Investment Performance Review For the Quarter Ended September 30, 2018

Transcription

1 Investment Performance Review Investment Advisors Steven Alexander, CTP, CGFO, CPPT, Managing Director Robert Cheddar, CFA, Chief Credit Officer, Managing Director Richard Pengelly, CFA, CTP, Director Jason Human, Client Manager Sean Gannon, Senior Analyst 213 Market Street Harrisburg, PA fax PFM Asset Management LLC 300 South Orange Avenue Suite 1170 Orlando, FL fax Page 1 of 45

2 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Table of Contents Tab I Tab II Tab III Market Update Executive Summary Investment Portfolio Short Term Portfolio Stress Test Horizon Analysis Asset Allocation Chart Important Disclosures PFM Asset Management LLC Page 2 of 45

3 Tab I PFM Asset Management LLC Page 3 of 45

4 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Quarterly Market Update Current Market Themes U.S. economic conditions are characterized by: Strong growth fueled by tax cuts and increased spending Solid job growth with a low unemployment rate of 3.7% Record corporate profits, driven in part by tax cuts Core inflation reaching the Fed s long-term target of 2% for the first time since 2012 Potential headwinds in the form of tariffs, slower housing market momentum and rising interest rates U.S. Treasury yields surged in September, continuing the year-long path toward higher rates. The yield curve remains quite flat relative to historical averages. The Federal Reserve raised rates again in September, their third hike of The federal funds rate moved to a new target range of 2.00% to 2.25%. An additional ¼ percent rate hike is expected in December, with two to four more hikes possible in U.S. equities broke records in September as the S&P 500 and Nasdaq indices hit new all-time highs on tailwinds from robust economic fundamentals, strong corporate earnings, and business optimism. The S&P 500 index is now up 10.6% for the year while the tech-heavy Nasdaq is up 17.5%. U.S., Canada, and Mexico reached an agreement to update NAFTA. The deal revises the country of origin rules, increases intellectual property protections, improves labor and environmental rights, and includes concessions on dairy products. PFM Asset Management LLC Page 4 of 45

5 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Quarterly Market Update Current Economic Conditions 6% 4% U.S. Real GDP (QoQ, SAAR) Rolling 4-Quarter Average 2.9% 2.5% 2.0% Inflation Measures (YoY) 2% 1.5% 0% -2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q % Core CPI 0.5% Core PCE Fed's Long Term Inflation Target 0.0% Aug '13 Aug '14 Aug '15 Aug '16 Aug '17 Unemployment Rate Consumer Confidence 9% 160 8% 7% 7.2% % 5.9% 100 5% 4% 5.0% 5.0% 4.2% 3.7% % Sep '13 Sep '14 Sep '15 Sep '16 Sep '17 Sep '18 40 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Source: Bloomberg, latest data available as of 9/30/18. SAAR is seasonally adjusted annualized rate. PFM Asset Management LLC Page 5 of 45

6 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Quarterly Market Update FOMC s September Dot Plot Projects One More Rate Hike in 2018 Fed Participants Assessments of Appropriate Monetary Policy 5% 4% Sept-18 FOMC Projections Sept-18 Median Fed Funds Futures 3% 2% 1% 0% History of Recent Fed Rate Hikes Sept % Jun % Mar % Dec % Jun % Mar % Dec % Dec % Fed expects 1 more rate hike in 2018 & maintained future projections Longer Term Source: Federal Reserve and Bloomberg. Individual dots represent each Fed members judgement of the midpoint of the appropriate target range for the federal funds rate at each year-end. Fed funds futures as of 9/26/18. PFM Asset Management LLC Page 6 of 45

7 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Quarterly Market Update U.S. Yield Curve Has Flattened U.S. Treasury Yield Curve Tenor Current 9/28/18 Year-End 12/31/2017 Year-End 12/31/16 3 month 2.20% 1.38% 0.45% 3.5% 3.0% 2.5% 6 month 2.36% 1.53% 0.61% 2.0% 1 year 2.56% 1.73% 0.82% Yield 1.5% 2 year 2.82% 1.88% 1.21% 1.0% 3 year 2.88% 1.97% 1.47% 0.5% September 28, 2018 December 30, year 2.95% 2.21% 1.95% 10 year 3.06% 2.41% 2.48% 0.0% 3 M 1 Y 2 Y 3 Y December 29, Y Y Maturity 10 Y Source: Bloomberg, as of 9/28/2018. PFM Asset Management LLC Page 7 of 45

8 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Quarterly Market Update Fixed-Income Index Returns September 30, Year Indices U.S. Treasury % 0.29% (0.12%) 0.19% 0.04% 0.38% 0.56% Agency % 0.53% (0.04%) 0.32% 0.34% 0.59% 0.74% Corp A-AAA % 0.73% 0.03% 0.67% 0.67% 1.38% 1.38% MBS (0 to 3 Years) % (0.41%) (0.73%) (0.37%) (0.38%) 0.82% 1.01% Municipals % 0.87% (0.28%) (0.01%) 0.29% 0.70% 0.80% 1-5 Year Indices Effective Duration U.S. Treasury % (0.20%) (0.28%) 0.05% (0.58%) 0.29% 0.73% Agency % 0.28% (0.11%) 0.26% 0.03% 0.59% 0.93% Corp A-AAA % 0.16% (0.10%) 0.66% 0.06% 1.47% 1.75% MBS (0 to 5 Years) % (0.71%) (0.35%) 0.11% (0.82%) 0.81% 1.57% Municipals % 0.70% (0.36%) (0.04%) (0.04%) 0.80% 1.07% Master Indices (Maturities 1 Year and Greater) Yield YTD 1 Month 3 Month 1 Year 3 Years 5 Years U.S. Treasury % (1.75%) (0.98%) (0.66%) (1.64%) 0.28% 1.51% Agency % (0.57%) (0.41%) (0.01%) (0.56%) 0.80% 1.57% Corp A-AAA % (2.34%) (0.50%) 0.67% (1.29%) 2.43% 3.18% MBS (0 to 30 Years) % (1.02%) (0.59%) (0.12%) (0.88%) 1.00% 2.00% Municipals % (0.51%) (0.64%) (0.25%) 0.24% 2.33% 3.74% Source: ICE BofAML Indices. Returns greater than one year are annualized. PFM Asset Management LLC Page 8 of 45

