20,235 (2011:
instruments carried at fair value

B/.18,492), represents the estimated value of filed or anticipated
Interest rate swaps B/. 239,582 B/. 215,714
claims for accidents in Canal waters for which the ACP expects
Commodities swap 264 -
B/. 239,846 B/. 215,714 to be liable.

Current B/. 12,076 B/. 12,941 Changes in the provision for marine accident claims are detailed,
Non-current 227,770 202,773 as follows:
B/. 239,846 B/. 215,714
2012 2011
On April 18, 2012, the ACP subscribed a hedge contract with

J.Aron & Co. (Goldman Sachs) for 18.1 million gallons of
Balance at the beginning of the year B/. 18,492 B/. 32,693
light diesel to cover the risk of variability of future cash flows
Provision (reversion) for the year 3,626 (764)
attributable to variability in the diesel price index from April 26,
Payments made (1,883) (13,437)
2012 to July 25, 2014.
Balance at the end of the year B/. 20,235 B/. 18,492
In order to cover the variability risk of the future cash flows

related to the volatility of the interest rate paid in the borrowing
The provision is included as an expense of the current period
associated to the Canal Expansion Program, the ACP subscribed
an interest rate swap contract which pays at a fixed rate and under “Provision for Marine Accidents.”
receives at a floating rate.
19. Other liabilities
17. Trade and other payables
Other liabilities are detailed as follows:
Trade and other payables are as follows:
2012 2011
2012 2011
Panamanian Treasury B/. 31,263 B/. 28,973
Suppliers and others 304,262 232,788 Inventories - in transit B/. 4,427 B/. 1,183
B/. 335,525 B/. 261,761 Miscellaneous claims 3,027 425
Other trusts 1,203 1,187
Current B/. 303,069 B/. 231,943 Trust - National Institute of Pipelines
Non current 32,456 29,818 and Sewerage (i) 528 576
B/. 335,525 B/. 261,761 B/. 9,185 B/. 3,371
23
September 30, 2012
19. Other liabilities (continued)
Autoridad
(i) The trust of del CanalInstitute
the National de Panamá
of Pipelines and Sewerage (Instituto de Acueductos y Alcantarillados Nacionales - IDAAN)
was established with the purpose of building the conduction line from Mendozas Filtration Plant to the IDAAN’s existing plant
Septe mber 30, 2012
in La Chorrera. The ACP executes the construction of the conduction line, property of IDAAN, and for this purpose, uses funds
(In provided
thousands of balboas B/.)
by this entity.
20. Labor, materials and other capitalized costs

20. Labor, materials and other capitalized costs
The most significant projects of the investment program that have been executed with the ACP’s own resources and equipment are
The most significant projects of the investment program that have been executed with the ACP’s
detailed
own as follows:
resources and equipment are detailed as follows:
2012 2011
Investment Program
Widening and straightening of the Gaillard (Culebra) Cut B/. 18,065 B/. 16,487
Assets administration system 517 456
Improvement to locks fender system at approach walls 1,350 2,039
Cutter suction dredge (multiannual project) - 478
Replace water treatment plant for tugboat fleet 418 -
Complementary projects of dredging at the entrance of the Canal 2,397 -
Sewer treatment project at ACP 574 -
Other various projects 1,902 1,689
25,223 21,149
Investment Program - Canal Expansion

Dredging of Gatun Lake 40,767 38,368
Dredging at the Pacific entrance 2,534 3,167
Dry excavation No. 4 of the North Pacific channel
1,279 1,186
access and construction of Borinquen's dam
Program administration 821 824
Increase of maximum operational level of Gatun Lake 935 946
Design and construction of post-panamax locks 1,590 2,123
Disposal site studies in the Atlantic Side 1,461 8,360
Other various projects 42 163
49,429 55,137
B/. 74,652 B/. 76,286
21. Income taxes
The ACP is not subject to income taxes, as stated in Article

24
43 of the Organic Law which exempts it
from the payment of all national or municipal taxes, except for the employer’s contribution of social
security, educational insurance, workmen’s compensation, fees for public services, and the fee per

