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HomeMy WebLinkAbout02-27-2019 Board Meeting Item 14 Attachment - 2018-19 Mid-Year Financial Report.pdf l • .N- _ le 40 Ai ORANGE COUNTY SANITATION DISTRICT MI' dmYear = �� inancF = 1 R for the period ended December 31 , 2018 Orange County, California Table of Contents ExecutiveSummary...................................................................................................1 Budget Review Section 1 — Consolidated Financial Reports..........................................................................1 Section 2 — Operating Budget Review Chart of the Cost per Million Gallons by Department— Budget and Actual.............. 1 Chart of the Net Expenses by Major Category— Budget and Actual........................ 1 Divisional Contributions to Cost Per Million Gallons ................................................2 Comparison of Expenses by Department.................................................................3 Summary of Collection, Treatment, and Disposal Expenses by Major Category.....4 Summary of District-Wide Revenues .......................................................................5 Summary of Collection, Treatment and Disposal Revenues....................................5 Summary of Collection, Treatment, and Disposal Expenses by Line Item...............6 Summary of Collection, Treatment, and Disposal Expenses by Process.................8 Chart of Staffing Trends ...........................................................................................9 Section 3 — Capital Improvement Program Budget Review Capital Improvement Program Graphs by Type and Funding Source...................... 1 Summary of Capital Improvement Construction Requirements - Current Year........2 Summary of Capital Improvement Construction Requirements - Project Life ..........6 Section 4 — Capital Assets Schedule & Debt Service Budget Review CapitalAssets Schedule ..........................................................................................1 Debt Service Budget Review....................................................................................1 Section 5 — Self Insurance Budget Review General Liability and Property Fund Budget Review................................................ 1 Workers' Compensation Fund Budget Review.........................................................2 Quarterly Treasurer's Report........................................................................................1 QuarterlyCOP Report.................................................................................................1 FY 2018-19 Mid-Year Financial Report This Page Intentionally Left Blank Executive Summary Consolidated Financial Reports For the Mid-Year Ended December 31, 2018 Included in this consolidated report are the following quarterly financial reports for the period ended December 31, 2018: • Mid-Year Budget Review: The Consolidated Financial Reports Section provides the Directors, staff, and the general public with a comprehensive overview of the financial results of the Sanitation District through the mid-year ended December 31, 2018. Contained within the Consolidated Financial Reports is the budget-to-actual status of the Collections, Treatment and Disposal Operations, the Capital Improvement Program, the Self-Insurance Program, and Debt Service Outlays. Also included is a Capital Assets Schedule as of December 31, 2018. The chart below provides for a summary of these activities. Mid-Year Results as a Percentage of Budget 60.0% $75.4M 50.0% $237.3M $78.7M $ 40.0% 1.0M 24.1M 30.0% 20.0% 10.0% 0.0% Oper. Oper. Capital Debt Self Ins Revenue Expense Outlays Service Outlays Various detail information can be found in this report. Below is a descriptive summary of these activities through December 31st: a) Most major expense categories are anticipated to be at or below budget. b) Total revenues are at 74.7 percent of the $465.3 million budget, mainly due to the receipt of $110.3 million from the issuance of Revenue Refunding Certificate Anticipation Notes, Series 2018A, during the second quarter of the fiscal year. The 2018A Notes were used to refund the Revenue Refunding Certificate Anticipation Notes, Series 2016B. Excluding debt financing proceeds, total revenues are at 51.0 percent of the budget. Except for Permit Fees, IRWD Intra District Sewer Use, IRWD Capital Assessments, CIP Page 1 FY 2018-19 Mid-Year Report Reimbursements, Grant Revenue and Other Revenues, most major revenue sources are currently tracking close to or exceeding revenue estimates. Overall, total revenues are projected to approximate budget at year-end. More detailed information on District revenues is provided within Section 1 — Pages 3 through 5. c) Collection, Treatment and Disposal Costs: As indicated within the Consolidated Financial Reports Section of this report, the net operating requirements through the mid-year of $75.4 million is currently tracking at 46.8 percent of the $161.2 million budget. In addition, net operating expenses have increased $2.6 million or 3.5 percent in comparison with the same period last year. Overall, staff expects the total operating costs to remain within budget throughout the remainder of the year. More detailed information on District operating expenses is provided within Section 1- Pages 1 through 3. The total cost per million gallons is $2,216 based on flows of 185 million gallons per day. This is $197 per million gallons, or 8.2 percent lower than the budgeted cost per million gallons per day. A further description of these costs and benchmarking with other agencies is contained within Section 1 — Pages 6 through 8. d) The total projected capital outlay cash flow of the Capital Improvement Program (CIP) for FY 2018-19 has been revised to $170.9 million, or 97.9 percent of the board approved cash outlay of $174.5 million. The actual cash outlay spending through the mid-year is $78.7 million, or 45.1 percent of the total budgeted outlay. More detailed information on the CIP budget review can be found in Section 3. • Quarterly Treasurer's Report This section reports on financial portfolio performance with respect to the Sanitation District's funds. Both Long-Term and Liquid Operating Monies Portfolios are summarized. A performance summary table can be found on page 2 of this section. The report also contains information on the national economic outlook from the Sanitation District's money manager, Chandler Asset Management (Chandler). Chandler notes the Long-Term Portfolio quarterly return of 132 basis points underperformed the ICE BAML 1-5 Year US Corp/Govt Rated AAA-A Index return of 157 basis points, while the Liquid Operating Monies Portfolio quarterly return of 57 basis points outperformed the ICE BAML 3-Month US Treasury Bill Index return of 56 basis points. Chandler further notes that the Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 basis points in December to a range of 2.25%- 2.50%. Although recent economic data has softened, the rate hike was widely expected. The Fed's long run fed funds rate target was lowered to 2.8% from the previous estimate of 3.0%. However, the Fed did little to acknowledge the Page 2 Executive Summary changing market dynamics and tightening financial conditions, reaffirming their strong economic forecast for 2019 and emphasizing the balance sheet reduction strategy remains on track. Although the modest adjustment in the Fed's projections was a step in the right direction, some market participants were expecting a more dovish tone from the Fed Chair. More recently, the Fed Chair and other members of the FOMC have begun to sound more dovish. We continue to believe the terminal fed funds rate will be below 3.0% and believe the Fed is at risk of making a policy error if monetary policy continues to tighten at the same quarterly pace of 2018. We believe there is a high probability that the Fed will keep monetary policy on pause at least through the first quarter. Interest rate sensitive sectors such as housing and autos have softened, and financial conditions have tightened in recent months as equity prices have declined, borrowing costs have increased, and the US dollar has strengthened. Global economic growth has slowed, even as many other global central banks remain accommodative. Although US labor market conditions remain tight, we expect the pace of job growth is likely to slow as the economy is at or near full employment. Meanwhile, inflation pressures remain subdued, particularly as oil prices have declined meaningfully over the past three months. Though we don't foresee a recession in the near-term, economic growth has eased. The consensus forecast calls for GDP growth of 2.6% this year versus 2.9% in 2018. Treasury yields declined in December and a portion of the Treasury yield curve inverted with the yield on 5-year Treasuries falling below the yield on 2-year Treasuries. Notably, the yield on 5-year Treasuries temporarily fell below the yield on 3-month T-bills last week. Although the yield curve hasn't completely inverted, we believe the current flatness of the curve reflects a high level of market participants' nervousness about the outlook for economic growth. At December month-end, the 2-year Treasury yield was down nearly 30 basis points to 2.49%, while the 10-year Treasury yield was down slightly more than 30 basis points to 2.68%. The spread between 2- and 10-year Treasury yields was just 20 basis points at year-end. The Consumer Price Index (CPI) was up just 2.2% year-over-year in November, versus up 2.5% year-over-year in October. Core CPI (CPI less food and energy) was also up 2.2% year-over-year in November, versus up 2.1% year-over-year in October. The Personal Consumption Expenditures (PCE) index was up 1.8% year- over-year in November, versus up 2.0% year-over-year in October. Core PCE (excluding food and energy) was up 1.9% on a year-over-year basis in November, versus up 1 .8% in October. Core PCE inflation, which is the Fed's primary inflation gauge remains below the Fed's 2.0% target. Economic Outlook Financial conditions tightened in the fourth quarter as market participants acknowledged the slowing global economic backdrop coupled with the continued tightening of domestic monetary policy. Risk assets performed poorly; the broad Page 3 FY 2018-19 Mid-Year Report domestic equity markets gave up all the gains achieved through the first nine months of the year and then some, posting negative total returns for the year. Investment grade and high yield credit spreads widened materially during the quarter, correlated with the move lower in equity markets. As risk asset performance continued to deteriorate through the quarter the investment grade new issue market was more or less closed in December with less than $10 billion clearing the market. The Treasury market found support in the heavy markets with yields moving lower across the maturity spectrum. Despite the most recent Summary of Economic Projections from the Federal Reserve released on December 19th, calling for two more rate hikes in 2019, the Treasury market priced them all out by year end with the Two-year Treasury note yielding 2.49% on December 31, 2018, consistent with the top end of the current Fed Funds target of 2.25% to 2.50%. The flat shape of the Treasury yield curve continues to have market participants concerned the Federal Reserve could be on the precipice of a policy error if they continue on their current policy normalization path. All the other major developed market central banks have yet to tighten traditional monetary policy in the face of the US Federal Reserve hiking rates four times in 2018. The domestic and global inflation outlook remains muted, as commodity prices remain low and domestic wage inflation moves higher but not yet to an alarming level. Market based measures of inflation moved further away from what most would define as `normal' with the Ten-Year TIPS breakeven inflation spread ending the year at 1.71% compared to 2.11% at the end of Q3 2018. If the Federal Reserve is to stay steadfast in support of the dual mandate of stable prices and full employment, current market-based measures of long-term inflation are disconcerting. In spite of the challenging environment for risk assets during the quarter, the underlying fundamentals of the US economy remain sound, despite some softening compared to Q3 2018. Many of the cyclical components of the US economy are facing headwinds, with the ISM Manufacturing Indices and the home price appreciation slowing down from the pace experienced earlier in the year. Commodity prices were also soft, with the price of oil dropping below $50 per barrel during the quarter and the price of copper continuing to move sideways after the large move lower earlier in the year. On the positive side, the December employment report was strong, with the three-month moving average for non-farm payrolls at 252k, well above the pace necessary to put downward pressure on the U-3 unemployment rate, currently at 3.9%. The Chandler team continues to look to the U-6 Underemployment rate as the better indicator of full employment, and with a current reading of 7.6% the team would argue there is still remaining slack in the domestic labor force. Further supporting the labor market slack view, the Labor Force participation rate remains very low at 63.1%. Given the material tightening of domestic financial conditions during the quarter, with credit and equity market underperforming, coupled with the flat US Treasury yield curve, the Chandler team thinks the Federal Reserve will pause on their policy normalization pace in the first quarter of 2019. Given the current dynamics in the domestic economy, we think it Page 4 Executive Summary is premature to price in monetary policy easing and think 2019 will be a difficult environment for fixed income investors as the next move for monetary policy is more uncertain as opposed to asymmetric. • Quarterly Certificates of Participation (COP) Report The report includes a summary of each outstanding debt issuance and a comparative chart illustrating the COP rate history. Page 5 FY 2018-19 Mid-Year Report This Page Intentionally Left Blank Page 6 Consolidated Financial Reports Mid-Year Financial Report December 31, 2018 Financial Management is pleased to present the FY 2018-19 mid-year financial report. This report provides a comprehensive overview of the financial condition of the Sanitation District and reports on the status of all capital projects in progress. A summary of the sections contained within this report is provided below. Operating Budget Review: This section reports on collection, treatment and disposal net operating requirements. At December 31, 2018, 46.8 percent, or $75.4 million of the FY 2018-19 net operating budget of $161.2 million has been expended. Net operating expenses increased from the same period last year by $2.6 million, or 3.5 percent, mainly due to an increase of $2.9 million in Salaries and Benefits, $925,000 in Other Non-Operating Expense, $538,000 in Utilities, $265,000 in Repairs and Maintenance, $119,000 in Other Operating Supplies, and $104,000 in Operating Materials and Supplies, partially offset by a decrease of $1.5 million in Contractual Services, $423,000 in Administrative Expenses, $155,000 in Professional Services, $111,000 in Training and Meetings, and an increase of $33,000 in indirect costs allocated out to capital projects. These and other variances that factor into this net increase in expenses are discussed in more detail below. Overall, staff expects the total operating costs to approximate budget throughout the remainder of the year. Significant operating results as of December 31, 2018 include the following: • Salaries, Wages and Benefits — Personnel costs of $48.7 million are on target at 50.8 percent of budget through the mid-year of FY 2018-19. Although the budget is based on a 5 percent vacancy factor, staffing is 12 full-time equivalents (FTE's), or 1.9 percent below the total 636 FTE's approved in the FY 2018-19 budget. Salary and benefit costs are $2.9 million or 6.3 percent higher than the $45.8 million incurred in the same period last year, mainly due to an increase of $2.4 million in salaries and wages resulting from additional FTE's of 42 or 7.1 percent, and cost of living adjustments included in the current Memorandums of Understanding for all employee bargaining units. Net operating personnel costs are expected to approximate budget throughout the remainder of the year. • Administrative Expenses — Administrative Expenses totaled $842,000, or 41.9 percent of the $2.0 million budget through December 31. These costs are $423,000 or 33.4 percent lower at December 31 in comparison with the prior year, mainly due to decreases of $262,000 in postage due to mailing Prop 218 notifications in the prior year, $132,000 in prior year purchases of small computer items including tablets and two-way radios, and $87,000 in minor furniture and fixtures for workstation installations and ergonomic chairs, offset by an increase of $65,000 in memberships attributable to timing of payments. It is anticipated that administrative costs will be below budget at year-end. Section 1 - Page 1 FY 2018-19 Mid-Year Report • Printing and Publication Expenses — Printing and Publication Expenses totaled $132,000, or 41.7 percent of the $317,000 budget through December 31. These costs are $21,000 or 13.7 percent lower at December 31 in comparison with the prior year mainly due to a decrease in notices and ads for job postings to advertise open positions throughout the District. Printing and publication costs are expected to be below budget at year-end. • Training and Meetings — Training and meetings of $309,000 are below target at 28.2 percent of the $1.1 million budget. This account is lower than the proportionate budget due to the timing and need for training throughout the year. These costs have decreased over the same period last year by $111,000 or 26.4 percent, primarily as a result of various training costs incurred in the prior period such as District-wide safety and infrastructure condition assessment. Total training and meeting costs are anticipated to be below budget at year-end. • Operating Materials and Supplies — Operating materials and supplies of $7.9 million is on target at 49.9 percent of the $15.8 million budget through December 31. Operating Materials and Supplies are higher than the prior year by $104,000 or 1.3 percent, primarily due to increases in Chemical Coagulants of $331,000, Gasoline, Diesel & Oil of $82,000, and Property Tax Fees of $55,000, offset by a decrease in Odor Control of $387,000. Based on current processes, operating materials and supplies are anticipated to approximate budget at year-end. • Contractual Services — Contractual services is below target at $10.3 million or 40.8 percent of the $25.2 million budget through December 31. Contractual Services is lower by $1.5 million or 12.9 percent over the same period last year. Solids Removal costs, budgeted at $16.2 million, comprise the majority of this expense category at $7.8 million, or 48.0 percent of budget at December 31. Other Contractual Services decreased by $856,000, primarily due to prior year contractual service costs for such as installing auto balance analyzers at each plant, condition assessment services, and the flow and loading study project. The reduction in Temporary Services of $828,000 is because of position vacancies filled in the current period that no longer require the use of temporary services. County Service Fees totaled only $28,000, or 5.7 percent of the $497,000 budget through the mid- year as the preponderance of these fees are billed by the County in the fourth quarter. Total contractual services costs are anticipated to approximate or be slightly below budget at year-end. • Professional Services — Professional services costs totaled $1.8 million or 32.8 percent of the $5.4 million budget through December 31. Professional service costs, such as Audit & Accounting, Engineering, Environmental Scientific Consulting, Software Consulting, Industrial Hygiene, Labor Negotiation, and Other Services, are proportionately low through December 31 due to a variety of factors such as timing of services and re-evaluation of needs for services. These costs are $155,000 or 8.1 percent lower at December 31 in comparison with the prior year, mainly attributable to a decrease of $118,000 in Engineering costs due to prior year control center Section 1 - Page 2 Consolidated Financial Reports remodeling and other supplemental engineering services. It is anticipated that the costs for this category will be below budget at year-end. • Research and Monitoring — Research and monitoring costs totaled $389,000, or 36.6 percent of the $1.1 million budget through December 31. These costs are $24,000, or 5.8 percent lower at December 31 in comparison with the prior year, mainly due to a decrease in Environmental Monitoring costs such as vessel services and regional ocean monitoring. Total research and monitoring costs are anticipated to be below budget at year-end. • Repairs and Maintenance — Repair and maintenance costs totaled $8.5 million, or 39.1 percent of the $21.7 million budget through December 31. These costs are $265,000, or 3.2 percent higher at December 31 in comparison with the prior year, mainly due to timing of payments and an increase in service maintenance agreements such as software support and license costs. It is anticipated that the costs for this category will be below budget at year-end. • Utilities — Utilities costs totaled $4.2 million, or 56.4 percent of the $7.4 million budget through December 31. These costs are $538,000 or 14.7 percent higher at December 31 in comparison with the prior year, primarily due to an increase of $239,000 in natural gas costs because of a volatile natural gas market causing unit prices to spike in the current period and $205,000 in power charges as a result of higher electricity rates and consumption from facility-related demand. It is anticipated that the costs will exceed budget at year-end. • Other Operating Supplies — Other operating supplies costs totaled $1.6 million, or 62.0 percent of the $2.5 million budget through December 31. Property and General Liability Insurance, budgeted at $1.3 million, comprise the majority of this expense category at $650,000. These costs are $406,000 or 38.5 percent lower at December 31 in comparison with the prior year primarily due to a reduction in budgeted in-lieu premium charges to maintain recommended reserve balances. In addition, Regulatory