Investment Performance Review For the Quarter Ended March 31, 2017

Transcription

1 Investment Performance Review Investment Advisors Steven Alexander, CTP, CGFO, CPPT, Managing Director Robert Cheddar, CFA, Chief Credit Officer, Managing Director D. Scott Stitcher, CFA, Director Richard Pengelly, CFA, CTP, Director Rebecca Geyer, CTP, Senior Analyst Cody Raulerson, Analyst One Keystone Plaza, Suite 300 North Front & Market Streets Harrisburg, PA fax PFM Asset Management LLC 300 South Orange Avenue Suite 1170 Orlando, FL fax 1 of 49

2 TABLE OF CONTENTS Tab I Tab II Tab III Market Update Executive Summary Investment Portfolio and Trade Analysis Short Term Portfolio Asset Allocation Chart Important Disclosures 2017 PFM Asset Management LLC 2 of 49

3 Tab I 2017 PFM Asset Management LLC 3 of 49

4 QUARTERLY MARKET SUMMARY SUMMARY The Trump trade dominated markets for much of the quarter pushing interest rate and equity prices higher, as the Trump administration and the Republican Party continued to push a bold agenda that promised new jobs, lower taxes, deregulation, and massive infrastructure spending. On March 15, with almost unanimous certainty from the market, the Federal Open Market Committee (FOMC) raised the federal funds target range by 0.25% to a range of 0.75% to 1.00%. The FOMC also released updated economic forecasts and a new dot plot. These were largely unchanged from the forecasts released in December. Central banks in the developed world outside of the United States continued to apply highly accommodative monetary policies as economic growth and inflation remained subdued. As a result, sovereign bond yields were at or near historic lows, with yields throughout Europe and Japan below 0%. Emerging markets experienced a resurgence this past quarter, after reeling from lack of positive investor sentiment, turning in a strong begining to ECONOMIC SNAPSHOT The pace of U.S. economic expansion slowed in the fourth quarter of Measurements of growth in the first quarter 2017 are forecasted to slow further, however, the labor market remained strong, consumer confidence continued to soar, business surveys picked up, and the housing market returned to near pre-crisis levels as the market continues to digest the size and scope of the Trump administration s proposed policies. U.S. gross domestic product (GDP) grew at a rate of 2.1% in the fourth quarter of 2016, a slowdown from the third quarter s pace of 3.5%. The deceleration reflected downturns in exports and federal government spending, and a deceleration in business investment. First quarter estimates are calling for further slowing in the pace of expansion to below 1.5% as consumer spending declines and business investment remains muted. The labor market added over 500,000 jobs in the first quarter as the unemployment rate declined to a decade low of 4.5% with the labor force participation rate rising to 63% for the first time in a year. Wage growth remained firm in the quarter, increasing at an annual rate of more than 2.5% during all three months. Confidence among Americans grew as the Conference Board s March reading increased to its highest level since the end of Manufacturing extended its expansion during the quarter with the ISM manufacturing PMI rebounding, Fixed Income Management after contracting over 2016 year-end, to its highest level since the end of On the housing front, existing home sales reached pre-crisis levels, selling at an annual rate of 5.69 million to start the year. INTEREST RATES Short-term (under five years) yields ended the first quarter higher, reflecting the Fed s March rate hike, while medium to long-term yields declined amid subdued inflation expectations. For much of the quarter, yields remained range bound until entering an upward trend at the start of March in anticipation of the expected FOMC March rate hike. They declined as the Fed reiterated its expectation for gradual tightening and the ability of the Trump administration to enact bold, pro-growth policies came into question. The 2-year Treasury yield ended the quarter only seven basis points over December 31, while the yield on the 10-year Treasury fell 6 basis points. In the money market space, shorter-term Treasury yields rose as the expectation for a Fed rate hike gained certainty. Yields on commercial paper and certificates of deposit did not increase. However, yields on short-term credit instruments remained elevated and offered incremental yield. SECTOR PERFORMANCE U.S. Treasury indexes posted positive returns in the first quarter of the year, the first positive quarter since the second quarter of Returns were largely generated by income rather than price appreciation as yields were little changed. Federal agency yield spreads remained near historically tight levels throughout the quarter as the supply-demand imbalance continued. The sector outperformed comparable maturity Treasuries for the third quarter in a row. Corporate yield spreads continued to tighten during the quarter, reaching multi-year lows, before drifting mildly wider at the end of March. The sector generated strong outperformance relative to comparable maturity Treasuries, as the sector turned in the sixth straight quarter of outperformance. Mortgage-backed securities (MBS) generally underperformed Treasuries due to duration extensions, and headline risk surrounding the potential reduction in the Fed s balance sheet holdings. Asset-backed securities (ABS) strongly outperformed Treasuries, as AAArated tranches, in our view, continued to offer good value, adding to returns and diversification PFM Asset Management LLC 4 of 49

5 QUARTERLY MARKET SUMMARY Fixed Income Management Economic Snapshot Labor Market Latest Dec '16 Mar '16 Unemployment Rate (left) vs. Change in Nonfarm Payrolls (right) Unemployment Rate Feb'17 4.7% 4.7% 5.0% 7% Change In Non-Farm Payrolls Unemployment Rate 375K Change In Non-Farm Payrolls Feb'17 235, , ,000 6% 250K Average Hourly Earnings (YoY) Feb'17 2.8% 2.9% 2.5% 5% 125K Personal Income (YoY) Feb'17 4.6% 3.6% 3.6% Initial Jobless Claims (week) 3/24/17 258, , ,000 4% 0 Feb '14 Aug '14 Feb '15 Aug '15 Feb '16 Aug '16 Feb '17 Growth Real GDP (QoQ SAAR) 2017Q4 2.1% 3.5% 0.9% GDP Personal Consumption (QoQ SAAR) 2017Q4 3.5% 3.0% 2.3% Retail Sales (YoY) Feb'17 5.7% 4.4% 1.7% ISM Manufacturing Survey (month) Mar' Existing Home Sales SAAR (month) Feb' mil mil mil. Inflation / Prices Personal Consumption Expenditures (YoY) Feb'17 2.1% 1.6% 0.8% Consumer Price Index (YoY) Feb'17 2.7% 2.1% 0.9% Consumer Price Index Core (YoY) Feb'17 2.2% 2.2% 2.2% % 4% 2% 0% -2% 3% 2% 1% Real GDP (QoQ) Dec '13 Jun '14 Dec '14 Jun '15 Dec '15 Jun '16 Dec '16 Consumer Price Index CPI (YoY) Core CPI (YoY) Crude Oil Futures (WTI, per barrel) Mar'17 $50.60 $53.72 $38.34 Gold Futures (oz.) Mar'17 $1,247 $1,152 $1,234 0% -1% Feb '14 Aug '14 Feb '15 Aug '15 Feb '16 Aug '16 Feb '17 1. Data as of Second Quarter Data as of Third Quarter 2015 Note: YoY = year over year, QoQ = quarter over quarter, SAAR = seasonally adjusted annual rate, WTI = West Texas Intermediate crude oil Source: Bloomberg PFM Asset Management LLC 5 of 49