September 30, 2012
(In thousands
Autoridad delofCanal
balboas B/.)
de Panamá
Septe
21. mber
Income taxes30, 2012 throughout the year. This allows management to plan and make
(In thousands of balboas B/.) decisions that enhance the economic contribution and operational
The ACP is not subject to income taxes, as stated in Article excellence, improving the chances of achieving strategic goals.
43 of the Organic Law which exempts it from the payment
22.allRisk
of management
national or municipal taxes, except for the employer’s
The ACP’s capital structure consists of net debt (borrowings
contribution of social security, educational insurance, workmen’s
as detailed in note 15), compensated by cash and bank deposit
Financial risk management
compensation, fees for public services, and the fee per net ton.
balances (note 10) and equity of the enterprise (consisting
The ACP maintains a conservative financial policy, designed to protect
of contributed capital,itsreserves,
capital other
and generate
equity accounts, and
optimal performance with low risk, for which variousunappropriated
risk management
retained activities
earnings, asthat include:
disclosed in notes 11, 12,
analysis, evaluation
22. Risk management and risk mitigation, are performed throughout the
13 and 14, respectively). year. This allows
management to plan and make decisions that enhance the economic contribution and operational
excellence,
Financial riskimproving the chances of achieving strategic Historically,
management goals. the ACP has operated with its own resources due
to its high levels of cash generated by its operations; however,
The ACP's capital structure consists of net debt (borrowings as detailed in note 15), compensated by
The ACP maintains a conservative financial policy, designed on December 9, 2008, the ACP subscribed to a common term
cash and bank deposit balances (note 10) and equity of the enterprise (consisting of contributed
to protect its capital and generate optimal performance with agreement with multilateral and bilateral agencies, which
capital, reserves, other equity accounts, and unappropriated retained earnings, as disclosed in notes
low risk, for which various risk management activities that committed to grant borrowings with the purpose of partially
11, 12, 13 and 14, respectively).
include: analysis, evaluation and risk mitigation, are performed finance the Canal Expansion Program (see note 15).
Historically, the ACP has operated with its own resources due to its high levels of cash generated by
its operations; however, on December 9, 2008, the ACP subscribed to a common term agreement
with multilateral and bilateral agencies, which committed to grant borrowings with the purpose of
partially finance the Canal Expansion Program (see note 15).
Categories of financial instruments
2012 2011
Financial assets
Cash and bank deposits (note 10) B/. 2,259,770 B/. 2,285,946
Amortized cost:
Trade and other receivables (note 6) 42,991 46,796
Other financial assets at amortized cost (note 8) 423,443 732,723
B/. 2,726,204 B/. 3,065,465
Financial instruments designated as hedging instruments
(note 16) B/. 239,846 B/. 215,714
Amortized cost:
Trade and other payables (note 17) 335,525 261,761
Borrowings (note 15) 1,000,000 900,000
B/. 1,575,371 B/. 1,377,475
25
September 30, 2012
22. Risk management (continued) Market risk
Financial risk management objectives ACP activities are primarily exposed to financial risks due to
variations of currency exchange, interest rates, and commodity
The main ACP’s financial liability consists of borrowings and prices. With the purpose of managing exposure to these risks,
trade accounts payable. The main purpose of these financial the ACP subscribes a variety of hedge financial instruments,
liabilities is to finance the Canal expansion program. The ACP
including:
also has trade and other receivables, cash and bank deposits
which originate directly from its operations and optimizes
• Interest rate swaps to mitigate the risk of interest rate
the performance of its funds through its investment in debt
increases.
instruments with short maturities which held until maturity. The
• Diesel price swaps to mitigate the risk of fluctuations in
ACP also contracts hedging instruments.
the price of this commodity used in the third set of locks
The ACP is exposed to credit, market and liquidity risks. contract for the expansion program.
• Option contracts for future diesel purchases to mitigate the
The ACP administration monitors these risks. ACP’s Treasury risk of fluctuations in the price of light diesel required in the
coordinates the access to international financial markets, Canal’s regular operations.
monitors and manages the financial risks related to the ACP’s
operations through internal risk reports, which analyze the Exchange rate risk management
exposures depending on degree and magnitude. These risks
include market risk (including exchange risk, and price risk), The ACP has established a policy to manage foreign currency
credit risk, liquidity risk, and interest rate risk. All the activities
risk related to its functional currency. This policy indicates that
related to risk hedging are performed by teams of specialists
all investments, and bank deposits, shall be in the currency of
with the knowledge, experience and appropriate supervision.
the United States of America, or in other currencies authorized
by the Board of Directors.
The ACP maintains policies that provide written principles
about foreign exchange risk management, interest rate risk,
credit risk, and the use of hedge financial instruments and the As of September 30, 2012 the ACP does not maintain
liquidity investment. The internal auditors periodically monitor commitments in other currencies. It only maintains deposits in
the compliance with the policies and exposure limits. The the currency of the United States of America.
ACP does not subscribe or negotiate financial instruments for
speculative purposes. Interest rate risk management
The ACP’s treasury quarterly updates the Board of Directors The ACP is exposed to interest rate risk because it borrows funds
Finance Committee and follows up the risks and implemented at both fixed and floating interest rates. The risk is managed by
policies to mitigate risk exposure. the ACP through the use of interest rate swap contracts. Hedging
activities are evaluated regularly to align with interest rates and
The Board of Directors revises and approves the policies for
the defined risk tolerance, ensuring that the most cost-effective
managing each of the following risks:
hedging strategies are applied.
26

September 30, 2012
22. Risk management (continued)
Interest rate risk management (continued)
Interest rate swap contracts
Since March 2010, the ACP established interest rate swap contracts, without collateral, to fix the floating interest rate of the
B/.800,000 variable rate loan. Of the B/.800,000, B/.200,000 were disbursed on March 1, 2010; B/.300,000 on October 29, 2010,
and B/.300,000 on April 13, 2011. Biannual amortizations of B/.40,000 are programmed to start on May 15, 2019 until loan
maturity on November 15, 2028.

According
Notesto tointerest rate swap contracts,
Financial the ACP agrees to swap the difference between the fixed and floating interest rate amounts
State ments
calculated
Septeonmberthe agreed
30,notional
2012 principal amounts. Such contracts allow the ACP to mitigate the risk of interest rate changes over
the cash
(In flow of the hedged
thousands debt agreed B/.)
of balboas at a floating interest rate. The fair value of interest rate swaps at the end of the reporting
period is determined by discounting future cash flows using the curves at the end of the period in question and the inherent credit
risk in the contract, as it is detailed further ahead.
The following table details the notional principal amounts and the remaining terms of the outstanding interest rate swap contracts
Interest
at the rate
end of the swap contracts
reporting period. (continued)
CashCash
flow flow
hedgeshedges
(Effective date: May 15, 2010, maturity: Nov 15, 2028)
(Effective date: May 15, 2010, maturity: Nov 15, 2028)
Contracts with floating

interest rates and
outstanding fixed Average contracted
payment rates fixed interest rate Notional principal value Fair value
2012 2011 2012 2011 2012 2011
5 years or more 4.67% 4.67% B/. 800,000 B/. 800,000 B/. (239,582) B/. (215,714)
The interest rate swaps are paid biannually. The floating rate on the interest rate swaps is at 6-
The interest rate swaps are paid biannually. The floating rate on the interest rate swaps is at 6-month Libor rate. The ACP will pay
month Libor rate. The ACP will pay or receive the difference between the floating and the fixed
or receive therate
interest difference between
on a net basis.the floating and the fixed interest rate on a net basis.
All interest rate swap