9 Tab II PFM Asset Management LLC Page 9 of 45

10 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Executive Summary The Investment Portfolio is of high credit quality and invested in U.S. Treasury, federal agency/gse, and corporate notes securities. The Investment Portfolio s quarterly total return performance of 0.47% outperformed the benchmark performance of 0.19% by 0.28%. For the last 12 months the Portfolio returned 0.94% versus the benchmark s return of 0.04%. We positioned portfolios with a defensive duration posture for the majority of the past two quarters in light of the Fed's impact on short-term rates. This has benefited portfolio returns as yields across the curve approached new highs for this cycle. Economic Conditions were characterized by: The yield on the 2-year Treasury note rising by 29 basis points to end the quarter at 2.82%, A robust labor market, with the U.S. unemployment rate near 48 year lows, Core inflation near the Fed s 2% target, while oil prices surged and wages trended higher, Consumer confidence is at a near two-decade high, while measures of manufacturing activity are also very strong, As well as, an escalating trade war with China, weakness in emerging market economies and currencies, and political uncertainty. While the Fed s policy actions will depend on future economic data, we believe the current strength of the U.S. economy, coupled with a strong labor market and rising inflation, will cause the Fed to continue raising rates at a pace of about one ¼ percent hike per quarter well into Therefore, we plan to maintain a defensive duration posture to mitigate a portion of interest rate risk relative to benchmarks.an environment of heightened volatility. The risk off sentiment triggered wider credit spreads. PFM Asset Management LLC Page 10 of 45

11 PALM BEACH CNTY FL S/D Portfolio Snapshot Credit Quality (S&P Ratings) Sector Allocation Portfolio Statistics As of September 30, 2018 Par Value: $45,340,000 Total Market Value: $45,027,088 BBB+ 1.5% A 6.3% A- 3.5% A+ 4.6% AA 1.5% AA- 1.4% U.S. Treasury 41.6% Corporate 19.7% Security Market Value: $44,864,222 Accrued Interest: Cash: Amortized Cost: Yield at Market: $162,866 - $45,223, % AA+ 81.3% Federal Agency/GSE 38.7% Yield at Cost: Effective Duration: Duration to Worst: 1.64% 1.16 Years 1.16 Years 60% 55.5% Maturity Distribution Average Maturity: 1.20 Years 50% Average Credit: * AA 40% 30% 24.8% 20% 17.8% 10% 0% 0-1 Year 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years 1.9% 0.0% 0.0% * 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 Page 11 of 45 Account ****0100

12 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Performance (Total Return) Annualized Return Portfolio/Benchmark Effective Duration Current Quarter 1 Year 3 Year 5 Year 10 Year Since Inception (12/31/98) ** PALM BEACH CNTY FL S/D % 0.94% 0.80% 0.82% 1.51% 3.02% ICE BofAML 1-3 Year U.S. Treasury Index % 0.04% 0.38% 0.56% 1.09% 2.78% Difference 0.28% 0.90% 0.42% 0.26% 0.42% 0.24% 3.2% 2.8% 3.02% 2.78% 2.4% Total Return 2.0% 1.6% 1.2% 0.8% 0.4% 0.0% 1.51% 1.09% 0.94% 0.80% 0.82% 0.47% 0.56% 0.38% 0.19% 0.04% Current Quarter 1 Year 3 Year 5 Year 10 Year Since Inception PALM BEACH CNTY FL S/D ICE BofAML 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 Page 12 of 45 Account ****0100

13 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Performance (Total Return) Quarter Ended Annualized Return Portfolio/Benchmark Effective Duration 09/30/18 06/30/18 03/31/18 12/31/17 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D % 0.40% 0.12% -0.05% 0.94% 0.80% 0.82% ICE BofAML 1-3 Year U.S. Treasury Index % 0.22% -0.13% -0.25% 0.04% 0.38% 0.56% Difference 0.28% 0.18% 0.25% 0.20% 0.90% 0.42% 0.26% 1.0% 0.8% 0.94% 0.80% 0.82% Total Return 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% 0.47% 0.19% 0.40% 0.22% 0.12% -0.13% -0.05% -0.25% 0.04% 0.38% 0.56% 09/30/18 06/30/18 03/31/18 12/31/17 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D ICE BofAML 1-3 Year U.S. Treasury Index Portfolio performance is gross of fees unless otherwise indicated. PFM Asset Management LLC Page 13 of 45 Account ****0100

14 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Performance (Total Return) Quarter Ended Annualized Return Portfolio/Benchmark Effective Duration 09/30/18 06/30/18 03/31/18 12/31/17 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D 0.47% 1.16 Net of Fees ** 0.45% - ICE BofAML 1-3 Year U.S. Treasury Index 0.19% % 0.12% -0.05% 0.38% 0.10% -0.07% 0.22% -0.13% -0.25% 0.94% 0.80% 0.82% 0.86% 0.72% 0.75% 0.04% 0.38% 0.56% Difference (Gross) 0.28% 0.18% 0.25% 0.20% 0.90% 0.42% 0.26% Difference (Net) 0.26% 0.16% 0.23% 0.18% 0.82% 0.34% 0.19% 1.0% 0.8% 0.94% 0.80% 0.82% Total Return 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% 0.47% 0.19% 0.40% 0.22% 0.12% -0.13% -0.05% -0.25% 0.04% 0.38% 0.56% 09/30/18 06/30/18 03/31/18 12/31/17 1 Year 3 Year 5 Year PALM BEACH CNTY FL S/D ICE BofAML 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 Page 14 of 45 Account ****0100

15 PALM BEACH CNTY FL S/D Portfolio Performance Portfolio Earnings Quarter-Ended September 30, 2018 Market Value Basis Accrual (Amortized Cost) Basis Beginning Value (06/30/2018) $44,281, $44,678, Net Purchases/Sales $539, $539, Change in Value $43, $4, Ending Value (09/30/2018) $44,864, $45,223, Interest Earned $162, $162, Portfolio Earnings $205, $167, PFM Asset Management LLC Account ****0100 Page 15 of 45

16 PALM BEACH CNTY FL S/D Portfolio Composition Sector Allocation September 30, 2018 June 30, 2018 March 31, 2018 December 31, 2017 Sector MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total MV ($MM) % of Total U.S. Treasury % % % % Federal Agency/GSE % % % % Corporate % % % % Municipal % % % % Total $ % $ % $ % $ % 100% 90% 80% 70% Municipal Corporate Federal Agency/GSE U.S. Treasury 60% 50% 40% 30% 20% 10% 0% September 2018 June 2018 March 2018 December 2017 Detail may not add to total due to rounding. PFM Asset Management LLC Page 16 of 45 Account ****0100