6 QUARTERLY MARKET SUMMARY Fixed Income Management Interest Rate Overview U.S. Treasury Note Yields U.S. Treasury Yield Curve Yield 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Sep '16 Oct '16 Nov '16 Dec '16 2-Year 5-Year 10-Year Yield 4% 3% 2% 1% 0% 3-yr 2-yr 1-yr 3-mo 5-yr 7-yr 10-yr Maturity March 31, 2017 December 31, 2016 March 31, yr U.S. Treasury Yields Yield Curves as of 3/31/17 Maturity March 31, 2017 December 31, 2016 Change over Quarter March 31, 2016 Change over Year 3-month 0.75% 0.50% 0.25% 0.20% 0.55% 1-year 1.02% 0.81% 0.21% 0.58% 0.44% 2-year 1.26% 1.19% 0.07% 0.72% 0.54% 5-year 1.92% 1.93% (0.01%) 1.21% 0.71% 10-year 2.39% 2.45% (0.06%) 1.77% 0.62% 30-year 3.01% 3.07% (0.06%) 2.61% 0.40% Yield 5% 4% 3% 2% 1% 0% 3-yr 2-yr 1-yr 3-mo 5-yr 7-yr 10-yr Maturity U.S. Treasury Federal Agency Industrial Corporates, A Rated 25-yr 30-yr Source: Bloomberg PFM Asset Management LLC 6 of 49

7 QUARTERLY MARKET SUMMARY Fixed Income Management BofA Merrill Lynch Index Returns As of 3/31/17 Returns for Periods ended 3/31/17 March 31, 2017 Duration Yield 3 Month 1 Year 3 Years 1-3 Year Indices U.S. Treasury % 0.26% 0.25% 0.72% Federal Agency % 0.30% 0.41% 0.83% U.S. Corporates, A-AAA rated % 0.60% 1.32% 1.41% Agency MBS (0 to 3 years) % 0.38% 0.40% 1.13% Taxable Municipals % 0.70% 2.26% 1.92% 1-5 Year Indices U.S. Treasury % 0.37% (0.10%) 1.14% Federal Agency % 0.41% 0.28% 1.16% U.S. Corporates, A-AAA rated % 0.80% 1.29% 1.96% Agency MBS (0 to 5 years) % 0.59% 0.39% 2.00% Taxable Municipals % 0.61% 2.12% 2.49% Master Indices (Maturities 1 Year or Greater) U.S. Treasury % 0.68% (1.47%) 2.32% Federal Agency % 0.74% 0.11% 2.00% U.S. Corporates, A-AAA rated % 1.11% 1.65% 3.54% Agency MBS (0 to 30 years) % 0.46% 0.18% 2.66% Taxable Municipals % 0.59% 1.49% 3.13% Returns for periods greater than one year are annualized. Source: BofA Merrill Lynch Indices PFM Asset Management LLC 7 of 49

8 QUARTERLY MARKET SUMMARY Fixed Income Management DISCLOSURES PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Investment advisory services are provided by PFM Asset Management LLC which is registered with the Securities and Exchange Commission under the Investment Advisers Act of The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request. For more information regarding PFM s services or entities, please visit The views expressed within this material constitute the perspective and judgment of PFM Asset Management LLC at the time of distribution and are subject to change. Information is obtained from sources generally believed to be reliable and available to the public; however, PFM Asset Management LLC cannot guarantee its accuracy, completeness, or suitability. This material is for general information purposes only and is not intended to provide specific advice or recommendation. The information contained in this report is not an offer to purchase or sell any securities PFM Asset Management LLC. Further distribution is not permitted without prior written consent PFM Asset Management LLC 8 of 49

9 Tab II 2017 PFM Asset Management LLC 9 of 49

10 EXECUTIVE SUMMARY The Investment Portfolio is of high credit quality and invested in U.S. Treasury, Federal Agency, municipal obligations, commercial paper, and corporate notes securities. The Investment Portfolio s quarterly total return performance of 0.27% outperformed the benchmark performance of 0.26% by 0.01%. For the last 12 months the Portfolio returned 0.36% versus the benchmark s return of 0.25%. PFM continued to actively manage the Investment Portfolio during the first quarter and found value in the market, taking advantage of market inefficiencies or changes in economic outlook. As a result, the Portfolio realized $5,301 in gains on sales (based on amortized cost) during the quarter. PFM is continually in the market monitoring for opportunities to add value to the Portfolio. Asset allocation amounts were within compliance limits at the time of purchase. Due to maturities in the short term portfolio reducing the asset base, the balance in the Florida Education Investment Trust Fund was out of compliance at quarter end. Yields remained within a narrow range through the first couple months before rising strongly in anticipation of the March FOMC rate hike as Fed officials made a concerted effort to telegraph expectations. Yields on the short-end of the curve ended the quarter higher, reflecting the rate hike, while long-term yields declined alongside future inflation expectations. We expect the Fed to remain on track to make two additional rate hikes in 2017, matching the three hikes projected for 2017 by the Committee s dot plot. In addition, a potential reduction in the size of the Fed s balance sheet later in the year could have significant implications for the markets. Since yields are currently stable and we expect no action at the next FOMC meeting in May, we are targeting portfolio durations to closely match that of benchmarks. We will continue to revisit this position regularly, especially in light of the potential for higher yields later in the year. We will continue to monitor incoming economic data, Fed policy, and market relationships, adjusting portfolio positioning as needed. This will include monitoring and assessing the policies of the incoming Trump administration for their impact on economic and market conditions PFM Asset Management LLC 10 of 49