All interest contracts
rate swap exchanging
contracts floating rate interest
exchanging amounts
floating rateforinterest
fixed rate interest amounts
amounts are designated
for fixed as cash flow
rate interest
amounts are designated as cash flow hedges in order to reduce the ACP's cash flow exposure
hedges in order to reduce the ACP’s cash flow exposure resulting from floating interest rates on borrowings.
resulting from floating interest rates on borrowings.
Interest rate sensitivity analysis
Interest rate sensitivity analysis
The following sensitivity analyses have been determined based on the financial instruments exposure to interest rates at the end of
The following
the reporting period. sensitivity analyses have been determined based on the financial instruments
exposure to interest rates at the end of the reporting period.
As of September 30, 2012, for each basis point increase/decrease in the Libor rate curve through the remaining term of the contract,
As of September 30, 2012, for each basis point increase/decrease in the Libor rate curve through the
27 on the interest rate swap contract would
remaining term of the contract, the unrealized loss
decrease/increase by B/.1,004.5. This amount was calculated based on the DV01 indicator
September 30, 2012
22. Risk management (continued) Energy generation
Interest rate risk management (continued) Power generation is related to the consumption of the Canal
operations, while excess capacity is sold in the domestic
Interest rate sensitivity analysis (continued) electricity market. During fiscal year 2012, the ACP consumed
22% of the energy produced, while the remaining 78% was
the unrealized loss on the interest rate swap contract would
sold to the electricity market. The energy is produced by
decrease/increase by B/.1,004.5. This amount was calculated
hydroelectric plants 39% and by thermal plants 61%.
based on the DV01 indicator generated by Bloomberg’s
valuation model tool used in the valuation of interest rate swap
Thermal plant generation is exposed to the risk of fuel price
contracts.
volatility. However, this price is indexed to the energy sale rate.
As of September 30, 2012, the ACP expects that the Libor would This indexing is defined in contractual clauses when the energy
maintain its value through the remaining term of the contract is sold under previously defined contracts or in weekly reports
during fiscal 2013. when energy is not sold under contracts, namely, in the spot
market.
Fuel price risk
Operational fuel price risk sensitivity analysis
The ACP is exposed to commodity price fluctuations risk
mainly from the fuel used in its maritime operations and power As of September 30, 2012, the current price index for light
generation activities for its operations and for the sale of surplus diesel purchases made by the ACP was B/.3.20 per gallon. With
energy to Panama’s National Grid (Sistema Integrado Nacional),
an estimated consumption for fiscal year 2012 of 12.9 million
to the extent that such variations cannot be transferred to ACP’s
gallons, assuming an downward variation trend that decreases
customers.
diesel prices to B/.3.13 per gallon during fiscal year 2013, fuel
expense would show a decrease of approximately B/.0.903
Maritime Operations
million. Up to date it has not been established an exercise price
The ACP uses annually approximately between 10 and 12 of the hedging instrument for the 2013 fiscal year.
million gallons of light diesel on its vessel transit operations.
Since October 20, 2009, risk management for price fluctuations Price risk on adjustment clauses in contracts related to the
on this commodity is mainly performed during the fiscal year, as Canal Expansion Program
this period is considered representative for the implementation
of appropriate commercial policies. As mentioned in Note 24, the ACP has different commitments
related to the Canal Expansion Program. These commitments
This process is carried out by means of specific hedging include adjustment clauses related to the main commodities
activities for approximately 80% of the forecasted fuel volume, that will be used during construction, such as: reinforced
with the objective of maintaining an economic balance of the
steel, cement, structural steel, and light diesel. The clauses
commodities.
use, as adjustment references, representative price indexes of
the commodities’ fair value, a fixed reference price for each
For fiscal year 2012, the ACP purchased a hedge instrument (cap)
commodity, the quantities or maximum volume, and the target
establishing a maximum price of B/.3.35 per gallon for 10.45
million annual gallons in order to hedge the price fluctuation risk dates for adjustment calculations.
for the diesel used in operations, of which 11.9 million gallons
were consumed by September 2012. The maximum quantities, to which the ACP is exposed to when
contracts were signed, are as follows:
28
Notes
98 Ato N N Financial
U A L R E P O R TState
2 0 1 2 ments
Septe mber del

Autoridad 30,Canal
2012 de Panamá
Notes
(In to Financial
thousands Statements
of balboas B/.)
September 30, 2012
Price risk on adjustment clauses in contracts related to the Canal Expansion Program
(continued)
Price risk on adjustment clauses in contracts related to the Canal Expansion Program (continued)
The maximum quantities, to which the ACP is exposed to when contracts were signed, are as
follows:
Commodity Agreed volume Fixed Fair value

(thousands) reference price reference index
Reinforced steel 279.0 metric B/.575 per “Reinforcing Bar - Platts Steel
tons metric ton Market Daily”
Structural steel 67.2 metric tons B/.1,000 per “Plate - Platts Steel Market
metric ton Daily”
Cement 1,278.6 short B/.100 per short “Portland and Other Cements,
tons ton Commodity Code 13220161”
from the US Bureau of Labor
Statistics
Light Diesel (Third Set 60,000 gallons B/.1.40 per US Gulf Coast Diesel No.2 Oil
of Locks contract) gallon from Platts Latin American
Wire
Light Diesel (Pacific 2,054 gallons B/.1.7580 per Diesel’s Import Parity Price
access channel gallon from the Secretariat of Energy
excavation contracts) for Light Diesel
During the life of the project, the ACP shall determine the fair value of the commodities and
consumed materials among periods established in the proposal in order to define the difference with
the fixed referenced price. This price difference shall be multiplied by the agreed quantities of
commodities or consumed materials in order to obtain the amount over which the ACP must pay or
charge the contractor during periodic payments for work progress made. Additionally, the locks
construction contract allows compensation for a portion of the incremental local labor cost, as it was
considered to cover exclusively over costs in Panamanian labor costs.
40
29
September 30, 2012
22. Risk management (continued) The variation of light diesel prices will not affect the ACP’s
income statement or its equity, as it is capitalized as part of the
Price risk on adjustment clauses in contracts related to the expansion program.
Canal Expansion Program (continued)
Reinforced steel and cement
During the life of the project, the ACP shall determine the fair
value of the commodities and consumed materials among periods For these commodities, under market conditions, it has not been
established in the proposal in order to define the difference feasible to obtain financial hedge services to allow the mitigation
with the fixed referenced price. This price difference shall be of future cash flows risk due to price variability.
multiplied by the agreed quantities of commodities or consumed
materials in order to obtain the amount over which the ACP The following table shows the quantities established in the lock
must pay or charge the contractor during periodic payments design and construction contract and the estimated adjustments
for work progress made. Additionally, the locks construction at the beginning of fiscal year 2012:
contract allows compensation for a portion of the incremental
local labor cost, as it was considered to cover exclusively over
Total (in
costs in Panamanian labor costs.
Commodity Unit Quantity thousands)