Operating Fees increased by $604,000 due to timing of payments for annual ocean discharge permit fees. It is anticipated that other operating supplies costs will approximate or exceed budget at year-end. • Other Non-Operating Expense — Other non-operating expense totaled $989,000, or 61.8 percent of the $1.6 million budget through December 31. These costs are $925,000 or 1447.4 percent higher at December 31 in comparison with the prior year primarily due to obsolete inventory items disposed in the current period. It is anticipated that other non-operating expense will approximate budget at year- end. • Revenues — Service Fees and Property Taxes — Through December 31, revenues from service fees are at $161.0 million, or 54.7 percent of the $294.5 million budget and property taxes are at $45.5 million, or 45.7 percent of the $99.6 million budget. These items comprise the majority of the Sanitation District's revenues and are mostly collected by the County through the property tax roll and distributed to the Sanitation District throughout the year based on a set distribution Section 1 - Page 3 FY 2018-19 Mid-Year Report schedule that begins in November of each year. The decrease of $1.7 million or 1.1 percent in service fee revenue over the prior period is due to additional user fee rebates issued in the current period, partially offset by higher sewer service rates. The property tax revenue increase of $1.1 million or 2.3 percent over the prior period is due to growth in assessed property values. These revenues are expected to approximate budget at year-end. • Revenues — Permittee User Fees — Permittee User Fees are at $2.5 million, or 13.7 percent of the $18.3 million budget. The revenues through the mid-year are lower than the same period last year by $6.4 million or 72.0 percent due to the actual discharge for industrial users was significantly less than the estimated billings in the prior year, with adjustments made in the current year. The number of permittees fluctuates from year to year as businesses are established or close their operations. Permit user fees revenues are expected to be below budget at year-end. • Revenues — Inter District Sewer Use — SAWPA and SBSD — Inter District Sewer revenues - SAWPA and SBSD are at $1.3 million, or 38.3 percent of the $3.3 million budget. This revenue is derived from charges to the Santa Ana Watershed Protection Agency (SAWPA) and Sunset Beach Sanitary District (SBSD) for treatment of flows. The revenues through the mid-year are lower than the same period last year by $165,000 or 11.6 percent due to a decrease in flows received from these agencies and a resulting reduction in operation and maintenance charges. These revenues are expected to be below budget at year-end. • Revenues — Intra District Sewer Use — IRWD — Intra District Sewer revenues- IRWD are at $469,000, or 10.7 percent of the $4.4 million budget. This revenue is derived from charges to the Irvine Ranch Water District (IRWD) for treatment of flows. The revenues through the mid-year are lower than the same period last year by $441,000 or 48.5 percent, due to an increase of $328,000 in interest income allocated to IRWD based on higher cash reserves, $77,000 in property tax income, and a decrease of $36,000 in operation and maintenance charges to IRWD. These revenues are expected to be below budget at year-end. • Revenues - Sludge Disposal — IRWD — Sludge Disposal fees - IRWD are at $4.0 million, or 40.8 percent of the $9.8 million budget. The revenue is for the handling, treatment and disposal of solids, derived from flows discharged from IRWD to the Sanitation District. The revenues through the mid-year are lower than the same period last year by $1.9 million or 32.2 percent, mainly due to decreased solids received from IRWD. The current fiscal year quarterly billing to IRWD is based on estimates. It is anticipated that IRWD sludge disposal revenues will be below budget at year-end. • Revenues — Capital Assessments — IRWD — Capital Assessments-IRWD are at $2.1 million, or 34.6 percent of the $6.1 million budget. The revenues through the mid-year are higher than the same period last year by $800,000 or 60.2 percent mainly due to an increase in joint capital costs allocable to IRWD. It is estimated that IRWD capital assessments revenues will be below budget at year-end. Section 1 - Page 4 Consolidated Financial Reports • Revenues — Capital Facilities Capacity Charges (CFCC) — CFCC are at $9.2 million, or 66.0 percent of the $14.0 million budget. The revenues through the mid-year are higher than the same period last year by $3.3 million or 56.2 percent due to an increase in connection fees collected from cities and more supplemental capital facilities capacity charges assessed to industrial dischargers than at this time last year. These revenues are expected to exceed the budget at year-end. • Revenues — Interest Earnings — Interest Earnings are at $9.4 million or 144.5 percent of the $6.5 million budget. The revenues through the mid-year are higher than the same period last year by $7.9 or 511.7 percent due to higher account balances and yields earned on securities held in the investment portfolios. It is estimated that interest earnings will exceed the budget amount at year-end. • Revenues — CIP Reimbursements — CIP Reimbursements are at $19,000 or 0.8 percent of the $2.4 million budget. This revenue is $1.1 million or 98.3 percent lower than the same period last year. The decrease is primarily due to timing of reimbursements received. In the prior year, revenues consisted of reimbursements for construction projects received from the Orange County Water District for P2-122 Headworks Modifications at Plant 2 for GWRS Final Expansion and the cities of Fullerton and Anaheim for 2-72B Newhope-Placentia Trunk Replacement, Segment B. No reimbursements were received for these projects during the same period in the current year. These revenues are expected to be below budget at year-end. • Revenues — Wastehauler — Wastehauler revenues are at $333,000 or 44.4 percent of the $750,000 budget. This revenue is derived from fees charged to wastehaulers allowing them to dump waste into the Sanitation District's system. The revenues through the mid-year are lower than the same period last year by $11,000 or 3.1 percent due to a reduction in waste dumping. These revenues are expected to be slightly below budget at year-end. • Revenues — CNG Sales — CNG Sales revenues are at $175,000 or 43.7 percent of the $400,000 budget. This revenue is derived from public sales at the District's Compressed Natural Gas (CNG) fueling station. The revenues through the mid-year are higher than the same period last year by $101,000 or 137.49 percent due to prior year mechanical failures of the public CNG fueling station that led to the station being offline for several months. These revenues are expected to be slightly below budget at year-end. • Revenues — Rents & Leases — Rents & Leases revenues are at $939,000 or 81.9 percent of the $1.1 million budget. The revenues through the mid-year are higher than the same period last year by $736,000 or 361.3 percent due to rent received from tenants occupying the newly acquired properties on Pacific/Bandilier and Mt. Langley. These revenues are expected to exceed budget at year-end. • Revenues - Other — Other revenues are at $245,000 or 8.7 percent of the $2.8 million budget. These revenues consist of miscellaneous revenues, such as reimbursements from insurance and employees. The revenues through the mid-year are higher than the same period last year by $78,000 or 46.9 percent, mainly due to auction sales. These revenues are expected to be below budget at year-end. Section 1 - Page 5 FY 2018-19 Mid-Year Report Comparison of Mid-Year Cost per Million Gallon Results with Budget Last Five Years $2,300 $2,250 2,41 $2,200 2,21 $2,150 / $2.1 $2,100 4 ,i 1 $2.1 $2,050 $2,07 sz,o $2,000 szoi $1,950 $1,900 $1,850 $1,800 $1,750 $1,700 $1,650 $1,600 $1,550 $1,500 14-15 15-16 16-17 17-18 18-19 2nd Annual 2nd Annual 2nd Annual 2nd Annual 2nd Annual Qtr Budget Qtr Budget Qtr Budget Qtr Budget Qtr Budget As demonstrated in the preceding graph for each of the last four fiscal years, the cost per million gallons at the end of the mid-year has been between 3.5 percent higher to 7.2 percent lower than the annual budget. The FY 2018-19 mid-year cost per million gallons of $2,216 is 8.2 percent lower when compared with this year's budget. The increase in cost per million gallons of $91 from the previous year is primarily due to an increase in operating expenses, which are 3.5 percent higher than the same period last year and a decrease in flows, which are 0.7 percent lower than the same period last year. Staff believes that overall operating costs will be below budget at year-end. The total cost per million gallons at December 31 is $2,216 based on flows of 185 million gallons per day. This is $197 per million gallons, or 8.2 percent, lower than the budgeted cost per million gallons of $2,413. There is an inverse relationship between the amount of flows and the cost per unit of collection, treatment, and disposal. Consequently, the lower cost per million gallons is due to net expenses being 6.4 percent less than the proportionate budget through December 31 and flows of 185 million gallons per day being 1.1 percent higher than the budgeted flow of 183 million gallons per day. More detailed information on operating revenues, costs, and related information is provided within Section 2. Section 1 - Page 6 Consolidated Financial Reports Following are data tables showing the last five years of Single Family Residential User Fees (SFR) and the cost per MG to collect, treat, and dispose of wastewater for OCSD and for similar agencies. The agencies used in the table were determined to be those that most closely resembled OCSD in terms of services provided and treatment levels. The summaries demonstrate that OCSD's SFR and cost per million gallons are each one of the lowest in their respective group. Benchmark Study Five-Year Single Family Residential Rate Rates as of July 2014 2015 2016 2017 2018 Agency SFR SFR SFR SFR SFR Notes San Francisco $ 745 $ 784 $ 842 $ 937 $ 988 Vallejo Sanitation/Flood Control Distric $ 520 $ 520 $ 520 $ 520 $ 585 City of San Diego $ 573 $ 573 $ 573 $ 573 $ 573 Note 4 Central Contra Costa Sanitary District $ 439 $ 471 $ 503 $ 530 $ 567 City of Los Angeles $ 435 $ 464 $ 495 $ 527 $ 561 Note 1 Sacramento County $ 348 $ 384 $ 420 $ 432 $ 444 Dublin San Ramon Services District $ 373 $ 382 $ 382 $ 397 $ 423 East Bay MUD $ 358 $ 355 $ 373 $ 391 $ 410 Union Sanitary District $ 357 $ 377 $ 380 $ 393 $ 407 City of Hayward $ 337 $ 347 $ 358 $ 375 $ 394 Orange County Sanitation District $ 316 $ 322 $ 327 $ 331 $ 335 City of Fresno $ 309 $ 309 $ 309 $ 309 $ 309 Note 3 Irvine Ranch Water District $ 246 $ 289 $ 309 $ 309 $ 309 Note 2 Oro Loma Sanitary District $ 200 $ 206 $ 221 $ 238 $ 256 Los Angeles County $ 151 $ 155 $ 159 $ 163 $ 167 Notes: (1)- Data is for the typical SFR customer rate. (2)- Data represents the usage of 10 hundred cubic feet per unit. (3)- Data represents the minimum SFR rate not including flow. (4)- Data represents the base sewer fee plus the average usage of 9 hundred cubic feet per month. Section 1 - Page 7 FY 2018-19 Mid-Year Report Benchmark Study Five-Year Cost per MG FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 Agency Svc.Trt. Cost/MG Cost/MG Cost/MG Cost/MG Cost/MG Notes Central Contra Costa Sanitary District B 4 $ 5,778 $ 6,281 $ 6,454 $ 6,081 $ 5,588 Vallejo Sanitation/Flood Control District B 3 $ 6,153 $ 5,590 $ 5,396 $ 4,745 $ 5,393 Union Sanitary District B 3 $ 3,832 $ 3,911 $ 3,957 $ 4,039 $ 4,757 City of San Diego B 4 $ 3,156 $ 3,592 $ 3,606 $ 3,834 $ 4,147 Dublin San Ramon Services District B 4 $ 2,507 $ 2,522 $ 2,896 $ 2,961 $ 3,422 East Bay MUD T 3 $ 2,559 $ 2,728 $ 2,599 $ 2,353 $ 3,137 Sacramento County T 4 $ 2,375 $ 2,494 $ 2,571 $ 2,752 $ 2,831 City of Los Angeles B 4 $ 2,163 $ 2,269 $ 2,452 $ 2,487 $ 2,329 Note 2 Orange County Sanitation District B 3 $ 1,935 $ 2,071 $ 2,110 $ 2,055 $ 2,069 City of Fresno B 4 $ 1,552 $ 1,629 $ 1,678 $ 1,796 $ 1,813 Los Angeles County B 4 $ 1,224 $ 1,239 $ 1,371 $ 1,151 $ 1,365 Note 1 San Francisco B 3 $ 5,400 $ 5,358 $ 5,268 $ 4,916 N/A Legend for Service Provided and Treatment Level: B-Agencyoperates both collection and treatment facilities T-Agency provides treatment services but not collection 3-Secondary treatment 4-Advanced secondaryor secondarywith some tertiary treatment Notes: (1)-Does not include source control or overhead costs. (2)-2017 Influent flow has not been reduced bythe amount of sludge discharged to the sewers from DCTWRP and LAGWRP. N/A-Not currently available. Section 1 - Page 8 Consolidated Financial Reports Capital Outlay Review: $200,000.000 $150,000,000 $100,000,000 $50,000,000 $0 12/31/18 Actual Projected 2018-19 2018-19 Capital Outlay Capital Outlay Capital Outlay Cashflow Budget $78,727,043 $170,944,500 $174,542,000 As depicted by the preceding chart, Capital Outlays totaled $78.7 million or 45.1 percent of the capital outlay cash flow budget for FY 2018-19 as of December 31, 2018. Costs are proportionately low through the mid-year as some projects are still in the design phase or have experienced various delays or deferrals. Examples as of December 31 are Bay Bridge Pump Station Replacement, which has a budget of $13.0 million but actual costs of only $73,000, and Safety Improvements Program, which has a budget of $9.4 million but actual costs of $974,000. Overall, the capital outlay costs of the capital improvement program are expected to approximate $170.9 million, or 97.9 percent of the capital outlay cash flow budget at year-end. More detailed information on the capital improvement program is provided within Section 3. Capital Assets Schedule and Debt Service Budget Review: Section 4 is the Capital Assets Schedule and Debt Service Section. This section shows the cost value of the Sanitation District's capital facilities at December 31, 2018, as well as the debt service costs resulting from the need to provide funding for the construction of capital facilities. The majority of principal payments on debt issues are due in February during the third quarter of each fiscal year. Excluding payments on refunding debt from the Revenue Refunding Certificate Anticipation Notes, Series 2018A, as of December 31, 2018, no principal payments have been made through the end of the mid-year. Total principal payments, excluding refundings, are expected to approximate budget at year-end. Section 1 - Page 9 FY 2018-19 Mid-Year Report Interest costs are expensed ratably throughout the fiscal year. Interest expense is anticipated to approximate budget at year-end. Self-Insurance Budget Reviews: Section 5 is the Self-Insurance Section. Through December 31, the Self-Insurance Fund revenues totaled $996,000 or 52.0 percent of the budget, while expenses were $1.0 million or 41.0 percent of the budget. Separate fund accounting is used for recording the revenue and expenses incurred in managing these liability claims. The revenues to these funds represent charges to operating divisions. Expenses to these funds include actual claims paid, claims administration, and excess loss policies. Section 1 - Page 10 Operating Budget Review Cost per Million Gallons by Department Budget and Actual December 31, 2018 $1,600 $1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 C N N � Ql ptf N > N E O ` U O U_ O O C O O N N N ul m EU SU) a Q w W p� ■Budget ■Actual Collection, Treatment, & Disposal Expenses by Major Category Budget and Actual (in thousands) December 31, 2018 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 N w N C N N N N 01 N N N O 01 N N N C U N y U OJ N - C N V U C - > N - = 0 C CO co Q U N Q N N C U1 N 06 06 X 3 X N (n O C M Ui N >` > 06 01 C 7 C 06 � N a (n O_ l` C> C U � L O_ ! O W E O O O U 'Q E a L) a a a Q eBudget oActual Section 2 - Page 1 2018-19 Mid-Year Report Divisional Contributions to Cost Per Million Gallons For the Six Months Ended December 31, 2018 2018-19 12/31/16 12/31/17 Annual 12/31/18 Actual Actual Budget Actual Flow in Million Gallons 33,601.95 34,284.89 66,795.00 34,032.65 Flow in Million Gallons per Day 182.62 186.33 183.00 184.96 Executive Management Department General Management Administration $ 36.87 $ 37.11 $ 43.99 $ 28.16 Board Services 8.07 9.27 10.35 11.18 Public Affairs 15.05 14.81 16.87 14.62 Subtotal 59.99 61.19 71.21 53.96 Human Resources Department Human Resources 54.33 53.80 62.45 59.44 Risk Management/Safety/Security 60.60 83.75 81.25 71.06 Subtotal 114.93 137.55 143.70 130.50 Administrative Services Department Administrative Services 7.66 7.24 9.39 6.92 Financial Management 42.54 53.97 57.40 36.45 Contracts, Purchasing,&Materials Mgmt. 63.24 65.85 90.65 94.04 Information Technology 143.82 159.00 173.97 179.28 Subtotal 257.26 286.06 331.41 316.69 Environmental Services Department Environmental Services Administration 12.16 12.57 12.98 13.10 Resource Protection 81.92 81.58 89.24 88.03 Laboratory, Monitoring and Compliance 146.20 152.00 167.64 174.85 Subtotal 240.28 246.15 269.86 275.98 Engineering Department Engineering Administration 6.72 7.49 7.62 8.35 Planning 49.05 47.21 53.72 53.25 Project Management Office 39.75 37.41 43.25 44.65 Civil and Mechanical Engineering 127.49 122.86 132.26 128.17 Electrical&Control System Engineering 61.45 69.63 81.18 78.35 Subtotal 284.46 284.60 318.03 312.77 Operations&Maintenance Department Operations&Maintenance Administration 7.29 8.39 12.46 8.69 Collections Facilities O&M 166.05 191.55 199.21 185.53 Fleet Services 28.10 27.35 31.57 29.99 Plant No. 1 Operations 414.15 376.33 398.12 392.67 Plant No.2 Operations 302.10 286.06 304.77 304.12 Plant No. 1 Maintenance 256.09 229.93 276.06 193.49 Maintenance Reliability and Planning - 102.02 115.71 93.02 Plant No.2 Maintenance 163.51 183.14 241.32 216.89 Subtotal 1,337.29 1,404.77 1,579.22 1,424.40 Total Operating Expenses 2,294.21 2,420.32 2,713.43 2,514.30 Cost Allocation (282.03) (295.56) (300.43) (298.74) Net Operating Requirements $ 2,012.18 $ 2,124.76 $ 2,413.00 $ 2,215.56 Section 2 - Page 2 Operating Budget Review Comparison of Expenses by Department For the Six Months Ended December 31, 2018 2018-19 12/31/16 12/31/17 Year to Date Budget% Department and Division Actual Actual Budget 12/31/18 Realized Executive Management Department General Management Administration $ 1,238,775 $ 1,272,284 $ 2,938,490 $ 958,205 32.61% Board Services 271,180 317,936 691,530 380,550 55.03% Public Affairs 505,756 507,736 1,126,500 497,665 44.18% Subtotal 2,015,711 2,097,956 4,756,520 1,836,420 38.61% Human Resources Department Human Resources 1,825,529 1,844,414 4,171,570 2,022,731 48.49% Risk Management/Safety/Security 2,036,378 2,871,454 5,427,000 2,418,359 44.56% Subtotal 3,861,907 4,715,868 9,598,570 4,441,090 46.27% Administrative Services Department Administrative Services 257,262 248,261 626,960 235,612 37.58% Financial Management 1,429,448 1,850,402 3,834,170 1,240,322 32.35% Contracts, Purchasing, &Materials Mgmt. 2,125,049 2,257,532 6,055,240 3,200,484 52.85% Information Technology 4,832,573 5,451,430 11,620,570 6,101,429 52.51% Subtotal 8,644,332 9,807,625 22,136,940 10,777,847 48.69% Environmental Services Department Environmental Services Administration 408,709 430,902 866,770 445,932 51.45% Resource Protection 2,752,519 2,796,905 5,960,650 2,995,873 50.26% Laboratory, Monitoring and Compliance 4,912,625 5,211,394 11,197,210 5,950,505 53.14% Subtotal 8,073,853 8,439,201 18,024,630 9,392,310 52.11% Engineering Department Engineering Administration 225,956 256,820 509,130 284,155 55.81% Planning 1,648,112 1,618,508 3,588,370 1,812,174 50.50% Project Management Office 1,335,715 1,282,645 2,888,850 1,519,557 52.60% Civil and Mechanical Engineering 4,284,039 4,212,371 8,834,460 4,361,898 49.37% Electrical&Control System Engineering 2,064,785 2,387,126 5,422,590 2,666,322 49.17% Subtotal 9,558,607 9,757,470 21,243,400 10,644,106 50.11% Operations&Maintenance Department Operations&Maintenance Administration 244,910 287,746 832,270 295,795 35.54% Collections Facilities O&M 5,579,495 6,567,237 13,305,960 6,313,957 47.45% Fleet Services 944,263 937,697 2,108,870 1,020,570 48.39% Plant No. 1 Operations 13,916,367 12,902,313 26,592,250 13,363,543 50.25% Plant No.2 Operations 10,151,167 9,807,555 20,357,180 10,350,051 50.84% Plant No. 1 Maintenance 8,605,039 7,883,274 18,439,550 6,584,980 35.71% Maintenance Reliability and Planning - 3,497,816 7,728,800 3,165,726 40.96% Plant No.2 Maintenance 5,494,260 6,278,849 16,118,650 7,381,359 45.79% Subtotal 44,935,501 48,162,487 105,483,530 48,475,981 45.96% Total Operating Expenses 77,089,911 82,980,607 181,243,590 85,567,754 47.21% Cost Allocation (9,476,871) (10,133,335) (20,070,430) (10,166,490) 50.65% Net Operating Requirements $ 67,613,040 $ 72,847,272 $ 161,173,160 $ 75,401,264 46.78% Section 2 - Page 3 2018-19 Mid-Year Report Summary of Collection, Treatment, & Disposal Expenses by Major Category For the Six Months Ended December 31, 2018 Expense Expense Increase Increase Percent Budget Through Through (Decrease) (Decrease) Budget Remaining Description 2018-19 12/31/18 12/31/17 $ % Realized Budget Salary&Wages $ 72,948,400 37,026,006 34,616,748 $ 2,409,258 6.96% 50.76% $ 35,922,394 Employee Benefits 23,044,400 11,719,773 11,235,517 484,256 4.31% 50.86% 11,324,627 Administrative Expenses 2,007,530 841,702 1,264,500 (422,798) -33.44% 41.93% 1,165,828 Printing&Publication 316,890 132,166 153,096 (20,930) -13.67% 41.71% 184,724 Training&Meetings 1,097,080 309,481 420,715 (111,234) -26.44% 28.21% 787,599 Operating Materials&Supplies 15,762,740 7,861,299 7,757,453 103,846 1.34% 49.87% 7,901,441 Contractual Services 25,206,520 10,279,554 11,802,148 (1,522,594) -12.90% 40.78% 14,926,966 Professional Services 5,393,480 1,767,374 1,922,324 (154,950) -8.06% 32.77% 3,626,106 Research&Monitoring 1,061,200 388,535 412,525 (23,990) -5.82% 36.61% 672,665 Repairs&Maintenance 21,715,360 8,499,076 8,234,235 264,841 3.22% 39.14% 13,216,284 Utilities 7,439,800 4,195,171 3,657,421 537,750 14.70% 56.39% 3,244,629 Other Materials, Supplies, and Services 5,250,190 2,547,617 1,503,925 1,043,692 69.40% 48.52% 2,702,573 Net Cost Allocation (20,070,430) (10,166,490) (10,133,335) (33,155) 0.33% 50.65% (9,903,940) Net Operating Requirements 161,173,160 75,401,264 72,847,272 2,553,992 3.51% 46.78% 85,771,896 Gallonage Flow(MG) 66,795.00 34,032.65 34,284.89 (252.24) -0.74% Gallonage Flow(MGD) 183.00 184.96 186.33 (1.37) -0.74% Gallonage Flow($'s/MG) $2,413.00 $2,215.56 $2,124.76 $90.80 4.27% Section 2 - Page 4 Operating Budget Review Summary of Revenues For the Six Months Ended December 31, 2018 Revenue Percent Revenue Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2018-19 12/31/18 Realized Budget 12/31/17 $ % Service Fees $294,450,000 $160,999,508 54.68% $ 133,450,492 $162,727,259 $ (1,727,751) -1.06% Permit Fees 18,320,000 2,504,500 13.67% 15,815,500 8,954,152 (6,449,652) -72.03% Inter District Sewer Use-SAWPA&SBSD 3,290,000 1,259,379 38.28% 2,030,621 1,424,139 (164,760) -11.57% Intra District Sewer Use-IRWD 4,373,820 468,659 10.72% 3,905,161 910,021 (441,362) -48.50% Sludge Disposal-IRWD 9,775,000 3,985,272 40.77% 5,789,728 5,881,841 (1,896,569) -32.24% Capital Assessments-IRWD 6,144,000 2,128,586 34.64% 4,015,414 1,328,848 799,738 60.18% Capital Facilities Capacity Charges 14,000,000 9,232,609 65.95% 4,767,391 5,911,882 3,320,727 56.17% Debt Proceeds - 110,302,416 N/A (110,302,416) - 110,302,416 100.00% Property Taxes 99,557,000 45,534,460 45.74% 54,022,540 44,499,417 1,035,043 2.33% Interest Earnings 6,510,000 9,404,761 144.47% (2,894,761) 1,537,397 7,867,364 511.73% CIP Reimbursements 2,425,122 18,677 0.77% 2,406,445 1,125,765 (1,107,088) -98.34% Wastehauler 750,000 332,756 44.37% 417,244 343,398 (10,642) -3.10% Grant Revenue 1,300,000 - 0.00% 1,300,000 - - 0.00% CNG Sales 400,000 174,586 43.65% 225,414 73,512 101,074 137.49% Rents&Leases 1,147,100 939,408 81.89% 207,692 203,647 735,761 361.29% Other Revenues 2,800,363 244,816 8.74% 2,555,547 166,654 78,162 46.90% Power Sales 25,000 18,442 73.77% 6,558 14,449 3,993 27.64% Other Sales 50,000 62,675 125.35% (12,675) 7,715 54,960 712.38% Total Revenues $465,317,405 $347,611,510 74.70% $ 117,705,895 $235,110,096 $ 112,501,414 47.85% Section 2- Page 5 2018-19 Mid-Year Report Summary of Collection,Treatment, &Disposal Expenses by Line Item For the Six Months Ended December 31,2018 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2018-19 12/31/18 Expensed Budget 12/31/17 $ % Salaries,Wages&Benefits Salaries&Wages $ 72,948,400 $ 37,026,006 50.76% $ 35,922,394 $ 34,616,748 $ 2,409,258 6.96% Employee Benefits Retirement 10,739,100 5,677,823 52.87% 5,061,277 5,565,505 112,318 2.02% Group Insurances 10,868,900 5,323,789 48.98% 5,545,111 4,988,565 335,224 6.72% Tuition&Certification Reimb 128,700 48,104 37.38% 80,596 38,945 9,159 23.52% Edu.degrees,Cert.