11 PALM BEACH CNTY FL S/D Credit Quality (S&P Ratings) Sector Allocation Portfolio Snapshot Portfolio Statistics As of March 31, 2017 AA 3.0% AA- 7.8% U.S. Treasury 39.2% Corporate 11.3% Par Value: 46,145,000 Total Market Value: 46,123,360 Security Market Value: 45,999,113 Accrued Interest: 124,247 Cash: - PFM - AA+ 89.1% Municipal 2.2% Federal Agency/GSE 47.3% Amortized Cost: Yield at Market: Yield at Cost: Effective Duration: Duration to Worst: 46,161, % 1.12% 1.71 Years 1.71 Years 60% 50% 51.2% Maturity Distribution Average Maturity: Average Credit: ** 1.75 Years AA 40% 30% 35.4% 20% 10% 0% 13.4% 0.0% 0.0% 0.0% 0-1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years * An average of each security s credit rating assigned a numeric value and adjusted for its relative weighting in the portfolio PFM Asset Management LLC 11 of 49 Account

12 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio/Benchmark Portfolio Performance (Total Return) Effective Duration Current Quarter 1 Year 3 Year 5 Year Annualized Return 10 Year Since Inception (12/31/98) ** PALM BEACH CNTY FL S/D % 0.36% 0.79% 0.71% 2.23% 3.19% BofA ML 1-3 Year U.S. Treasury Index % 0.25% 0.72% 0.64% 2.00% 2.99% Difference 0.01% 0.11% 0.07% 0.07% 0.23% 0.20% 3.5% 3.0% 3.19% 2.99% Total Return 2.5% 2.0% 1.5% 1.0% 0.5% 0.27% 0.36% 0.26% 0.25% 0.79% 0.72% 0.71% 0.64% 2.23% 2.00% 0.0% Current Quarter 1 Year 3 Year 5 Year 10 Year Since Inception PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index Portfolio performance is gross of fees unless otherwise indicated. **Since Inception performance is not shown for periods less than one year PFM Asset Management LLC 12 of 49 Account

13 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio/Benchmark Portfolio Performance (Total Return) Effective Duration Quarter Ended 03/31/17 12/31/16 09/30/16 06/30/16 1 Year 3 Year Annualized Return 5 Year PALM BEACH CNTY FL S/D % -0.33% -0.06% 0.48% 0.36% 0.79% 0.71% BofA ML 1-3 Year U.S. Treasury Index % -0.43% -0.11% 0.53% 0.25% 0.72% 0.64% Difference 0.01% 0.10% 0.05% -0.05% 0.11% 0.07% 0.07% 0.8% 0.6% 0.48% 0.53% 0.79% 0.72% 0.71% 0.64% Total Return 0.4% 0.2% 0.0% -0.2% 0.27% 0.26% -0.06% -0.11% 0.36% 0.25% -0.4% -0.6% -0.33% -0.43% 03/31/17 12/31/16 09/30/16 06/30/16 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index Portfolio performance is gross of fees unless otherwise indicated PFM Asset Management LLC 13 of 49 Account

14 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Performance (Total Return) Quarter Ended Effective Portfolio/Benchmark Duration 03/31/17 12/31/16 09/30/16 06/30/16 1 Year 3 Year Annualized Return 5 Year PALM BEACH CNTY FL S/D % -0.33% -0.06% 0.48% 0.36% 0.79% 0.71% Net of Fees ** % -0.35% -0.08% 0.46% 0.28% 0.72% 0.64% BofA ML 1-3 Year U.S. Treasury Index % -0.43% -0.11% 0.53% 0.25% 0.72% 0.64% Difference (Gross) 0.01% 0.10% 0.05% -0.05% 0.11% 0.07% 0.07% Difference (Net) -0.01% 0.08% 0.03% -0.07% 0.03% 0.00% 0.00% 0.8% 0.6% 0.48% 0.53% 0.79% 0.72% 0.71% 0.64% Total Return 0.4% 0.2% 0.0% -0.2% 0.27% 0.26% -0.06% -0.11% 0.36% 0.25% -0.4% -0.6% -0.33% -0.43% 03/31/17 12/31/16 09/30/16 06/30/16 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index Portfolio performance is gross of fees unless otherwise indicated. ** Fees were calculated based on average assets during the period at the contractual rate PFM Asset Management LLC 14 of 49 Account

15 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Earnings Quarter-Ended March 31, 2017 Beginning Value (12/31/2016) Market Value Basis $47,865, Accrual (Amortized Cost) Basis $48,018, Net Purchases/Sales ($1,862,641.19) ($1,862,641.19) Change in Value ($3,672.81) $5, Ending Value (03/31/2017) $45,999, $46,161, Interest Earned $130, $130, Portfolio Earnings $126, $136, PFM Asset Management LLC Account of 49

16 PALM BEACH CNTY FL S/D Portfolio Composition Sector Allocation As of March 31, 2017 Sector Market Value ($) % of Portfolio Federal Agency/GSE 21,787, % U.S. Treasury 18,019, % Corporate 5,194, % Municipal 996, % U.S. Treasury 39.2% Corporate 11.3% Total 45,999, % Municipal 2.2% Federal Agency/GSE 47.3% Detail may not add to total due to rounding PFM Asset Management LLC 16 of 49 Account

17 PALM BEACH CNTY FL S/D Portfolio Composition Sector Allocation As of March 31, 2017 Sector Market Value ($) % of Portfolio % of Benchmark Federal Agency/GSE U.S. Treasury Corporate Municipal Total 21,787,806 18,019,958 5,194, , % 39.2% 11.3% 2.2% % ,999, % 100.0% 100% 100.0% 80% 60% 40% 47.3% 39.2% 20% 0% 11.3% 0.0% 0.0% 2.2% 0.0% Corporate Federal Agency/GSE Municipal U.S. Treasury PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index Detail may not add to total due to rounding PFM Asset Management LLC 17 of 49 Account