Sensitivity to price risk on adjustment clauses in contracts Reinforced Steel Metric Ton 143,307 B/. 33,054
related to the Canal Expansion Program Cement Short Ton 788,253 (B/. 7,575)
The ACP’s internal policies allow to award hedging contracts

with specialized institutions, in an effort to neutralize or mitigate Reinforced Steel
the risks associated with the price fluctuation of the commodities
procured by the ACP, in regards to the functioning, maintenance, During fiscal year 2012, the scaling adjustment for reinforced
operations, modernization, and expansion of the Canal. steel resulted in a B/.31,978; it was B/.1,076 lower than the
B/.33,054 estimated at the beginning of fiscal year 2012. As of
Light diesel September, 30 2012, the reinforced steel price (moving average
as stipulated in the contract) was B/.757.58 per metric ton, which
On April 18, 2012, ACP conducted a hedging transaction for is B/.182.58 over the reference price of B/.575.00 per metric ton.
18.1 million gallons of light diesel to cover the risk of variability If the average price remains unchanged for fiscal year 2013, for
in future cash flows attributable to variability in the diesel price the established volume of 82,890 metric tons, ACP’s exposure
index from April 26 2012 to July 25, 2014. The instrument was shall be B/.15,134.
set at a swap price of B/.3.1347/gal.
Cement
On April 22, 2010, ACP conducted a hedging transaction for
36.5 million gallons of light diesel to cover the risk of variability During fiscal year 2012, the scaling adjustment for cement
in future cash flows attributable to variability in the diesel price resulted in a credit of B/. 7,774 in favor of ACP; it was B/.199
index from April 26 2010 to April 25, 2012 (first two years of the higher than the estimated amount at the beginning of fiscal year
project). The instrument was set at a swap price of B/.2.4396/ 2012. As of September 30, 2012 the price was B/.90.02 per
gal.
30

September 30, 2012
22. Risk management (continued) The ACP is not allowed to place its funds in banks or to invest
in financial instrument if one of its ratings is lower than what
Reinforced steel and cement (continued) is indicated herein, except for the Banco Nacional de Panamá
(National Bank of Panama). The ACP’s exposure and the credit
Cement (continued) ratings of its counterparties are continuously monitored. The
credit exposure is controlled by counterparty limits that are
short ton. For fiscal year 2013, if the average price remains reviewed quarterly through the use of an own financial model
unchanged and with an established consumption of 455,750 called “Risk Assessment System for Banking Institutions and
short tons, the margin between the reference price and the current Financial Instruments”.
price would represent a credit of B/.4.548 in favor of ACP.
The maximum limits for funds deposits in each bank institution
The variation in price in these commodities will not affect the and financial instruments are assigned according to the
ACP’s income statement nor its equity, as it is capitalized as part assessment of the following weighted factors:
of the Canal expansion project.
1. Short-term risk rating
Credit risk management 2. Capital hedging or leverage
3. Economic factor for the country where the counterparty is
It refers to the risk that the borrower or issuer of a financial asset located, including gross domestic product, unemployment
may not comply, completely and on time, with any payment to be index, inflation index, and current account balance
made in accordance with the terms and conditions agreed upon 4. Liquidity index
when the obligation was acquired. To mitigate the credit risk, 5. Deterioration index
the liquidity investment policy establishes limits by industry and
limits by issuer, as the result of the categorization of the Risk Banking institutions are rated in three categories within the
Assessment System adopted by the ACP, which includes the ACP’s risk system:
following factors: short-term risk rating, issuer leverage index,
economic factor, liquidity index, and deterioration index. A. Up to B/.100 million
B. Up to B/.80 million
Counterparty risk refers to the risk of a counterparty defaulting C. Up to B/.60 million
in the payment of a security purchase transactions. The ACP
does not have counterparty risk, as it buys all of its securities Liquidity risk management
using the method of payment on delivery (“delivery versus
payment”) through payment systems, using a custodian account. The ACP manages the liquidity risk through continuous
monitoring of the forecasted and actual cash flows, and
Credit risk refers to the risk that one of the parties does not reconciling the maturity profiles for the financial assets and
comply with its contractual obligations, resulting in financial liabilities. Historically, the cash generated by the ACP’s
loss to the ACP. ACP’s policies only allow depositing funds operations has been enough to cope with its operations and
in banking institutions and financial instruments that have more the requirements of its investments program, while generating
than one short-term international investment quality risk rating adequate returns to the ACP. However, since 2008, the ACP
of at least the following: A-2 by Standard & Poors, P-2 by faced the necessity to obtain financing for a portion of the Canal
Moody’s Bank Deposit Ratings, or F-2 by Fitch Ratings. Expansion Program. The credit facilities available to the ACP to
reduce the liquidity risk are detailed as follows:

31
Notes to
Notes toFinancial
FinancialStatements
State ments
Septe mber30,
September
Autoridad 30,2012
del 2012 de Panamá
Canal
(In
(In thousands
thousands
Notes ofofbalboas
balboas
to Financial B/.)
B/.)
State ments
Septe mber 30, 2012
22.
(InRisk management
thousands of(continued)
balboas B/.)
Interest and liquidity risk tables
Interest and liquidity risk tables
To finance the expansion program, the ACP has a credit facility with various financial institutions. Currently, 10 percent of the debt
To finance the expansion program, the ACP has a credit facility with various financial institutions.
isInterest
contractedand
Currently, 10 liquidity
at fixed effectiverisk
percent theoftables
ofrate 5.196 percent, and the remaining 90 percent shows a moving average effective rate of 2.611
debt is contracted at fixed effective rate of 5.196 percent, and the
percent, calculated based on undiscounted cash flows to the date in which the ACP shall make the payments.
remaining
To finance90
thepercent shows
expansion a moving
program, the average
ACP haseffective
a credit rate of 2.611
facility percent,financial
with various calculated based on
institutions.
undiscounted cash flows to the date in which the ACP shall make the payments.
Currently, 10 percent of the debt is contracted at fixed effective rate of 5.196 percent, and the
remaining 90 percent shows a moving average effective rate of 2.611 percent, calculated based on
undiscounted cash flowsWeighted average
to the date in which
effective interest
the ACP shall
1 month or 1-3
make the payments.
More than 5
rate (%) less months 1 - 5 years years Total
September 30, 2012 (2011) Weighted average
Variable interest loan effective interest
2.611 (1.22191)1B/.
month or- B/.1 - 3 - B/. - More900,000
B/. than 5 B/. 900,000
Fixed interest loan rate(5.196)
5.196 (%) less - months - 1 - 5 years- years
100,000 Total
100,000
September 30, 2012 (2011) B/. - B/. - B/. - B/. 1,000,000 B/. 1,000,000
Variable interest loan 2.611 (1.22191) B/. - B/. - B/. - B/. 900,000 B/. 900,000
Fixed interest loan 5.196 (5.196) - - - 100,000 100,000
The following table details the ACP’s expected
B/. cash
- flows
B/. for
- its
B/. main- financial assets:
B/. 1,000,000 B/. 1,000,000
The following table details the ACP’s expected cash flows for its main financial assets:
2012
The following table Up
details the ACP’s
to 1 month expected
1 - 3 months cash- flows
3 months 1 year for1 its main financial
- 5 years More thanassets:
5 years Total
Time deposits B/. 60,001 B/. 176,924 B/. 1,656,812 B/. - B/. - B/. 1,893,737
Held-to-maturity securities
2012 - - 423,443 - - 423,443
B/. to 1 month
Up 60,001 B/. 176,924
1 - 3 months B/.months2,080,255
3 - 1 year B/.1 - 5 years - B/.
More than 5 years- B/. Total
2,317,180
Time deposits B/. 60,001 B/. 176,924 B/. 1,656,812 B/. - B/. - B/. 1,893,737
Held-to-maturity
2011securities - - 423,443 - - 423,443
B/. 60,001
Up to 1 month B/. 176,924
1 - 3 months B/.
3 months2,080,255
- 1 year B/.1 - 5 years - B/.
More than 5 years - B/. Total
2,317,180
Time deposits B/. - B/. - B/. 2,009,497 B/. - B/. - B/. 2,009,497
Held-to-maturity securities
2011 - 6,067 726,656 - - 732,723
B/.
Up to 1 month- B/.1 - 3 months
6,067 B/.
3 months2,736,153
- 1 year B/.1 - 5 years - B/.
More than 5 years - B/. Total
2,742,220
Time deposits B/. - B/. - B/. 2,009,497 B/. - B/. - B/. 2,009,497
Held-to-maturity securities - 6,067 726,656 - - 732,723
The ACP has accessB/.to financing- B/.
facilities, as described
6,067 B/.
afterward, of- which
2,736,153 B/. B/.
USD 1,300,000
- B/.
were
2,742,220
not utilized at the end of the 2012 period. The ACP expects to comply with its other obligations
with the cash
The ACP has flows
accessfrom its operations
to financing and from
facilities, the maturity
as described of financial
afterward, of which assets.
USD 1,300,000 were
notACP
The utilized at the
has access to end of the
financing 2012 asperiod.
facilities, describedThe ACP of
afterward, expects to comply
which USD with
1,300,000 wereits
notother obligations
utilized at the end of the
The
with following
the cash table
flows details
from its the ACP's
operations liquidity
and from analysis
the for its
maturity of financial
financial instruments.
assets. The table
2012 period. The ACP expects to comply with its other obligations with the cash flows from
has been designed based on contractual net cash flows that are paid on a net basis. Cash flows its operations and from theare
maturity
ofbased
financial
onassets.
the contractual maturities of financial instruments.
The following table details the ACP's liquidity analysis for its financial instruments. The table
has been designed based on contractual net cash flows that are paid on a net basis. Cash flows are
The following table details the ACP’s liquidity analysis for its financial instruments. The table has been designed based on
based on the contractual maturities of financial instruments.
contractual net cash flows that are paid on a net basis. Cash flows are based on the contractual maturities of financial instruments.
32
44
Autoridad
102 A N N U Adel
L R ECanal
P O R T 2de
0 1 2Panamá
Notes to Financial
Autoridad del Canal State ments
de Panamá
Septe mber 30,
Notes to Financial
Autoridad 2012
del Canal Statements
de Panamá
(In thousands
September
Notes 30,of2012
to Financial balboas B/.)
State ments
(In thousands
Septe mber 30,of2012
balboas B/.)
22.Risk
22. Risk management
management (continued)
(continued)
Interest
22. Risk
Interest and liquidity
management
and liquidity risk tables
(continued)
risk tables (continued)
(continued)
Interest and liquidity risk tables (continued) Less than 3 3 to 12 More than 5
months months 1 - 5 years years
Less than 3 3 to 12 More than 5
September 30, 2012 months months 1 - 5 years years
Trade and other payables B/. 303,069 B/. - B/. 32,456 B/. -
Other financial liabilities
September 30, 2012 12,076 - - 227,770
Borrowings
Trade and other payables B/. 303,069- B/. -- B/. 32,456- B/. 1,000,000-
Other financial liabilities 12,076
B/. 315,145 B/. -- B/. 32,456- 227,770
B/. 1,227,770
Borrowings - - - 1,000,000
September 30, 2011 B/. 315,145 B/. - B/. 32,456 B/. 1,227,770
Trade and other payables B/. 231,943 B/. - B/. 29,818 B/. -
Other financial
September liabilities
30, 2011 12,941 - - 202,773
Borrowings
Trade and other payables B/. 231,943- B/. -- B/. 29,818- B/. 900,000-
Other financial liabilities 12,941
B/. 244,884 B/. -- B/. 29,818- 202,773
B/. 1,102,773
Borrowings - - - 900,000
All subscribed contracts with the different counterparties
B/. 244,884 B/. have a -clause B/.that 29,818
prevents the
B/. ACP from
1,102,773
having to provide collateral guarantees for any unrealized loss resulting from the periodic
All subscribed contracts with the different counterparties have a clause that prevents the ACP from having to provide collateral
valuations
All of these
subscribed financial
contracts withinstruments.
the different counterparties have a clause that prevents the ACP from
guarantees for any unrealized loss resulting from the periodic valuations of these financial instruments.
having to provide collateral guarantees for any unrealized loss resulting from the periodic
FinancingofStructure
valuations these financial instruments.
Financing Structure
Used and available
Financing Structureborrowing amounts until 2014:
Used and available borrowing amounts until 2014:
Used and available borrowing amounts until 2014: 2012 2011
Amount used
Japan Bank for International Cooperation (JBIC) 800,000 B/. 2011
B/. 2012 800,000
Amount
Europeanused
Investment Bank (EIB) 100,000 100,000
Japan Bank for International
Inter-American DevelopmentCooperation
Bank (IADB)(JBIC) 100,000 B/. 800,000-
B/. 800,000
Inter-American
Available AmountDevelopment Bank (IADB) 100,000 -
Available Amount
Inter-American Development Bank (IADB) 300,000 400,000
European Investment
International Finance Bank (EIB) (IFC)
Corporation 400,000
300,000 400,000
300,000
Inter-American Development
Andean Development Bank (ADC)
Corporation (IADB) 300,000
300,000 300,000
400,000
International Finance Corporation (IFC) 300,000 300,000
B/. 2,300,000 B/. 2,300,000
Andean Development Corporation (ADC) 300,000 300,000
B/. 2,300,000 B/. 2,300,000
45
45 33
Autoridad del Canal
Autoridad Canal de
de Panamá
Panamá
Notes State ments
September
Septe mber 30, 2012
2012
(In thousands of balboas
(In balboas B/.)
B/.)