17 PALM BEACH CNTY FL S/D Portfolio Composition Maturity Distribution As of September 30, 2018 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 2.55% 1.20 yrs 55.5% 17.8% 24.8% 1.9% 0.0% 0.0% ICE BofAML 1-3 Year U.S. Treasury Index 2.81% 1.94 yrs 2.8% 54.2% 43.0% 0.0% 0.0% 0.0% 60% 50% 55.5% 54.2% 40% 43.0% 30% 24.8% 20% 17.8% 10% 0% 2.8% 1.9% 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 ICE BofAML 1-3 Year U.S. Treasury Index PFM Asset Management LLC Account ****0100 Page 17 of 45

18 PALM BEACH CNTY FL S/D Portfolio Composition Duration Distribution As of September 30, 2018 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 % 20.3% 23.6% 0.6% 0.0% 0.0% ICE BofAML 1-3 Year U.S. Treasury Index % 54.9% 42.3% 0.0% 0.0% 0.0% 60% 50% 40% 56% Distribution by Effective Duration 55% 42% 60% 50% 40% Contribution to Portfolio Duration 55% 51% 44% 30% 20% 20% 24% 30% 20% 22% 25% 10% 0% 3% 1% 0% 0% 0% 0% 0% 0-1 Years 1-2 Years 2-3 Years 3-4 Years 4-5 Years > 5 Years 10% 0% 1% 2% 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 PALM BEACH CNTY FL S/D ICE BofAML 1-3 Year U.S. Treasury Index ICE BofAML 1-3 Year U.S. Treasury Index PFM Asset Management LLC Account ****0100 Page 18 of 45

19 PALM BEACH CNTY FL S/D Portfolio Composition Credit Quality As of September 30, 2018 S&P Rating Market Value ($) % of Portfolio AA+ $36,459, % A $2,822, % A+ $2,082, % A- $1,553, % BBB+ $687, % AA $650, % BBB+ 1.5% A 6.3% A- 3.5% A+ 4.6% AA 1.5% AA- 1.4% AA- $607, % Totals 100.0% $44,864,222 AA+ 81.3% Detail may not add to total due to rounding. PFM Asset Management LLC Page 19 of 45 Account ****0100

20 PALM BEACH CNTY FL S/D Portfolio Composition Issuer Distribution As of September 30, 2018 Issuer Market Value ($) % of Portfolio UNITED STATES TREASURY 18,677, % FEDERAL HOME LOAN BANKS 7,446, % FANNIE MAE 5,863, % FREDDIE MAC 4,042, % PACCAR FINANCIAL CORP 466, % TOYOTA MOTOR CORP 447, % AMERICAN HONDA FINANCE 444, % Top 5 = 81.3% Top 10 = 86.2% BANK OF AMERICA CO 437, % EXXON MOBIL CORP 429, % DEERE & COMPANY 422, % AMERICAN EXPRESS CO 421, % IBM CORP 405, % GOLDMAN SACHS GROUP INC 394, % THE BANK OF NEW YORK MELLON CORPORATION 392, % BB&T CORPORATION 390, % HOME DEPOT INC 389, % WAL-MART STORES INC 350, % CATERPILLAR INC 339, % PFM Asset Management LLC Account ****0100 Page 20 of 45

21 PALM BEACH CNTY FL S/D Portfolio Composition Issuer Market Value ($) % of Portfolio CHARLES SCHWAB 305, % JP MORGAN CHASE & CO 304, % PFIZER INC 299, % GENERAL DYNAMICS CORP 299, % HSBC HOLDINGS PLC 296, % MORGAN STANLEY 293, % NATIONAL RURAL UTILITIES CO FINANCE CORP 273, % UNILEVER PLC 247, % PEPSICO INC 218, % STATE STREET CORPORATION 217, % HERSHEY COMPANY 184, % 3M COMPANY 159, % Grand Total: 44,864, % PFM Asset Management LLC Account ****0100 Page 21 of 45

22 PALM BEACH CNTY FL S/D Portfolio Composition Sector/Issuer Distribution As of September 30, 2018 Sector / Issuer Market Value ($) % of Sector % of Total Portfolio Corporate 3M COMPANY 159, % 0.4% AMERICAN EXPRESS CO 421, % 0.9% AMERICAN HONDA FINANCE 444, % 1.0% BANK OF AMERICA CO 437, % 1.0% BB&T CORPORATION 390, % 0.9% CATERPILLAR INC 339, % 0.8% CHARLES SCHWAB 305, % 0.7% DEERE & COMPANY 422, % 0.9% EXXON MOBIL CORP 429, % 1.0% GENERAL DYNAMICS CORP 299, % 0.7% GOLDMAN SACHS GROUP INC 394, % 0.9% HERSHEY COMPANY 184, % 0.4% HOME DEPOT INC 389, % 0.9% HSBC HOLDINGS PLC 296, % 0.7% IBM CORP 405, % 0.9% JP MORGAN CHASE & CO 304, % 0.7% MORGAN STANLEY 293, % 0.7% NATIONAL RURAL UTILITIES CO FINANCE CORP 273, % 0.6% PACCAR FINANCIAL CORP 466, % 1.0% PEPSICO INC 218, % 0.5% PFIZER INC 299, % 0.7% PFM Asset Management LLC Account ****0100 Page 22 of 45

23 PALM BEACH CNTY FL S/D Portfolio Composition Sector / Issuer Market Value ($) % of Sector % of Total Portfolio STATE STREET CORPORATION 217, % 0.5% THE BANK OF NEW YORK MELLON CORPORATION 392, % 0.9% TOYOTA MOTOR CORP 447, % 1.0% UNILEVER PLC 247, % 0.6% WAL-MART STORES INC 350, % 0.8% Sector Total 8,834, % 19.7% Federal Agency/GSE FANNIE MAE 5,863, % 13.1% FEDERAL HOME LOAN BANKS 7,446, % 16.6% FREDDIE MAC 4,042, % 9.0% Sector Total 17,352, % 38.7% U.S. Treasury UNITED STATES TREASURY 18,677, % 41.6% Sector Total 18,677, % 41.6% 44,864,222 Portfolio Total 100.0% 100.0% PFM Asset Management LLC Account ****0100 Page 23 of 45