18 PALM BEACH CNTY FL S/D Portfolio Composition Sector Sector Allocation March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total Federal Agency/GSE % % % % U.S. Treasury % % % % Corporate % % % % Municipal % % % % Commercial Paper % % % % Total $ % $ % $ % $ % 100% 90% 80% Commercial Paper Municipal Corporate U.S. Treasury Federal Agency/GSE 70% 60% 50% 40% 30% 20% 10% 0% March 2017 December 2016 September 2016 June 2016 Detail may not add to total due to rounding PFM Asset Management LLC 18 of 49 Account

19 PALM BEACH CNTY FL S/D Portfolio Composition Maturity Distribution As of March 31, 2017 Portfolio/Benchmark Yield at Market Average Maturity 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years >5 Years PALM BEACH CNTY FL S/D 1.31% 1.75 yrs 13.4% 51.2% 35.4% 0.0% 0.0% 0.0% BofA ML 1-3 Year U.S. Treasury Index 1.27% 1.94 yrs 3.2% 53.5% 43.3% 0.0% 0.0% 0.0% 60% 50% 51.2% 53.5% 43.3% 40% 35.4% 30% 20% 10% 0% 13.4% 3.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index 2017 PFM Asset Management LLC Account of 49

20 PALM BEACH CNTY FL S/D Portfolio Composition Duration Distribution As of March 31, 2017 Portfolio / Benchmark Effective Duration 0-1 YEARS 1-2 YEARS 2-3 YEARS 3-4 YEARS 4-5 YEARS > 5 YEARS PALM BEACH CNTY FL S/D % 55.34% 31.27% 0.00% 0.00% 0.00% BofA ML 1-3 Year U.S. Treasury Index % 53.53% 43.30% 0.00% 0.00% 0.00% 60% Distribution by Effective Duration 55% 54% 60% Contribution to Portfolio Duration 56% 50% 40% 30% 31% 43% 50% 40% 30% 49% 43% 45% 20% 13% 20% 10% 0% 3% 0% 0% 0% 0% 0% 0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years 10% 0% 6% 2% 0% 0% 0% 0% 0% 0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index PALM BEACH CNTY FL S/D BofA ML 1-3 Year U.S. Treasury Index 2017 PFM Asset Management LLC Account of 49

21 PALM BEACH CNTY FL S/D Portfolio Composition Credit Quality As of March 31, 2017 S&P Rating Market Value ($) % of Portfolio AA+ $41,004, % AA- $3,598, % AA $1,396, % AA 3.0% AA- 7.8% Totals $45,999, % AA+ 89.1% Detail may not add to total due to rounding PFM Asset Management LLC 21 of 49 Account

22 PALM BEACH CNTY FL S/D Portfolio Composition Issuer Issuer Distribution As of March 31, 2017 Market Value ($) % of Portfolio UNITED STATES TREASURY 18,019, % FEDERAL HOME LOAN BANKS 10,706, % FANNIE MAE 8,138, % FREDDIE MAC 2,942, % TOYOTA MOTOR CORP 1,199, % IBM CORP 1,199, % CHEVRON CORP 1,199, % APPLE INC 1,196, % REGIONAL TRANS AUTH, IL 996, % BERKSHIRE HATHAWAY INC 399, % Top 5 = 89.1% Top 10 = 100.0% Grand Total: 45,999, % 2017 PFM Asset Management LLC Account of 49

23 PALM BEACH CNTY FL S/D Portfolio Composition Sector/Issuer Distribution As of March 31, 2017 Sector / Issuer Market Value ($) % of Sector % of Total Portfolio Corporate APPLE INC 1,196, % 2.6% BERKSHIRE HATHAWAY INC 399, % 0.9% CHEVRON CORP 1,199, % 2.6% IBM CORP 1,199, % 2.6% TOYOTA MOTOR CORP 1,199, % 2.6% Sector Total 5,194, % 11.3% Federal Agency/GSE FANNIE MAE 8,138, % 17.7% FEDERAL HOME LOAN BANKS 10,706, % 23.3% FREDDIE MAC 2,942, % 6.4% Sector Total 21,787, % 47.4% Municipal REGIONAL TRANS AUTH, IL 996, % 2.2% Sector Total 996, % 2.2% U.S. Treasury UNITED STATES TREASURY 18,019, % 39.2% 2017 PFM Asset Management LLC Account of 49

24 PALM BEACH CNTY FL S/D Portfolio Composition Sector / Issuer Market Value ($) % of Sector % of Total Portfolio Sector Total 18,019, % 39.2% Portfolio Total 45,999, % 100.0% 2017 PFM Asset Management LLC Account of 49

25 PALM BEACH CNTY FL S/D Portfolio Activity Quarterly Portfolio Transactions Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield at Market Realized G/L (BV) BUY 1/3/17 1/5/17 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 1,256, % 2/1/17 2/3/17 750, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 749, % 2/24/17 2/28/17 480, G0T29 FNMA NOTES 1.50% 2/28/20 479, % Total BUY 2,490,000 2,486, INTEREST 1/12/17 1/12/17 1,200, TCA1 TOYOTA MOTOR CREDIT CORP NOTE 1.45% 1/12/18 8, /19/17 1/19/17 1,065, EAEB1 FHLMC REFERENCE NOTE 0.87% 7/19/19 4, /31/17 1/31/17 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 6, /31/17 1/31/17 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 7, /2/17 2/2/17 1,070, G0N33 FNMA BENCHMARK NOTE 0.87% 8/2/19 4, /7/17 2/7/17 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 6, /8/17 2/8/17 1,200, HK0 IBM CORP GLOBAL NOTES 1.25% 2/8/18 7, /15/17 2/15/17 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL NOTES 1.15% 8/15/ /26/17 2/26/17 1,000, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 5, /26/17 2/26/17 1,220, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 6, /28/17 2/28/17 2,160, G0P49 FNMA NOTES 1.00% 8/28/19 10, /28/17 2/28/17 750, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 5, /28/17 2/28/17 520, SH4 US TREASURY NOTES 1.37% 2/28/19 3, /2/17 3/2/17 1,200, AV2 CHEVRON CORP NOTES 1.36% 3/2/18 8, /7/17 3/7/17 300, CE9 BERKSHIRE HATHAWAY FINANCE CORP NOTE 1.45% 3/7/18 2, /26/17 3/26/17 2,420, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 12, /26/17 3/26/17 1,350, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 6, /27/17 3/27/17 1,200, G0ZL0 FNMA NOTES 1.00% 9/27/17 6, PFM Asset Management LLC Account of 49