&Lic. 460,800 247,557 53.72% 213,243 231,371 16,186 7.00% Uniform Rental 131,200 70,354 53.62% 60,846 65,609 4,745 7.23% Workers'Compensation 586,600 293,300 50.00% 293,300 277,161 16,139 5.82% Unemployment Insurance 37,700 1,607 4.26% 36,093 18,817 (17,210) -91.46% EMT Supplemental Benefits 91,400 57,239 62.62% 34,161 49,544 7,695 15.53% Total Benefits 23,044,400 11,719,773 50.86% 11,324,627 11,235,517 484,256 4.31% Salaries,Wages&Benefits 95,992,800 48,745,779 50.78% 47,247,021 45,852,265 2,893,514 6.31% Matl,Supply.&Services Administrative Expenses Memberships 618,760 421,247 68.08% 197,513 355,841 65,406 18.38% OfficeExp-Supplies 67,470 21,594 32.01% 45,876 25,963 (4,369) -16.83% Postage 43,270 19,553 45.19% 23,717 281,158 (261,605) -93.05% Books&Publications 38,070 10,691 28.08% 27,379 15,034 (4,343) -28.89% Forms 960 1,245 129.69% (285) 190 1,055 555.26% Small Computer Items 900,000 331,490 36.83% 568,510 463,900 (132,410) -28.54% Minor Furniture&Fixtures 339,000 35,882 10.58% 303,118 122,414 (86,532) -70.69% Subtotal 2,007,530 841,702 41.93% 1,165,828 1,264,500 (422,798) -33.44% Printing&Publication Repro-In-House 198,040 104,944 52.99% 93,096 88,894 16,050 18.06% Printing-Outside 60,370 11,673 19.34% 48,697 22,090 (10,417) -47.16% Notices&Ads 58,430 15,538 26.59% 42,892 42,112 (26,574) -63.10% Photo Processing 50 11 22.00% 39 - 11 N/A Subtotal 316,890 132,166 41.71% 184,724 153,096 (20,930) -13.67% Training&Meetings Meetings 167,360 43,948 26.26% 123,412 48,977 (5,029) -10.27% Training 929,720 265,533 28.56% 664,187 371,738 (106,205) -28.57% Subtotal 1,097,080 309,481 28.21% 787,599 420,715 (111,234) -26.44% Operating Mat'Is&Supplies Chemical Coagulants 5,489,080 2,808,386 51.16% 2,680,694 2,477,570 330,816 13.35% Odor Control 7,142,120 3,534,314 49.49% 3,607,806 3,921,158 (386,844) -9.87% Disinfection 253,000 98,435 38.91% 154,565 83,807 14,628 17.45% Chemicals-Misc&Cogan 326,860 145,371 44.48% 181,489 147,742 (2,371) -1.60% Gasoline,Diesel&Oil 582,640 298,809 51.29% 283,831 216,365 82,444 38.10% Tools 496,340 210,312 42.37% 286,028 192,162 18,150 9.45% Safetyequipment/tools 559,690 273,528 48.87% 286,162 341,111 (67,583) -19.81% Solv,Paints&Jan.Supplies 106,320 49,416 46.48% 56,904 42,834 6,582 15.37% Lab Chemicals&Supplies 624,570 306,804 49.12% 317,766 266,204 40,600 15.25% Other Operating Supplies 168,480 80,103 47.54% 88,377 67,457 12,646 18.75% Property Tax Fees 13,640 55,821 409.24% (42,181) 1,043 54,778 5251.97% Subtotal 15,762,740 7,861,299 49.87% 7,901,441 7,757,453 103,846 1.34% Contractual Services Solids Removal 16,200,000 7,777,376 48.01% 8,422,624 7,707,580 69,796 0.91% Other Waste Disposal 811,900 391,309 48.20% 420,591 346,445 44,864 12.95% Groundskeeping 175,700 82,351 46.87% 93,349 81,858 493 0.60% Janitorial 435,000 218,280 50.18% 216,720 183,916 34,364 18.68% Outside Lab Services 210,000 60,303 28.72% 149,697 69,498 (9,195) -13.23% Oxygen 330,000 153,813 46.61% 176,187 153,079 734 0.48% County Service Fee 497,490 28,398 5.71% 469,092 24,797 3,601 14.52% Temporary Services 1,429,400 107,643 7.53% 1,321,757 935,232 (827,589) -88.49% Security Services 1,608,000 808,682 50.29% 799,318 792,766 15,916 2.01% Other 3,509,030 651,399 18.56% 2,857,631 1,506,977 (855,578) -56.77% Subtotal 25,206,520 10,279,554 40.78% 14,926,966 11,802,148 (1,522,594) -12.90% (Continued) Section 2 - Page 6 Operating Budget Review Summary of Expenses by Line Item For the Six Months Ended December 31, 2018 Expense Percent Expense Increase Increase Budget Through Budget Remaining Through (Decrease) (Decrease) Description 2018-19 12/31/18 Expensed Budget 12/31/17 $ % Continued: Professional Services Legal 1,147,030 662,411 57.75% 484,619 637,051 25,360 3.98% Audit&Accounting 231,690 76,745 33.12% 154,945 105,328 (28,583) -27.14% Engineering 1,985,460 411,793 20.74% 1,573,667 529,564 (117,771) -22.24% Enviro Scientific Consulting 280,000 20,000 7.14% 260,000 51,270 (31,270) -60.99% Software Prgm Consulting 376,000 120,340 32.01% 255,660 182,224 (61,884) -33.96% Advocacy Efforts 165,000 77,232 46.81% 87,768 64,000 13,232 20.68% Industrial Hygiene Services 50,000 19,734 39.47% 30,266 29,735 (10,001) -33.63% Labor Negotiation Services 40,000 - 0.00% 40,000 - - N/A Other 1,118,300 379,119 33.90% 739,181 323,152 55,967 17.32% Subtotal 5,393,480 1,767,374 32.77% 3,626,106 1,922,324 (154,950) -8.06% Research&Monitoring Environmental Monitoring 511,200 152,303 29.79% 358,897 197,300 (44,997) -22.81% Air Quality Monitoring 100,000 11,232 11.23% 88,768 2,725 8,507 312.18% Research 450,000 225,000 50.00% 225,000 212,500 12,500 5.88% Subtotal 1,061,200 388,535 36.61% 672,665 412,525 (23,990) -5.82% Repairs&Maintenance Materials&Services 18,445,730 6,582,740 35.69% 11,862,990 6,727,801 (145,061) -2.16% Svc.Mtc.Agreements 3,269,630 1,916,336 58.61% 1,353,294 1,506,434 409,902 27.21% Subtotal 21,715,360 8,499,076 39.14% 13,216,284 8,234,235 264,841 3.22% Utilities Telephone 501,000 219,704 43.85% 281,296 183,530 36,174 19.71% Diesel For Generators 11,290 9,469 83.87% 1,821 5,616 3,853 68.61% Natural Gas 576,100 534,515 92.78% 41,585 295,548 238,967 80.86% Power 5,732,860 3,076,765 53.67% 2,656,095 2,871,997 204,768 7.13% Water 618,550 354,718 57.35% 263,832 300,730 53,988 17.95% Subtotal 7,439,800 4,195,171 56.39% 3,244,629 3,657,421 537,750 14.70% Other Operating Supplies Outside Equip Rental 132,000 16,024 12.14% 115,976 60,754 (44,730) -73.62% Insurance Premiums 35,500 27,302 76.91% 8,198 26,189 1,113 4.25% Prop&Gen Liab Insurance 1,299,300 649,650 50.00% 649,650 1,055,436 (405,786) -38.45% Freight 87,050 37,998 43.65% 49,052 42,948 (4,950) -11.53% Misc.Operating Expense 210,250 115,713 55.04% 94,537 146,798 (31,085) -21.18% Regulatory Operating Fees 749,000 711,994 95.06% 37,006 107,892 604,102 559.91% Subtotal 2,513,100 1,558,681 62.02% 954,419 1,440,017 118,664 8.24% General Mgr Contingency &Reappropriations 1,135,600 - 0.00% 1,135,600 - - N/A Other Non-Oper Expense 1,601,490 988,936 61.75% 612,554 63,908 925,028 1447.44% Total Materials, Supplies&Services 85,250,790 36,821,975 43.19% 48,428,815 37,128,342 (306,367) -0.83% Total Expenditures 181,243,590 85,567,754 47.21% 95,675,836 82,980,607 2,587,147 3.12% Cost Allocation (20,070,430) (10,166,490) 50.65% (9,903,940) (10,133,335) (33,155) 0.33% Net Operating Requirements $ 161,173,160 $ 75,401,264 46.78% $ 85,771,896 $ 72,847,272 $ 2,553,992 3.51% Section 2 - Page 7 2018-19 Mid-Year Report Summary of Collection, Treatment, & Disposal Expenses by Process For the Six Months Ended December 31, 2018 Increase Increase Actual Actual (Decrease) (Decrease) 12/31/18 12/31/17 $ % Process: Preliminary Treatment $ 3,656,914 $ 3,300,677 $ 356,237 10.79% Primary Treatment 6,256,818 5,608,504 648,314 11.56% Secondary Treatment 4,382,522 3,984,519 398,003 9.99% Cryogenic Plant (Plant 2) 325,917 299,685 26,232 8.75% Effluent Disposal 451,190 260,616 190,574 73.12% Solids Handling 24,160,130 21,109,472 3,050,658 14.45% Cogeneration 8,247,706 10,685,254 (2,437,548) -22.81% Utilities 1,523,956 1,522,649 1,307 0.09% Electrical Distribution 875,039 675,283 199,756 29.58% Miscellaneous Buildings 4,635,917 5,776,908 (1,140,991) -19.75% External Location 164,598 28,480 136,118 477.95% Nerissa Vessel 126,417 117,655 8,762 7.45% Laboratory 9,118,072 7,830,729 1,287,343 16.44% Collections 11,476,068 11,646,841 (170,773) -1.47% Net Operating Requirements $ 75,401,264 $ 72,847,272 $ 2,553,992 3.51% Section 2 - Page 8 Operating Budget Review Staffing Trends Full Time Equivalents December 31, 2018 700 650 624 624 627 635 636 3 600 44 52 49 550 500 450 6/30/15 6/30/16 6/30/17 6/30/18 12/31/18 ■Actual O Vacant At December 31, 2018, the total head count was 641 employees, or a full time equivalency of 624. Section 2- Page 9 2018-19 Mid-Year Report This Page Intentionally Left Blank Section 2 - Page 10 CIP Budget Review Capital Improvement Program By Type and Funding Source For the Six Months Ended December 31, 2018 ■Collections Facilities: 16.1% OHeadworks: 6.3% ■Primary Treatment: 2.6% 0Secondary Treatment: 1.1% OSolids Handling&Digestion: 21.5% OOcean Outfall Systems: 6.0% OUtility Systems: 10.2% ■Process Related Special Projects: 1.2% ■Information Management Systems: 3.2% ■Strategic&Master Planning: 1.2% ■Water Management Projects: 0.1% O Research: 0.2% OSupport Facilities: 27.5% ■Others: 0.1% \` ■Prior Year Treatment Projects: 0.0% ■Capital Equipment Purchases: 2.71/6 Total Capital Improvement Outlays -$78,727,043 ❑Rehabilitation and Replacement: 60% ❑Strategic Initiatives: 23% ❑Additional Capacity: 13% Regulatory: 4% Total Capital Improvement Outlays -$78,727,043 Section 3- Page 1 FY 2018-19 Mid-Year Report Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2018 2018-19 2018-19 2018-19 Cashflow Actual at Projected Budget 12/31/2018 Outlay Collection System Improvement Projects Collections Facilities Raitt and Bristol Street Sewer Extension 135,408 - 67,800 Newhope - Placentia Trunk Grade Separation Replacement 100,599 6,935 54,000 Newhope-Placentia Trunk Replacement 13,499,364 5,858,086 19,461,400 Tustin Rose OCTA Grade Separation 11,361 368 8,100 Westminster Blvd Force Main Replacement 3,356,135 590,490 2,302,700 Rehabilitation of Western Regional Sewers 6,537,370 1,611,042 5,804,700 Interstate 405 Widening Project Impacts on OCSD Sewers 39,448 5,671 32,800 Seal Beach Pump Station Replacement 485,556 5,398 207,500 Newport Force Main Rehabilitation 69,910 11,529 102,900 Bay Bridge Pump Station Replacement 13,047,597 73,113 425,400 Newport Beach Pump Station Odor Control Improvements 50,720 7,686 26,000 District 6 Trunk Sewer Relief 2,886,772 825,590 1,861,600 Gisler- Red Hill Trunk Improvements - Reach B 1,674,943 1,945,595 2,155,600 Sunflower and Red-Hill Interceptor Repair - - 47,900 Small Construction Projects Program - Collections 2,802,441 1,281,571 1,281,600 Planning Studies Program - Collections - 285,173 285,200 Operations & Maintenance Capital Program - Collections - 31,450 31,500 Research Program - Collections - 22,267 22,300 SARI Rock Stabilizers Removal 1,058,174 60,022 1,174,600 Bay Bridge Pump Station and Force Mains Rehab Study - 3,027 3,100 Additional Charges to CIP Closed at 6/30/18 - 21,568 21,600 Subtotal -Collections Facilities 45,755,798 12,646,581 35,378,300 Revenue Area 14 Newport Force Main Rehabilitation (2.18%) 1,558 257 2,300 Subtotal - Revenue Area 14 1,558 257 2,300 Total Collection System Improvement Projects 45,757,356 12,646,838 35,380,600 (Continued) Section 3 - Page 2 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2018 2018-19 2018-19 2018-19 Cashflow Actual at Projected Budget 12/31/2018 Outlay Treatment& Disposal Protects Headworks Headworks Rehabilitation and Expansion at Plant 1 12,397,710 3,922,203 6,922,300 Trunk Line Odor Control Improvements 48,499 291 300 Headworks Modifications at P2 for GWRS Final Expansion 2,451,764 1,065,008 3,049,400 Subtotal - Headworks 14,897,973 4,987,502 9,972,000 Primary Treatment Primary Clarifier Reliability Improvements at Plant No. 1 379,331 122,903 298,400 Primary Treatment Rehabilitation at Plant 2 4,850,687 1,918,061 4,402,600 Subtotal - Primary Treatment 5,230,018 2,040,964 4,701,000 Secondary Treatment Return Activated Sludge Piping Replacement at Plant 1 697,946 101,794 179,800 Activated Sludge Aeration Basin Deck Repair at Plant 2 1,376,540 266,422 438,100 Return Activated Sludge Piping Replacement at Plant 2 1,447,905 515,927 678,800 Subtotal -Secondary Treatment 3,522,391 884,143 1,296,700 Solids Handling & Digestion Digester Rehabilitation at Plant 1 136,855 60,187 462,600 Sludge Dewatering and Odor Control at Plant 1 16,681,794 9,234,197 16,464,200 Plant No. 2 Digester Facilities Rehabilitation 2,507,265 387,932 1,239,800 Sludge Dewatering and Odor Control at Plant 2 13,378,013 7,155,414 11,968,600 Interim Food Waste Receiving Facility 304,086 65,695 407,400 Subtotal -Solids Handling & Digestion 33,008,013 16,903,425 30,542,600 Ocean Outfall Systems Ocean Outfall System Rehabilitation 7,417,783 4,718,159 9,716,000 Subtotal -Ocean Outfall Systems 7,417,783 4,718,159 9,716,000 Utility Systems Digester Gas Facilities Rehabilitation 4,896,117 381,448 3,945,500 Natural Gas Pipelines Replacement at Plants 1 and 2 65,178 12,167 41,800 Electrical Power Distribution System Improvements 285,913 49,456 130,800 Uninterruptable Power Supply Improvements at Plant 1 154,548 24,839 42,400 Consolidated Demolition and Utility Improvements at P2 11,303,152 7,585,726 14,258,600 Subtotal - Utility Systems 16,704,908 8,053,636 18,419,100 (Continued) Section 3 - Page 3 FY 2018-19 Mid-Year Report Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2018 2018-19 2018-19 2018-19 Cashflow Actual at Projected Budget 12/31/2018 Outlay Process Related Special Projects Safety Improvements Program 9,372,763 973,838 5,090,600 Subtotal - Process Related Special Projects 9,372,763 973,838 5,090,600 Information Management Systems Project Management Information System 1,668,647 216,708 978,600 SCADA System and Network Upgrades 1,299,323 481,886 641,400 Information Technology Capital Program 515,592 1,113,868 1,398,500 Geographic Information System 867,988 238,424 368,500 EAM Software and Process Implementation 941,955 161,663 579,700 Process Control Systems Upgrades Study 1,662,962 296,232 1,453,000 Subtotal - Information Management Systems 6,956,467 2,508,781 5,419,700 Strategic & Master Planning Planning Studies Program 7,047,719 949,854 6,347,900 Climate Resiliency Study 188,757 14,824 635,500 Subtotal -Strategic & Master Planning 7,236,476 964,678 6,983,400 Water Management Projects GWRS Final Expansion Coordination 108,588 83,948 174,000 Subtotal -Water Management Projects 108,588 83,948 174,000 Research Research Program 2,166,356 134,407 1,517,400 Subtotal - Research 2,166,356 134,407 1,517,400 Support Facilities Small Construction Projects Program 4,231,590 1,722,449 8,047,900 Fleet Services UST Leak Remediation at Plant 1 2,626,773 59,875 59,900 Operations & Maintenance Capital Program 930,125 53,381 586,900 18350 Mt. Langley Building Purchase and Improvement 126,931 12,877 820,500 Title 24 Access Compliance and Building Rehab Project 2,554,359 693,455 2,388,700 Headquarters Complex and Site Security at Plant 1 10,536,486 19,073,331 26,052,000 Plant 2 Warehouse Relocation 497,768 - 66,800 Subtotal -Support Facilities 21,504,032 21,615,368 38,022,700 (Continued) Section 3 - Page 4 CIP Budget Review Summary of Capital Improvement Construction Requirements - Current Year For the Six Months Ended December 31, 2018 2018-19 2018-19 2018-19 Cashflow Actual at Projected Budget 12/31/2018 Outlay Others Perimeter Screening at Plant 2 105,711 20,229 53,700 Capital Improvement Program Management Services - 27,805 42,300 Subtotal -Others 105,711 48,034 96,000 Additional Charges to CIP Completed at 6/30/18 - 30,282 30,300 Total Treatment and Disposal Projects 128,231,479 63,947,165 131,981,500 Capital Equipment Purchases 3,582,400 2,133,040 3,582,400 Total Collection, Treatment and Disposal Projects and Capital Equipment Purchases 177,571,235 78,727,043 170,944,500 Add: Future Rehab and Replacement 14,278,000 - - 191,849,235 78,727,043 170,944,500 Less: Savings and Deferrals (17,307,124) - - Net Collection, Treatment and Disposal Projects and Capital Equipment Purchases $174,542,111 $ 78,727,043 $170,944,500 Section 3 - Page 5 FY 2018-19 Mid-Year Report Summary of Capital Improvement Construction Requirements - Project Life For the Six Months Ended December 31, 2018 Current Total Approved June 30,2018 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2019 Budget Collection System Improvement Projects Collections Facilities Raitt and Bristol Street Sewer Extension 7,100,000 259,075 67,800 326,875 6,773,125 Taft Branch Improvements 2,130,000 12,083 - 12,083 2,117,917 Newhope-Placentia Trunk Grade Separation Replacement 4,300,000 4,177,654 54,000 4,231,654 68,346 Newhope-Placentia Trunk Replacement 112,000,000 34,442,135 19,461,400 53,903,535 58,096,465 Yorba Linda Pump Station Abandonment 10,800,000 - - - 10,800,000 Tustin Rose OCTA Grade Separation 455,000 437,790 8,100 445,890 9,110 Beach Trunk/Knott Interceptor Sewer Relief 136,000,000 - - - 136,000,000 Westminster Blvd Force Main Replacement 54,000,000 4,488,574 2,302,700 6,791,274 47,208,726 Rehabilitation of Western Regional Sewers 202,000,000 10,960,026 5,804,700 16,764,726 185,235,274 Interstate 405 Widening Project Impacts on OCSD Sewers 528,000 54,819 32,800 87,619 440,381 Seal Beach Pump Station Replacement 78,900,000 - 207,500 207,500 78,692,500 Los Alamitos Sub-Trunk Extension 66,000,000 - - - 66,000,000 Newport Force Main Rehabilitation 58,367,238 58,264,373 102,900 58,367,273 (35) Crystal Cove Pumping Station Upgrade and Rehabilitation 17,900,000 - - - 17,900,000 Bay Bridge Pump Station Replacement 64,000,000 876,689 425,400 1,302,089 62,697,911 Newport Beach Pump Station Odor Control Improvements 4,066,000 - 26,000 26,000 4,040,000 District 6 Trunk Sewer Relief 7,965,000 5,644,126 1,861,600 7,505,726 459,274 Gisler-Red Hill Trunk Improvements-Reach B 25,213,000 23,057,459 2,155,600 25,213,059 (59) MacArthur Pump Station Rehabilitation 13,100,000 - - - 13,100,000 Main Street Pump Station Rehabilitation 60,400,000 60,400,000 Gisler-Red Hill Interceptor Rehabilitation 14,800,000 14,800,000 Sunflower and Red-Hill Interceptor Repair 5,500,000 47,900 47,900 5,452,100 Edinger Bolsa Chica Trunk Improvements 5,159,000 - - 5,159,000 Edinger Pump Station Upgrade and Rehabilitation 14,100,000 14,100,000 Slater Avenue Pump Station Rehabilitation 25,300,000 25,300,000 Small Construction Projects Program-Collections 10,033,000 1,906,878 1,281,600 3,188,478 6,844,522 Planning Studies Program-Collections 4,793,800 2,692,376 285,200 2,977,576 1,816,224 Operations&Maintenance Capital Program-Collections 500,000 - 31,500 31,500 468,500 Research Program-Collections 154,000 13,396 22,300 35,696 118,304 SARI Rock Stabilizers Removal 6,860,000 754,576 1,174,600 1,929,176 4,930,824 Bay Bridge Pump Station and Force Mains Rehab Study 725,000 564,695 3,100 567,795 157,205 Additional Charges to CIP Closed at 6/30/18 - - 21,600 21,600 (21,600) Subtotal-Collections Facilities 1,013,149,038 148,606,724 35,378,300 183,985,024 829,164,014 Revenue Area 14: Newport Force Main Rehabilitation(2.18%) 1,300,762 1,298,470 2,300 1,300,770 (8) Subtotal-Revenue Area 14 1,300,762 1,298,470 2,300 1,300,770 (8) Total Collection System Improvement Projects 1,014,449,800 149,905,194 35,380,600 185,285,794 829,164,006 (Continued) Section 3 - Page 6 CIP Budget Review Summary of Capital Improvement Construction Requirements - Project Life For the Six Months Ended December 31, 2018 Current Total Approved June 30,2018 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2019 Budget Treatment&Disposal Projects Headworks Headworks Rehabilitation and Expansion at Plant 1 370,000,000 12,489,150 6,922,300 19,411,450 350,588,550 Trunk Line Odor Control Improvements 9,299,000 9,091,812 300 9,092,112 206,888 Headworks Modifications at P2 for GWRS Final Expansion 54,000,000 2,443,746 3,049,400 5,493,146 48,506,854 Subtotal-Headworks 433,299,000 24,024,708 9,972,000 33,996,708 399,302,292 Primary Treatment Primary Clarifiers Replacements and Improvements at P1 106,000,000 520,752 - 520,752 105,479,248 Primary Clarifier Reliability Improvements at Plant No. 1 21,500,000 - 298,400 298,400 21,201,600 Primary Treatment Rehabilitation at Plant 2 245,000,000 10,053,689 4,402,600 14,456,289 230,543,711 B/C-Side Primary Clarifiers Rehabilitation at Plant 2 249,560,000 - - - 249,560,000 Subtotal-Primary Treatment 622,060,000 10,574,441 4,701,000 15,275,441 606,784,559 Secondary Treatment Return Activated Sludge Piping Replacement at Plant 1 9,000,000 730,862 179,800 910,662 8,089,338 Activated Sludge Aeration Basin Deck Repair at Plant 2 2,800,000 1,297,544 438,100 1,735,644 1,064,356 Return Activated Sludge Piping Replacement at Plant 2 20,000,000 179,514 678,800 858,314 19,141,686 Subtotal-Secondary Treatment 31,800,000 2,207,920 1,296,700 3,504,620 28,295,380 Solids Handling&Digestion Digester Rehabilitation at Plant 1 66,000,000 65,537,473 462,600 66,000,073 (73) Sludge Dewatering and Odor Control at Plant 1 199,500,000 174,764,587 16,464,200 191,228,787 8,271,213 Plant No.2 Digester Facilities Rehabilitation 20,000,000 810,472 1,239,800 2,050,272 17,949,728 Sludge Dewatering