24 PALM BEACH CNTY FL S/D Portfolio Activity Quarterly Portfolio Transactions Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield at Market Realized G/L (BV) BUY 7/30/18 7/31/18 175, RN93 PACCAR FINANCIAL CORP NOTES 2.80% 3/1/21 175, % 7/30/18 7/31/18 225, AV5 STATE STREET CORP NOTES 1.95% 5/19/21 218, % 7/30/18 7/31/18 625, F96 US TREASURY NOTES 2.00% 10/31/21 612, % 7/30/18 7/31/18 225, DX3 PEPSICO INC CORP (CALLABLE) NOTE 2.00% 4/15/21 220, % 8/8/18 8/10/18 300, HPR7 HSBC USA INC NOTES 2.35% 3/5/20 299, % 8/8/18 8/10/18 275, HER9 NATIONAL RURAL UTIL COOP 2.90% 3/15/21 277, % 9/4/18 9/7/18 300, EM1 PFIZER INC CORP NOTE 3.00% 9/15/21 299, % 9/4/18 9/7/18 250, BF3 UNILEVER CAPITAL CORP 3.00% 3/7/22 248, % 9/5/18 9/10/18 125, EUK3 JOHN DEERE CAPITAL CORP CORP NOTES 3.12% 9/10/21 124, % 9/11/18 9/14/18 160, YBA8 3M COMPANY 3.00% 9/14/21 159, % 9/25/18 9/26/18 1,250, A4 US TREASURY N/B 2.75% 9/15/21 1,245, % 9/27/18 9/28/18 750, A4 US TREASURY N/B 2.75% 9/15/21 747, % Total BUY 4,660,000 4,630, INTEREST 7/19/18 7/19/18 1,065, EAEB1 FHLMC REFERENCE NOTE 0.87% 7/19/19 4, /31/18 7/31/18 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 7, /31/18 7/31/18 1,215, N89 US TREASURY NOTES 1.37% 1/31/21 8, /31/18 7/31/18 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 6, /1/18 8/1/18 400, FAZ6 BRANCH BANKING & TRUST (CALLABLE) NOTES 2.15% 2/1/21 4, /2/18 8/2/18 1,070, G0N33 FNMA BENCHMARK NOTE 0.87% 8/2/19 4, /5/18 8/5/18 410, HAG8 IBM CORP CORP NOTES 2.65% 2/5/21 5, /7/18 8/7/18 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 6, /12/18 8/12/18 450, WCD1 AMERICAN HONDA FINANCE 2.65% 2/12/21 5, PFM Asset Management LLC Account ****0100 Page 24 of 45

25 PALM BEACH CNTY FL S/D Portfolio Activity Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield at Market Realized G/L (BV) 8/15/18 8/15/18 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL NOTES 1.15% 8/15/ /25/18 8/25/18 400, U8F1 GOLDMAN SACHS GROUP INC (CALLABLE) NOTE 2.87% 2/25/21 5, /26/18 8/26/18 1,000, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 5, /26/18 8/26/18 1,220, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 6, /28/18 8/28/18 2,160, G0P49 FNMA NOTES 1.00% 8/28/19 10, /28/18 8/28/18 480, G0T29 FNMA NOTES 1.50% 2/28/20 3, /31/18 8/31/18 270, J50 US TREASURY NOTES 1.37% 2/29/20 1, /31/18 8/31/18 520, SH4 US TREASURY NOTES 1.37% 2/28/19 3, /1/18 9/1/18 310, HQJ2 JP MORGAN CHASE & CO CORP NT (CALLABLE) 2.55% 3/1/21 3, /1/18 9/1/18 175, RN93 PACCAR FINANCIAL CORP NOTES 2.80% 3/1/21 2, /5/18 9/5/18 300, HPR7 HSBC USA INC NOTES 2.35% 3/5/20 3, /6/18 9/6/18 435, GAG7 EXXON MOBIL (CALLABLE) CORP NOTE 1.91% 3/6/20 4, /12/18 9/12/18 300, EUD9 JOHN DEERE CAPITAL CORP NOTES 2.87% 3/12/21 4, /14/18 9/14/18 425, M0DX4 AMERICAN EXP (CALLABLE) CREDIT CORP NOTE 2.60% 9/14/20 5, /15/18 9/15/18 275, HER9 NATIONAL RURAL UTIL COOP 2.90% 3/15/21 4, /26/18 9/26/18 1,350, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 6, /26/18 9/26/18 2,420, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 12, /29/18 9/29/18 650, EAEJ4 FHLMC NOTES 1.62% 9/29/20 5, /30/18 9/30/18 975, RH5 US TREASURY NOTES 1.37% 9/30/18 6, /30/18 9/30/18 1,175, L65 US TREASURY NOTES 1.37% 9/30/20 8, Total INTEREST 23,810, , MATURITY 7/31/18 7/31/18 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 1,000, /7/18 8/7/18 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 2,000, /15/18 8/15/18 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL NOTES 1.15% 8/15/18 100, /30/18 9/30/18 975, RH5 US TREASURY NOTES 1.37% 9/30/18 975, PFM Asset Management LLC Account ****0100 Page 25 of 45

26 PALM BEACH CNTY FL S/D Portfolio Activity Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield at Market Realized G/L (BV) Total MATURITY 4,075,000 4,075, PFM Asset Management LLC Account ****0100 Page 26 of 45

27 PALM BEACH CNTY FL S/D Portfolio Activity Quarterly Portfolio Transactions Tran. Type Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield Realized G/L (BV) INTEREST 7/19/18 7/19/18 1,065, EAEB1 FHLMC REFERENCE NOTE 0.87% 7/19/19 4, BUY 7/30/18 7/31/18 175, RN93 PACCAR FINANCIAL CORP NOTES 2.80% 3/1/21 (175,577.11) 3.15% BUY 7/30/18 7/31/18 225, AV5 STATE STREET CORP NOTES 1.95% 5/19/21 (218,774.25) 3.14% BUY 7/30/18 7/31/18 625, F96 US TREASURY NOTES 2.00% 10/31/21 (612,963.87) 2.79% BUY 7/30/18 7/31/18 225, DX3 PEPSICO INC CORP (CALLABLE) NOTE 2.00% 4/15/21 (220,511.00) 3.00% INTEREST 7/31/18 7/31/18 1,260, H52 US TREASURY NOTES 1.25% 1/31/20 7, INTEREST 7/31/18 7/31/18 1,215, N89 US TREASURY NOTES 1.37% 1/31/21 8, INTEREST 7/31/18 7/31/18 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 6, MATURITY 7/31/18 7/31/18 1,000, VQ0 US TREASURY NOTES 1.37% 7/31/18 1,000, INTEREST 8/1/18 8/1/18 400, FAZ6 BRANCH BANKING & TRUST (CALLABLE) NOTES 2.15% 2/1/21 4, INTEREST 8/2/18 8/2/18 1,070, G0N33 FNMA BENCHMARK NOTE 0.87% 8/2/19 4, INTEREST 8/5/18 8/5/18 410, HAG8 IBM CORP CORP NOTES 2.65% 2/5/21 5, INTEREST 8/7/18 8/7/18 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 6, MATURITY 8/7/18 8/7/18 2,000, A8PK3 FHLB NOTES 0.62% 8/7/18 2,000, BUY 8/8/18 8/10/18 300, HPR7 HSBC USA INC NOTES 2.35% 3/5/20 (299,729.42) 3.07% BUY 8/8/18 8/10/18 275, HER9 NATIONAL RURAL UTIL COOP 2.90% 3/15/21 (277,263.56) 3.10% INTEREST 8/12/18 8/12/18 450, WCD1 AMERICAN HONDA FINANCE 2.65% 2/12/21 5, INTEREST 8/15/18 8/15/18 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL NOTES 1.15% 8/15/ MATURITY 8/15/18 8/15/18 100, BX5 BERKSHIRE HATHAWAY INC GLOBAL NOTES 1.15% 8/15/18 100, INTEREST 8/25/18 8/25/18 400, U8F1 GOLDMAN SACHS GROUP INC (CALLABLE) NOTE 2.87% 2/25/21 5, PFM Asset Management LLC Account ****0100 Page 27 of 45