26 PALM BEACH CNTY FL S/D Portfolio Activity Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield at Market Realized G/L (BV) 3/27/17 3/27/17 1,060, G0ZL0 FNMA NOTES 1.00% 9/27/17 5, /31/17 3/31/17 975, RH5 US TREASURY NOTES 1.37% 9/30/18 6, Total INTEREST 23,050, , MATURITY 2/3/17 2/3/17 850, TP34 CREDIT AGRICOLE CIB NY COMM PAPER 0.00% 2/3/17 850, /8/17 2/8/17 1,000, BP80 BANK OF TOKYO MITSUBISHI COMM PAPER 0.00% 2/8/17 1,000, Total MATURITY 1,850,000 1,850, SELL 1/3/17 1/5/17 1,260, TM2 US TREASURY NOTES 0.62% 8/31/17 1,261, % 1, /1/17 2/3/17 750, TM2 US TREASURY NOTES 0.62% 8/31/17 751, % 1, /24/17 2/28/17 480, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 479, % 1, Total SELL 2,490,000 2,492, , PFM Asset Management LLC Account of 49

27 PALM BEACH CNTY FL S/D Portfolio Activity Quarterly Portfolio Transactions Tran. Type Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield Realized G/L (BV) BUY 1/3/17 1/5/17 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 (1,256,820.04) 1.51% SELL 1/3/17 1/5/17 1,260, TM2 US TREASURY NOTES 0.62% 8/31/17 1,261, % 1, INTEREST 1/12/17 1/12/17 1,200, TCA1 TOYOTA MOTOR CREDIT CORP NOTE 1.45% 1/12/18 8, INTEREST 1/19/17 1/19/17 1,065, EAEB1 FHLMC REFERENCE NOTE 0.87% 7/19/19 4, INTEREST 1/31/17 1/31/17 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 6, INTEREST 1/31/17 1/31/17 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 7, BUY 2/1/17 2/3/17 750, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 (749,932.34) 1.58% SELL 2/1/17 2/3/17 750, TM2 US TREASURY NOTES 0.62% 8/31/17 751, % 1, INTEREST 2/2/17 2/2/17 1,070, G0N33 FNMA BENCHMARK NOTE 0.87% 8/2/19 4, MATURITY 2/3/17 2/3/17 850, TP34 CREDIT AGRICOLE CIB NY COMM PAPER 0.00% 2/3/17 850, INTEREST 2/7/17 2/7/17 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 6, INTEREST 2/8/17 2/8/17 1,200, HK0 IBM CORP GLOBAL NOTES 1.25% 2/8/18 7, MATURITY 2/8/17 2/8/17 1,000, BP80 BANK OF TOKYO MITSUBISHI COMM PAPER 0.00% 2/8/17 1,000, INTEREST 2/15/17 2/15/17 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL 1.15% 8/15/ NOTES BUY 2/24/17 2/28/17 480, G0T29 FNMA NOTES 1.50% 2/28/20 (479,692.80) 1.52% SELL 2/24/17 2/28/17 480, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 479, % 1, INTEREST 2/26/17 2/26/17 1,000, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 5, INTEREST 2/26/17 2/26/17 1,220, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 6, INTEREST 2/28/17 2/28/17 2,160, G0P49 FNMA NOTES 1.00% 8/28/19 10, INTEREST 2/28/17 2/28/17 750, J50 UNITED STATES TREASURY NOTES 1.37% 2/29/20 5, PFM Asset Management LLC Account of 49

28 PALM BEACH CNTY FL S/D Portfolio Activity Tran. Type Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield Realized G/L (BV) INTEREST 2/28/17 2/28/17 520, SH4 US TREASURY NOTES 1.37% 2/28/19 3, INTEREST 3/2/17 3/2/17 1,200, AV2 CHEVRON CORP NOTES 1.36% 3/2/18 8, INTEREST 3/7/17 3/7/17 300, CE9 BERKSHIRE HATHAWAY FINANCE CORP 1.45% 3/7/18 2, NOTE INTEREST 3/26/17 3/26/17 2,420, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 12, INTEREST 3/26/17 3/26/17 1,350, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 6, INTEREST 3/27/17 3/27/17 1,200, G0ZL0 FNMA NOTES 1.00% 9/27/17 6, INTEREST 3/27/17 3/27/17 1,060, G0ZL0 FNMA NOTES 1.00% 9/27/17 5, INTEREST 3/31/17 3/31/17 975, RH5 US TREASURY NOTES 1.37% 9/30/18 6, TOTALS 1,980, , PFM Asset Management LLC Account of 49

29 PALM BEACH CNTY FL S/D Trade Analysis Trade Analysis for January 5, 2017 Transaction Date: January 5, 2017 Transaction Security Maturity Date Par Value Price Yield at Market Benefit Gain/Loss Additional Earnings Sold US TREASURY NOTES 8/31/2017 $1,260, $ % $1, Purchased US TREASURY NOTES 1/31/2020 $1,260, $ % 0.762% 6, Total Estimated Benefit from Transaction to Original Maturity $8, Total Estimated Benefit from Transactions $8, Transaction Commentary: In accordance with Section III. Investment Objectives, of the District's Investment Policy, from time to time, securities may be traded for other similar securities to improve yield, maturity, or credit risk. For these transactions, a loss may be incurred for accounting purposes, provided any of the following occurs with respect to the replacement security: 1) The yield has been increased, 2) the maturity has been reduced, or lengthened, 3) or the quality of the investment has been improved. The transactions presented were executed in accordance with Section III Investment Objectives of the District's Investment Policy to 1) the yield of the portfolio has been increased and 2) the maturity has been extended, as part of PFM's overall active management strategy for the District's Investment Portfolio, which should also increase the portfolio's total return. The performance of this portfolio should be evaluated based on the total return versus the District's Merrill Lynch 1-3 Year U.S. Treasury Index benchmark. PFM calculates the total return of the District's Investment Portfolio in a manner consistent with the CFA Institute's Global Investment Performance Standards. Notes: 1. The total estimated benefit from the transaction is based on the net of the benefit in yield and the gain or loss on the transaction. The benefit is calculated on a 30/360 day basis until the earlier of: 1) original maturity of the sold security, or 2) new maturity of the purchased security. Total purchase may not equal to proceeds from sold securities as a result of additional income included in purchase or from a portion of maturity not reinvested. Calculations based on lesser of amount sold or reinvested. 29 of 49