and Odor Control at Plant 2 90,477,000 68,807,979 11,968,600 80,776,579 9,700,421 Interim Food Waste Receiving Facility 6,300,000 68,680 407,400 476,080 5,823,920 Digester P,Q,R,and S Replacement 166,000,000 - - - 166,000,000 Subtotal-Solids Handling&Digestion 548,277,000 309,989,191 30,542,600 340,531,791 207,745,209 Ocean Outfall Systems Ocean Outfall System Rehabilitation 166,000,000 25,028,649 9,716,000 34,744,649 131,255,351 Subtotal-Ocean Outfall Systems 166,000,000 25,028,649 9,716,000 34,744,649 131,255,351 Utility Systems UPS System Upgrades 4,700,000 - - - 4,700,000 Digester Gas Facilities Rehabilitation 96,500,000 1,553,893 3,945,500 5,499,393 91,000,607 Natural Gas Pipelines Replacement at Plants 1 and 2 1,310,000 74,297 41,800 116,097 1,193,903 Electrical Power Distribution System Improvements 34,608,000 - 130,800 130,800 34,477,200 (Continued) Section 3 - Page 7 FY 2018-19 Mid-Year Report Summary of Capital Improvement Construction Requirements - Project Life For the Six Months Ended December 31, 2018 Current Total Approved June 30,2018 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2019 Budget Utility Systems(continued) Central Generation Rehabilitation at Plant 1 87,000,000 - - - 87,000,000 Uninterruptable Power Supply Improvements at Plant 1 4,800,000 18,927 42,400 61,327 4,738,673 Consolidated Demolition and Utility Improvements at P2 31,000,000 13,119,376 14,258,600 27,377,976 3,622,024 Central Generation Rehabilitation at Plant 2 114,000,000 - - - 114,000,000 Subtotal-Utility Systems 373,918,000 14,766,493 18,419,100 33,185,593 340,732,407 Process Related Special Projects Safety Improvements Program 19,000,000 4,606,887 5,090,600 9,697,487 9,302,513 Subtotal-Process Related Special Projects 19,000,000 4,606,887 5,090,600 9,697,487 9,302,513 Information Management Systems Process Control Systems Upgrades 46,000,000 - - - 46,000,000 Project Management Information System 4,000,000 771,962 978,600 1,750,562 2,249,438 SCADA System and Network Upgrades 5,000,000 4,376,218 641,400 5,017,618 (17,618) Information Technology Capital Program 10,000,000 1,096,448 1,398,500 2,494,948 7,505,052 Geographic Information System 4,568,000 2,762,896 368,500 3,131,396 1,436,604 EAM Software and Process Implementation 7,500,000 4,975,483 579,700 5,555,183 1,944,817 Process Control Systems Upgrades Study 3,554,000 432,168 1,453,000 1,885,168 1,668,832 Subtotal-Information Management Systems 80,622,000 14,415,175 5,419,700 19,834,875 60,787,125 Strategic&Master Planning Planning Studies Program 23,858,200 9,880,440 6,347,900 16,228,340 7,629,860 Climate Resiliency Study 878,000 14,511 635,500 650,011 227,989 Subtotal-Strategic&Master Planning 24,736,200 9,894,951 6,983,400 16,878,351 7,857,849 Water Management Projects GWRS Final Expansion Coordination 1,132,000 93,576 174,000 267,576 864,424 Subtotal-Water Management Projects 1,132,000 93,576 174,000 267,576 864,424 Research Research Program 8,346,000 315,847 1,517,400 1,833,247 6,512,753 Subtotal-Research 8,346,000 315,847 1,517,400 1,833,247 6,512,753 (Continued) Section 3 - Page 8 CIP Budget Review Summary of Capital Improvement Construction Requirements - Project Life For the Six Months Ended December 31, 2018 Current Total Approved June 30,2018 Year Projected Remaining Project Accumulated Projected Cost at Future Budget Cost Cost June 30,2019 Budget Support Facilities Small Construction Projects Program 30,015,000 8,663,223 8,047,900 16,711,123 13,303,877 Fleet Services UST Leak Remediation at Plant 1 14,952,000 290,896 59,900 350,796 14,601,204 Operations&Maintenance Capital Program 15,122,000 856,510 586,900 1,443,410 13,678,590 18350 Mt.Langley Building Purchase and Improvement 11,000,000 9,852,057 820,500 10,672,557 327,443 Title 24 Access Compliance and Building Rehab Project 18,400,000 15,434,337 2,388,700 17,823,037 576,963 Headquarters Complex and Site Security at Plant 1 179,067,000 2,488,272 26,052,000 28,540,272 150,526,728 Plant 2 Warehouse Relocation 9,800,000 - 66,800 66,800 9,733,200 Plant 2 Collections Yard Relocation 1,840,000 - - 1,840,000 TPAD Digester Facility at Plant 2 405,100,000 - - - 405,100,000 Subtotal-Support Facilities 685,296,000 37,585,295 38,022,700 75,607,995 609,688,005 Others Banning Gate Relocation and Grading at Plant 2 2,931,000 - - - 2,931,000 Perimeter Screening at Plant 2 2,800,000 35,032 53,700 88,732 2,711,268 Capital Improvement Program Management Services 300,000 101,379 42,300 143,679 156,321 Subtotal-Others 6,031,000 136,411 96,000 232,411 5,798,589 Additional Charges to CIP Completed at 6/30/18 - - 30,300 30,300 (30,300) Total Treatment and Disposal Projects 3,000,517,200 453,639,544 131,981,500 585,621,044 2,414,896,156 Capital Equipment Purchases 9,593,700 - 3,582,400 3,582,400 6,011,300 Total Collection,Treatment and Disposal Projects and Capital Equipment Purchases $4,024,560,700 $603,544,738 $170,944,500 $774,489,238 $3,250,071,462 Section 3 - Page 9 FY 2018-19 Mid-Year Report This Page Intentionally Left Blank Section 3 - Page 10 Capital Assets Schedule & Debt Service Budget Review Capital Assets Schedule For the Six Months Ended December 31, 2018 Capital Facilities Budget Review Balance Year-to-Date Balance 07/01/18 Activity 6/30/19 CONSTRUCTION IN PROGRESS: Treatment Plant $ 356,575,569 $ 66,080,205 $ 422,655,774 Collection System 71,420,281 12,646,838 84,067,119 Subtotal 427,995,850 78,727,043 506,722,893 PROPERTY, PLANT&EQUIPMENT(at cost): Land and Property Rights 29,741,243 - 29,741,243 Collection Lines and Pump Stations 860,710,368 - 860,710,368 Treatment Facilities 2,477,357,509 - 2,477,357,509 Effluent disposal facilities 97,014,820 - 97,014,820 Solids disposal facilities 3,463,236 - 3,463,236 General and administrative facilities 253,129,772 - 253,129,772 Excess purchase price over book value on acquired assets 19,979,000 - 19,979,000 Subtotal 3,741,395,948 - 3,741,395,948 Total Property, Plant&Equipment&CIP $ 4,169,391,798 $ 78,727,043 $ 4,248,118,841 Debt Service Budget Review 2018-19 Year-to-Date Remaining Budget Payments %of Budget Budget Principal Payments by Debt Issue: 2009A COP 4,690,000 - 0.00% 4,690,000 2010A BABs - - 0.00% - 2010C BABs - - 0.00% - 2011A COP - - 0.00% - 2012A COP - - 0.00% - 2012B COP 19,920,000 - 0.00% 19,920,000 2014A COP 7,045,000 - 0.00% 7,045,000 2015A COP - - 0.00% - 2016A COP - - 0.00% - 2016B CANs 7,488,968 109,875,000 1467.16% (102,386,032) 2017A COP - - 0.00% - 2018A CANs - - 0.00% - Subtotal Principal Payments 39,143,968 109,875,000 280.69% (70,731,032) Interest Expense by Debt Issue: 2009A COP 234,500 117,250 50.00% 117,250 2010A BABs 2,897,639 2,107,508 72.73% 790,131 2010C BABs 6,523,780 4,744,863 72.73% 1,778,917 2011A COP 3,348,350 1,674,175 50.00% 1,674,175 2012A COP 3,735,900 1,867,950 50.00% 1,867,950 2012B COP 3,187,400 1,593,700 50.00% 1,593,700 2014A COP 3,918,750 1,959,375 50.00% 1,959,375 2015A COP 6,375,500 3,187,750 50.00% 3,187,750 2016A COP 6,977,300 3,488,650 50.00% 3,488,650 2016B CANs 802,410 909,483 113.34% (107,073) 2017A COP 3,318,500 1,659,250 50.00% 1,659,250 2018A CANs - 801,884 N/A (801,884) Subtotal Interest Expense 41,320,029 24,111,838 58.35% 9,781,498 Total Debt Service $ 80,463,997 $ 133,986,838 166.52% $ (60,949,534) Section 4 - Page 1 2018-19 Mid-Year Report This Page Intentionally Left Blank Section 4 - Page 2 Self Insurance Budget Review General Liability and Property Fund Budget Review For the Six Months Ended December 31, 2018 Percent Actual of Budget Remaining Actual 2018-19 Through Through 2018-19 Through Increase Budget 12/31/18 12/31/18 Budget 12/31/17 (Decrease) Revenues: In-Lieu Premiums $ 1,299,300 $ 649,650 50.00% $ 649,650 $ 1,055,436 $ (405,786) Miscellaneous Other Revenue 10,000 - 0.00% - 3,532 (3,532) Service Department Allocations 20,000 (1,548) -7.74% 21,548 9,348 (10,896) Total Revenues 1,329,300 648,102 48.76% 671,198 1,068,316 (420,214) Expenses: Benefits/Claims 350,000 - 0.00% 350,000 2,500 (2,500) Legal Services 40,000 - 0.00% 40,000 2,445 (2,445) Professional Services 10,000 - 0.00% 10,000 - - Subtotal 400,000 - 0.00% 400,000 4,945 (4,945) Policy Premium Expense 1,300,000 638,449 49.11% 661,551 601,055 37,394 Total Expenses 1,700,000 638,449 37.56% 1,061,551 606,000 32,449 Excess Revenue (Expense) (370,700) 9,653 $ (390,353) 462,316 (452,663) Beginning Reserves 55,370,700 55,367,246 54,445,772 921,474 Ending Reserves $ 55,000,000 $ 55,376,899 $ 54,908,088 $ 468,811 Section 5 - Page 1 FY 2018-19 Mid-Year Report Workers' Compensation Fund Budget Review For the Six Months Ended December 31, 2018 Percent Actual of Budget Remaining Actual 2018-19 Through Through 2018-19 Through Increase Budget 12/31/18 12/31/18 Budget 12/31/17 (Decrease) Revenues: In-Lieu Premiums $ 586,600 $ 293,300 50.00% $ 293,300 $ 277,165 $ 16,135 Service Department Allocations - 54,348 N/A (54,348) - 54,348 Total Revenues 586,600 347,648 59.26% 238,952 277,165 70,483 Expenses: Benefits/Claims 420,000 201,334 47.94% 218,666 263,010 (61,676) Legal Services 80,000 26,811 33.51% 53,189 64,005 (37,194) Professional Services 60,000 31,627 52.71% 28,373 34,573 (2,946) Subtotal 560,000 259,772 46.39% 300,228 361,588 (101,816) Policy Premium Expense 200,000 109,664 54.83% 90,336 103,256 6,408 Total Expenses 760,000 369,436 48.61% 390,564 464,844 (95,408) Excess Revenue(Expense) (173,400) (21,788) $ (151,612) (187,679) 165,891 Beginning Reserves 2,173,400 2,085,542 2,464,418 (378,876) Ending Reserves $ 2,000,000 $ 2,063,754 $ 2,276,739 $ (212,985) Section 5- Page 2 4oJNZy SANQ411 � � O a _ � 9 ti FAT/Np E ENV\P�a January 31, 2019 STAFF REPORT Mid-Year Treasurer's Report For the Period Ended December 31, 2018 SUMMARY Section 17.0 of the Sanitation District's Investment Policy includes quarterly reporting requirements for the Sanitation District's two investment portfolios. These two funds, the "Liquid Operating Monies," and the "Long-Term Operating Monies" are managed by Chandler Asset Management, the Sanitation District's external money manager. The ongoing monitoring of the Sanitation District's investment program by staff and Callan Associates, the Sanitation District's independent investment advisor, indicates that the Sanitation District's investments are in compliance with the Sanitation District's adopted Investment Policy and the California Government Code, and that overall performance has tracked with benchmark indices. In addition, sufficient liquidity and anticipated revenues are available for the Sanitation District to meet budgeted expenditures for the next six months. The Sanitation District's portfolios do not include any reverse repurchase agreements or derivative securities. ADDITIONAL INFORMATION Performance Reports The Quarterly Strategy Review, prepared by Chandler Asset Management, and the Investment Measurement Service Quarterly Review, prepared by Callan Associates, is attached for reference. Also attached are Long-Term and Liquid Operating Monies Summary of Performance Data and Portfolio Statistics charts that depict the performance results, estimated yield and duration, credit quality, and sector diversification of the Sanitation District's portfolios, as of December 31, 2018. The Liquid Operating Monies portfolio, with an average maturity of 69 days, consists entirely of high quality fixed income investments consistent with the Sanitation District's investment policy. Portfolio Performance Summary The following table presents a performance summary of the Sanitation District's portfolios as compared to their benchmarks as of December 31, 2018. OCSD ♦ P.O.Box 8127 ♦ Fountain Valley,CA 92728-8127 ♦ (714)962-2411 Mid-Year Treasurer's Report For the Period Ended December 31, 2018 Page 2 of 4 Portfolio Performance Summary As of December 31,2018 Liquid Operating Monies(%) Long-Term Operating Monies(%) Total Rate of Total Rate of Return Benchmark(') Return Benchmark(') 3 Months 0.57 0.56 1.32 1.57 6 Months 1.09 1.06 1.59 1.77 9 Months 1.55 1.51 1.86 1.95 12 Months 1.90 1.87 1.51 1.49 Annualized Since inception 30 Nov 2014 0.86 0.76 1.17 1.11 Market Value $176.7 M $498.8 M Average Quality "AAX Aaa" 11AXTAa1" Current Yield(%) 1.8 2.2 Estimated Yield to Maturity(%) 2.4 2.7 Quarterly Deposits(Withdrawals) $101.0.M $30.4 M Estimated Annual Income $4.3 M $11.3 M (1) Benchmarks: • Liquid Operating Portfolio: ICE BAML 3-Month Treasury Bill Index ■ Long-Term Operating Portfolio: ICE BAML Corp/Govt. 1-5 Year Bond Index Portfolio Market Values Comparative marked-to-market quarter-end portfolio values are shown in the following table, and in the attached bar chart. Liquid Long-Term Quarter Operating Operating Ending Monies($M) Monies($M) 31 Mar. 18 92.9 412.8 30 Jun. 18 156.1 460.8 30 Sep. 18 75.2 462.1 31 Dec. 18 176.7 498.8 Mid-Year Treasurer's Report For the Period Ended December 31, 2018 Page 3 of 4 The Sanitation District's Investment Account Balances as of December 31, 2018 Book Balances Estimated Investment Accounts December 31, 2018 Yield (%) State of California LAIF $55,125,783 2.29 Union Bank Checking Account 50,192 0.25 Union Bank Overnight Sweep Account 5,470,372 2.28 Banc of California Checking Account 50,000 0.85 Banc of California Overnight Sweep Account 5,867,479 0.20 Union Bank W/C Checking 54,652 0.25 Banc of California W/C Checking 114,401 0.85 Union Bank Mount Langley Account 313,562 0.80 Union Bank Bandilier Account 262,429 0.80 Chandler—Short-term Portfolio 176,713,788 2.42 Chandler—Long-term Portfolio 498,839,336 2.70 Petty Cash 3,000 N/A BNY Mellon OCIP Reserve 3,652,890 0.86 TOTAL $746.517,884 2.57 Debt Service Reserves w/Trustees $5 035 599 2.27 The Sanitation District's Cost of Funds on Debt Issues as of December 31, 2018 Annual Cost of Funds Outstanding Interest Issue Description COP Balance Rate(%) 2009A Fixed $4,690,000 4.72 2010A Fixed 80,000,000 3.68 2010C Fixed 157,000,000 4.11 2011A Fixed 75,370,000 2.61 2012A Fixed 100,645,000 3.54 2012E Fixed 66,395,000 1.50 2014A Fixed 78,375,000 2.34 2015A Fixed 127,510,000 3.30 2016A Fixed 145,880,000 3.02 2017A Fixed 66,370,000 2.55 2018A Fixed 102,200,000 2.02 TOTAL $1,004,435,000 Weighted Avg. Cost of Funds 3.02 Mid-Year Treasurer's Report For the Period Ended December 31, 2018 Page 4 of 4 ATTACHMENTS 1. Chandler Quarterly Report 2. Summary of Performance Data and Portfolio Statistics — Liquid Operating Monies 3. Summary of Performance Data and Portfolio Statistics — Long Term Operating Monies 4. Investment Transactions and Balances in LAIF 5. Asset Summary by Asset Type — Liquid Operating Portfolio 6. Asset Summary by Asset Type — Long Term Portfolio 7. Asset Summary by Asset Type — Owner Controlled Insurance Program Escrow Account 8. Investment Listing (Yield Analysis Report) 9. Asset Detail — Consolidated 10. Custody Transaction History — Consolidated 11. Callan Quarterly Review 12. Chandler Quarterly Review 13. Rating Agency Comparisons CHANDLER CiNk � ASSET MANAGEMENT December 31, 2018 Mr. Lorenzo Tyner Assistant General Manager Director of Finance and Administrative Services Orange County Sanitation District 10844 Ellis Avenue Fountain Valley CA 92708-7018 Dear Lorenzo, Bond Market Recap The Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 basis points in December to a range of 2.25%-2.50%. Although recent economic data has softened, the rate hike was widely expected.The Fed's long run fed funds rate target was lowered to 2.8%from the previous estimate of 3.0%. However,the Fed did little to acknowledge the changing market dynamics and tightening financial conditions, reaffirming their strong economic forecast for 2019 and emphasizing the balance sheet reduction strategy remains on track. Although the modest adjustment in the Fed's projections was a step in the right direction, some market participants were expecting a more dovish tone from the Fed Chair. More recently, the Fed Chair and other members of the FOMC have begun to sound more dovish. We continue to believe the terminal fed funds rate will be below 3.0% and believe the Fed is at risk of making a policy error if monetary policy continues to tighten at the same quarterly pace of 2018. We believe there is a high probability that the Fed will keep monetary policy on pause at least through the first quarter. Interest rate sensitive sectors such as housing and autos have softened, and financial conditions have tightened in recent months as equity prices have declined, borrowing costs have increased, and the US dollar has strengthened. Global economic growth has slowed, even as many other global central banks remain accommodative.Although US labor market conditions remain tight, we expect the pace of job growth is likely to slow as the economy is at or near full employment. Meanwhile, inflation pressures remain subdued, particularly as oil prices have declined meaningfully over the past three months.Though we don't foresee a recession in the near-term, economic growth has eased.The consensus forecast calls for GDP growth of 2.6%this year versus 2.9% in 2018. Treasury yields declined in December and a portion of the Treasury yield curve inverted with the yield on 5-year Treasuries falling below the yield on 2-year Treasuries. Notably,the yield on 5-year Treasuries temporarily fell below the yield on 3- month T-bills last week. Although the yield curve hasn't completely inverted, we believe the current flatness of the curve reflects a high level of market participants' nervousness about the outlook for economic growth. At December month- end, the 2-year Treasury yield was down nearly 30 basis points to 2.49%, while the 10-year Treasury yield was down slightly more than 30 basis points to 2.68%.The spread between 2-and 10-year Treasury yields was just 20 basis points at year-end. 1 CHANDLER CiNk � ASSET MANAGEMENT Consumer Prices The Consumer Price Index (CPI) was up just 2.2%year-over-year in November, versus up 2.5%year-over-year in October. Core CPI (CPI less food and energy) was also up 2.2% year-over-year in November, versus up 2.1% year-over-year in October. The Personal Consumption Expenditures (PCE) index was up 1.8%year-over-year in November, versus up 2.0% year-over-year in October. Core PCE (excluding food and energy) was up 1.9% on a year-over-year basis in November, versus up 1.8% in October. Core PCE inflation, which is the Fed's primary inflation gauge remains below the Fed's 2.0% target. Retail Sales On a year-over-year basis, retail sales were up 4.2% in November,versus up 4.8%year-over-year in October. On a month- over-month basis, retail sales increased 0.2% in November, above expectations for a 0.1% increase, following growth of 1.1% in October. October sales were likely boosted in part by a hurricane-related rebound in auto sales and building materials. Lower gas prices held back monthly retail sales growth in November, but sales growth excluding autos and gas was solid. Labor Market U.S. payrolls rose by 312,000 in December,well above the consensus forecast of 184,000. October and November payrolls were revised up by a total of 58,000.On a trailing 3-month and 6-month basis payrolls increased by an average of 254,000 and 222,000 per month, respectively, more than enough to absorb new entrants into the labor market. The unemployment rate increased to 3.9% in December from 3.7% in November as the labor participation rate increased to 63.1%from 62.9%.A broader measure of unemployment called the U-6,which includes those who are marginally attached to the labor force and employed part time for economic reasons, was unchanged at 7.6%. Wages jumped 0.4% in December on a month-over-month basis, exceeding expectations of 0.3%.Wages were up 3.2%on a year-over-year basis in December, versus up 3.1%year-over-year in November. The average workweek increased to 34.5 hours in December from 34.4 hours in November. Housing Starts Total housing starts were stronger than expected in November, up 3.2%to a 1.256 million annualized rate. However,the growth was driven by multi-family starts which rose 22.4%. Single-family starts declined 4.6% in November. Permits rose 5.0%in the month. 2 CHANDLER CiNk ASSET MANAGEMENT TREASURY YIELDS 12/31/2018 9/30/2018 CHANGE 3 Month 2.36 2.20 0.16 2 Year 2.49 2.82 (0.33) 3 Year 2.46 2.88 (0.42) 5 Year 2.51 2.95 (0.44) 7 Year 2.59 3.02 (0.43) 10 Year 2.69 3.06 (0.37) 30 Year 3.02 3.21 (0.19) Economic Growth Has Moderated ECONOMIC INDICATOR Current Release Prior Release One Year Ago Trade Balance (55.5)$Bin OCT 18 (54.6)$Bin SEP 18 (47.0)$Bin OCT 17 GDP 3.4%SEP 18 4.2%JUN 18 2.8%SEP 17 Unemployment Rate 3.9%DEC 18 3.7%NOV 18 4.1%DEC 17 Prime Rate S.SO%DEC 18 S.2S%NOV 18 4.50%DEC 17 CRB Index 169.80 DEC 18 181.74 NOV 18 193.86 DEC 17 Oil(West Texas Int.) $45.41 DEC 18 $50.93 NOV 18 $60.42 DEC 17 Consumer Price Index(y/o/y) 2.2%NOV 18 2.5%OCT 18 2.2%NOV 17 Producer Price Index(y/o/y) 1.6%NOV 18 3.4%OCT 18 4.2%NOV 17 Dollar/Euro 1.15 DEC 18 1.13 NOV 18 1.20 DEC 17 Source:Bloomberg 3 CHANDLER ASSET MANAGEMENT Performance Attribution Long-Term Portfolio The portfolio underperformed the benchmark during the quarter, generating a return of 1.32% compared to the 1.57% return of the ICE Bank of America Merrill Lynch 1-5 Year US Corporate and Government AAA-A index. From a sector allocation standpoint,the largest driver of the underperformance was due to the mis-match in the US Treasury allocation compared to the benchmark. Based on the output of the attribution model, the mix of securities within the Corporate allocation was additive relative to the mix in the benchmark, but the overall flight to quality dynamics in the Treasury market overwhelmed the performance of the majority of assets held in the fixed income portfolio on a relative basis. From a maturity distribution standpoint, the underweight in the 1-3 year portion of the distribution, relative to the benchmark, was a negative contributor to the total return of the portfolio during the quarter. The Chandler team added diversified mix of securities to the portfolio during the quarter across the Treasury, Agency, Supranational, Asset Backed, Commercial Paper and Corporate sectors of the market to keep the asset allocation of the strategy consistent with Chandler objectives. The purchased securities ranged in maturity from January 2019 to December 2023. A$30.4 million contribution into the portfolio late in the year was partially invested in short maturity notes to await more liquid markets in the beginning of the year. The sector allocation was relatively stable. Some of the modest changes include increases in the Corporate and Supranational allocations offset by declines in the Treasury and Asset Backed allocations. The duration of the portfolio contracted during the quarter, predominately due to the aforementioned contribution late in the year,which the Chandler team chose to tactically invest in shorter maturity note in late December. The overall duration of the portfolio will be moving closer to the benchmark in Q1, although the bias is still to remain modestly below the index duration. Liquid Portfolio The portfolio marginally outperformed the ICE Bank of America 3 Month Treasury Bill Index during the quarter,generating a return of 0.57% compared to 0.56% for the index. Many securities were purchased across the Treasury, Agency, Certificate of Deposit, Commercial Paper and Corporate sectors of the market to keep the portfolio fully invested. The heavy transactional activity was driven by both the large number of maturing notes, totaling$43.3 million, as well as the large contribution late in the quarter totaling $101.0 million. The sector allocation evolved with the large contribution into the portfolio late in the quarter. Notably the Treasury allocation remains higher than the historical experience due to the increased issuance of the Treasury sector, improving valuations, offset by the light funding needs of both Fannie Mae and Freddie Mac,which is leading to unattractive valuations in the Agency sector. The duration of the portfolio was little changed, currently 0.19 versus 0.22 at the end of the prior reporting period. 