28 PALM BEACH CNTY FL S/D Portfolio Activity Tran. Type Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield Realized G/L (BV) INTEREST 8/26/18 8/26/18 1,000, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 5, INTEREST 8/26/18 8/26/18 1,220, G0J53 FNMA BENCHMARK NOTE 1.00% 2/26/19 6, INTEREST 8/28/18 8/28/18 2,160, G0P49 FNMA NOTES 1.00% 8/28/19 10, INTEREST 8/28/18 8/28/18 480, G0T29 FNMA NOTES 1.50% 2/28/20 3, INTEREST 8/31/18 8/31/18 270, J50 US TREASURY NOTES 1.37% 2/29/20 1, INTEREST 8/31/18 8/31/18 520, SH4 US TREASURY NOTES 1.37% 2/28/19 3, INTEREST 9/1/18 9/1/18 310, HQJ2 JP MORGAN CHASE & CO CORP NT (CALLABLE) 2.55% 3/1/21 3, INTEREST 9/1/18 9/1/18 175, RN93 PACCAR FINANCIAL CORP NOTES 2.80% 3/1/21 2, BUY 9/4/18 9/7/18 300, EM1 PFIZER INC CORP NOTE 3.00% 9/15/21 (299,595.00) 3.05% BUY 9/4/18 9/7/18 250, BF3 UNILEVER CAPITAL CORP 3.00% 3/7/22 (248,790.00) 3.15% INTEREST 9/5/18 9/5/18 300, HPR7 HSBC USA INC NOTES 2.35% 3/5/20 3, BUY 9/5/18 9/10/18 125, EUK3 JOHN DEERE CAPITAL CORP CORP NOTES 3.12% 9/10/21 (124,961.25) 3.14% INTEREST 9/6/18 9/6/18 435, GAG7 EXXON MOBIL (CALLABLE) CORP NOTE 1.91% 3/6/20 4, BUY 9/11/18 9/14/18 160, YBA8 3M COMPANY 3.00% 9/14/21 (159,672.00) 3.07% INTEREST 9/12/18 9/12/18 300, EUD9 JOHN DEERE CAPITAL CORP NOTES 2.87% 3/12/21 4, INTEREST 9/14/18 9/14/18 425, M0DX4 AMERICAN EXP (CALLABLE) CREDIT CORP NOTE 2.60% 9/14/20 5, INTEREST 9/15/18 9/15/18 275, HER9 NATIONAL RURAL UTIL COOP 2.90% 3/15/21 4, BUY 9/25/18 9/26/18 1,250, A4 US TREASURY N/B 2.75% 9/15/21 (1,245,331.65) 2.91% INTEREST 9/26/18 9/26/18 1,350, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 6, INTEREST 9/26/18 9/26/18 2,420, A9EP2 FHLB GLOBAL NOTES 1.00% 9/26/19 12, BUY 9/27/18 9/28/18 750, A4 US TREASURY N/B 2.75% 9/15/21 (747,605.91) 2.90% INTEREST 9/29/18 9/29/18 650, EAEJ4 FHLMC NOTES 1.62% 9/29/20 5, PFM Asset Management LLC Account ****0100 Page 28 of 45

29 PALM BEACH CNTY FL S/D Portfolio Activity Tran. Type Trade Settle Par ($) CUSIP Security Description Coupon Maturity Transact Amt ($) Yield Realized G/L (BV) INTEREST 9/30/18 9/30/18 975, RH5 US TREASURY NOTES 1.37% 9/30/18 6, INTEREST 9/30/18 9/30/18 1,175, L65 US TREASURY NOTES 1.37% 9/30/20 8, MATURITY 9/30/18 9/30/18 975, RH5 US TREASURY NOTES 1.37% 9/30/18 975, TOTALS (396,984.57) 0.00 PFM Asset Management LLC Account ****0100 Page 29 of 45

30 PALM BEACH CNTY FL S/D Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description d /Coupon/Maturity CUSIP Par S&P Rating Moody's Rating Trade Settle Original Cost YTM at Cost Accrued Interest Amortized Cost Market Value U.S. Treasury Bond / Note US TREASURY NOTES DTD 10/31/ % 10/31/2018 US TREASURY NOTES DTD 10/31/ % 10/31/2018 US TREASURY NOTES DTD 12/31/ % 12/31/2018 US TREASURY NOTES DTD 12/31/ % 12/31/2018 US TREASURY NOTES DTD 02/29/ % 02/28/2019 US TREASURY NOTES DTD 12/01/ % 11/30/2019 US TREASURY NOTES DTD 02/02/ % 01/31/2020 US TREASURY NOTES DTD 03/02/ % 02/29/2020 US TREASURY NOTES DTD 09/30/ % 09/30/2020 US TREASURY NOTES DTD 01/31/ % 01/31/2021 US TREASURY N/B DTD 09/17/ % 09/15/2021 US TREASURY N/B DTD 09/17/ % 09/15/2021 US TREASURY NOTES DTD 10/31/ % 10/31/ WD8 1,295, WD8 3,080, A75 2,040, A75 2,220, SH4 520, G61 3,160, H52 1,260, J50 270, L65 1,175, N89 1,215, A4 750, A4 1,250, F96 625, AA+ Aaa 3/30/2016 3/31/2016 1,307, , ,295, ,294, AA+ Aaa 11/5/ /9/2015 3,088, , ,080, ,077, AA+ Aaa 12/28/ /30/2015 2,049, , ,040, ,036, AA+ Aaa 12/1/ /4/2015 2,238, , ,221, ,215, AA+ Aaa 2/1/2016 2/3/ , , , AA+ Aaa 12/1/ /5/2016 3,163, , ,161, ,116, AA+ Aaa 1/3/2017 1/5/2017 1,250, , ,255, ,235, AA+ Aaa 2/1/2017 2/3/ , , , AA+ Aaa 9/28/2017 9/29/2017 1,167, ,169, ,142, AA+ Aaa 1/11/2018 1/12/2018 1,188, , ,194, ,174, AA+ Aaa 9/27/2018 9/28/ , , , AA+ Aaa 9/25/2018 9/26/2018 1,244, , ,244, ,245, AA+ Aaa 7/30/2018 7/31/ , , , , Security Type Sub-Total 18,860, ,848, , ,811, ,677, Federal Agency Bond / Note PFM Asset Management LLC Account ****0100 Page 30 of 45