Fair value of financial instruments
Fair value of financial instruments
Fair value of financial instruments measured at amortized cost
Fair value of financial instruments measured at amortized cost
Except for
Except forwhat is detailed
what in theinfollowing
is detailed table, thetable,
the following ACP considers
the ACPthat the carrying
considers thatamounts of financial
the carrying assets and
amounts of financial
liabilities recognized
financial assets andat amortized
financialcostliabilities
in the financial statementsatapproximate
recognized amortizedtheir
costfairinvalues:
the financial statements
approximate their fair values:
2012 2011
Carrying
Fair Value Carrying Amount Fair Value
Amount
Financial assets
Financial assets measuret at
amortized cost:
Investment in bonds B/. 423,443 B/. 424,258 B/. 732,723 B/. 730,544
Financial liabilities measured
at amortized cost:
Borrowings at floating rate B/. 900,000 B/. 884,863 B/. 800,000 B/. 813,138
Borrowings at fixed rate 100,000 123,203 100,000 122,366
B/. 1,000,000 B/. 1,008,066 B/. 900,000 B/. 935,504
Valuation techniques and assumptions applied in order to measure fair value
The fair value of financial assets and financial liabilities is determined in the following manner:
Valuation techniques and assumptions applied in order to measure fair value
 The fair value of financial assets and financial liabilities with standard terms and conditions and
The fair valueon
traded of active
financialliquid
assets markets
and financial liabilities is determined
is determined in the following
with reference to quotedmanner:
market prices.
• Thefair
The fair value
value of other
of financial financial
assets assetsliabilities
and financial and financial liabilities
with standard (excluding
terms and conditionshedging
and tradedinstruments)
on active liquid markets
isisdetermined
determined withinreference
accordance with
to quoted generally
market prices. accepted fixed pricing models based on discounted
cash flow analysis using prices from current observed market transactions and quotes for
• similar
The instruments.
fair value of other financial assets and financial liabilities (excluding hedging instruments) is determined in accordance
with generally accepted fixed pricing models based on discounted cash flow analysis using prices from current observed market
 The fair value of derivative instruments is calculated using quoted prices. When such prices
transactions and quotes for similar instruments.
are not available, a discounted cash flow analysis is performed using the applicable yield curve
for the duration of the instruments for non-optional derivatives, and option pricing models for
optional derivatives. Interest rate swaps are measured at the present value of future cash flows
estimated and discounted based on the applicable yield curves derived from quoted interest
rates.
46 34

September 30, 2012
Septe mber 30, 2012
Valuation techniques and assumptions applied in order to measure fair value (continued)
• The fair value of derivative instruments is calculated using quoted prices. When such prices are not available, a discounted
22. Riskcash
management
flow analysis(continued)
is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives,
and option pricing models for optional derivatives. Interest rate swaps are measured at the present value of future cash flows
Fair value measurements
estimated recognized
and discounted inapplicable
based on the the statement of financial
yield curves position
derived from quoted interest rates.
The following table providesrecognized