4 CHANDLER CiNk � ASSET MANAGEMENT Economic Outlook Financial conditions tightened in the fourth quarter as market participants acknowledged the slowing global economic backdrop coupled with the continued tightening of domestic monetary policy. Risk assets performed poorly; the broad domestic equity markets gave up all the gains achieved through the first nine months of the year and then some, posting negative total returns for the year. Investment grade and high yield credit spreads widened materially during the quarter, correlated with the move lower in equity markets. As risk asset performance continued to deteriorate through the quarter the investment grade new issue market was more or less closed in December with less than$10 billion clearing the market. The Treasury market found support in the heavy markets with yields moving lower across the maturity spectrum. Despite the most recent Summary of Economic Projections from the Federal Reserve released on December 19th, calling for two more rate hikes in 2019, the Treasury market priced them all out by year end with the Two-year Treasury note yielding 2.49%on December 31, 2018, consistent with the top end of the current Fed Funds target of 2.25%to 2.50%. The flat shape of the Treasury yield curve continues to have market participants concerned the Federal Reserve could be on the precipice of a policy error if they continue on their current policy normalization path. All the other major developed market central banks have yet to tighten traditional monetary policy in the face of the US Federal Reserve hiking rates four times in 2018. The domestic and global inflation outlook remains muted, as commodity prices remain low and domestic wage inflation moves higher but not yet to an alarming level. Market based measures of inflation moved further away from what most would define as 'normal' with the Ten-Year TIPS breakeven inflation spread ending the year at 1.71% compared to 2.11% at the end of Q3 2018. If the Federal Reserve is to stay steadfast in support of the dual mandate of stable prices and full employment, current market-based measures of long-term inflation are disconcerting. In spite of the challenging environment for risk assets during the quarter,the underlying fundamentals of the US economy remain sound, despite some softening compared to Q3 2018. Many of the cyclical components of the US economy are facing headwinds, with the ISM Manufacturing Indices and the home price appreciation slowing down from the pace experienced earlier in the year. Commodity prices were also soft, with the price of oil dropping below $50 per barrel during the quarter and the price of copper continuing to move sideways after the large move lower earlier in the year. On the positive side, the December employment report was strong, with the three-month moving average for non-farm payrolls at 252k, well above the pace necessary to put downward pressure on the U-3 unemployment rate, currently at 3.9%. The Chandler team continues to look to the U-6 Underemployment rate as the better indicator of full employment, and with a current reading of 7.6% the team would argue there is still remaining slack in the domestic labor force. Further supporting the labor market slack view, the Labor Force participation rate remains very low at 63.1%. Given the material tightening of domestic financial conditions during the quarter, with credit and equity market underperforming, coupled with the flat US Treasury yield curve,the Chandler team thinks the Federal Reserve will pause on their policy normalization pace in the first quarter of 2019. Given the current dynamics in the domestic economy, we think it is premature to price in monetary policy easing and think 2019 will be a difficult environment for fixed income investors as the next move for monetary policy is more uncertain as opposed to asymmetric. 5 CHANDLER CiNk � ASSET MANAGEMENT Strategy Strategy highlights for the Long-Term Portfolio in coming months: • Change the mix of securities in the Corporate sector o The Chandler team would like to keep the overall allocation between 22%to 26%of the portfolio, however in light of changing market dynamics and the likely heavy new issue calendar in Q12019, we will look to optimize the mix of securities. o The focus will continue to be on up in quality names with attractive relative value compared to the peer group. • Increase the Asset Backed allocation, at the expense of the Agency allocation, to above 12%of the overall portfolio. • Avoid the Supranational asset class until valuations improve. In Chandler's judgement the current relative value of the asset class is poor with little spread differentiation compared to the more liquid Agency sector. • Increase the overall duration of the portfolio to be closer to the benchmark. Strategy highlights for the Liquidity Portfolio in coming months: • Continue to ladder the Treasury and Agency exposure to coincide with forecasted liquidity needs. • Opportunistically add Corporate, Negotiable CD, and Commercial Paper exposure to the portfolio where the additional spread compensation versus like maturity Treasury notes is attractive. • Maintain a dedicated exposure to the Treasury sector on an ongoing basis to ensure ample liquidity in the portfolio for unexpected cash flow needs of the District. 6 CHANDLER (J, ASSET MANAGEMENT Compliance Issues Orange County Sanitation District Long Term Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 5 years maxmaturity; Minimum allocation of 10% Complies* U.S.Agencies 20%max issuer;5 years max maturity Complies "AA"rated or better by a NRSRO;30%maximum; 5 years max maturity; USD denominated senior unsecured Su pra nati ona Complies unsubordinated obligations issued or unconditionally guaranteed by IBRD,IFC,or IADB "A"rated or better longterm debt by a NRSRO;30%maximum;5%max issuer;5 years max maturity; Issued by Corporate(MTNs) Complied at time of purchase** corporations organized and operating within the U.S.or issued by depository institutions licensed by the U.S. Municipal Securities "A"rated or higher bya NRSRO;10%maximum; 5%max issuer;5 years max maturity Complies Asset Backed/CMOs/Mortgage-backed "AA"rated or better by a NRSRO; "A"or higher issuer rating by a NRSRO;20%maximum;5%max issuer(excluding Complies* gout agency/mbs);5 years max maturity Negotiable CDs "A"rated or better long term debt by a NRSRO;or"A-1"/highest short term rating by a NRSRO;30%maxi mum;5%max Complies issuer;5 years max maturity Certificates of Deposit 5%max issuer;5 years max maturity;Secured/collateralized Complies Banker's Acceptances A-1 rated or equivalent short term rating by a NRSRO;40%maximum; 5%max issuer;180 days max maturity Complies A-1 rated or equivalent short term rating by a NRSRO; "A"or better longterm debt issuer by a NRSRO; Issued by a Commercial Paper domestic corporation organized and operating in the US with AUM>$500million; 25%maximum;5%maxissuer; Complies 270 days max maturity Mutual Fund&Money Market Mutual Highest rating or"AAA"rated by two NRSROs;SEC registered adviser with AUM>$500 million and experience greater Fund than 5 years;10%per one Mutual Fund;20%max per issuer on Money Market Mutual Funds;20%max of the Complies District's surplus money Repurchase Agreements 102%collateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies OCI P Not used by investment adviser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Max Per Issuer 5%of portfolio(except Supranationals,U.S.Government,Agencies,Mutual Fund) Complies Maximum Maturity 5 years maximum maturity Complies* *The portfolio has twenty-one(21)securities with maturities greater than 5 years including four(4)CMOs,sixteen(16)MBS and one(1)treasury.All securities were inherited from the previous manager and complied at time of purchase. **GE(36962G7M0)was downgraded by Moody's(Baal)and S&P(BBB+)in October2018 and by Fitch(BBB+)in November2018,complied at time of purchase. 7 CHANDLER ASSET MANAGEMENT Orange County Sanitation District Liquid Assets managed by ChandlerAsset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 1 year max maturity; Minimum allocation of 10% Complies U.S.Agencies 20%max issuer; 1 year max maturity Complies "AA"rated or better by a NRSRO;30%maximum; 1 year max maturity; USD denominated senior unsecured Su pra nati ona Complies unsubordinated obligations issued or unconditionally guaranteed by IBRD,IFC,or IADB "A"rated or better longterm debt by a NRSRO; 30%maximum;5%max issuer; 1 year max maturity; Issued by Corporate(MTNs) Complies corporations organized and operating within the U.S.or issued by depository institutions licensed by the U.S. Asset Backed/CMOs "AA"rated or better by a NRSRO; "A"or higher issuer rating by a NRSRO;20%maximum;5%max issuer; 1 year max Complies maturity Negotiable CDs "A"rated or better long term debt by a NRSRO;or"A-1"/highest short term rating by a NRSRO;30%maxi mum;5%max Complies issuer;1 year max maturity Certificates of Deposit 5%max issuer;1 year max maturity;Secured/collateralized Complies Banker's Acceptances A-1 rated or equivalent shortterm rating by a NRSRO;40%maximum; 5%max issuer;180 days max maturity Complies A-1 rated or equivalent short term rating by a NRSRO; "A"or better long term debt issuer by a NRSRO; Issued by a Commercial Paper domestic corporation organized and operating in the US with AUM>$500million; 25%maximum;5%maxissuer; Complies 270 days max maturity Mutual Fund&Money Market Mutual Highest rating or"AAA"rated by two NRSROs;SEC registered adviser with AUM>$500 million and experience greater Fund than 5 years;10%per one Mutual Fund;20%max per issuer on Money Market Mutual Funds;20%max of the Complies District's surplus money Repurchase Agreements 102%collateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies OCIP Not used by investment adviser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Notto exceed 180 days; Max duration of 1/2 year Complies Max Per Issuer 5%of portfolio(except Supranationals,U.S.Government,Agencies,Mutual Fund) Complies Maximum Maturity 1 year maximum maturity Complies g CHANDLER ASSET MANAGEMENT OCSD Lehman Exposure Assets managed by ChandlerAsset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranational CAA°or better by 1 of 3 NRSROs;30%maximum; 5%max;5 years maturity; Includes only: IADB,IBRD,and IFC per Complies GC U.S.Agencies 20%max issuer;5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better longterm rating by 1 of 3 NRSROs; 30%maximum;5%max issuer;5 years max maturity Complies* Municipal Securities "A"or higher by 1 of 3 NRSROS;10%maximum;5%max issuer; 5 years maximum maturity Complies Asset Backed/CMOs/Mortgage-backed W or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20%maximum;5%max issuer Complies (excluding MBS/govtagency);5 years max maturity Negotiable CDs "A"or better on its long term debt by 1 of 3 NRSROs; "Al/Pl"or highest short term ratings by 1 of 3 NRSROs;30% Complies maximum;5%max issuer;5 years max maturity CDs/TDS 5%max issuer;5 years max maturity Complies Banker's Acceptances A-1,or equivalent highest short term rating by 1 of 3 NRSROS;40%maximum; 5%max issuer;180 days max maturity Complies Commercial Paper A-1,or equivalent by 1 of 3 NRSROS; "A"or better by 1 of 3 NRSROs,if longterm debt issued; 25%maximum;5%max Complies issuer;270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum;10%max issuer Complies Repurchase Agreements 102%collateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Maximum Maturity 5 years maximum maturity Complies *Account holds$2 million face value(cusip 525ESCOY6)and$600,000 face value(cusip 525ESC1B7)of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at time of purchase. 9 CHANDLER (J, ASSET MANAGEMENT Defaulted Bonds OCSD Lehman Exposure-Account#10284 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration Common Stock SLHOPNTA4 Lehman Brothers,Inc Open Position Long Exposure 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 34.15% NR/NR 0.00 0.000% Due12/31/2018 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 57,842.64 25,621.03 34.15% NR/NR 0.00 TOTAL Common Stock 60,641.49 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 US Corporate 525ESCIB7 Lehman Brothers Note-Defaulted 600,000.00 09/19/2008 322,755.11 1.90 11,400.00 15.20% NR/NR 0.07 0.000% Due01/24/2019 0.00% 322,755.11 0.00% 0.00 (311,355.11) NR 0.00 525ESCOY6 Lehman Brothers Note-Defaulted 2,000,000.00 09/18/2008 1,040,394.96 1.90 38,000.00 50.65% NR/NR 30.83 0.000% Due10/22/2049 0.00% 1,040,394.96 0.00% 0.00 (1,002,39496) NR 0.00 1,363,150.07 49,400.00 65.85% NR/NR 23.73 TOTAL US Corporate 2,600,000.00 0.00% 1,363,150.07 0.00% 0.00(1,313,750.07) NR 0.00 1,420,992.71 75,021.03 100.00% NR/NR 15.63 TOTAL PORTFOLIO 2,660,641.49 0.00% 1,420,992.71 0.00% 0.00(1,345,971.68) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUALS 75,021.03 10 CHANDLER ASSET MANAGEMENT Ratings Orange County Sanitation District Long Term December3l,2018 vs.September30,2018 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% AAA AA A <A NR ■12/31/2018 ■9/30/2018 12/31/18 12.8% 62.8% 13.9% 1.6% 9.0% 09/30/18 11.6% 63.8% 14.5% 0.6% 9.5% Source:S&P Ratings Orange County Sanitation District Liquid December3l,2018 vs.September30,2018 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% AAA AA A <A NR ■12/31/2018 ■9/30/2018 12/31/18 38.6% 55.6% 5.2% 0.0% 0.6% 09/30/18 45.7% 44.6% 8.3% 0.0% 1.3% Source:S&P Ratings 11 CHANDLER ( , ASSET V MANAGEMENT OCSD Investment Program Quarter End Portfolio Value $600,000,000 ■ Liquid Operating Monies ■ Long-Term Operating Monies $500,000,000 $400,000,000 - $300,000,000 $200,000,000 $100,000,000 $- SP OP ?7 ✓4 SP �P 2� ✓4 SP OP ?7 ✓4 SP OP /� ✓4 sP �P /� ✓4 sP �P .0�3 c1S d 1 �1Q 01� c1A d 1 �1S o1S c1S d 1 �16 016 c16 d 1,�1, .01, c,7, d 1 �1d' .o,j c,7 sr S G 8 8 8 HISTORICAL YIELD CURVE 4.00% 3.00% ------------------------ ■ Q i p 2.00% -------o--A ---------------------------------- DEC 2018 1.00% ----------- -.*--DEC 2017 0.00% % % 12 Orange County Sanitation District Liquid Portfolio Summary Account#10282 As of December 31, 2018 C11% PORTFOLIO CHARACTERISTICS ACCOUNT SUMMARY TOP ISSUERS Average Modified Duration 0.19 Beg.Values End Values Government of United States 77.9% as of 11/30/18 as of 12/31/18 Federal Home Loan Bank 5.4% Average Coupon 1.84% Market Value 75,190,060 176,054,233 Accrued Interest 279064 617359 Intl Bank Recon and Development 2.8% , , Average Purchase YTM 2.43% First American Govt Obligation 2.3% Total Market Value 75,469,124 176,671,592 Average Market YTM 2.42% Income Earned 149,958 195,681 PNC Financial Services Group 1.7% Average S&P/Moody Rating AAA/Aaa Cont/WD 101,000,000 Toronto Dominion Holdings 1.2% Average Final Maturity 0.19 yrs par 75,356,278 176,551,666 Bank of Montreal Chicago 1.1% Book Value 75,200,983 176,058,369 Rabobank Nederland NV NY 1.1% Average Life 0.13 yrs Cost Value 75,063,628 175,843,331 Total 93.5% SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY(S&P) US Treasury 77.9% 100% 81.9% AA(55.6%) Agency 5.9% 80% us Corp' 5.2% 60% Neg CD 3.1% 40% NR(0.6%) A(5 supras 2.8% 20% 15.6% Comm Paper 2,$% 2.6% 0 4 0 % 0-.25 .25-.5 .5.1 1.1.5 1.5-2 2-25 2.5-3 3- Money Mkt Fd 12.3% Maturity AAA(38.Maturity(Yis) PERFORMANCE REVIEW Annualized TOTAL RATE OF RETURN 1M 3M YTD 1YR 2YRS 3YRS SYRS 10YRS 11/30/2014 Orange County Sanitation District Liquid 0.19% 0.57% 1.90% 1.90% 1.40% 1.09% N/A N/A 0.86% ICE BAML 3-Month US Treasury Bill Index 0.18% 0.56% 1.87% 1.87% 1.36% 1.02% N/A N/A 0.76% Chandler Asset Manaeement-CONFIDENTIAL Paee 1 Execution Time:1/2/2019 9:25:10 PM Orange County Sanitation District Long Term Portfolio Summary Account#10268 As of December 31, 2018 C11% PORTFOLIO CHARACTERISTICS ACCOUNT SUMMARY TOP ISSUERS Average Modified Duration 2.27 Beg.Values End Values Government of United States 31.3% as of 11/30/18 as of 12/31/18 Federal National Mortgage Assoc 8.8% Average Coupon 2.15% Market Value 461,693,026 496,658,209 Accrued Interest 2251023 2125366 Federal Home Loan Bank 8.4% , , , , Average Purchase YTM 2.27% Federal Home Loan Mortgage Corp 6.4% Total Market Value 463,944,049 498,783,575 Average Market YTM 2.70% Income Earned 864,139 887,371 Intl Bank Recon and Development 4.0% Average S&P/Moody Rating AA/Aa1 Cont/WD 30,419,355 Inter-American Dev Bank 3.5% Par 470,475,821 501,816,977 First American Govt Obligation 2.3% Average Final Maturity 2.60 yrs Book Value 468,652,529 500,084,912 Honda ABS 2.3% Average Life 2.39 yrs Cost Value 468,439,928 499,841,573 Total 66.9% SECTOR ALLOCATION MATURITY DISTRIBUTION CREDIT QUALITY(S&P) US Treasury 31.3% 25% 21.4% Agency 23.0% 20.1% 19.8% 20% AA(62.8%) US Corp 22.6% Supras- 8.5% 15% 13.6% 14.2% ABS_ 8.0% Money Mkt Fd. 2.3% 10% 2 9zo BBB(1-6%) Comm Paper, 1.8% Foreign Corp' 0,9% 5% 2 6% NR(9.0%) Muni Bonds' 0.9% 0.4% CMOI 0.4% % 0-.25 .25•.5 .5-1 1-2 2-3 3-4 •1-5 5. A(139Y) AAA(12.8%) MBS 10.3% Maturity(yrs) PERFORMANCE REVIEW Annualized TOTAL RATE OF RETURN 1M 3M YTD 1YR 2YRS 3YRS SYRS 10YRS 11/30/2014 Orange County Sanitation District Long Term 0.93% 1.32% 1.51% 1.51% 1.34% 1.38% N/A N/A 1.17% ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index 1.06% 1.57% 1.49% 1.49% 1.25% 1.27% N/A N/A 1.11% ICE BAML US 1-5 Yr US Corp/Govt Rated AAA-BBB Indx 1.02% 1.43% 1.39% 1.39% 1.34% 1.43% N/A N/A 1.21% Chandler Asset Management-CONFIDENTIAL Page 1 Execution Time:1/2/2019 9:19:40 PM Orange County Sanitation District Investment Transactions and Balances in the State of California Local Agency Investment Fund December 31, 2018 Par Value Book Value Market Value Rate Yield Balance December 1, 2018 $64,925,783 $64,925,783 $64,925,783 2.29 2.29 Deposits: Total Deposits - - - 2.29 2.29 Quarterly Interest Distribution - - - 2.29 2.29 Withdrawals: 12/27/2019 (4,700,000) (4,700,000) (4,700,000) 2.29 2.29 12/31/2019 (2,800,000) (2,800,000) (2,800,000) 2.29 2.29 12/31/2019 (2,300,000) (2,300,000) (2,300,000) 2.29 2.29 Total Withdrawals (9,800,000) (9,800,000) (9,800,000) 2.29 2.29 Balance December 31, 2018 $55,125,783 $55,125,783 $55,125,783 2.29 2.29 U.S. Bank Asset Summary - Liquid As of 12/31/2018 Industry Name Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss Cash Equivalents COMMERCIAL PAPER 5,000,000.0000 4,935,123.19 4,947,315.00 2.81 12,191.81 FIRST AMERICAN SHORT TERM FDS 4,056,666.3200 4,056,666.32 4,056,666.32 2.30 - U. S. GOVERNMENT 50,000,000.0000 49,799,828.50 49,844,800.00 28.31 44,971.50 US AGY-SHORT TERM CASH EQUIV 3,662,000.0000 3,644,403.71 3,654,217.80 2.08 9,814.09 Cash Equivalents Total 62,718,666.3200 62,436,021.72 62,502,999.12 35.50 66,977.40 Fixed Income FINANCE 6,920,000.0000 6,894,283.90 6,896,730.70 3.92 2,446.80 INDUSTRIAL 1,083,000.0000 1,069,484.16 1,071,097.83 0.61 1,613.67 SHORT TERM FUNDS 5,500,000.0000 5,497,312.00 5,499,020.00 3.12 1,708.00 SUPRANATIONAL 5,000,000.0000 4,992,912.50 4,996,050.00 2.84 3,137.50 TELECOMMUNICATION SERVICES 1,130,000.0000 1,114,812.80 1,117,649.10 0.63 2,836.30 U. S. GOVERNMENT 87,500,000.0000 87,150,703.15 87,278,100.00 49.58 127,396.85 US AGY- LONG TERM ISSUES 6,700,000.0000 6,687,800.69 6,689,513.00 3.80 1,712.31 Fixed Income Total 113,833,000.0000 113,407,309.20 113,548,160.63 64.50 140,851.43 Grand Total 176,551,666.3200 175,843,330.92 176,051,159.75 100.00 207,828.83 1 of 1 U.S. Bank Asset Summary - Long-Term As of 12/31/2018 Industry Name Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss Cash Equivalents COMMERCIAL PAPER 9,000,000.0000 8,921,565.00 8,966,520.00 1.81 44,955.00 FIRST AMERICAN SHORT TERM FDS 11,433,011.6900 11,433,011.69 11,433,011.69 2.30 - U. S. GOVERNMENT 10,000,000.0000 9,986,250.00 9,987,200.00 2.01 950.00 Cash Equivalents Total 30,433,011.6900 30,340,826.69 30,386,731.69 6.12 45,905.00 Fixed Income CONSUMER DISCRETIONARY 6,845,000.0000 6,888,498.15 6,840,625.05 1.38 (47,873.10) CONSUMER STAPLES 3,880,000.0000 3,878,991.40 3,920,002.80 0.79 41,011.40 ENERGY 12,350,000.0000 12,297,131.90 12,170,578.00 2.45 (126,553.90) FINANCE 56,689,000.0000 55,658,821.99 53,490,416.57 10.77 (2,168,405.42) FOREIGN CORPORATE 4,500,000.0000 4,429,980.00 4,365,585.00 0.88 (64,395.00) HEALTH CARE 6,000,000.0000 5,958,315.00 5,964,000.00 1.20 5,685.00 INDUSTRIAL 9,410,000.0000 9,435,259.50 9,397,297.10 1.89 (37,962.40) INFORMATION TECHNOLOGY 20,715,000.0000 20,582,924.95 20,313,738.95 4.09 (269,186.00) INVESTMENT GRADE-MUNI REVENUE 4,240,000.0000 4,307,633.89 4,338,341.60 0.87 30,707.71 MTG RELATED SECURITY 43,501,942.4800 43,417,757.48 43,489,838.04 8.76 72,080.56 SUPRANATIONAL 43,005,000.0000 42,728,425.25 42,349,138.10 8.53 (379,287.15) U. S. GOVERNMENT 137,307,439.0700 135,767,573.30 134,978,096.48 27.18 (789,476.82) U.S. GOVERNMENT TIPS 11,075,584.0000 10,930,864.09 10,620,709.77 2.14 (310,154.32) US AGY- LONG TERM ISSUES 114,465,000.0000 114,550,644.65 114,051,140.65 22.96 (499,504.00) Fixed Income Total 473,983,965.5500 470,832,821.55 466,289,508.11 93.88 (4,543,313.44) Grand Total 504,416,977.2400 501,173,648.24 496,676,239.80 100.00 (4,497,408.44) 1 of 1 004719 XBNE0001013411 E BNY ME LLON Statement Period 12J01/2018 Through 12/31/2018 Account 300282 Base Currency=USD OCSD LIBERTY MUTUAL Statement of Assets Held by Asset Classification Accrued Estimated Market Shares/Par Value Asset Description Market Price Market Value Cost Average Cost Income Income Yield FIXED INCOME 3,600,000.000 UNITED STATES TREASURY NOTE/BOND 99.56100 3,584,196.00 