31 PALM BEACH CNTY FL S/D Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description d /Coupon/Maturity CUSIP Par S&P Rating Moody's Rating Trade Settle Original Cost YTM at Cost Accrued Interest Amortized Cost Market Value Federal Agency Bond / Note FHLB GLOBAL NOTES DTD 08/26/ % 10/01/2018 FNMA BENCHMARK NOTE DTD 02/23/ % 02/26/2019 FNMA BENCHMARK NOTE DTD 02/23/ % 02/26/2019 FREDDIE MAC NOTES DTD 03/21/ % 04/15/2019 FHLB GLOBAL NOTE DTD 06/03/ % 06/21/2019 FHLMC REFERENCE NOTE DTD 07/20/ % 07/19/2019 FNMA BENCHMARK NOTE DTD 08/02/ % 08/02/2019 FNMA NOTES DTD 09/02/ % 08/28/2019 FHLB GLOBAL NOTES DTD 09/09/ % 09/26/2019 FHLB GLOBAL NOTES DTD 09/09/ % 09/26/2019 FNMA NOTES DTD 02/28/ % 02/28/2020 FHLMC AGENCY NOTES DTD 04/20/ % 04/20/2020 FHLMC NOTES DTD 09/29/ % 09/29/ A9AE1 2,500, G0J53 1,220, G0J53 1,000, EADZ9 1,900, A8DB6 1,250, EAEB1 1,065, G0N33 1,070, G0P49 2,160, A9EP2 2,420, A9EP2 1,350, G0T29 480, EAEF2 480, EAEJ4 650, AA+ Aaa 8/25/2016 8/26/2016 2,498, , ,500, ,500, AA+ Aaa 2/19/2016 2/23/2016 1,217, , ,219, ,213, AA+ Aaa 5/26/2016 5/31/ , , , AA+ Aaa 7/6/2016 7/8/2016 1,918, , ,903, ,886, AA+ Aaa 6/2/2016 6/3/2016 1,249, , ,249, ,237, AA+ Aaa 7/19/2016 7/20/2016 1,062, , ,064, ,050, AA+ Aaa 7/29/2016 8/2/2016 1,068, , ,069, ,054, AA+ Aaa 9/1/2016 9/2/2016 2,154, , ,158, ,128, AA+ Aaa 9/8/2016 9/9/2016 2,417, ,419, ,380, AA+ Aaa 10/3/ /5/2016 1,349, ,349, ,328, AA+ Aaa 2/24/2017 2/28/ , , , AA+ Aaa 4/19/2017 4/20/ , , , , AA+ Aaa 9/28/2017 9/29/ , , , Security Type Sub-Total 17,545, ,541, , ,542, ,352, Corporate Note PFM Asset Management LLC Account ****0100 Page 31 of 45

32 PALM BEACH CNTY FL S/D Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description d /Coupon/Maturity CUSIP Par S&P Rating Moody's Rating Trade Settle Original Cost YTM at Cost Accrued Interest Amortized Cost Market Value Corporate Note HSBC USA INC NOTES DTD 03/05/ % 03/05/2020 EXXON MOBIL (CALLABLE) CORP NOTE DTD 03/06/ % 03/06/2020 GENERAL DYNAMICS CORP DTD 05/11/ % 05/11/2020 CATERPILLAR FINL SERVICE DTD 05/16/ % 05/15/2020 AMERICAN EXP (CALLABLE) CREDIT CORP NOTE DTD 09/14/ % 09/14/2020 BRANCH BANKING & TRUST (CALLABLE) NOTES DTD 10/26/ % 02/01/2021 IBM CORP CORP NOTES DTD 02/06/ % 02/05/2021 AMERICAN HONDA FINANCE DTD 02/15/ % 02/12/2021 GOLDMAN SACHS GROUP INC (CALLABLE) NOTE DTD 02/25/ % 02/25/2021 JP MORGAN CHASE & CO CORP NT (CALLABLE) DTD 03/01/ % 03/01/2021 PACCAR FINANCIAL CORP NOTES DTD 02/27/ % 03/01/2021 JOHN DEERE CAPITAL CORP NOTES DTD 03/13/ % 03/12/2021 NATIONAL RURAL UTIL COOP DTD 02/26/ % 03/15/ HPR7 300, GAG7 435, BA5 300, Q2J7 340, M0DX4 425, FAZ6 400, HAG8 410, WCD1 450, U8F1 400, HQJ2 310, RN93 175, EUD9 300, HER9 275, A A2 8/8/2018 8/10/ , , , AA+ Aaa 9/28/2017 9/29/ , , , A+ A2 5/8/2018 5/11/ , , , , A A3 5/9/2018 5/16/ , , , , A- A2 3/1/2018 3/2/ , , , A- A2 5/1/2018 5/3/ , , , , A+ A1 3/1/2018 3/2/ , , , , A+ A2 2/12/2018 2/15/ , , , , BBB+ A3 5/8/2018 5/10/ , , , , A- A3 2/13/2018 2/15/ , , , A+ A1 7/30/2018 7/31/ , , , A A2 3/8/2018 3/13/ , , , A A2 8/8/2018 8/10/ , , , PFM Asset Management LLC Account ****0100 Page 32 of 45