Fair value measurements an analysis ofstatement
in the financialofinstruments that are measured subsequent to
financial position
initial recognition at fair value, grouped into levels from 1 to 3 based on the degree to which the fair
valueThe
is observed:
following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into levels from 1 to 3 based on the degree to which the fair value is observed:
 Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities.
• Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
 Level 2: fair value measurements are those derived from indicators other than quoted prices
included within Level 1 which are observable for the assets or liabilities either directly (i.e. as
• Level
prices) or 2: fair value(i.e.
indirectly measurements are those
derived from derived from indicators other than quoted prices included within Level 1 which are
prices).
observable for the assets or liabilities either directly (i.e. as prices) or indirectly (i.e. derived from prices).
 Level 3: fair value measurements are those derived from valuation techniques that include
indicators
• Level 3:for the measurements
fair value assets or liabilities that from
are those derived are valuation
not based on observable
techniques marketfordata
that include indicators the assets or liabilities
(unobservable indicators)
that are not based on observable market data (unobservable indicators)
2012
Level 1 Level 2 Level 3 Total
LIABILITIES:
Financial liabilities at fair value with
changes in other comprehensive income
Financial instruments in hedged relationships B/. - B/. 239,846 B/. - B/. 239,846
2011
Level 1 Level 2 Level 3 Total
ASSETS:
Financial assets at fair value with
LIABILITIES:
Financial liabilities at fair value with
35
Notes to Financial State ments ANNUAL REPORT 2012 105
Septe mber del
Autoridad 30, Canal
2012 de Panamá
(In thousands
Notes
Septe 30,of2012
to Financial
mber balboas B/.)
Statements
September
(In thousands30,of2012
balboas B/.)
23. Related party transactions
23.
23.Related
Relatedparty transactions
party transactions
Commercial transactions
Commercial
Commercial transactions
transactions
During the year, the ACP executed the following commercial transactions with the Republic of
Panama:
Duringthethe
During year,
year, the executed
the ACP ACP executed the following
the following commercial commercial transactions
transactions with the Republicwith the Republic of
of Panama:
Panama:
Sale of goods and services Purchase of goods and services
Sale of Year
goodsended
and services Purchase Year ended
of goods and services
2012 2011 2012
Year ended Year ended2011
Sale of potable water to the Instituto de 2012 2011 2012 2011
Acueductos y Alcantarillados Nacionales
Sale of potable water to the Instituto de
(IDAAN) B/. 26,486 B/. 25,520 B/. - B/. -
Other government entities
(IDAAN) 5,176
1,581 B/. 25,520
B/. 26,486 B/. -- B/. --
Employee benefits entities
Other government 1,581- 5,176- 60,204- 58,418-
Public service
Employee fees
benefits -- -- 2,218
60,204 1,906
58,418
Panamanian 381,130 366,987
Public serviceTreasury
fees - fees per net ton -- -- 2,218 1,906
Panamanian Treasury - fees per net ton B/. 28,067- B/. 30,696- B/. 381,130 B/.
443,552 427,311
366,987
B/. 28,067 B/. 30,696 B/. 443,552 B/. 427,311
The following balances were outstanding at the end of the reporting period:
Amounts owed by the Amounts owed to the
Republic of Panama Republic of Panama
Amounts owed by the Amounts owed to the
2012 2011 2012 2011
Republic of Panama Republic of Panama
Sale of potable water to the Instituto de 2012 2011 2012 2011
Sale of potable water to the Instituto de
(IDAAN) B/. 6,129 B/. 6,990 B/. - B/. -
Other government entities
(IDAAN) B/. 1,555
6,129 B/. 1,426
6,990 B/. -- B/. --
Employee benefits entities
Other government 1,555- 1,426- 22,794- 18,556-
Public service
Employee fees
benefits -- -- 186
22,794 156
18,556
Panamanian - -- 31,263 28,973
Public serviceTreasury
fees - fees per net ton - 186 156
Panamanian Treasury - fees per net ton B/. 7,684- B/. 8,416- B/. 31,263 B/.
54,243 47,685
28,973
B/. 7,684 B/. 8,416 B/. 54,243 B/. 47,685
48
48
36

September 30, 2012
23. Related party transactions (continued) Total commitments include the Panama Canal expansion
program contracts awarded during the fiscal year totaling
Commercial transactions (continued) B/.30,271 (2011: B/.18,332).
Amounts owed by and owed to the Republic of Panama During fiscal year 2012, the most significant contracts were
Panamá
ancierosare classified as accounts receivable and accounts payable, awarded to: Celmec, S.A., for modifications to the Agua Clara
2 respectively.
substation on the Atlantic, East Side of the Canal for B/.3,797;
les de balboas B/.)
Howard Group, S.A., for realignment of the Limon Road, new
Sales of good and services to the Republic of Panama were
Telfers Road and improvements to the Bolivar Avenue at the
made at ACP´s usual list prices without discount.
s relacionadas (continuación) Atlantic Side for B/.5,777; and J. Aron & Co. for the diesel
The outstanding amounts are unsecured and will be settled in swap hedging contract to cover the Panama Canal expansion
continuación)
cash. No guaranties have been given or received. No expense program for B/.9,227.
l Estado has
y losbeen
adeudados al Estado
recognized se clasifican
in the current or priorcomo cuentas
period for badpor
or
spectivamente.
doubtful debts with respect to the amounts owed by related During fiscal year 2011, the most significant contracts were
parties. awarded to: Fattuto, S.A, for cleaning unexploded ordinances
os al Estado se realizaron a los precios de lista usuales de la ACP,
for B/.2,248; Sociedad Española de Montajes Industriales for
Compensation and benefits to key managers range towers at San Pablo and Tabernilla reach for B/.2,000;
stán garantizados y se liquidarán en efectivo. No se han otorgado and Howard Group, S.A. for drainage channels in Marieta and
ha reconocido ningún gasto en el período actual ni en períodos
The ACP paid a total of B/.2,768 (2011: B/.2,905) for Cocoli for B/.1,588.
obrables o cuentas de dudoso cobro relacionados con los importes
adas. remuneration and benefits to its key management personnel.
It is the responsibility of the Administrator to determine the
Fiscal year 2012 balance includes the design-construction
a los ejecutivos
salariesclaves
of key management personnel in conformity with the
contract for the Canal Expansion Program of the third set
Personnel Administration Regulations, subject to the Board of
s y beneficios a los ejecutivos en puestos claves por un total de of locks, to Grupo Unidos por el Canal, S.A. (GUPCSA) of
Directors ratification. It is the Board of Directors’ responsibility
orresponde al Administrador fijar los salarios de los ejecutivos de B/.2,205,906 (2011: B/.2,823,744).
do en eltoReglamento
determine the salaries of the de
de Administración Administrator, Deputy
Personal, sujeto a
Administrator, Inspector General and the Secretary of
nta Directiva. A su vez, le corresponde a la Junta Directiva fijar the Board
el
ub-administrador, Fiscalizador General y Secretario de la Junta
of Directors. 25. Contingent liabilities
24. Commitments During 2012, the contractor GUPCSA submitted to the ACP
several claims, including one for B/.586,000. These claims are
Commitments as a result of construction contracts in progress at different stages of the dispute resolution process provided
os de construcción en proceso
and undelivered y órdenes
purchase ordersdeamounted
compra pendientes de
to approximately for in the contract for the design and construction of the
mente a B/.2,677,000 (2011: B/.3,537,000) como sigue:
B/.2,677,000 (2011: B/.3,537,000), as follows: third set of locks. In some cases, this process has not begun
2012 2011 because GUPCSA has not submitted the information to support
Investment programs: the alleged costs and additional time claimed, and in others,
Canal Expansion B/. 2,362,000 B/. 3,088,000 the information presented is not sufficient to make a proper
Others 275,000 416,000 assessment of claims. As the contractor GUPCSA presents
Sub-total 2,637,000 3,504,000 additional information regarding such claims, ACP analyzes
Operations 40,000 and proceeds to evaluate it. This is an interactive process
33,000
B/. 2,677,000 B/. 3,537,000
37
September 30, 2012
25. Contingent liabilities (continued) of acceptance of responsibility on the part of the ACP. In the
opinion of the Administration and its General Counsel, the
involving constant communication with the contractor until outcome of these actions will not have significant adverse effects
the information submitted is complete, in order to follow the on the financial position of the ACP.
dispute resolution process set out in the Contract and issue a
determination as appropriate.
26. Events that occurred after the reporting period
The ACP has received other claims from GUPCSA for an