3,553,031.25 98.6953' 7c;0:•,, 31.500.00 oAft CUSIP:912828052 MATURITY DATE:04/15/2019 RATE:0.875% MOODY'S Aaa Total FIXED INCOME 3,584,196.00 3,553,031.25 6,750.00 31,500.00 0.88% CASH AND SHORT TERM CASH BALANCE 61,944.16 61.944 16 0.00000 coo 000 0.00% Total CASH AND SHORT TERM 61,94-4.16 61,944.16 Q00 Q00 0.00% ACCOUNT TOTALS 3,646,140.16 3,614,975.41 6,750.00 31,500.00 0.861% Total Market Value Plus Total Accrued Income 3.652.890.16 Statement of Transactions by Transaction Date Realized Transaction Date Transaction Description Income Principal cost Gains/Losses No Transactions This Period Cumulative realized capital gain and loss position from 12/31/2017 for securities held in principal of account: a Short Term: 9,984.37' Long Term: 0.00 N The above gain and loss position does not include transactions where tax cost information is incomplete or unavailable. a 0 vi N m The Bank of New York Mellon may utilize subsidiaries and affiliates to provide services and certain products to the Account. Subsidiaries and affiliates may be compensated for their services and products. The value of securities set forth on this Account Statement are determined by The Bank of New York Melton for Corporate Trust on the basis of market prices and information obtained by The Bank of New York Mellon from o unaffiliated third parties(including independent pricing vendors)("third party pricing services'). The Bank of New York Mellon has not venfied such market values or information and makes no assurances as to the accuracy or correctness of such market values or information or that the market values set forth on this Account Statement reflect the value of the securities that can be realized upon the sale of such securities. In addition,the market values for securities set forth in this Account Statement may differ from the market prices and information for the same securities used by other business units of The Bank of New York Mellon or its subsidiaries or affiliates based upon market prices and information received from other third party pricing services utilized by such other business units. Corporate Trust does not compare its market values with those used by,or reconcile different market values w� used by,other business units of The Bank of New York Mellon or its subsidiaries or its affiliates. The Bank of New York Mellon shall not be liable for any loss,damage or expense incurred as a result of or arising from or N related to the market values or informaton provided by third party pricing services or the differences in market prices or information provided by other third party pricing services. w U.S. Bank Investment Listing -Yield As of 12/31/2018 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Cash Equivalents 21687BW D9 COOPERATIEVE CENTRAL C P 9/13/19 0.0000% 2,000,000.0000 97.85 1,957,864.44 1,956,960.00 Cash Equivalents 313384BF5 F H L B DISC NTS 1/30/19 0.0000% 3,012,000.0000 N/A N/A 99.82 2,996,848.58 3,006,427.80 Cash Equivalents 313384CE7 F H L B DISC NTS 2/22/19 0.0000% 650,000.0000 N/A N/A 99.66 647,555.13 647,790.00 Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 2.2727% 4,056,666.3200 100.00 4,056,666.32 4,056,666.32 Cash Equivalents 31846V567 FIRST AM GOVT OB FD CL Z 2.2727% 11,433,011.6900 100.00 11,433,011.69 11,433,011.69 Cash Equivalents 62479MPK3 MUFG BANK LTD NY BRAN C P 2/19/19 0.0000% 1,500,000.0000 99.63 1,486,927.50 1,494,420.00 Cash Equivalents 62479MPK3 MUFG BANK LTD NY BRAN C P 2/19/19 0.0000% 9,000,000.0000 99.63 8,921,565.00 8,966,520.00 Cash Equivalents 89233HP65 TOYOTA MOTOR CREDIT CO C P 2/06/19 0.0000% 1,500,000.0000 99.73 1,490,331.25 1,495,935.00 Cash Equivalents 912796UK3 U S TREASURY BILL 1/22/19 2.2979% 5,000,000.0000 N/A N/A 99.87 4,993,125.00 4,993,600.00 Cash Equivalents 912796UK3 U S TREASURY BILL 1/22/19 2.2979% 10,000,000.0000 N/A N/A 99.87 9,986,250.00 9,987,200.00 Cash Equivalents 912796PP8 U S TREASURY BILL 1/31/19 2.2354% 5,000,000.0000 N/A N/A 99.82 4,958,270.17 4,990,800.00 Cash Equivalents 912796UN7 U S TREASURY BILL 2/12/19 2.3866% 20,000,000.0000 N/A N/A 99.73 19,939,433.33 19,945,000.00 Cash Equivalents 912796QZ5 U S TREASURY BILL 3/07/19 2.3525% 20,000,000.0000 N/A N/A 99.58 19,909,000.00 19,915,400.00 Fixed Income 00440EAP2 ACE INA HOLDINGS 2.700% 3/13/23 2.7630% 2,000,000.0000 A3 A 97.72 1,937,000.00 1,954,400.00 Fixed Income 00440EAUl ACE INA HOLDINGS 2.875% 11/03/22 2.8996% 4,169,000.0000 A3 A 99.15 4,232,453.17 4,133,688.57 Fixed Income 02587AAJ3 AMERICAN EXPRESS 1.930% 9/15/22 1.9531% 6,270,000.0000 AAA N/A 98.82 6,174,085.15 6,195,825.90 Fixed Income 02665WAH4 AMERICAN HONDA MTN 2.250% 8/15/19 2.2606% 4,000,000.0000 A2 A+ 99.53 4,046,640.00 3,981,200.00 Fixed Income 02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 3.4490% 845,000.0000 A2 A+ 100.03 843,538.15 845,245.05 Fixed Income 02665WCQ2 AMERICAN HONDA MTN 3.625% 10/10/23 3.5995% 2,000,000.0000 A2 A+ 100.71 1,998,320.00 2,014,180.00 Fixed Income 03215PFN4 AMRESCO 3.44628% 6/25/29 3.6011% 133,743.2900 N/A A+ 95.70 100,432.85 127,995.00 Fixed Income 037833BS8 APPLE INC 2.250% 2/23/21 2.2767% 4,000,000.0000 AA1 AA+ 98.83 4,050,840.00 3,953,120.00 Fixed Income 06370RQY8 BANK MONTREAL C D 2.860% 6/11/19 2.8599% 2,000,000.0000 100.01 2,000,000.00 2,000,100.00 Fixed Income 06406HCW7 BANK NY MELLON MTN 2.300% 9/11/19 2.3120% 2,120,000.0000 Al A 99.48 2,142,175.20 2,108,976.00 Fixed Income 06051GFD6 BANK OF AMERICA CORP 2.650% 4/01/19 2.6528% 1,500,000.0000 A3 A- 99.90 1,499,910.00 1,498,425.00 Fixed Income 06406RAA5 BANK OF NY MTN 2.600% 2/07/22 2.6468% 2,500,000.0000 Al A 98.23 2,504,475.00 2,455,750.00 Fixed Income 06406RAE7 BANK OF NY MTN 2.950% 1/29/23 2.9972% 1,500,000.0000 Al A 98.43 1,486,065.00 1,476,390.00 Fixed Income 084670BR8 BERKSHIRE HATHAWAY 2.750% 3/15/23 2.8013% 2,500,000.0000 AA2 AA 98.17 2,440,950.00 2,454,200.00 Fixed Income 084664BT7 BERKSHIRE HATHAWAY 3.000% 5/15/22 3.0069% 4,000,000.0000 AA2 AA 99.77 4,131,120.00 3,990,840.00 Fixed Income 166764BG4 CHEVRON CORP 2.100% 5/16/21 2.1413% 2,500,000.0000 AA2 AA 98.07 2,485,350.00 2,451,750.00 Fixed Income 166764AH3 CHEVRON CORP 3.191% 6/24/23 3.1960% 3,500,000.0000 AA2 AA 99.84 3,441,095.00 3,494,505.00 Fixed Income 532457BF4 ELI LILLY CO 1.950% 3/15/19 1.9544% 4,000,000.0000 A2 AA- 99.77 4,009,675.00 3,990,920.00 Fixed Income 30231GAV4 EXXON MOBIL 2.222% 3/01/21 2.2545% 3,000,000.0000 AAA AA+ 98.56 3,016,097.40 2,956,800.00 Fixed Income 3130A7CV5 F H L B DEB 1.375% 2/18/21 1.4077% 5,365,000.0000 AAA AA+ 97.68 5,343,325.40 5,240,317.40 Fixed Income 3133782M2 F H L B DEB 1.500% 3/08/19 1.5026% 4,200,000.0000 AAA AA+ 99.82 4,191,684.00 4,192,608.00 Fixed Income 3133782M2 F H L B DEB 1.500% 3/08/19 1.5026% 7,500,000.0000 AAA AA+ 99.82 7,589,190.00 7,486,800.00 Fixed Income 313383HU8 F H L B DEB 1.750% 6/12/20 1.7704% 5,000,000.0000 AAA AA+ 98.85 5,008,950.00 4,942,300.00 Fixed Income 313379RB7 F H L B DEB 1.875% 6/11/21 1.9105% 4,000,000.0000 AAA AA+ 98.14 4,030,160.00 3,925,600.00 1 of 5 U.S. Bank Investment Listing -Yield As of 12/31/2018 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 313383QR5 F H L B DEB 3.250% 6/09/23 3.1697% 5,000,000.0000 AAA AA+ 102.53 5,083,350.00 5,126,700.00 Fixed Income 313383YJ4 F H L B DEB 3.375% 9/08/23 3.2766% 6,475,000.0000 AAA AA+ 103.00 6,566,064.50 6,669,379.50 Fixed Income 3130AOF70 F H L B DEB 3.375% 12/08/23 3.2750% 8,125,000.0000 AAA AA+ 103.06 8,342,143.75 8,373,218.75 Fixed Income 313384CC1 F H L B DISC NTS 2/20/19 0.0000% 1,700,000.0000 N/A N/A 99.67 1,693,740.69 1,694,441.00 Fixed Income 3137EAEN5 F H L M C 2.750% 6/19/23 2.7340% 10,000,000.0000 AAA AA+ 100.58 9,956,500.00 10,058,400.00 Fixed Income 3137EADM8 F H L M C M T N 1.250% 10/02/19 1.2630% 7,500,000.0000 AAA AA+ 98.97 7,399,650.00 7,422,525.00 Fixed Income 3137EAEK1 F H L M C M T N 1.875% 11/17/20 1.8986% 5,000,000.0000 N/A AA+ 98.76 4,986,225.00 4,937,750.00 Fixed Income 3137EAEL9 F H L M C M T N 2.375% 2/16/21 2.3833% 7,500,000.0000 AAA AA+ 99.65 7,484,475.00 7,473,975.00 Fixed Income 3137EACA5 F H L M C M T N 3.750% 3/27/19 3.7385% 800,000.0000 AAA AA+ 100.31 802,376.00 802,464.00 Fixed Income 31348SWZ3 F H L M C#786064 4.270% 1/01/28 4.1795% 1,998.8600 N/A N/A 102.17 1,950.20 2,042.16 Fixed Income 3133TCE95 F H L M C MLTCL MTG 3.587% 8/15/32 3.5421% 12,390.7500 101.27 12,403.72 12,547.80 Fixed Income 31398VJ98 F H L M C MLTCL MTG 4.251% 1/25/20 4.2135% 900,000.0000 N/A N/A 100.89 951,046.88 908,019.00 Fixed Income 31394JY35 F H L M C MLTCL MTG 6.500% 9/25/43 5.7094% 771,463.1900 N/A N/A 113.85 873,682.05 878,295.41 Fixed Income 3135GOF73 F N M A 1.500% 11/30/20 1.5303% 7,500,000.0000 AAA AA+ 98.02 7,370,726.00 7,351,350.00 Fixed Income 3135GOT45 F N M A 1.875% 4/05/22 1.9135% 5,000,000.0000 AAA AA+ 97.99 4,972,500.00 4,899,400.00 Fixed Income 3135GOS38 F N M A 2.000% 1/05/22 2.0300% 3,000,000.0000 AAA AA+ 98.52 2,994,570.00 2,955,600.00 Fixed Income 3135GOU35 F N M A 2.750% 6/22/21 2.7347% 7,500,000.0000 AAA AA+ 100.56 7,515,225.00 7,542,075.00 Fixed Income 31371 NUC7 F N M A#257179 4.500% 4/01/28 4.3355% 15,951.3200 N/A N/A 103.79 16,870.09 16,556.51 Fixed Income 31376KT22 F N M A#357969 5.000% 9/01/35 4.7074% 110,535.9000 N/A N/A 106.22 118,826.07 117,406.81 Fixed Income 31381 PDA3 F N M A#466397 3.400% 11/01/20 3.3684% 343,782.8600 N/A N/A 100.94 336,343.20 347,007.54 Fixed Income 31403DJZ3 F N M A#745580 5.000% 6/01/36 4.7094% 105,151.3100 N/A N/A 106.17 113,037.67 111,639.15 Fixed Income 31403GXF4 F N M A#748678 5.000% 10/01/33 4.7563% 1,859.9200 N/A N/A 105.12 1,999.42 1,955.22 Fixed Income 31406PQY8 F N M A#815971 5.000% 3/01/35 4.7107% 184,549.3900 N/A N/A 106.14 198,390.61 195,884.41 Fixed Income 31406XWT5 F N M A#823358 3.972% 2/01/35 3.8033% 113,183.2800 N/A N/A 104.44 112,299.04 118,202.96 Fixed Income 31407BXH7 F N M A#826080 5.000% 7/01/35 4.7068% 20,825.1500 N/A N/A 106.23 22,387.02 22,122.56 Fixed Income 3141OF4V4 F N M A#888336 5.000% 7/01/36 4.7088% 207,540.4600 N/A N/A 106.19 223,105.99 220,376.84 Fixed Income 3138EG6F6 F N M A#AL0869 4.500% 6/01/29 4.3340% 11,744.2100 N/A N/A 103.83 12,420.66 12,194.13 Fixed Income 31417YAY3 F N M A#MA0022 4.500% 4/01/29 4.3338% 19,087.0300 N/A N/A 103.83 20,186.41 19,818.83 Fixed Income 3135GOJ20 F N M A DEB 1.375% 2/26/21 1.4093% 10,000,000.0000 AAA AA+ 97.56 10,040,950.00 9,756,300.00 Fixed Income 3135GOD75 F N M A DEB 1.500% 6/22/20 1.5223% 5,000,000.0000 AAA AA+ 98.54 4,955,650.00 4,926,850.00 Fixed Income 3135GOT94 F N M A DEB 2.375% 1/19/23 2.3929% 5,000,000.0000 AAA AA+ 99.25 4,910,990.00 4,962,600.00 Fixed Income 31397QREO F N M A GTD REMIC 1.113% 2/25/41 3.1305% 214,903.6500 N/A N/A 101.78 214,836.49 218,733.23 Fixed Income 36225CAZ9 G N M A 11#080023 3.125% 12/20/26 3.0349% 18,348.3000 N/A N/A 102.97 18,651.43 18,892.88 Fixed Income 36225CC20 G N M A 11#080088 3.625% 6/20/27 3.5429% 17,864.7700 N/A N/A 102.32 18,255.57 18,278.88 Fixed Income 36225CNM4 G N M A 11#080395 3.625% 4/20/30 3.5133% 7,439.0700 N/A N/A 103.18 7,371.62 7,675.48 Fixed Income 36225CN28 G N M A 11#080408 3.625% 5/20/30 3.5130% 57,165.6200 N/A N/A 103.19 56,585.03 58,987.49 Fixed Income 36225DCB8 G N M A 11#080965 3.750% 7/20/34 3.6115% 55,669.5600 N/A N/A 103.84 55,634.77 57,805.04 2 of 5 U.S. Bank Investment Listing -Yield As of 12/31/2018 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 369550BE7 GENERAL DYNAMICS 3.000% 5/11/21 2.9976% 3,160,000.0000 A2 A+ 100.08 3,138,038.00 3,162,559.60 Fixed Income 36962G7MO GENERAL ELEC CA MTN 2.200% 1/09/20 2.2325% 5,000,000.0000 BAA1 BBB+ 98.54 5,014,950.00 4,927,200.00 Fixed Income 43814RACO HONDA AUTO 1.210% 12/18/20 1.2210% 1,893,324.6100 N/A AAA 99.10 1,872,542.41 1,876,265.76 Fixed Income 43814QAC2 HONDA AUTO 1.390% 4/15/20 1.3955% 451,323.7300 AAA N/A 99.60 451,314.97 449,536.49 Fixed Income 43814PAB6 HONDAAUTO 1.570% 1/21/20 1.5737% 284,988.9300 N/A AAA 99.77 284,963.60 284,324.91 Fixed Income 43814PAC4 HONDA AUTO 1.790% 9/20/21 1.8122% 3,090,000.0000 N/A AAA 98.78 3,040,994.53 3,052,147.50 Fixed Income 43815HAC1 HONDA AUTO 2.950% 8/22/22 2.9481% 3,970,000.0000 AAA N/A 100.06 3,969,455.32 3,972,501.10 Fixed Income 43814UAG4 HONDA AUTO 3.010% 5/18/22 3.0070% 1,710,000.0000 N/A AAA 100.10 1,709,962.72 1,711,692.90 Fixed Income 404280BF5 HSBC HOLDINGS PLC 2.650% 1/05/22 2.7316% 4,500,000.0000 A2 A 97.01 4,429,980.00 4,365,585.00 Fixed Income 40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 2.3740% 2,500,000.0000 A2 A 98.99 2,472,287.50 2,474,750.00 Fixed Income 44932HAH6 IBM CREDIT CORP 3.000% 2/06/23 3.0586% 5,670,000.0000 Al A 98.08 5,603,264.40 5,561,362.80 Fixed Income 4581XOCX4 INTER AMER DEV BK 1.625% 5/12/20 1.6461% 3,035,000.0000 AAA AAA 98.72 3,027,807.05 2,996,091.30 Fixed Income 4581XOCZ9 INTER AMER DEV BK 1.750% 9/14/22 1.8076% 6,500,000.0000 N/A N/A 96.81 6,249,655.00 6,292,845.00 Fixed Income 4581XOCW6 INTER AMER DEV BK 2.125% 1/18/22 2.1560% 3,000,000.0000 AAA N/A 98.56 2,996,310.00 2,956,860.00 Fixed Income 4581XOCS5 INTER AMERICAN DEVEL 1.875% 3/15/21 1.9033% 5,000,000.0000 AAA AAA 98.51 5,059,610.00 4,925,700.00 Fixed Income 459058FY4 INTL BK 2.000% 1/26/22 2.0358% 10,000,000.0000 AAA N/A 98.24 10,006,350.00 9,824,300.00 Fixed Income 45950KCMO INTL BK M T N 2.250% 1/25/21 2.2649% 2,970,000.0000 AAA AAA 99.34 2,961,268.20 2,950,516.80 Fixed Income 459052AP1 INTL BK DISC NTS 1/14/19 0.0000% 5,000,000.0000 N/A N/A 99.92 4,992,912.50 4,996,050.00 Fixed Income 459052AP1 INTL BK DISC NTS 1/14/19 0.0000% 10,000,000.0000 N/A N/A 99.92 9,985,825.00 9,992,100.00 Fixed Income 45950KCJ7 INTL FINANCE CORP 1.125% 7/20/21 1.1667% 2,500,000.0000 AAA AAA 96.43 2,441,600.00 2,410,725.00 Fixed Income 24422ESS9 JOHN DEERE CAP MTN 2.300% 9/16/19 2.3131% 5,000,000.0000 A2 A 99.43 5,046,984.00 4,971,650.00 Fixed Income 24422EUM9 JOHN DEERE MTN 3.650% 10/12/23 3.6122% 1,250,000.0000 A2 A 101.05 1,250,237.50 1,263,087.50 Fixed Income 47788MAC4 JOHN DEERE OWNER 1.360% 4/15/20 1.3632% 441,203.8100 AAA N/A 99.77 441,134.37 440,171.39 Fixed Income 47788NADO JOHN DEERE OWNER 1.490% 5/15/23 1.5073% 1,151,000.0000 AAA N/A 98.85 1,131,936.56 1,137,751.99 Fixed Income 47788BABO JOHN DEERE OWNER 1.590% 4/15/20 1.5930% 262,773.5600 AAA N/A 99.81 262,750.73 262,271.66 Fixed Income 47788BAD6 JOHN DEERE OWNER 1.820% 10/15/21 1.8408% 675,000.0000 AAA N/A 98.87 674,950.59 667,372.50 Fixed Income 47788CAB8 JOHN DEERE OWNER 2.420% 10/15/20 2.4246% 1,584,682.4200 AAA N/A 99.81 1,581,463.53 1,581,687.37 Fixed Income 47788CAC6 JOHN DEERE OWNER 2.660% 4/18/22 2.6686% 1,340,000.0000 AAA N/A 99.68 1,339,903.65 1,335,658.40 Fixed Income 47788EAC2 JOHN DEERE OWNER 3.080% 11/15/22 3.0650% 4,630,000.0000 AAA N/A 100.49 4,629,649.05 4,652,594.40 Fixed Income 46625HRL6 JP MORGAN CHASE CO 2.700% 5/18/23 2.8109% 4,000,000.0000 A2 A- 96.05 3,832,440.00 3,842,120.00 Fixed Income 46625HKA7 JPMORGAN CHASE CO 2.250% 1/23/20 2.2726% 2,000,000.0000 A2 A- 99.00 1,994,880.00 1,980,080.00 Fixed Income 46625HJR2 JPMORGAN CHASE CO 2.350% 1/28/19 2.3512% 1,000,000.0000 WR N/R 99.95 998,810.00 999,510.00 Fixed Income 525ESCOY6 LEHMAN BRTH HLD ESC 0.0000% 2,000,000.0000 - 1,040,394.96 - Fixed Income 525ESCIB7 LEHMAN BRTH MTN ES 0.00001% 1/24/13 0.0005% 600,000.0000 N/A N/A 1.90 322,755.11 11,400.00 Fixed Income 58933YAF2 MERCK CO INC 2.800% 5/18/23 2.8382% 2,000,000.0000 Al AA 98.65 1,948,640.00 1,973,080.00 Fixed Income 594918BP8 MICROSOFT CORP 1.550% 8/08/21 1.5955% 3,045,000.0000 AAA AAA 97.15 3,041,385.15 2,958,126.15 Fixed Income 61747WAL3 MORGAN STANLEY 5.500% 7/28/21 5.2481% 2,800,000.0000 A3 BBB+ 104.80 3,200,848.00 2,934,372.00 3 of 5 U.S. Bank Investment Listing -Yield As of 12/31/2018 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 64971 M5E8 NEW YORK CITY NY 4.075% 11/01/20 4.0132% 1,400,000.0000 AA1 AAA 101.54 1,400,000.00 1,421,574.00 Fixed Income 65478VAD9 NISSAN AUTO 1.320% 1/15/21 1.3306% 1,051,134.7200 AAA N/A 99.20 1,042,717.43 1,042,736.15 Fixed Income 654747ABO NISSAN AUTO 1.470% 1/15/20 1.4707% 78,074.3800 AAA N/A 99.95 78,073.98 78,038.47 Fixed Income 65477UAD2 NISSAN AUTO 1.500% 9/15/21 1.5063% 1,092,704.9600 AAA N/A 99.58 1,085,875.55 1,088,137.45 Fixed Income 65478GAD2 NISSAN AUTO 1.750% 10/15/21 1.7706% 2,625,000.0000 AAA N/A 98.84 2,584,291.99 2,594,497.50 Fixed Income 65479GAD1 NISSAN AUTO 3.060% 3/15/23 3.0482% 3,560,000.0000 AAA AAA 100.39 3,559,884.66 3,573,741.60 Fixed Income 674599CK9 OCCIDENTAL PETROLEUM 2.600% 4/15/22 2.6656% 3,350,000.0000 A3 A 97.54 3,354,589.50 3,267,523.00 Fixed Income 68389XBKO ORACLE CORP 1.900% 9/15/21 1.9583% 3,000,000.0000 Al AA- 97.02 2,892,240.00 2,910,630.00 Fixed Income 69371 RN36 PACCAR FINANCIAL MTN 1.200% 8/12/19 1.2133% 1,083,000.0000 Al A+ 98.90 1,069,484.16 1,071,097.83 Fixed Income 69353REX2 PNC BANK MTN 1.450% 7/29/19 1.4626% 1,890,000.0000 A2 A 99.14 1,872,668.70 1,873,746.00 Fixed Income 69353RFL7 PNC BANK NA 3.500% 6/08/23 3.4931% 5,000,000.0000 A2 A 100.20 4,993,318.05 5,009,900.00 Fixed Income 69353RCH9 PNC BANK NA MTN 2.200% 1/28/19 2.2011% 1,030,000.0000 W R N/R 99.95 1,028,805.20 1,029,474.70 Fixed Income 69353RFB9 PNC BANK NA MTN 2.625% 2/17/22 2.6858% 1,000,000.0000 A2 A 97.74 974,940.00 977,370.00 Fixed Income 73358WAG9 PORT AUTH NY NJ 5.309% 12/01/19 5.1872% 2,440,000.0000 AA3 AA- 102.35 2,507,633.89 2,497,315.60 Fixed Income 747525AD5 QUALCOMM INC 2.250% 5/20/20 2.2817% 5,000,000.0000 A2 A- 98.61 4,995,195.40 4,930,500.00 Fixed Income 83162CLJO S B A GTD DEV PART 6.340% 3/01/21 6.2055% 23,619.2100 N/A N/A 102.17 23,619.21 24,131.04 Fixed Income 78445JAA5 S L M A 4.07854% 4/25/23 4.0574% 25,862.2100 BAA3 A 100.52 25,757.28 25,997.21 Fixed Income 89113XUZ5 TORONTO DOMINION C D 2.150% 1/24/19 2.1506% 1,000,000.0000 99.97 997,312.00 999,740.00 Fixed Income 89113X3W2 TORONTO DOMINION C D 2.700% 6/07/19 2.7028% 1,000,000.0000 P-1 A-1+ 99.90 1,000,000.00 998,970.00 Fixed Income 89238BAB8 TOYOTA AUTO 2.100% 10/15/20 2.1082% 3,973,491.1200 AAA AAA 99.61 3,973,085.03 3,957,994.50 Fixed Income 912828W UO U S TREASURY I P S 0.125% 7/15/24 0.1304% 11,075,584.0000 AAA N/A 95.89 10,930,864.09 10,620,709.77 Fixed Income 912828TH3 U S TREASURY NT 0.875% 7/31/19 0.8835% 10,000,000.0000 AAA N/A 99.04 9,898,437.50 9,903,900.00 Fixed Income 912828V56 U S TREASURY NT 1.125% 1/31/19 1.1261% 3,000,000.0000 AAA N/A 99.90 2,991,328.13 2,997,120.00 Fixed Income 912828T34 U S TREASURY NT 1.125% 9/30/21 1.1664% 7,000,000.0000 AAA N/A 96.45 6,757,914.08 6,751,430.00 Fixed Income 912828SD3 U S TREASURY NT 1.250% 1/31/19 1.2511% 5,000,000.0000 AAA N/A 99.91 4,984,765.63 4,995,700.00 Fixed Income 912828W97 U S TREASURY NT 1.250% 3/31/19 1.2536% 5,000,000.0000 AAA N/A 99.72 4,965,429.69 4,985,750.00 Fixed Income 912828T67 U S TREASURY NT 1.250% 10/31/21 1.2931% 6,000,000.0000 AAA N/A 96.66 5,813,691.98 5,799,840.00 Fixed Income 912828N89 U S TREASURY NT 1.375% 1/31/21 1.4073% 6,000,000.0000 AAA N/A 97.71 5,895,840.41 5,862,420.00 Fixed Income 9128282K5 U S TREASURY NT 1.375% 7/31/19 1.3845% 10,000,000.0000 AAA N/A 99.32 9,928,515.63 9,931,600.00 Fixed Income 9128281-99 U S TREASURY NT 1.375% 10/31/20 1.4035% 10,000,000.0000 AAA N/A 97.97 9,850,311.40 9,796,900.00 Fixed Income 9128281333 U S TREASURY NT 1.500% 1/31/19 1.5010% 54,500,000.0000 AAA N/A 99.93 54,382,226.57 54,464,030.00 Fixed Income 9128281333 U S TREASURY NT 1.500% 1/31/19 1.5010% 11,000,000.0000 AAA N/A 99.93 11,042,439.19 10,992,740.00 Fixed Income 912828SN1 U S TREASURY NT 1.500% 3/31/19 1.5034% 5,000,000.0000 AAA N/A 99.77 5,016,423.00 4,988,700.00 Fixed Income 912828XE5 U S TREASURY NT 1.500% 5/31/20 1.5224% 5,000,000.0000 AAA N/A 98.53 4,966,423.00 4,926,550.00 Fixed Income 912828G61 U S TREASURY NT 1.500% 11/30/19 1.5156% 7,500,000.0000 AAA N/A 98.97 7,449,634.50 7,422,675.00 Fixed Income 912828R69 U S TREASURY NT 1.625% 5/31/23 1.6867% 5,000,000.0000 AAA N/A 96.34 4,757,226.56 4,817,000.00 Fixed Income 912828WS5 U S TREASURY NT 1.625% 6/30/19 1.6324% 2,000,000.0000 AAA N/A 99.55 1,996,861.44 1,990,940.00 4 of 5 U.S. Bank Investment Listing -Yield As of 12/31/2018 Asset Category CUSIP Asset Short Name Yield Shares/Units Moody's S&P Rating Price Cost Basis Market Value Fixed Income 912828WW U S TREASURY NT 1.625% 7/31/19 1.6337% 5,000,000.0000 AAA N/A 99.47 5,012,388.70 4,973,250.00 Fixed Income 912828,176 U S TREASURY NT 1.750% 3/31/22 1.7901% 5,000,000.0000 AAA N/A 97.76 4,976,383.94 4,887,900.00 Fixed Income 912828XW5 U S TREASURY NT 1.750% 6/30/22 1.7934% 5,000,000.0000 AAA N/A 97.58 4,973,454.25 4,878,900.00 Fixed Income 912828F39 U S TREASURY NT 1.750% 9/30/19 1.7614% 5,800,000.0000 AAA N/A 99.35 5,873,186.87 5,762,416.00 Fixed Income 9128281-57 U S TREASURY NT 1.750% 9/30/22 1.7975% 13,000,000.0000 AAA N/A 97.36 12,763,554.69 12,656,670.00 Fixed Income 912828U65 U S TREASURY NT 1.750% 11/30/21 1.7860% 7,000,000.0000 AAA N/A 97.98 6,900,492.20 6,858,880.00 Fixed Income 912828V72 U S TREASURY NT 1.875% 1/31/22 1.9090% 3,000,000.0000 AAA N/A 98.22 3,004,814.74 2,946,570.00 Fixed Income 9128281-24 U S TREASURY NT 1.875% 8/31/22 1.9160% 6,000,000.0000 AAA N/A 97.86 5,987,832.60 5,871,540.00 Fixed Income 912828M80 U S TREASURY NT 2.000% 11/30/22 2.0371% 8,000,000.0000 AAA N/A 98.18 7,907,500.00 7,854,400.00 Fixed Income 912828N30 U S TREASURY NT 2.125% 12/31/22 2.1554% 5,000,000.0000 AAA N/A 98.59 4,926,562.50 4,929,500.00 Fixed Income 9128284D9 U S TREASURY NT 2.500% 3/31/23 2.4997% 10,000,000.0000 AAA N/A 100.01 9,887,265.63 10,001,200.00 Fixed Income 913366EJ5 UNIV OF CALIFORNIA 5.035% 5/15/21 4.8015% 400,000.0000 AA3 AA- 104.86 400,000.00 419,452.00 Fixed Income 90331HNL3 US BANK NA MTN 2.850% 1/23/23 2.8995% 5,000,000.0000 Al AA- 98.29 4,981,600.00 4,914,650.00 Fixed Income 931142EK5 WALMART INC 3.400% 6/26/23 3.3653% 3,880,000.0000 AA2 AA 101.03 3,878,991.40 3,920,002.80 Fixed Income 25468PDL7 WALT DISNEY MTN 0.875% 7/12/19 0.8847% 1,130,000.0000 A2 A+ 98.91 1,114,812.80 1,117,649.10 Fixed Income 94974BGM6 WELLS FARGO CO MTN 2.600% 7/22/20 2.6254% 5,000,000.0000 A2 A- 99.03 5,001,650.00 4,951,550.00 Fixed Income 94974BFU9 WELLS FARGO COM MTN 2.125% 4/22/19 2.1313% 1,500,000.0000 A2 A- 99.71 1,494,090.00 1,495,575.00 Fixed Income 95000U2138 WELLS FARGO MTN 2.625% 7/22/22 2.7223% 3,000,000.0000 A2 A- 96.43 2,954,520.00 2,892,780.00 Fixed Income 96130ABJ6 W ESTPAC BKING C D 2.970% 9/13/19 2.9696% 1,500,000.0000 100.01 1,500,000.00 1,500,210.00 Total Consolidated 672,727,399.55 5of5 U.S. Bank Asset Detail - Consolidated As of 12/31/2018 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss Cash Equivalents Total 21687BWD9 COOPERATIEVE CENTRAL C P 9/13/19 97.85 2,000,000.0000 1,957,864.44 1,956,960.00 0.29 (904.44) 313384BF5 F H L B DISC NTS 1/30/19 99.82 3,012,000.0000 2,996,848.58 3,006,427.80 0.45 9,579.22 313384CE7 F H L B DISC NTS 2/22/19 99.66 650,000.0000 