33 PALM BEACH CNTY FL S/D Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description d /Coupon/Maturity CUSIP Par S&P Rating Moody's Rating Trade Settle Original Cost YTM at Cost Accrued Interest Amortized Cost Market Value Corporate Note HOME DEPOT INC CORP NOTES DTD 02/12/ % 04/01/2021 TOYOTA MOTOR CREDIT CORP NOTES DTD 04/13/ % 04/13/2021 BANK OF NEW YORK MELLON CORP (CALLABLE) DTD 02/19/ % 04/15/2021 PEPSICO INC CORP (CALLABLE) NOTE DTD 10/10/ % 04/15/2021 BANK OF AMERICA CORP NOTE DTD 04/19/ % 04/19/2021 MORGAN STANLEY CORP NOTES DTD 04/21/ % 04/21/2021 PACCAR FINANCIAL CORP DTD 05/10/ % 05/10/2021 HERSHEY COMPANY CORP NOTES DTD 05/10/ % 05/15/2021 STATE STREET CORP NOTES DTD 05/19/ % 05/19/2021 CHARLES SCHWAB CORP NOTES DTD 05/22/ % 05/21/2021 WAL-MART STORES INC CORP NOTES DTD 06/27/ % 06/23/2021 JOHN DEERE CAPITAL CORP CORP NOTES DTD 09/10/ % 09/10/2021 3M COMPANY DTD 09/14/ % 09/14/ BL5 400, TEU5 450, FAA1 400, DX3 225, GFW4 445, BEA0 300, RP26 295, BA5 185, AV5 225, AW5 305, EJ8 350, EUK3 125, YBA8 160, A A2 5/1/2018 5/3/ , , , , AA- Aa3 5/1/2018 5/3/ , , , , A A1 3/1/2018 3/2/ , , , , A+ A1 7/30/2018 7/31/ , , , , A- A3 2/13/2018 2/15/ , , , , BBB+ A3 5/1/2018 5/3/ , , , , A+ A1 5/7/2018 5/10/ , , , , A A1 5/3/2018 5/10/ , , , , A A1 7/30/2018 7/31/ , , , , A A2 5/17/2018 5/22/ , , , , AA Aa2 6/20/2018 6/27/ , , , , A A2 9/5/2018 9/10/ , , , AA- A1 9/11/2018 9/14/ , , , PFM Asset Management LLC Account ****0100 Page 33 of 45

34 PALM BEACH CNTY FL S/D Portfolio Holdings Managed Account Detail of Securities Held Security Type/Description d /Coupon/Maturity CUSIP Par S&P Rating Moody's Rating Trade Settle Original Cost YTM at Cost Accrued Interest Amortized Cost Market Value Corporate Note PFIZER INC CORP NOTE DTD 09/07/ % 09/15/2021 UNILEVER CAPITAL CORP DTD 09/07/ % 03/07/ EM1 300, BF3 250, AA A1 9/4/2018 9/7/ , , , A+ A1 9/4/2018 9/7/ , , , Security Type Sub-Total 8,935, ,859, , ,869, ,834, Managed Account Sub Total 45,340, ,249, , ,223, ,864, Securities Sub-Total $45,340, $45,249, % $162, $45,223, $44,864, Accrued Interest $162, Total Investments $45,027, Bolded items are forward settling trades. PFM Asset Management LLC Account ****0100 Page 34 of 45

35 Tab III PFM Asset Management LLC Page 35 of 45

36 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Analysis Summary Interest Rate Sensitivity Stress Test: Analysis performed on portfolio holdings as of September 30, Portfolio market value results based on instantaneous rate shock over multiple scenarios, ranging from -0.50% to 0.50%. The impact of an instantaneous rate shock results in portfolio market values that range from $44.8 to $45.3 million, under rate shock changes of 0.50% to -0.50%. Interest Rate Sensitivity Horizon Analysis: Analysis performed on portfolio holdings as of September 30, Change in market value and total return results based on 12-month horizon analysis over multiple scenarios, ranging from -0.50% to 0.50%. The impact of a 12-month horizon analysis on estimated portfolio total returns range from 2.06% to 3.75%, under rate shock changes of 0.50% to -0.50%. Credit Quality Stress Test: Analysis performed on portfolio holdings as of September 30, Portfolio credit quality distribution based on downgrade of securities by one notch (AA- to A+, A to A-, etc.). For illustrative purposes, S&P ratings are utilized. After all credit downgrades, Goldman Sachs and Morgan Stanley Corporate Notes would be rated BBB by S&P, resulting in a policy warning. PFM Asset Management LLC Page 36 of 45

37 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Portfolio Stress Test Portfolio Stress Test Instantaneous Rate Shock Total Portfolio Value ($ mm) Total Portfolio Value (%) $ % $45.3 $45.2 $45.1 $45.0 $44.9 $44.8 $44.7 $44.6 $45.3 $45.2 $45.0 $44.9 $ % 0.4% 0.2% 0.0% -0.2% -0.4% -0.6% 0.59% 0.29% - (0.28%) (0.57%) $ % % UNCH % % -0.8% % % UNCH % % Summary of Market Value Earnings Estimates under Instantaneous Rate Shock Next 12 Months % % UNCH % % Ending Portfolio Value 45,291,020 45,159,868 45,027,088 44,899,898 44,771,068 Total Return % 0.59% 0.29% - (0.28%) (0.57%) PFM Asset Management LLC Page 37 of 45

38 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Portfolio Horizon Analysis Portfolio Horizon Analysis 12-Month Horizon Market Value ($ mm) Total Return (% Change) $2.0 Yield Income Price Change Total MV Change 4.0% $1.5 $1.0 $ % 3.0% 2.5% 2.0% 1.5% 3.75% 3.33% 2.90% 2.48% 2.06% $ % 0.5% ($0.5) % % UNCH % % 0.0% % % UNCH % % Summary of Market Value Earnings Estimates over the Next 12 Months Next 12 Months % % UNCH % % Yield Income 1,255,078 1,265,294 1,275,510 1,285,727 1,295,943 Price Change 427, ,341 27,473 (172,395) (372,263) Total MV Change 1,682,287 1,492,635 1,302,984 1,113, ,680 Next 12 Months % % UNCH % % Yield Income % 2.80% 2.82% 2.84% 2.87% 2.89% Price Change % 0.95% 0.50% 0.06% (0.38%) (0.83%) Total Return % 3.75% 3.33% 2.90% 2.48% 2.06% PFM Asset Management LLC Page 38 of 45

39 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Credit Downgrade Stress Test Credit Downgrade Stress Test Holdings as of September 30, 2018 Current All Downgraded 1 Notch 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- CCC AAAm AAm A-1+ A-1 A-2 NR Rating AAA AA+/AA/AA- A+/A/A- BBB+/BBB/BBB- A-1+/A-1 Current (9/30) 0% 84% 14% 2% 0% All Downgraded 1 Notch 0% 83% 12% 5% 0% PFM Asset Management LLC Page 39 of 45