On November 27, 2012 meeting, the Board of Directors approved
aggregate amount of B/.180,182, which have been denied by
the transfer to the Panamanian Treasury of the operating and
ACP, stating that the contractor has submitted these claims to
functioning economic surplus corresponding to fiscal year 2012
the Dispute Adjudication Board (DAB) for its decision. Two
other minor claims were received, that were already submitted in the amount of B/.648,991. (See note 14).
to the DAB, and for which the DAB had ruled in favor of the
contractor as to merit but not in regards to quantum by which 27. Approval of financial statements
the definition of the amount payable is being discussed by the
parties. The financial statements of the Autoridad del Canal Panamá for
the period ended as of September 30, 2012, were approved by
The notes contained herein relating to claims against the ACP the Board of Directors and authorized for issuance on November
cannot and should not be considered as support or evidence 27, 2012.
******
38
For more information on the Panama Canal, visit
the Balboa Administration Building
Information Office or Call (507) 272-7602 or
(507) 272-7677.
The Miraflores Locks Visitors Center is open
daily from 9 a.m. to 5 p.m.
Internet users can visit the ACP website www.
pancanal.com or send an
Credits
e-mail to info@pancanal.com
PRODUCTION AND DIRECTION

Autoridad del Canal de Panama
Corporate Affairs, Strategic Planning and
Productivity Section
Phone (507) 272-1407 / (507) 272-7383
www.pancanal.com
DESIGN AND DIAGRAMMING

Maclovia Araúz de Durling
www.pancanal.com

Panama Canal Annual Report 2012

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Panama Canal Annual Report 2012

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MESSAGE FROM THE CHAIRMAN OF

THE BOARD OF DIRECTORS 2

Adolfo Ahumada Alfredo Ramírez

Eduardo A. Quirós B. Norberto R. Delgado D.

Rafael E. Bárcenas P. Nicolás Corcione

José A. Sosa A. Marco A, Ameglio S.

Jorge L. Quijano Manuel Benítez

Francisco Loaiza B. Ilya Marotta

Luis Alfaro Álvaro A. Cabal

Rodolfo Sabonge Carlos Vargas

Ana María P. de Chiquilani Manuel Domínguez

Objective 3 - To implement business practices that enhance good corporate governance.

Objective 5 - To increase productivity through excellence in performance and the wellbeing of

In the general requests category (which encloses unions, employees, government

Operating Results which culminated in a decline of the increase

beginning of 2012, economic indicators show a downward trend,

Full Container Vessel

2012, showing an increase in traffic figures as compared for fiscal

foot equivalent unit) invoiced. These figures reflect a 2.9 percent

increase in transits, a 5.4 percent increase in tons and a 5.6 percent

increase in TEU volumes as compared to the previous year. Of

for 47.3 percent. which contributed positively to increase cargo

volumes transits. Likewise, the global demand for

the average deployed vessel size increased from

Reefer Vessels Segment

registered 1,116 transits, which represent 9.9

million PC/UMS tons and B/.50.6 million in revenues

from tolls. Transits, tonnage and tolls were down

24.5 percent, 20.8 percent, and 12.9 percent,

respectively, in comparison with fiscal year 2011.

Transit by Vessel Types

0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Transit Operations Performance

Transit of Oceangoing Vessels

Panamax Vessel Transits

Service Rendering Performance Canal Water Time (CWT)

27.09 26.81 26.20

less time than programmed.

Percentaje of CP/SUAB Tons

with Good Service Level

1.33 percent increase over fiscal year 2011 results of 10.56

This cumulative average was slightly affected by the

Average and Cumulative Average in our organizational culture in customer satisfaction

Customer Satisfaction inside the navigational channel) were completed in the

Percentage of Progress Annual Goal FY2012 Percentage of Progress to Date

On the other hand, we are analyzing the infrastructure required

With regards to dredging, we are developing a plan for the

Regarding safety, we are assessing the capacity required to respond

Capacity Model for the Expanded

Post-Panamax Locks inspection services subcontractor SGS S.A. and

task through its subcontractor, NDE Associates Inc. Meanwhile,

Accumulated Volume (Mm3)

removal of a cumulative volume of approximately 15.9 million 35

Another important task is the transportation of

The quality assurance, environmental

its performance, always stressing the importance of 26

after the contractual completion date), and they are 4

working to reduce delays. 0

A dry excavation is underway to connect the Pacific Locks

of Ingenieros Civiles Asociados S.A. de C.V. (ICA), Fomentos de

Gatun Lake Deepening

by Dredging International de Panamá S.A., covered around 11

dredge D’Artagnan, upon completion of its assignment in Gatun 20