647,555.13 647,790.00 0.10 234.87 31846V567 FIRST AM GOVT OB FD CL Z 100.00 4,056,666.3200 4,056,666.32 4,056,666.32 0.60 - 31846V567 FIRST AM GOVT OB FD CL Z 100.00 11,433,011.6900 11,433,011.69 11,433,011.69 1.70 - 62479MPK3 MUFG BANK LTD NY BRAN C P 2/19/19 99.63 1,500,000.0000 1,486,927.50 1,494,420.00 0.22 7,492.50 62479MPK3 MUFG BANK LTD NY BRAN C P 2/19/19 99.63 9,000,000.0000 8,921,565.00 8,966,520.00 1.33 44,955.00 89233HP65 TOYOTA MOTOR CREDIT CO C P 2/06/19 99.73 1,500,000.0000 1,490,331.25 1,495,935.00 0.22 5,603.75 912796PP8 U S TREASURY BILL 1/31/19 99.82 5,000,000.0000 4,958,270.17 4,990,800.00 0.74 32,529.83 912796QZ5 U S TREASURY BILL 3/07/19 99.58 20,000,000.0000 19,909,000.00 19,915,400.00 2.96 6,400.00 912796UK3 U S TREASURY BILL 1/22/19 99.87 5,000,000.0000 4,993,125.00 4,993,600.00 0.74 475.00 912796UK3 U S TREASURY BILL 1/22/19 99.87 10,000,000.0000 9,986,250.00 9,987,200.00 1.48 950.00 912796UN7 U S TREASURY BILL 2/12/19 99.73 20,000,000.0000 19,939,433.33 19,945,000.00 2.96 5,566.67 Cash Equivalents Total 93,151,678.0100 92,776,848.41 92,889,730.81 13.81 112,882.40 Fixed Income 00440EAP2 ACE INA HOLDINGS 2.700% 3/13/23 97.72 2,000,000.0000 1,937,000.00 1,954,400.00 0.29 17,400.00 00440EAUl ACE INA HOLDINGS 2.875%11/03/22 99.15 4,169,000.0000 4,232,453.17 4,133,688.57 0.61 (98,764.60) 02587AAJ3 AMERICAN EXPRESS 1.930% 9/15/22 98.82 6,270,000.0000 6,174,085.15 6,195,825.90 0.92 21,740.75 02665WAH4 AMERICAN HONDA MTN 2.250% 8/15/19 99.53 4,000,000.0000 4,046,640.00 3,981,200.00 0.59 (65,440.00) 02665WCJ8 AMERICAN HONDA MTN 3.450% 7/14/23 100.03 845,000.0000 843,538.15 845,245.05 0.13 1,706.90 02665WCQ2 AMERICAN HONDA MTN 3.625%10/10/23 100.71 2,000,000.0000 1,998,320.00 2,014,180.00 0.30 15,860.00 03215PFN4 AMRESCO 3.44628% 6/25/29 95.70 133,743.2900 100,432.85 127,995.00 0.02 27,562.15 037833BS8 APPLE INC 2.250% 2/23/21 98.83 4,000,000.0000 4,050,840.00 3,953,120.00 0.59 (97,720.00) 06370RQY8 BANK MONTREAL C D 2.860% 6/11/19 100.01 2,000,000.0000 2,000,000.00 2,000,100.00 0.30 100.00 06406HCW7 BANK NY MELLON MTN 2.300% 9/11/19 99.48 2,120,000.0000 2,142,175.20 2,108,976.00 0.31 (33,199.20) 06051GFD6 BANK OF AMERICA CORP 2.650% 4/01/19 99.90 1,500,000.0000 1,499,910.00 1,498,425.00 0.22 (1,485.00) 06406RAA5 BANK OF NY MTN 2.600% 2/07/22 98.23 2,500,000.0000 2,504,475.00 2,455,750.00 0.37 (48,725.00) 06406RAE7 BANK OF NY MTN 2.950% 1/29/23 98.43 1,500,000.0000 1,486,065.00 1,476,390.00 0.22 (9,675.00) 084670BR8 BERKSHIRE HATHAWAY 2.750% 3/15/23 98.17 2,500,000.0000 2,440,950.00 2,454,200.00 0.36 13,250.00 084664BT7 BERKSHIRE HATHAWAY 3.000% 5/15/22 99.77 4,000,000.0000 4,131,120.00 3,990,840.00 0.59 (140,280.00) 166764BG4 CHEVRON CORP 2.100% 5/16/21 98.07 2,500,000.0000 2,485,350.00 2,451,750.00 0.36 (33,600.00) 166764AH3 CHEVRON CORP 3.191% 6/24/23 99.84 3,500,000.0000 3,441,095.00 3,494,505.00 0.52 53,410.00 532457BF4 ELI LILLY CO 1.950% 3/15/19 99.77 4,000,000.0000 4,009,675.00 3,990,920.00 0.59 (18,755.00) 30231GAV4 EXXON MOBIL 2.222% 3/01/21 98.56 3,000,000.0000 3,016,097.40 2,956,800.00 0.44 (59,297.40) 3130A7CV5 F H L B DEB 1.375% 2/18/21 97.68 5,365,000.0000 5,343,325.40 5,240,317.40 0.78 (103,008.00) 3133782M2 F H L B DEB 1.500% 3/08/19 99.82 4,200,000.0000 4,191,684.00 4,192,608.00 0.62 924.00 3133782M2 F H L B DEB 1.500% 3/08/19 99.82 7,500,000.0000 7,589,190.00 7,486,800.00 1.11 (102,390.00) 313383HU8 F H L B DEB 1.750% 6/12/20 98.85 5,000,000.0000 5,008,950.00 4,942,300.00 0.73 (66,650.00) 313379RB7 F H L B DEB 1.875% 6/11/21 98.14 4,000,000.0000 4,030,160.00 3,925,600.00 0.58 (104,560.00) 313383QR5 F H L B DEB 3.250% 6/09/23 102.53 5,000,000.0000 5,083,350.00 5,126,700.00 0.76 43,350.00 1 of 5 U.S. Bank Asset Detail - Consolidated As of 12/31/2018 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 313383YJ4 F H L B DEB 3.375% 9/08/23 103.00 6,475,000.0000 6,566,064.50 6,669,379.50 0.99 103,315.00 3130AOF70 F H L B DEB 3.375%12/08/23 103.06 8,125,000.0000 8,342,143.75 8,373,218.75 1.24 31,075.00 313384CC1 F H L B DISC NTS 2/20/19 99.67 1,700,000.0000 1,693,740.69 1,694,441.00 0.25 700.31 3137EAEN5 F H L M C 2.750% 6/19/23 100.58 10,000,000.0000 9,956,500.00 10,058,400.00 1.50 101,900.00 3137EADM8 F H L M C M T N 1.250%10/02/19 98.97 7,500,000.0000 7,399,650.00 7,422,525.00 1.10 22,875.00 3137EAEK1 F H L M C M T N 1.875%11/17/20 98.76 5,000,000.0000 4,986,225.00 4,937,750.00 0.73 (48,475.00) 3137EAEL9 F H L M C M T N 2.375% 2/16/21 99.65 7,500,000.0000 7,484,475.00 7,473,975.00 1.11 (10,500.00) 3137EACA5 F H L M C M T N 3.750% 3/27/19 100.31 800,000.0000 802,376.00 802,464.00 0.12 88.00 31348SWZ3 F H L M C#786064 4.270% 1/01/28 102.17 1,998.8600 1,950.20 2,042.16 0.00 91.96 3133TCE95 F H L M C MLTCL MTG 3.587% 8/15/32 101.27 12,390.7500 12,403.72 12,547.80 0.00 144.08 31398VJ98 F H L M C MLTCL MTG 4.251% 1/25/20 100.89 900,000.0000 951,046.88 908,019.00 0.13 (43,027.88) 31394JY35 F H L M C MLTCL MTG 6.500% 9/25/43 113.85 771,463.1900 873,682.05 878,295.41 0.13 4,613.36 3135GOF73 F N M A 1.500%11/30/20 98.02 7,500,000.0000 7,370,726.00 7,351,350.00 1.09 (19,376.00) 3135GOT45 F N M A 1.875% 4/05/22 97.99 5,000,000.0000 4,972,500.00 4,899,400.00 0.73 (73,100.00) 3135GOS38 F N M A 2.000% 1/05/22 98.52 3,000,000.0000 2,994,570.00 2,955,600.00 0.44 (38,970.00) 3135GOU35 F N M A 2.750% 6/22/21 100.56 7,500,000.0000 7,515,225.00 7,542,075.00 1.12 26,850.00 31371 NUC7 F N M A#257179 4.500% 4/01/28 103.79 15,951.3200 16,870.09 16,556.51 0.00 (313.58) 31376KT22 F N M A#357969 5.000% 9/01/35 106.22 110,535.9000 118,826.07 117,406.81 0.02 (1,419.26) 31381PDA3 F N M A#466397 3.400%11/01/20 100.94 343,782.8600 336,343.20 347,007.54 0.05 10,664.34 31403DJZ3 F N M A#745580 5.000% 6/01/36 106.17 105,151.3100 113,037.67 111,639.15 0.02 (1,398.52) 31403GXF4 F N M A#748678 5.000%10/01/33 105.12 1,859.9200 1,999.42 1,955.22 0.00 (44.20) 31406PQY8 F N M A#815971 5.000% 3/01/35 106.14 184,549.3900 198,390.61 195,884.41 0.03 (2,506.20) 31406XWT5 F N M A#823358 3.972% 2/01/35 104.44 113,183.2800 112,299.04 118,202.96 0.02 5,903.92 31407BXH7 F N M A#826080 5.000% 7/01/35 106.23 20,825.1500 22,387.02 22,122.56 0.00 (264.46) 31410F4V4 F N M A#888336 5.000% 7/01/36 106.19 207,540.4600 223,105.99 220,376.84 0.03 (2,729.15) 3138EG6F6 F N M A#AL0869 4.500% 6/01/29 103.83 11,744.2100 12,420.66 12,194.13 0.00 (226.53) 31417YAY3 F N M A#MA0022 4.500% 4/01/29 103.83 19,087.0300 20,186.41 19,818.83 0.00 (367.58) 3135GOJ20 F N M A DEB 1.375% 2/26/21 97.56 10,000,000.0000 10,040,950.00 9,756,300.00 1.45 (284,650.00) 3135GOD75 F N M A DEB 1.500% 6/22/20 98.54 5,000,000.0000 4,955,650.00 4,926,850.00 0.73 (28,800.00) 3135GOT94 F N M A DEB 2.375% 1/19/23 99.25 5,000,000.0000 4,910,990.00 4,962,600.00 0.74 51,610.00 31397QREO F N M A GTD REMIC 1.113% 2/25/41 101.78 214,903.6500 214,836.49 218,733.23 0.03 3,896.74 36225CAZ9 G N M A 1 1#080023 3.125%12/20/26 102.97 18,348.3000 18,651.43 18,892.88 0.00 241.45 36225CC20 G N M A 1 1#080088 3.625% 6/20/27 102.32 17,864.7700 18,255.57 18,278.88 0.00 23.31 36225CNM4 G N M A 1 1#080395 3.625% 4/20/30 103.18 7,439.0700 7,371.62 7,675.48 0.00 303.86 36225CN28 G N M A 1 1#080408 3.625% 5/20/30 103.19 57,165.6200 56,585.03 58,987.49 0.01 2,402.46 36225DCB8 G N M A 1 1#080965 3.750% 7/20/34 103.84 55,669.5600 55,634.77 57,805.04 0.01 2,170.27 369550BE7 GENERAL DYNAMICS 3.000% 5/11/21 100.08 3,160,000.0000 3,138,038.00 3,162,559.60 0.47 24,521.60 36962G7MO GENERAL ELEC CA MTN 2.200% 1/09/20 98.54 5,000,000.0000 5,014,950.00 4,927,200.00 0.73 (87,750.00) 43814RACO HONDAAUTO 1.210%12/18/20 99.10 1,893,324.6100 1,872,542.41 1,876,265.76 0.28 3,723.35 43814QAC2 HONDAAUTO 1.390% 4/15/20 99.60 451,323.7300 451,314.97 449,536.49 0.07 (1,778.48) 43814PAB6 HONDAAUTO 1.570% 1/21/20 99.77 284,988.9300 284,963.60 284,324.91 0.04 (638.69) 43814PAC4 HONDAAUTO 1.790% 9/20/21 98.78 3,090,000.0000 3,040,994.53 3,052,147.50 0.45 11,152.97 2of5 U.S. Bank Asset Detail - Consolidated As of 12/31/2018 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 43815HAC1 HONDA AUTO 2.950% 8/22/22 100.06 3,970,000.0000 3,969,455.32 3,972,501.10 0.59 3,045.78 43814UAG4 HONDAAUTO 3.010% 5/18/22 100.10 1,710,000.0000 1,709,962.72 1,711,692.90 0.25 1,730.18 404280BF5 HSBC HOLDINGS PLC 2.650% 1/05/22 97.01 4,500,000.0000 4,429,980.00 4,365,585.00 0.65 (64,395.00) 40428HPR7 HSBC USA INC MTN 2.350% 3/05/20 98.99 2,500,000.0000 2,472,287.50 2,474,750.00 0.37 2,462.50 44932HAH6 IBM CREDIT CORP 3.000% 2/06/23 98.08 5,670,000.0000 5,603,264.40 5,561,362.80 0.83 (41,901.60) 4581XOCX4 INTER AMER DEV BK 1.625% 5/12/20 98.72 3,035,000.0000 3,027,807.05 2,996,091.30 0.45 (31,715.75) 4581XOCZ9 INTER AMER DEV BK 1.750% 9/14/22 96.81 6,500,000.0000 6,249,655.00 6,292,845.00 0.94 43,190.00 4581XOCW6 INTER AMER DEV BK 2.125% 1/18/22 98.56 3,000,000.0000 2,996,310.00 2,956,860.00 0.44 (39,450.00) 4581XOCS5 INTER AMERICAN DEVEL 1.875% 3/15/21 98.51 5,000,000.0000 5,059,610.00 4,925,700.00 0.73 (133,910.00) 459058FY4 INTL BK 2.000% 1/26/22 98.24 10,000,000.0000 10,006,350.00 9,824,300.00 1.46 (182,050.00) 45950KCMO INTL BK M T N 2.250% 1/25/21 99.34 2,970,000.0000 2,961,268.20 2,950,516.80 0.44 (10,751.40) 459052AP1 INTL BK DISC NTS 1/14/19 99.92 5,000,000.0000 4,992,912.50 4,996,050.00 0.74 3,137.50 459052AP1 INTL BK DISC NTS 1/14/19 99.92 10,000,000.0000 9,985,825.00 9,992,100.00 1.49 6,275.00 45950KCJ7 INTL FINANCE CORP 1.125% 7/20/21 96.43 2,500,000.0000 2,441,600.00 2,410,725.00 0.36 (30,875.00) 24422ESS9 JOHN DEERE CAP MTN 2.300% 9/16/19 99.43 5,000,000.0000 5,046,984.00 4,971,650.00 0.74 (75,334.00) 24422EUM9 JOHN DEERE MTN 3.650%10/12/23 101.05 1,250,000.0000 1,250,237.50 1,263,087.50 0.19 12,850.00 47788MAC4 JOHN DEERE OWNER 1.360% 4/15/20 99.77 441,203.8100 441,134.37 440,171.39 0.07 (962.98) 47788NADO JOHN DEERE OWNER 1.490% 5/15/23 98.85 1,151,000.0000 1,131,936.56 1,137,751.99 0.17 5,815.43 47788BABO JOHN DEERE OWNER 1.590% 4/15/20 99.81 262,773.5600 262,750.73 262,271.66 0.04 (479.07) 47788BAD6 JOHN DEERE OWNER 1.820%10/15/21 98.87 675,000.0000 674,950.59 667,372.50 0.10 (7,578.09) 47788CAB8 JOHN DEERE OWNER 2.420%10/15/20 99.81 1,584,682.4200 1,581,463.53 1,581,687.37 0.24 223.84 47788CAC6 JOHN DEERE OWNER 2.660% 4/18/22 99.68 1,340,000.0000 1,339,903.65 1,335,658.40 0.20 (4,245.25) 47788EAC2 JOHN DEERE OWNER 3.080%11/15/22 100.49 4,630,000.0000 4,629,649.05 4,652,594.40 0.69 22,945.35 46625HRL6 JP MORGAN CHASE CO 2.700% 5/18/23 96.05 4,000,000.0000 3,832,440.00 3,842,120.00 0.57 9,680.00 46625HKA7 JPMORGAN CHASE CO 2.250% 1/23/20 99.00 2,000,000.0000 1,994,880.00 1,980,080.00 0.29 (14,800.00) 46625HJR2 JPMORGAN CHASE CO 2.350% 1/28/19 99.95 1,000,000,0000 998,810.00 999,510.00 0.15 700.00 525ESCOY6 LEHMAN BIRTH HLD ESC - 2,000,000.0000 1,040,394.96 - - (1,040,394.96) 525ESCIB7 LEHMAN BIRTH MTN ES 0.00001% 1/24/13 1.90 600,000.0000 322,755.11 11,400.00 0.00 (311,355.11) 58933YAF2 MERCK CO INC 2.800% 5/18/23 98.65 2,000,000.0000 1,948,640.00 1,973,080.00 0.29 24,440.00 594918BP8 MICROSOFT CORP 1.550% 8/08/21 97.15 3,045,000.0000 3,041,385.15 2,958,126.15 0.44 (83,259.00) 61747WAL3 MORGAN STANLEY 5.500% 7/28/21 104.80 2,800,000.0000 3,200,848.00 2,934,372.00 0.44 (266,476.00) 64971M5E8 NEW YORK CITY NY 4.075%11/01/20 101.54 1,400,000.0000 1,400,000.00 1,421,574.00 0.21 21,574.00 65478VAD9 NISSAN AUTO 1.320% 1/15/21 99.20 1,051,134.7200 1,042,717.43 1,042,736.15 0.16 18.72 654747ABO NISSAN AUTO 1.470% 1/15/20 99.95 78,074.3800 78,073.98 78,038.47 0.01 (35.51) 65477UAD2 NISSAN AUTO 1.500% 9/15/21 99.58 1,092,704.9600 1,085,875.55 1,088,137.45 0.16 2,261.90 65478GAD2 NISSAN AUTO 1.750%10/15/21 98.84 2,625,000.0000 2,584,291.99 2,594,497.50 0.39 10,205.51 65479GAD1 NISSAN AUTO 3.060% 3/15/23 100.39 3,560,000.0000 3,559,884.66 3,573,741.60 0.53 13,856.94 674599CK9 OCCIDENTAL PETROLEUM 2.600% 4/15/22 97.54 3,350,000.0000 3,354,589.50 3,267,523.00 0.49 (87,066.50) 68389XBKO ORACLE CORP 1.900% 9/15/21 97.02 3,000,000.0000 2,892,240.00 2,910,630.00 0.43 18,390.00 69371RN36 PACCAR FINANCIAL MTN 1.200% 8/12/19 98.90 1,083,000.0000 1,069,484.16 1,071,097.83 0.16 1,613.67 69353REX2 PNC BANK MTN 1.450% 7/29/19 99.14 1,890,000.0000 1,872,668.70 1,873,746.00 0.28 1,077.30 69353RFL7 PNC BANK NA 3.500% 6/08/23 100.20 5,000,000.0000 4,993,318.05 5,009,900.00 0.74 16,581.95 3of5 U.S. Bank Asset Detail - Consolidated As of 12/31/2018 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 69353RCH9 PNC BANK NA MTN 2.200% 1/28/19 99.95 1,030,000.0000 1,028,805.20 1,029,474.70 0.15 669.50 69353RFB9 PNC BANK NA MTN 2.625% 2/17/22 97.74 1,000,000.0000 974,940.00 977,370.00 0.15 2,430.00 73358WAG9 PORT AUTH NY NJ 5.309%12/01/19 102.35 2,440,000.0000 2,507,633.89 2,497,315.60 0.37 (10,318.29) 747525AD5 QUALCOMM INC 2.250% 5/20/20 98.61 5,000,000.0000 4,995,195.40 4,930,500.00 0.73 (64,695.40) 83162CLJO S B A GTD DEV PART 6.340% 3/01/21 102.17 23,619.2100 23,619.21 24,131.04 0.00 511.83 78445JAA5 S L M A 4.07854% 4/25/23 100.52 25,862.2100 25,757.28 25,997.21 0.00 239.93 89113XUZ5 TORONTO DOMINION C D 2.150% 1/24/19 99.97 1,000,000,0000 997,312.00 999,740.00 0.15 2,428.00 89113X3W2 TORONTO DOMINION C D 2.700% 6/07/19 99.90 1,000,000,0000 1,000,000.00 998,970.00 0.15 (1,030.00) 89238BAB8 TOYOTA AUTO 2.100%10/15/20 99.61 3,973,491.1200 3,973,085.03 3,957,994.50 0.59 (15,090.53) 912828WUO U S TREASURY I P S 0.125% 7/15/24 95.89 11,075,584.0000 10,930,864.09 10,620,709.77 1.58 (310,154.32) 912828TH3 U S TREASURY NT 0.875% 7/31/19 99.04 10,000,000.0000 9,898,437.50 9,903,900.00 1.47 5,462.50 912828V56 U S TREASURY NT 1.125% 1/31/19 99.90 3,000,000.0000 2,991,328.13 2,997,120.00 0.45 5,791.87 912828T34 U S TREASURY NT 1.125% 9/30/21 96.45 7,000,000.0000 6,757,914.08 6,751,430.00 1.00 (6,484.08) 912828SD3 U S TREASURY NT 1.250% 1/31/19 99.91 5,000,000.0000 4,984,765.63 4,995,700.00 0.74 10,934.37 912828W97 U S TREASURY NT 1.250% 3/31/19 99.72 5,000,000.0000 4,965,429.69 4,985,750.00 0.74 20,320.31 912828T67 U S TREASURY NT 1.250%10/31/21 96.66 6,000,000.0000 5,813,691.98 5,799,840.00 0.86 (13,851.98) 9128281\189 U S TREASURY NT 1.375% 1/31/21 97.71 6,000,000.0000 5,895,840.41 5,862,420.00 0.87 (33,420.41) 9128282K5 U S TREASURY NT 1.375% 7/31/19 99.32 10,000,000.0000 9,928,515.63 9,931,600.00 1.48 3,084.37 9128281-99 U S TREASURY NT 1.375%10/31/20 97.97 10,000,000.0000 9,850,311.40 9,796,900.00 1.46 (53,411.40) 9128281333 U S TREASURY NT 1.500% 1/31/19 99.93 54,500,000.0000 54,382,226.57 54,464,030.00 8.10 81,803.43 9128281333 U S TREASURY NT 1.500% 1/31/19 99.93 11,000,000.0000 11,042,439.19 10,992,740.00 1.63 (49,699.19) 912828SN1 U S TREASURY NT 1.500% 3/31/19 99.77 5,000,000.0000 5,016,423.00 4,988,700.00 0.74 (27,723.00) 912828XE5 U S TREASURY NT 1.500% 5/31/20 98.53 5,000,000.0000 4,966,423.00 4,926,550.00 0.73 (39,873.00) 912828G61 U S TREASURY NT 1.500%11/30/19 98.97 7,500,000.0000 7,449,634.50 7,422,675.00 1.10 (26,959.50) 912828R69 U S TREASURY NT 1.625% 5/31/23 96.34 5,000,000.0000 4,757,226.56 4,817,000.00 0.72 59,773.44 912828WS5 U S TREASURY NT 1.625% 6/30/19 99.55 2,000,000.0000 1,996,861.44 1,990,940.00 0.30 (5,921.44) 912828WW6 U S TREASURY NT 1.625% 7/31/19 99.47 5,000,000.0000 5,012,388.70 4,973,250.00 0.74 (39,138.70) 912828J76 U S TREASURY NT 1.750% 3/31/22 97.76 5,000,000.0000 4,976,383.94 4,887,900.00 0.73 (88,483.94) 912828XW5 U S TREASURY NT 1.750% 6/30/22 97.58 5,000,000.0000 4,973,454.25 4,878,900.00 0.73 (94,554.25) 912828F39 U S TREASURY NT 1.750% 9/30/19 99.35 5,800,000.0000 5,873,186.87 5,762,416.00 0.86 (110,770.87) 9128281-57 U S TREASURY NT 1.750% 9/30/22 97.36 13,000,000.0000 12,763,554.69 12,656,670.00 1.88 (106,884.69) 912828U65 U S TREASURY NT 1.750%11/30/21 97.98 7,000,000.0000 6,900,492.20 6,858,880.00 1.02 (41,612.20) 912828V72 U S TREASURY NT 1.875% 1/31/22 98.22 3,000,000.0000 3,004,814.74 2,946,570.00 0.44 (58,244.74) 9128281-24 U S TREASURY NT 1.875% 8/31/22 97.86 6,000,000.0000 5,987,832.60 5,871,540.00 0.87 (116,292.60) 912828M80 U S TREASURY NT 2.000%11/30/22 98.18 8,000,000.0000 7,907,500.00 7,854,400.00 1.17 (53,100.00) 9128281\130 U S TREASURY NT 2.125%12/31/22 98.59 5,000,000.0000 4,926,562.50 4,929,500.00 0.73 2,937.50 9128284D9 U S TREASURY NT 2.500% 3/31/23 100.01 10,000,000.0000 9,887,265.63 10,001,200.00 1.49 113,934.37 913366EJ5 UNIV OF CALIFORNIA 5.035% 5/15/21 104.86 400,000.0000 400,000.00 419,452.00 0.06 19,452.00 90331HNL3 US BANK NA MTN 2.850% 1/23/23 98.29 5,000,000.0000 4,981,600.00 4,914,650.00 0.73 (66,950.00) 931142EK5 WALMART INC 3.400% 6/26/23 101.03 3,880,000.0000 3,878,991.40 3,920,002.80 0.58 41,011.40 25468PDL7 WALT DISNEY MTN 0.875% 7/12/19 98.91 1,130,000.0000 1,114,812.80 1,117,649.10 0.17 2,836.30 94974BGM6 WELLS FARGO CO MTN 2.600% 7/22/20 99.03 5,000,000.0000 5,001,650.00 4,951,550.00 0.74 (50,100.00) 4of5 U.S. Bank Asset Detail - Consolidated As of 12/31/2018 CUSIP Asset Short Name Price Shares/Units Cost Basis Market Value Percent of Total Unrealized Gain/Loss 949746FU9 WELLS FARGO COM MTN 2.125% 4/22/19 99.71 1,500,000.0000 1,494,090.00 1,495,575.00 0.22 1,485.00 95000U268 WELLS FARGO MTN 2.625% 7/22/22 96.43 3,000,000.0000 2,954,520.00 2,892,780.00 0.43 (61,740.00) 96130ABJ6 WESTPAC BKING C D 2.970% 9/13/19 100.01 1,500,000.0000 1,500,000.00 1,500,210.00 0.22 210.00 Fixed Income Total 587,816,965.5500 584,240,130.75 579,837,668.74 86.19 (4,402,462.01) Grand Total 680,968,643.5600 677,016,979.16 672,727,399.55 100.00 (4,289,579.61) 5of5 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss ACQUISITIONS 10/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 51,125.0000 1.000000 -51,125.00 51,125.00 0.00 10/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 408,086.9600 1.000000 -408,086.96 408,086.96 0.00 10/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 2,038.0400 1.000000 -2,038.04 2,038.04 0.00 10/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,000,000.0000 1.000000 -2,000,000.00 2,000,000.00 0.00 10/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 12,410.4900 1.000000 -12,410.49 12,410.49 0.00 10/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 68,879.9800 1.000000 -68,879.98 68,879.98 0.00 10/04/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 20,324.7200 1.000000 -20,324.72 20,324.72 0.00 10/05/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 17,188.8900 1.000000 -17,188.89 17,188.89 0.00 10/05/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,000,000.0000 1.000000 -1,000,000.00 1,000,000.00 0.00 10/05/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 46,875.0000 1.000000 -46,875.00 46,875.00 0.00 10/10/2018 02665WCQ2 PURCHASED PAR VALUE OF AMERICAN HONDA MTN 3.625% 10/10/23/MLPFS 1,000,000.0000 0.999180 -999,180.00 999,180.00 0.00 INC/FIXED INCOME/1,000,000 PAR VALUE AT 99.918% 10/11/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 10,000,000.0000 1.000000 -10,000,000.00 10,000,000.00 0.00 10/11/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,000,000.0000 1.000000 -5,000,000.00 5,000,000.00 0.00 10/12/2018 912828B33 PURCHASED PAR VALUE OF U S TREASURY NT 1.500% 1/31/19/J.P. MORGAN 10,000,000.0000 0.997539 -9,975,390.63 9,975,390.63 0.00 SECURITIES LLC/10,000,000 PAR VALUE AT 99.7539063% 10/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,100,000.0000 1.000000 -3,100,000.00 3,100,000.00 0.00 10/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 10,016,657.5700 1.000000 -10,016,657.57 10,016,657.57 0.00 10/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 171,814.7700 1.000000 -171,814.77 171,814.77 0.00 10/16/2018 62479MPK3 PURCHASED PAR VALUE OF MUFG BANK LTD NY BRAN C P 2/19/19/MUFG UNION 1,500,000.0000 0.991285 -1,486,927.50 1,486,927.50 0.00 BK NA/MMI/PIMS/IPA/1,500,000 PAR VALUE AT 99.1285% 10/16/2018 62479MPK3 PURCHASED PAR VALUE OF MUFG BANK LTD NY BRAN C P 2/19/19/MUFG UNION 9,000,000.0000 0.991285 -8,921,565.00 8,921,565.00 0.00 BK NA/MMI/PIMS/IPA/9,000,000 PAR VALUE AT 99.1285% 10/16/2018 69353RCH9 PURCHASED PAR VALUE OF PNC BANK NA MTN 2.200% 1/28/19/MLPFS 1,030,000.0000 0.998840 -1,028,805.20 1,028,805.20 0.00 INC/FIXED INCOME/1,030,000 PAR VALUE AT 99.884% 10/18/2018 313385580 PURCHASED PAR VALUE OF F H L B DISC NTS 12/12/18/MIZUHO SECURITIES 5,000,000.0000 0.996647 -4,983,232.64 4,983,232.64 0.00 USA FXD INC/5,000,000 PAR VALUE AT 99.6646528% 10/18/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 264,713.0600 1.000000 -264,713.06 264,713.06 0.00 10/22/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 15,937.5000 1.000000 -15,937.50 15,937.50 0.00 10/22/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 9,759.5800 1.000000 -9,759.58 9,759.58 0.00 10/22/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 5,223.3300 1.000000 -5,223.33 5,223.33 0.00 10/24/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,000,000.0000 1.000000 -5,000,000.00 5,000,000.00 0.00 10/25/2018 912828SD3 PURCHASED PAR VALUE OF U S TREASURY NT 1.250% 1/31/19/BMO CAPITAL 5,000,000.0000 0.996953 -4,984,765.63 4,984,765.63 0.00 MARKETS CORP/BONDS/5,000,000 PAR VALUE AT 99.6953126% 1 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/25/2018 25468PDL7 PURCHASED PAR VALUE OF WALT DISNEY MTN 0.875% 7/12/19/PERSHING 1,130,000.0000 0.986560 -1,114,812.80 1,114,812.80 0.00 LLC/1,130,000 PAR VALUE AT 98.656% 10/25/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 3,882,358.2800 1.000000 -3,882,358.28 3,882,358.28 0.00 10/25/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 21,019.2500 1.000000 -21,019.25 21,019.25 0.00 10/25/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 21,816.1400 1.000000 -21,816.14 21,816.14 0.00 10/29/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 6,403.3300 1.000000 -6,403.33 6,403.33 0.00 10/29/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,000,000.0000 1.000000 -1,000,000.00 1,000,000.00 0.00 10/30/2018 58933YAF2 PURCHASED PAR VALUE OF MERCK CO INC 2.800% 5/18/23/US BANCORP 2,000,000.0000 0.974320 -1,948,640.00 1,948,640.00 0.00 INVESTMENTS INC./2,000,000 PAR VALUE AT 97.432% 10/31/2018 313383YJ4 PURCHASED PAR VALUE OF F H L B DEB 3.375% 9/08/23/BONY/TORONTO 5,000,000.0000 1.013310 -5,066,550.00 5,066,550.00 0.00 DOMINION SECURITI/5,000,000 PAR VALUE AT 101.331 % 10/31/2018 313385N51 PURCHASED PAR VALUE OF F H L B DISC NTS 11/07/18/CITIGROUP GLOBAL 3,000,000.0000 0.999584 -2,998,751.67 2,998,751.67 0.00 MARKETS INC./3,000,000 PAR VALUE AT 99.958389% 11/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,000,000.0000 1.000000 -1,000,000.00 1,000,000.00 0.00 11/01/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 28,525.0000 1.000000 -28,525.00 28,525.00 0.00 11/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 26,553.6900 1.000000 -26,553.69 26,553.69 0.00 11/02/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 24,923.8200 1.000000 -24,923.82 24,923.82 0.00 