30 PALM BEACH CNTY FL S/D Trade Analysis Trade Analysis for February 3, 2017 Transaction Date: February 3, 2017 Transaction Security Maturity Date Par Value Price Yield at Market Benefit Gain/Loss Additional Earnings Sold US TREASURY NOTES 8/31/2017 $750, $ % $1, Purchased US TREASURY NOTES 2/29/2020 $750, $ % 0.904% 3, Total Estimated Benefit from Transaction to Original Maturity $5, Transaction Commentary: In accordance with Section III. Investment Objectives, of the District's Investment Policy, from time to time, securities may be traded for other similar securities to improve yield, maturity, or credit risk. For these transactions, a loss may be incurred for accounting purposes, provided any of the following occurs with respect to the replacement security: 1) The yield has been increased, 2) the maturity has been reduced, or lengthened, 3) or the quality of the investment has been improved. The transactions presented were executed in accordance with Section III Investment Objectives of the District's Investment Policy to 1) the yield of the portfolio has been increased and 2) the maturity has been extended, as part of PFM's overall active management strategy for the District's Investment Portfolio, which should also increase the portfolio's total return. The performance of this portfolio should be evaluated based on the total return versus the District's Merrill Lynch 1-3 Year U.S. Treasury Index benchmark. PFM calculates the total return of the District's Investment Portfolio in a manner consistent with the CFA Institute's Global Investment Performance Standards. Notes: 1. The total estimated benefit from the transaction is based on the net of the benefit in yield and the gain or loss on the transaction. The benefit is calculated on a 30/360 day basis until the earlier of: 1) original maturity of the sold security, or 2) new maturity of the purchased security. Total purchase may not equal to proceeds from sold securities as a result of additional income included in purchase or from a portion of maturity not reinvested. Calculations based on lesser of amount sold or reinvested. 30 of 49

31 PALM BEACH CNTY FL S/D Trade Analysis Trade Analysis for February 28, 2017 Transaction Date: February 28, 2017 Transaction Security Maturity Date Par Value Price Yield at Market Benefit Gain/Loss Additional Earnings Sold US TREASURY NOTES 2/29/2020 $480, $ % $1, Purchased FNMA Notes 2/28/2020 $480, $ % 0.084% 1, Total Estimated Benefit from Transaction to Original Maturity $3, Transaction Commentary: In accordance with Section III. Investment Objectives, of the District's Investment Policy, from time to time, securities may be traded for other similar securities to improve yield, maturity, or credit risk. For these transactions, a loss may be incurred for accounting purposes, provided any of the following occurs with respect to the replacement security: 1) The yield has been increased, 2) the maturity has been reduced, or lengthened, 3) or the quality of the investment has been improved. The transactions presented were executed in accordance with Section III Investment Objectives of the District's Investment Policy to 1) the yield of the portfolio has been increased and 2) the maturity has been extended, as part of PFM's overall active management strategy for the District's Investment Portfolio, which should also increase the portfolio's total return. The performance of this portfolio should be evaluated based on the total return versus the District's Merrill Lynch 1-3 Year U.S. Treasury Index benchmark. PFM calculates the total return of the District's Investment Portfolio in a manner consistent with the CFA Institute's Global Investment Performance Standards. Notes: 1. The total estimated benefit from the transaction is based on the net of the benefit in yield and the gain or loss on the transaction. The benefit is calculated on a 30/360 day basis until the earlier of: 1) original maturity of the sold security, or 2) new maturity of the purchased security. Total purchase may not equal to proceeds from sold securities as a result of additional income included in purchase or from a portion of maturity not reinvested. Calculations based on lesser of amount sold or reinvested. 31 of 49

32 PALM BEACH COUNTY SD SHORT TERM FUND Credit Quality (S&P Ratings) Sector Allocation Portfolio Snapshot Portfolio Statistics As of March 31, 2017 A % Commercial Paper 37.5% Par Value: 400,000,000 Total Market Value: 507,026,948 Security Market Value: 399,506,850 Accrued Interest: 138,075 Cash: 107,382,024 PFM - AA+ 62.5% U.S. Treasury 62.5% Amortized Cost: Yield at Market: Yield at Cost: Effective Duration: 399,601, % 0.88% 0.31 Years 100% 100.0% Maturity Distribution Duration to Worst: Average Maturity: 0.31 Years 0.31 Years 80% Average Credit: ** AA 60% Benchmark Eff. Yield: 0.71% 40% 20% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0-1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years * An average of each security s credit rating assigned a numeric value and adjusted for its relative weighting in the portfolio PFM Asset Management LLC 32 of 49 Account

33 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Performance Portfolio Earnings Quarter-Ended March 31, 2017 Beginning Value (12/31/2016) Market Value Basis $498,855, Accrual (Amortized Cost) Basis $498,886, Net Purchases/Sales ($100,000,000.00) ($100,000,000.00) Change in Value $651, $715, Ending Value (03/31/2017) $399,506, $399,601, Interest Earned $360, $360, Portfolio Earnings $1,012, $1,076, PFM Asset Management LLC Account of 49

34 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Sector Allocation As of March 31, 2017 Sector Market Value ($) % of Portfolio U.S. Treasury 249,734, % Commercial Paper 149,772, % Commercial Paper 37.5% Total 399,506, % U.S. Treasury 62.5% Detail may not add to total due to rounding PFM Asset Management LLC 34 of 49 Account

35 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Sector Allocation As of March 31, 2017 Sector Market Value ($) % of Portfolio % of Benchmark U.S. Treasury Commercial Paper Total 249,734, ,772, % 37.5% 100.0% - 399,506, % 100.0% 100% 100.0% 80% 60% 62.5% 40% 37.5% 20% 0% Commercial Paper 0.0% PALM BEACH COUNTY SD SHORT TERM FUND BofA ML 3 Month U.S. Treasury Bill Index U.S. Treasury Detail may not add to total due to rounding PFM Asset Management LLC 35 of 49 Account