40 PALM BEACH COUNTY SCHOOL DISTRICT, FL Asset Allocation Demand Deposit Bank Account 74.4% Intergovernmental Pools Florida Prime (SBA) United States Treasury Securities Money Market Funds Federal Agency Corporate Notes 17.6% 0.0% 3.2% 0.2% 3.0% 1.5% Security Type Amortized Cost (Includes Interest) Allocation Percentage Permitted by Policy In Compliance Florida Prime (SBA) 33, % 25% YES United States Treasury Securities 18,880, % 100% YES Federal Agency 17,578, % 80% YES Corporate Notes 8,926, % 15% YES Municipals % 20% YES Agency Mortgage-Backed Securities (MBS) % 20% YES Certificates of Deposit and Savings Accounts % 25% YES Demand Deposit Bank Account 432,902, % 100% YES Commercial Paper % 35% YES Bankers Acceptances % 35% YES Repurchase Agreements % 50% YES Money Market Funds 1,147, % 75% YES Intergovernmental Pools 102,470, % 25% YES End of month trade-date amortized cost of portfolio holdings, including accrued interest. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2018 PFM Asset Management LLC Page 40 of 45

41 PALM BEACH COUNTY SCHOOL DISTRICT, FL Asset Allocation Sector Individual Issuer Breakdown Amortized Cost (Includes Interest) Allocation Percentage Permitted by Policy In Compliance Us Tsy Bond/Note UNITED STATES TREASURY 18,880, % 100% YES Intergovernmental Pools FEITF 102,470, % 25% YES Florida Prime (SBA) SBA 33, % 25% YES Fed Agy Bond/Note FANNIE MAE 5,933, % 50% YES Fed Agy Bond/Note FEDERAL HOME LOAN BANKS 7,534, % 50% YES Fed Agy Bond/Note FREDDIE MAC 4,111, % 50% YES Demand Deposit Bank Account CASH WELLS FARGO 430,169, % 100% YES Demand Deposit Bank Account CASH BOA 444, % 100% YES Demand Deposit Bank Account CASH TD BANK 2,289, % 100% YES Corporate Note AMERICAN EXPRESS CREDIT CORP 422, % 5% YES Corporate Note AMERICAN HONDA FINANCE 451, % 5% YES Corporate Note GOLDMAN SACHS GROUP INC 396, % 5% YES Corporate Note HSBC USA 297, % 5% YES Corporate Note IBM CORP 409, % 5% YES Corporate Note JOHN DEERE CAPITAL CORP 425, % 5% YES Corporate Note MELLON BANK 399, % 5% YES Corporate Note TOYOTA MOTOR CREDIT CORP 454, % 5% YES Corporate Note EXXON MOBIL CORP 436, % 5% YES Corporate Note PEPSICO INC 221, % 5% YES Corporate Note JP MORGAN CHASE & CO 308, % 5% YES Corporate Note BRANCH BANKING & TRUST 392, % 5% YES Corporate Note PFIZER INC 300, % 5% YES Corporate Note MORGAN STANLEY 297, % 5% YES Corporate Note STATE STREET CORPORATION 219, % 5% YES Corporate Note UNILEVER CAPITAL CORP 249, % 5% YES Corporate Note CATERPILLAR FINANCIAL SERVICES CORP 343, % 5% YES Corporate Note HOME DEPOT INC 394, % 5% YES Corporate Note BANK OF AMERICA CORP 447, % 5% YES Corporate Note WAL-MART STORES INC 352, % 5% YES Corporate Note PACCAR FINANCIAL CORP 472, % 5% YES Corporate Note NATIONAL RURAL UTIL COOP 274, % 5% YES Corporate Note HERSHEY COMPANY 187, % 5% YES Corporate Note GENERAL DYNAMICS CORP 302, % 5% YES Corporate Note CHARLES SCHWAB CORP 308, % 5% YES Corporate Note 3M COMPANY 159, % 5% YES End of month trade-date amortized cost of portfolio holdings, including accrued interest PFM Asset Management LLC Page 41 of 45

42 THE SCHOOL DISTRICT OF PALM BEACH COUNTY Analysis 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. Notes to Stress Test and Horizon Analysis 1. Portfolio holdings are as of September 30, Yield curve data source Bloomberg. 3. Yield curve scenarios assume parallel rate shocks in even monthly increments. 4. Security maturities occurring during the analysis period are reinvested in a 3-Year US Treasury Note. 5. Reinvestments are at assumed prevailing rates for the benchmark Treasury Note, per the interest rate scenario. 6. Spreads are assumed to remain constant. Notes to Credit Downgrade 1. Portfolio holdings are as of September 30, All securities (excluding Treasuries and Agencies) are downgraded one notch. 3. For illustrative purposes, S&P ratings are utilized. PFM Asset Management LLC Page 42 of 45

43 PALM BEACH CNTY FL S/D Appendix 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 à Market values that 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. à 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. à 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. à Bank of America/Merrill Lynch Indices provided by Bloomberg Financial Markets. à Money market fund/cash balances are included in performance and duration computations. à Standard & Poorʼs is the source of the credit ratings. Distribution of credit rating is exclusive of money market fund/lgip holdings. à Callable securities in the portfolio are included in the maturity distribution analysis to their stated maturity date, although, they may be called prior to maturity. à MBS maturities are represented by expected average life. PFM Asset Management LLC Account ****0100 Page 43 of 45

44 PALM BEACH CNTY FL S/D Appendix GLOSSARY Ã ACCRUED INTEREST: Interest that is due on a bond or other fixed income security since the last interest payment was made. Ã AGENCIES: Federal agency securities and/or Government-sponsored enterprises. Ã 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. Ã 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. Ã COMMERCIAL PAPER: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. Ã 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. Ã 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. Ã EFFECTIVE DURATION: A measure of the sensitivity of a security s price to a change in interest rates, stated in years. Ã 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 ominal yield does not. Ã FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount. Ã INTEREST RATE: Interest per year divided by principal amount and expressed as a percentage. Ã MARKET VALUE: The value that would be received or paid for an investment in an orderly transaction between market participants at the measurement date. Ã MATURITY: The date upon which the principal or stated value of an investment becomes due and payable. Ã NEGOTIABLE CERTIFICATES OF DEPOSIT: A CD with a very large denomination, usually $1 million or more, that can be traded in secondary markets. Ã PAR VALUE: The nominal dollar face amount of a security. PFM Asset Management LLC Account ****0100 Page 44 of 45