36 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Sector Sector Allocation March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total U.S. Treasury % % % % Commercial Paper % % % % Total $ % $ % $ % $ % 100% 90% 80% 70% Commercial Paper U.S. Treasury 60% 50% 40% 30% 20% 10% 0% March 2017 December 2016 June 2016 Detail may not add to total due to rounding PFM Asset Management LLC 36 of 49 Account

37 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Maturity Distribution As of March 31, 2017 Portfolio/Benchmark Yield at Market Average Maturity 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years >5 Years PALM BEACH COUNTY SD SHORT TERM FUND 0.90% 0.31 yrs 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% BofA ML 3 Month U.S. Treasury Bill Index 0.75% 0.25 yrs 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100% 100.0% 100.0% 80% 60% 40% 20% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years PALM BEACH COUNTY SD SHORT TERM FUND BofA ML 3 Month U.S. Treasury Bill Index 2017 PFM Asset Management LLC Account of 49

38 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Duration Distribution As of March 31, 2017 Portfolio / Benchmark Effective Duration 0-1 YEARS 1-2 YEARS 2-3 YEARS 3-4 YEARS 4-5 YEARS > 5 YEARS PALM BEACH COUNTY SD SHORT TERM FUND % 0.00% 0.00% 0.00% 0.00% 0.00% BofA ML 3 Month U.S. Treasury Bill Index % 0.00% 0.00% 0.00% 0.00% 0.00% 100% 100% 100% Distribution by Effective Duration 120% Contribution to Portfolio Duration 80% 100% 100% 100% 60% 80% 40% 60% 40% 20% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years 20% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years PALM BEACH COUNTY SD SHORT TERM FUND BofA ML 3 Month U.S. Treasury Bill Index PALM BEACH COUNTY SD SHORT TERM FUND BofA ML 3 Month U.S. Treasury Bill Index 2017 PFM Asset Management LLC Account of 49

39 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Credit Quality As of March 31, 2017 S&P Rating Market Value ($) % of Portfolio AA+ $249,734, % A-1 $149,772, % A % Totals $399,506, % AA+ 62.5% Detail may not add to total due to rounding PFM Asset Management LLC 39 of 49 Account

40 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Issuer Issuer Distribution As of March 31, 2017 Market Value ($) % of Portfolio UNITED STATES TREASURY 249,734, % BANK OF MONTREAL 49,963, % BNP PARIBAS 49,916, % CREDIT AGRICOLE SA 49,892, % Grand Total: 399,506, % 2017 PFM Asset Management LLC Account of 49

41 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Composition Sector/Issuer Distribution As of March 31, 2017 Sector / Issuer Market Value ($) % of Sector % of Total Portfolio Commercial Paper BANK OF MONTREAL 49,963, % 12.5% BNP PARIBAS 49,916, % 12.5% CREDIT AGRICOLE SA 49,892, % 12.5% Sector Total 149,772, % 37.5% U.S. Treasury UNITED STATES TREASURY 249,734, % 62.5% Sector Total 249,734, % 62.5% Portfolio Total 399,506, % 100.0% 2017 PFM Asset Management LLC Account of 49

42 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Activity Quarterly Portfolio Transactions Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield at Market Realized G/L (BV) INTEREST 1/3/17 1/3/17 0 MONEY0002 MONEY MARKET FUND 3, /31/17 1/31/17 100,000, TG5 US TREASURY NOTES 0.50% 7/31/17 250, /1/17 2/1/17 0 MONEY0002 MONEY MARKET FUND /28/17 2/28/17 100,000, TM2 US TREASURY NOTES 0.62% 8/31/17 312, /1/17 3/1/17 0 MONEY0002 MONEY MARKET FUND 1, /31/17 3/31/17 50,000, TS9 US TREASURY NOTES 0.62% 9/30/17 156, Total INTEREST 250,000, , MATURITY 2/28/17 2/28/17 50,000, GPU4 TOYOTA MOTOR CREDIT CORP COMM PAPER 0.00% 2/28/17 50,000, /31/17 3/31/17 50,000, BQX4 BANK OF TOKYO MITSUBISHI COMM PAPER 0.00% 3/31/17 50,000, Total MATURITY 100,000, ,000, PFM Asset Management LLC Account of 49

43 PALM BEACH COUNTY SD SHORT TERM FUND Portfolio Activity Quarterly Portfolio Transactions Tran. Type Trade Date Settle Date Par ($) CUSIP Security Description Coupon Maturity Date Transact Amt ($) Yield Realized G/L (BV) INTEREST 1/3/17 1/3/ MONEY0002 MONEY MARKET FUND 3, INTEREST 1/31/17 1/31/17 100,000, TG5 US TREASURY NOTES 0.50% 7/31/17 250, INTEREST 2/1/17 2/1/ MONEY0002 MONEY MARKET FUND INTEREST 2/28/17 2/28/17 100,000, TM2 US TREASURY NOTES 0.62% 8/31/17 312, MATURITY 2/28/17 2/28/17 50,000, GPU4 TOYOTA MOTOR CREDIT CORP COMM 0.00% 2/28/17 50,000, PAPER INTEREST 3/1/17 3/1/ MONEY0002 MONEY MARKET FUND 1, INTEREST 3/31/17 3/31/17 50,000, TS9 US TREASURY NOTES 0.62% 9/30/17 156, MATURITY 3/31/17 3/31/17 50,000, BQX4 BANK OF TOKYO MITSUBISHI COMM PAPER 0.00% 3/31/17 50,000, TOTALS 100,724, PFM Asset Management LLC Account of 49

44 Tab III 2017 PFM Asset Management LLC 44 of 49

45 PALM BEACH COUNTY SCHOOL DISTRICT Asset Allocation Federal Instrumentalities 2.70% Commercial Paper 18.42% Corporate Notes 0.64% United States Treasury Securities 32.99% Florida Prime (SBA) 0.004% Bank Cash 19.75% State and/or Local Government Debt 0.12% Intergovernmental Investment Pools - FEITF 25.37% Security Type 1 Amortized Cost (Includes Interest) Allocation Percentage Notes Permitted by Policy In Compliance Florida Prime (SBA) 32, % 2 25% YES United States Treasury Securities 268,098, % 100% YES United States Government Agency Securities % 50% YES Federal Instrumentalities 21,976, % 3 80% YES Mortgage-Backed Securities % 3 20% YES Certificates of Deposit or Savings Accounts % 25% YES Repurchase Agreements % 50% YES Commercial Paper 149,736, % 35% YES Corporate Notes 5,207, % 15% YES Bankers' Acceptances % 35% YES State and/or Local Government Debt 1,006, % 20% YES Fixed Income Money Market Mutual Funds % 75% YES Short Term Bonds Funds % 25% YES Intergovernmental Investment Pools - FEITF 206,219, % 4 25% YES* Bank Cash 160,498, % 2 100% YES Notes: 1. End of month trade-date amortized cost of portfolio holdings, including accrued interest. 2. Managed by the School District. 3. The combined total of Federal Instrumentalities and Mortgage Backed Securities cannot be more than 80%. The combined total as of March 31, 2017 is 2.70%. 4. The balance in FEITF was in compliance at the time of purchase. It was out of compliance at quarter end due to maturities in the short term portfolio PFM Asset Management LLC 45 of 49

46 PALM BEACH COUNTY SCHOOL DISTRICT Asset Allocation Amortized Cost (Includes Interest) Allocation Percentage Permitted by Policy In Compliance Individual Issuer Breakdown Notes Government National Mortgage Association (GNMA) % 25% YES Federal Farm Credit Bank (FFCB) % 50% YES Federal Home Loan Bank (FHLB) 10,799, % 50% YES Federal National Mortgage Association (FNMA) 8,188, % 50% YES Federal Home Loan Mortgage Corporation (FHLMC) 2,988, % 50% YES Regional Transportation Authority Municipal Bonds 1,006, % 20% YES Apple, Inc. Corporate Notes 1,199, % 5% YES Berkshire Hathaway, Inc. Corporate Notes 400, % 5% YES Chevron Corporation Corporate Notes 1,200, % 5% YES IBM Corporation Corporate Notes 1,202, % 5% YES Toyota Motor Corporation Corporate Notes 1,204, % 5% YES Bank of Montreal Commercial Paper 49,958, % 10% YES BNP Paribas Commercial Paper 49,904, % 10% YES Credit Agricole, S.A. Commercial Paper 49,874, % 10% YES Florida Prime 32, % 25% YES Cash: Bank of America 306, % 100% YES Florida Education Investment Trust Fund 206,219, % 4 25% YES* Cash: Wells Fargo 160,192, % 100% YES 4. The balance in FEITF was in compliance at the time of purchase. It was out of compliance at quarter end due to maturities in the short term portfolio PFM Asset Management LLC 46 of 49

47 PALM BEACH CNTY FL S/D Portfolio Activity Important Disclosures This material is based on information obtained from sources generally believed to be reliable and available to the public, however PFM Asset Management LLC cannot guarantee its accuracy, completeness or suitability. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. All statements as to what will or may happen under certain circumstances are based on assumptions, some but not all of which are noted in the presentation. Assumptions may or may not be proven correct as actual events occur, and results may depend on events outside of your or our control. Changes in assumptions may have a material effect on results. Past performance does not necessarily reflect and is not a guaranty of future results. The information contained in this presentation is not an offer to purchase or sell any securities. Dime Market values which include accrued interest, are derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, Bloomberg or Telerate. Where prices are not available from generally recognized sources the securities are priced using a yield based matrix system to arrive at an estimated market value. In accordance with generally accepted accounting principles, information is presented on a trade date basis; forward settling purchases are included in the monthly balances and forward settling sales are excluded. Performance is presented in accordance with the CFA Institute s Global Investment Performance Standards (GIPS). Unless otherwise noted, performance is shown gross of fees. Quarterly returns are presented on an unannualized basis. Returns for periods greater than one year are presented on an annualized basis. Past performance is not indicative of future returns. Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets. Money market fund/cash balances are included in performance and duration computations. Standard & Poor's is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/lgip holdings. Callable securities in portfolio are included in the maturity distribution analysis to their stated maturity date, although they may be called prior to maturity. MBS maturities are represented by expected average life PFM Asset Management LLC Account of 49

48 PALM BEACH CNTY FL S/D Appendix Glossary ACCRUED INTEREST: Interest that is due on a bond or other fixed income security since the last interest payment was made. AGENCIES: Federal agency securities and/or Government-sponsored enterprises. AMORTIZED COST: The original cost of the principal of the security is adjusted for the amount of the periodic reduction of any discount or premium from the purchase date until the date of the report. Discount or premium with respect to short term securities (those with less than one year to maturity at time of issuance) is amortized on a straight line basis. Such discount or premium with respect to longer term securities is amortized using the constant yield basis. BANKERS ACCEPTANCE: A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the insurer. COMMERCIAL PAPER: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. CONTRIBUTION TO DURATION: Represents each sector or maturity range s relative contribution to the overall duration of the portfolio measured as a percentage weighting. Since duration is a key measure of interest rate sensitivity, the contribution to duration measures the relative amount or contribution of that sector or maturity range to the total rate sensitivity of the portfolio. DURATION TO WORST: A measure of the sensitivity of a security s price to a change in interest rates, stated in years, computed from cash flows to the maturity date or to the put date, whichever results in the highest yield to the investor. EFFECTIVE DURATION: A measure of the sensitivity of a security s price to a change in interest rates, stated in years. EFFECTIVE YIELD: The total yield an investor receives in relation to the nominal yield or coupon of a bond. Effective yield takes into account the power of compounding on investment returns, while nominal yield does not. FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount. INTEREST RATE: Interest per year divided by principal amount, expressed as a percentage. MARKET VALUE: The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date. MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. NEGOTIABLE CERTIFICATES OF DEPOSIT: A CD with a very large denomination, usually $1 million or more that can be traded in secondary markets. PAR VALUE: The nominal dollar face amount of a security PFM Asset Management LLC Account of 49