11/05/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 59,929.3800 1.000000 -59,929.38 59,929.38 0.00 11/07/2018 89233HP65 PURCHASED PAR VALUE OF TOYOTA MOTOR CREDIT CO C P 2/06/19/DBTC 1,500,000.0000 0.993554 -1,490,331.25 1,490,331.25 0.00 AMERICAS/COMMERCIAL PAPER/1,500,000 PAR VALUE AT 99.35541667% 11/07/2018 912828V56 PURCHASED PAR VALUE OF U S TREASURY NT 1.125% 1/31/19/NOMURA 3,000,000.0000 0.997109 -2,991,328.13 2,991,328.13 0.00 SECURITIES INTERNATIONA/3,000,000 PAR VALUE AT 99.71093767% 11/07/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 4,212,531.2500 1.000000 -4,212,531.25 4,212,531.25 0.00 11/08/2018 65478GAD2 PURCHASED PAR VALUE OF NISSAN AUTO 1.750% 10/15/21 /INTL FCSTONE 2,625,000.0000 0.984492 -2,584,291.99 2,584,291.99 0.00 FINL INC./BD RATE/2,625,000 PAR VALUE AT 98.44921867% 11/13/2018 166764AH3 PURCHASED PAR VALUE OF CHEVRON CORP 3.191% 6/24/23/MLPFS INC/FIXED 3,500,000.0000 0.983170 -3,441,095.00 3,441,095.00 0.00 INCOME/3,500,000 PAR VALUE AT 98.317% 11/13/2018 313384BF5 PURCHASED PAR VALUE OF F H L B DISC NTS 1/30/19/GOLDMAN SACHS& 2,500,000.0000 0.994973 -2,487,433.33 2,487,433.33 0.00 CO. LLC/2,500,000 PAR VALUE AT 99.4973332% 11/13/2018 313384BF5 PURCHASED PAR VALUE OF F H L B DISC NTS 1/30/19/WELLS FARGO 512,000.0000 0.994952 -509,415.25 509,415.25 0.00 SECURITIES,LLC/512,000 PAR VALUE AT 99.49516602% 11/13/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 2,950,000.0000 1.000000 -2,950,000.00 2,950,000.00 0.00 11/15/2018 69371RN36 PURCHASED PAR VALUE OF PACCAR FINANCIAL MTN 1.200% 8/12/19/PERSHING 1,083,000.0000 0.987520 -1,069,484.16 1,069,484.16 0.00 LLC/1,083,000 PAR VALUE AT 98.752% 11/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 701,027.8200 1.000000 -701,027.82 701,027.82 0.00 2of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/15/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 520,077.3200 1.000000 -520,077.32 520,077.32 0.00 11/16/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 216,900.9100 1.000000 -216,900.91 216,900.91 0.00 11/19/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 274,943.0200 1.000000 -274,943.02 274,943.02 0.00 11/19/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 74,875.0000 1.000000 -74,875.00 74,875.00 0.00 11/20/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 60,062.2100 1.000000 -60,062.21 60,062.21 0.00 11/21/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 9,759.5800 1.000000 -9,759.58 9,759.58 0.00 11/26/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 37,990.6100 1.000000 -37,990.61 37,990.61 0.00 11/26/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 3,188.2500 1.000000 -3,188.25 3,188.25 0.00 11/27/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 17,528.8900 1.000000 -17,528.89 17,528.89 0.00 11/27/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,000,000.0000 1.000000 -1,000,000.00 1,000,000.00 0.00 11/29/2018 02665WCQ2 PURCHASED PAR VALUE OF AMERICAN HONDA MTN 3.625% 10/10/23/MLPFS 1,000,000.0000 0.999140 -999,140.00 999,140.00 0.00 INC/FIXED INCOME/1,000,000 PAR VALUE AT 99.914% 11/30/2018 313383YJ4 PURCHASED PAR VALUE OF F H L B DEB 3.375% 9/08/23/PERSHING 1,475,000.0000 1.016620 -1,499,514.50 1,499,514.50 0.00 LLC/1,475,000 PAR VALUE AT 101.662% 11/30/2018 24422EUM9 PURCHASED PAR VALUE OF JOHN DEERE MTN 3.650% 10/12/23/MERRILL 1,250,000.0000 1.000190 -1,250,237.50 1,250,237.50 0.00 LYNCH,PIERCE,FENNER&/1,250,000 PAR VALUE AT 100.019% 12/04/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 5,581.0800 1.000000 -5,581.08 5,581.08 0.00 12/11/2018 06370RQY8 PURCHASED PAR VALUE OF BANK MONTREAL C D 2.860% 6/11/19/BMO CAPITAL 2,000,000.0000 1.000000 -2,000,000.00 2,000,000.00 0.00 MARKETS CORP/BONDS/2,000,000 PAR VALUE AT 100% 12/12/2018 31846V567 PURCHASED UNITS OF FIRST AM GOUT OB FD CL Z 5,000,000.0000 1.000000 -5,000,000.00 5,000,000.00 0.00 12/13/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 1,000,000.0000 1.000000 -1,000,000.00 1,000,000.00 0.00 12/13/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 9,750.0000 1.000000 -9,750.00 9,750.00 0.00 12/14/2018 96130ABJ6 PURCHASED PAR VALUE OF WESTPAC BIKING C D 2.970% 9/13/19/RBC CAPITAL 1,500,000.0000 1.000000 -1,500,000.00 1,500,000.00 0.00 MARKETS, LLC/1,500,000 PAR VALUE AT 100% 12/19/2018 21687BWD9 PURCHASED PAR VALUE OF COOPERATIEVE CENTRAL C P 9/13/19/BOA/LASALLE 2,000,000.0000 0.978932 -1,957,864.44 1,957,864.44 0.00 BANK NA/IPA/2,000,000 PAR VALUE AT 97.893222% 12/19/2018 31846V567 PURCHASED UNITS OF FIRST AM GOVT OB FD CL Z 101,000,000.0000 1.000000 -101,000,000.00 101,000,000.00 0.00 12/20/2018 912828B33 PURCHASED PAR VALUE OF U S TREASURY NT 1.500% 1/31/19/CITIGROUP 10,000,000.0000 0.998945 -9,989,453.13 9,989,453.13 0.00 GLOBAL MARKETS INC./10,000,000 PAR VALUE AT 99.8945313% 12/21/2018 3133782M2 PURCHASED PAR VALUE OF F H L B DEB 1.500% 3/08/19/J.P. MORGAN 1,200,000.0000 0.998020 -1,197,624.00 1,197,624.00 0.00 SECURITIES LLC/1,200,000 PAR VALUE AT 99.802% 12/21/2018 3133782M2 PURCHASED PAR VALUE OF F H L B DEB 1.500% 3/08/19/PERSHING 3,000,000.0000 0.998020 -2,994,060.00 2,994,060.00 0.00 LLC/3,000,000 PAR VALUE AT 99.802% 12/21/2018 912828TH3 PURCHASED PAR VALUE OF U S TREASURY NT 0.875% 7/31/19/J.P. MORGAN 10,000,000.0000 0.989844 -9,898,437.50 9,898,437.50 0.00 SECURITIES LLC/10,000,000 PAR VALUE AT 98.984375% 3of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 12/24/2018 459052AP1 PURCHASED PAR VALUE OF INTL BK DISC NTS 1/14/19/GOLDMAN SACHS& 5,000,000.0000 0.998583 -4,992,912.50 4,992,912.50 0.00 CO. LLC/5,000,000 PAR VALUE AT 99.85825% 12/24/2018 9128282K5 PURCHASED PAR VALUE OF U S TREASURY NT 1.375% 7/31/19/J.P. MORGAN 10,000,000.0000 0.992852 -9,928,515.63 9,928,515.63 0.00 SECURITIES LLC/10,000,000 PAR VALUE AT 99.2851563% 12/24/2018 912828633 PURCHASED PAR VALUE OF U S TREASURY NT 1.500% 1/31/19/WELLS FARGO 12,000,000.0000 0.999023 -11,988,281.25 11,988,281.25 0.00 SECURITIES,LLC/12,000,000 PAR VALUE AT 99.90234375% 12/26/2018 69353REX2 PURCHASED PAR VALUE OF PNC BANK MTN 1.450% 7/29/19/PERSHING 1,890,000.0000 0.990830 -1,872,668.70 1,872,668.70 0.00 LLC/1,890,000 PAR VALUE AT 99.083% 12/27/2018 313384CC1 PURCHASED PAR VALUE OF F H L B DISC NTS 2/20/19/JEFFERIES 1,700,000.0000 0.996318 -1,693,740.69 1,693,740.69 0.00 LLC/1,700,000 PAR VALUE AT 99.63180529% 12/27/2018 912796QZ5 PURCHASED PAR VALUE OF U S TREASURY BILL 3/07/19/J.P. MORGAN 20,000,000.0000 0.995450 -19,909,000.00 19,909,000.00 0.00 SECURITIES LLC/20,000,000 PAR VALUE AT 99.545% 12/28/2018 313384CE7 PURCHASED PAR VALUE OF F H L B DISC NTS 2/22/19/MIZUHO SECURITIES 650,000.0000 0.996239 -647,555.13 647,555.13 0.00 USA FXD INC/650,000 PAR VALUE AT 99.62386615% 12/28/2018 912796UN7 PURCHASED PAR VALUE OF U S TREASURY BILL 2/12/19/J.P. MORGAN 20,000,000.0000 0.996972 -19,939,433.33 19,939,433.33 0.00 SECURITIES LLC/20,000,000 PAR VALUE AT 99.69716665% 12/31/2018 3137EACA5 PURCHASED PAR VALUE OF F H L M C M T N 3.750% 3/27/19/PERSHING 800,000.0000 1.002970 -802,376.00 802,376.00 0.00 LLC/800,000 PAR VALUE AT 100.297% 12/31/2018 912796UK3 PURCHASED PAR VALUE OF U S TREASURY BILL 1/22/19/J.P. MORGAN 5,000,000.0000 0.998625 -4,993,125.00 4,993,125.00 0.00 SECURITIES LLC/5,000,000 PAR VALUE AT 99.8625% TOTAL ACQUISITIONS 329,221,779.7200 -328,512,719.20 328,512,719.20 0.00 DISPOSITIONS 10/02/2018 4595151-196 MATURED PAR VALUE OF IFC DISC NTS 10/02/18 2,000,000 PAR VALUE AT -2,000,000.0000 1.000000 2,000,000.00 -1,992,444.44 7,555.56 100% 10/05/2018 78009N2V7 MATURED PAR VALUE OF ROYAL BK CANADA C D 1.700% 10/05/18 1,000,000 PAR -1,000,000.0000 1.000000 1,000,000.00 -996,762.00 3,238.00 VALUE AT 100% 10/10/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -999,180.0000 1.000000 999,180.00 -999,180.00 0.00 10/11/2018 912796NZ8 MATURED PAR VALUE OF U S TREASURY BILL 10/11/18 10,000,000 PAR VALUE -10,000,000.0000 1.000000 9,959,266.11 -9,959,266.11 0.00 AT100% 10/11/2018 912796NZ8 MATURED PAR VALUE OF U S TREASURY BILL 10/11/18 5,000,000 PAR VALUE -5,000,000.0000 1.000000 4,996,302.22 -4,996,302.22 0.00 AT100% 10/12/2018 313385K39 MATURED PAR VALUE OF F H L B DISC NTS 10/12/18 6,000,000 PAR VALUE AT -6,000,000.0000 1.000000 5,990,620.00 -5,990,620.00 0.00 100% 10/12/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,005,146.0600 1.000000 4,005,146.06 -4,005,146.06 0.00 10/15/2018 62479MKF9 MATURED PAR VALUE OF MUFG BANK LTD NY BRAN C P 10/15/18 3,100,000 PAR -3,100,000.0000 1.000000 3,075,417.00 -3,075,417.00 0.00 VALUE AT 100% 4of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/15/2018 62479MKF9 MATURED PAR VALUE OF MUFG BANK LTD NY BRAN C P 10/15/18 9,000,000 PAR -9,000,000.0000 1.000000 8,937,870.00 -8,937,870.00 0.00 VALUE AT 100% 10/15/2018 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C#786064 3.427% 1/01/28 SEPTEMBER -15.9100 0.000000 15.91 -15.52 0.39 FHLMC DUE 10/15/18 10/15/2018 43814QAC2 PAID DOWN PAR VALUE OF HONDA AUTO 1.390% 4/15/20 -90,253.4200 0.000000 90,253.42 -90,251.67 1.75 10/15/2018 47788MAC4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.360% 4/15/20 -111,579.4500 0.000000 111,579.45 -111,561.89 17.56 10/15/2018 47787XAB3 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.500% 10/15/19 -109,328.1400 0.000000 109,328.14 -109,327.70 0.44 10/15/2018 47788BABO PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.590% 4/15/20 -54,749.5300 0.000000 54,749.53 -54,744.77 4.76 10/15/2018 65478VAD9 PAID DOWN PAR VALUE OF NISSAN AUTO 1.320% 1/15/21 -98,423.7400 0.000000 98,423.74 -97,635.58 788.16 10/15/2018 654747ABO PAID DOWN PAR VALUE OF NISSAN AUTO 1.470% 1/15/20 -81,595.2500 0.000000 81,595.25 -81,594.83 0.42 10/15/2018 65477UAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.500% 9/15/21 -169,794.3400 0.000000 169,794.34 -168,733.13 1,061.21 10/15/2018 89238BAB8 PAID DOWN PAR VALUE OF TOYOTA AUTO 2.100% 10/15/20 -373,528.7300 0.000000 373,528.73 -373,490.56 38.17 10/16/2018 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.587% 8/15/32 -1,025.7000 5.994121 1,025.70 -1,026.77 -1.07 10/16/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,033,714.8700 1.000000 1,033,714.87 -1,033,714.87 0.00 10/16/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,486,927.5000 1.000000 1,486,927.50 -1,486,927.50 0.00 10/16/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -8,920,493.2900 1.000000 8,920,493.29 -8,920,493.29 0.00 10/18/2018 43814RACO PAID DOWN PAR VALUE OF HONDA AUTO 1.210% 12/18/20 -178,829.4600 0.000000 178,829.46 -176,866.53 1,962.93 10/18/2018 43814PAB6 PAID DOWN PAR VALUE OF HONDA AUTO 1.570% 1/21/20 -73,874.5300 0.000000 73,874.53 -73,867.96 6.57 10/18/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,983,232.6400 1.000000 4,983,232.64 -4,983,232.64 0.00 10/22/2018 36225CAZ9 PAID DOWN PAR VALUE OF G N M A I I#080023 3.125% 12/20/26 SEPTEMBER GNMA -176.1000 0.000000 176.10 -179.01 -2.91 DUE 10/20/18 10/22/2018 36225CC20 PAID DOWN PAR VALUE OF G N M A 11#080088 3.625% 6/20/27 SEPTEMBER GNMA -1,409.2500 0.000000 1,409.25 -1,440.08 -30.83 DUE 10/20/18 10/22/2018 36225CNM4 PAID DOWN PAR VALUE OF G N M A I I#080395 3.625% 4/20/30 SEPTEMBER GNMA -54.4000 0.000000 54.40 -53.91 0.49 DUE 10/20/18 10/22/2018 36225CN28 PAID DOWN PAR VALUE OF G N M A 11#080408 3.625% 5/20/30 SEPTEMBER GNMA -1,922.7900 0.000000 1,922.79 -1,903.26 19.53 DUE 10/20/18 10/22/2018 36225DCB8 PAID DOWN PAR VALUE OF G N M A 11#080965 2.750% 7/20/34 SEPTEMBER GNMA -1,206.6300 0.000000 1,206.63 -1,205.88 0.75 DUE 10/20/18 10/24/2018 3133851-79 MATURED PAR VALUE OF F H L B DISC NTS 10/24/18 5,000,000 PAR VALUE AT -5,000,000.0000 1.000000 4,992,012.50 -4,992,012.50 0.00 10/25/2018 912796QE2 MATURED PAR VALUE OF U S TREASURY BILL 10/25/18 5,000,000 PAR VALUE -5,000,000.0000 1.000000 4,976,302.17 -4,976,302.17 0.00 10/25/2018 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -13,550.4900 0.000000 13,550.49 -15,345.93 -1,795.44 10/25/2018 31371NUC7 PAID DOWN PAR VALUE OF F N M A#257179 4.500% 4/01/28 SEPTEMBER FNMA -1,843.5200 0.000000 1,843.52 -1,949.70 -106.18 10/25/2018 31376KT22 PAID DOWN PAR VALUE OF F N M A#357969 5.000% 9/01/35 SEPTEMBER FNMA -462.1100 0.000000 462.11 -496.77 -34.66 5of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/25/2018 31381 PDA3 PAID DOWN PAR VALUE OF F N M A#466397 3.400% 11/01/20 SEPTEMBER FNMA -714.1800 0.000000 714.18 -698.72 15.46 DUE 10/25/18 10/25/2018 31403DJZ3 PAID DOWN PAR VALUE OF F N M A#745580 5.000% 6/01/36 SEPTEMBER FNMA -2,150.6400 0.000000 2,150.64 -2,311.94 -161.30 DUE 10/25/18 10/25/2018 31403GXF4 PAID DOWN PAR VALUE OF F N M A#748678 5.000% 10/01/33 SEPTEMBER FNMA -10.4700 0.000000 10.47 -11.26 -0.79 DUE 10/25/18 10/25/2018 31406PQY8 PAID DOWN PAR VALUE OF F N M A#815971 5.000% 3/01/35 SEPTEMBER FNMA -2,794.2800 0.000000 2,794.28 -3,003.85 -209.57 DUE 10/25/18 10/25/2018 31406XWT5 PAID DOWN PAR VALUE OF F N M A#823358 3.481% 2/01/35 SEPTEMBER FNMA -468.3600 0.000000 468.36 -464.70 3.66 DUE 10/25/18 10/25/2018 31407BXH7 PAID DOWN PAR VALUE OF F N M A#826080 5.000% 7/01/35 SEPTEMBER FNMA -884.0500 0.000000 884.05 -950.35 -66.30 10/25/2018 31410F4V4 PAID DOWN PAR VALUE OF F N M A#888336 5.000% 7/01/36 SEPTEMBER FNMA -2,886.6000 0.000000 2,886.60 -3,103.10 -216.50 DUE 10/25/18 10/25/2018 3138EG6F6 PAID DOWN PAR VALUE OF F N M A#AL0869 4.500% 6/01/29 SEPTEMBER FNMA -235.7800 0.000000 235.78 -249.36 -13.58 DUE 10/25/18 10/25/2018 31417YAY3 PAID DOWN PAR VALUE OF F N M A#MA0022 4.500% 4/01/29 SEPTEMBER FNMA -418.6900 0.000000 418.69 -442.81 -24.12 DUE 10/25/18 10/25/2018 31397QREO PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2/25/41 -2,477.1500 0.000000 2,477.15 -2,476.38 0.77 10/25/2018 78445JAA5 PAID DOWN PAR VALUE OF S L M A 3.92054% 4/25/23 -1,017.2000 0.000000 1,017.20 -1,013.07 4.13 10/25/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,999,371.6100 1.000000 4,999,371.61 -4,999,371.61 0.00 10/29/2018 89113X7B4 MATURED PAR VALUE OF TORONTO C D 2.260% 10/29/18 1,000,000 PAR VALUE -1,000,000.0000 1.000000 1,000,000.00 -1,000,000.00 0.00 AT 100% 10/30/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,973,840.0000 1.000000 1,973,840.00 -1,973,840.00 0.00 10/31/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,998,751.6700 1.000000 2,998,751.67 -2,998,751.67 0.00 10/31/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,985,143.7500 1.000000 4,985,143.75 -4,985,143.75 0.00 11/01/2018 96121T6G8 MATURED PAR VALUE OF WESTPAC BKING C D 2.060% 11/01/18 1,000,000 PAR -1,000,000.0000 1.000000 1,000,000.00 -998,657.01 1,342.99 VALUE AT 100% 11/07/2018 313385N51 MATURED PAR VALUE OF F H L B DISC NTS 11/07/18 3,000,000 PAR VALUE AT -3,000,000.0000 1.000000 2,998,751.67 -2,998,751.67 0.00 100% 11/07/2018 74005PBH6 MATURED PAR VALUE OF PRAXAIR INC 1.250% 11/07/18 1,205,000 PAR VALUE -1,205,000.0000 1.000000 1,205,000.00 -1,198,513.80 6,486.20 AT 100% 11/07/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,490,738.8600 1.000000 4,490,738.86 -4,490,738.86 0.00 11/08/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,587,226.8900 1.000000 2,587,226.89 -2,587,226.89 0.00 11/13/2018 06371 ERK5 MATURED PAR VALUE OF BANK OF MONTREAL C D 1.750% 11/13/18 2,950,000 PAR -2,950,000.0000 1.000000 2,950,000.00 -2,941,422.57 8,577.43 VALUE AT 100% 11/13/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,940,491.2900 1.000000 2,940,491.29 -2,940,491.29 0.00 6of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/13/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -3,412,158.4400 1.000000 3,412,158.44 -3,412,158.44 0.00 11/15/2018 31348SWZ3 PAID DOWN PAR VALUE OF F H L M C#786064 3.427% 1/01/28 OCTOBER FHLMC -17.3200 0.000000 17.32 -16.90 0.42 DUE 11/15/18 11/15/2018 3133TCE95 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 3.587% 8/15/32 -728.3000 0.000000 728.30 -729.06 -0.76 11/15/2018 43814QAC2 PAID DOWN PAR VALUE OF HONDA AUTO 1.390% 4/15/20 -89,342.2300 0.000000 89,342.23 -89,340.50 1.73 11/15/2018 47788MAC4 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.360% 4/15/20 -151,000.5000 0.000000 151,000.50 -150,976.73 23.77 11/15/2018 47787XAB3 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.500% 10/15/19 CMO FINAL -83,538.8400 0.000000 83,538.84 -83,538.51 0.33 PAYDOWN 11/15/2018 47788BABO PAID DOWN PAR VALUE OF JOHN DEERE OWNER 1.590% 4/15/20 -76,051.4600 0.000000 76,051.46 -76,044.85 6.61 11/15/2018 47788CAB8 PAID DOWN PAR VALUE OF JOHN DEERE OWNER 2.420% 10/15/20 -57,306.3300 0.000000 57,306.33 -57,189.93 116.40 11/15/2018 65478VAD9 PAID DOWN PAR VALUE OF NISSAN AUTO 1.320% 1/15/21 -113,392.4200 0.000000 113,392.42 -112,484.40 908.02 11/15/2018 654747ABO PAID DOWN PAR VALUE OF NISSAN AUTO 1.470% 1/15/20 -96,082.0000 0.000000 96,082.00 -96,081.51 0.49 11/15/2018 65477UAD2 PAID DOWN PAR VALUE OF NISSAN AUTO 1.500% 9/15/21 -188,842.7200 0.000000 188,842.72 -187,662.45 1,180.27 11/15/2018 89238BAB8 PAID DOWN PAR VALUE OF TOYOTA AUTO 2.100% 10/15/20 -427,372.7800 0.000000 427,372.78 -427,329.10 43.68 11/15/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,072,841.4600 1.000000 1,072,841.46 -1,072,841.46 0.00 11/19/2018 43814RACO PAID DOWN PAR VALUE OF HONDA AUTO 1.210% 12/18/20 -188,201.8400 1.553671 188,201.84 -186,136.03 2,065.81 11/19/2018 43814PAB6 PAID DOWN PAR VALUE OF HONDA AUTO 1.570% 1/21/20 -75,009.0800 3.898244 75,009.08 -75,002.41 6.67 11/20/2018 36225CAZ9 PAID DOWN PAR VALUE OF G N M A 1 1#080023 3.125% 12/20/26 OCTOBER GNMA -183.3000 0.000000 183.30 -186.33 -3.03 DUE 11/20/18 11/20/2018 36225CC20 PAID DOWN PAR VALUE OF G N M A 11#080088 3.625% 6/20/27 OCTOBER GNMA -1,554.1600 0.000000 1,554.16 -1,588.16 -34.00 DUE 11/20/18 11/20/2018 36225CNM4 PAID DOWN PAR VALUE OF G N M A 1 1#080395 3.625% 4/20/30 OCTOBER GNMA -95.0100 0.000000 95.01 -94.15 0.86 DUE 11/20/18 11/20/2018 36225CN28 PAID DOWN PAR VALUE OF G N M A 11#080408 3.625% 5/20/30 OCTOBER GNMA -360.7400 0.000000 360.74 -357.08 3.66 DUE 11/20/18 11/20/2018 36225DCB8 PAID DOWN PAR VALUE OF G N M A 11#080965 3.750% 7/20/34 OCTOBER GNMA -1,130.3800 0.000000 1,130.38 -1,129.67 0.71 DUE 11/20/18 11/26/2018 31394JY35 PAID DOWN PAR VALUE OF F H L M C MLTCL MTG 6.500% 9/25/43 -1,797.8500 0.000000 1,797.85 -2,036.07 -238.22 11/26/2018 31371 NUC7 PAID DOWN PAR VALUE OF F N M A#257179 4.500% 4/01/28 OCTOBER FNMA -128.6700 0.000000 128.67 -136.08 -7.41 DUE 11/25/18 11/26/2018 31376KT22 PAID DOWN PAR VALUE OF F N M A#357969 5.000% 9/01/35 OCTOBER FNMA -2,293.4400 0.000000 2,293.44 -2,465.45 -172.01 DUE 11/25/18 11/26/2018 31381 PDA3 PAID DOWN PAR VALUE OF F N M A#466397 3.400% 11/01/20 OCTOBER FNMA -670.8400 0.000000 670.84 -656.32 14.52 DUE 11/25/18 11/26/2018 31403DJZ3 PAID DOWN PAR VALUE OF F N M A#745580 5.000% 6/01/36 OCTOBER FNMA -1,830.1500 0.000000 1,830.15 -1,967.41 -137.26 DUE 11/25/18 7of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/26/2018 31403GXF4 PAID DOWN PAR VALUE OF F N M A#748678 5.000% 10/01/33 OCTOBER FNMA -693.9000 0.000000 693.90 -745.94 -52.04 DUE 11/25/18 11/26/2018 31406PQY8 PAID DOWN PAR VALUE OF F N M A#815971 5.000% 3/01/35 OCTOBER FNMA -4,909.6700 0.000000 4,909.67 -5,277.90 -368.23 DUE 11/25/18 11/26/2018 31406XWT5 PAID DOWN PAR VALUE OF F N M A#823358 3.481% 2/01/35 OCTOBER FNMA -6,482.3600 0.000000 6,482.36 -6,431.72 50.64 DUE 11/25/18 11/26/2018 31407BXH7 PAID DOWN PAR VALUE OF F N M A#826080 5.000% 7/01/35 OCTOBER FNMA -554.2400 0.000000 554.24 -595.81 -41.57 DUE 11/25/18 11/26/2018 31410F4V4 PAID DOWN PAR VALUE OF F N M A#888336 5.000% 7/01/36 OCTOBER FNMA -5,879.3200 0.000000 5,879.32 -6,320.27 -440.95 DUE 11/25/18 11/26/2018 3138EG6F6 PAID DOWN PAR VALUE OF F N M A#AL0869 4.500% 6/01/29 OCTOBER FNMA -147.3600 0.000000 147.36 -155.85 -8.49 DUE 11/25/18 11/26/2018 31417YAY3 PAID DOWN PAR VALUE OF F N M A#MA0022 4.500% 4/01/29 OCTOBER FNMA -276.3000 0.000000 276.30 -292.21 -15.91 DUE 11/25/18 11/26/2018 31397QREO PAID DOWN PAR VALUE OF F N M A GTD REMIC 1.113% 2/25/41 -2,910.8100 0.000000 2,910.81 -2,909.90 0.91 11/27/2018 78012UAX3 MATURED PAR VALUE OF ROYAL BK OF C D 2.320% 11/27/18 1,000,000 PAR VALUE -1,000,000.0000 1.000000 1,000,000.00 -1,000,000.00 0.00 AT 100% 11/29/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,004,074.0300 1.000000 1,004,074.03 -1,004,074.03 0.00 11/30/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,435,299.3900 1.000000 2,435,299.39 -2,435,299.39 0.00 12/11/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -2,000,000.0000 1.000000 2,000,000.00 -2,000,000.00 0.00 12/12/2018 313385580 MATURED PAR VALUE OF F H L B DISC NTS 12/12/18 5,000,000 PAR VALUE AT -5,000,000.0000 1.000000 4,983,232.64 -4,983,232.64 0.00 100% 12/13/2018 24422ESF7 MATURED PAR VALUE OF JOHN DEERE MTN 1.950% 12/13/18 1,000,000 PAR -1,000,000.0000 1.000000 1,000,000.00 -997,500.00 2,500.00 VALUE AT 100% 12/14/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,500,000.0000 1.000000 1,500,000.00 -1,500,000.00 0.00 12/19/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,957,864.4400 1.000000 1,957,864.44 -1,957,864.44 0.00 12/20/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -10,047,333.5600 1.000000 10,047,333.56 -10,047,333.56 0.00 12/21/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -14,142,147.8600 1.000000 14,142,147.86 -14,142,147.86 0.00 12/24/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,992,912.5000 1.000000 4,992,912.50 -4,992,912.50 0.00 12/24/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -22,042,761.5500 1.000000 22,042,761.55 -22,042,761.55 0.00 12/26/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -1,883,859.0800 1.000000 1,883,859.08 -1,883,859.08 0.00 12/27/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -21,602,740.6900 1.000000 21,602,740.69 -21,602,740.69 0.00 12/28/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -20,586,988.4600 1.000000 20,586,988.46 -20,586,988.46 0.00 12/31/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -810,209.3300 1.000000 810,209.33 -810,209.33 0.00 8of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Arnt Cost Gain/Loss 12/31/2018 31846V567 SOLD UNITS OF FIRST AM GOVT OB FD CL Z -4,993,125.0000 1.000000 4,993,125.00 -4,993,125.00 0.00 TOTAL DISPOSITIONS -226,100,039.4300 225,909,813.74 -225,875,944.04 33,869.70 OTHER TRANSACTIONS 10/01/2018 06051GFD6 INTEREST EARNED ON BANK OF AMERICA CORP 2.650% 4/01/19$1 PV ON 0.0000 0.000000 19,875.00 0.00 0.00 1500000.0000 SHARES DUE 10/1/2018 10/01/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 12,410.49 0.00 0.00 9/30/2018 INTEREST FROM 9/1/18 TO 9/30/18 10/01/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 22,004.98 0.00 0.00 9/30/2018 INTEREST FROM 9/1/18 TO 9/30/18 10/01/2018 912828T34 INTEREST EARNED ON U S TREASURY NT 1.125% 9/30/21 $1 PV ON 7000000.0000 0.0000 0.000000 39,375.00 0.00 0.00 SHARES DUE 9/30/2018 10/01/2018 912828W97 INTEREST EARNED ON U S TREASURY NT 1.250% 3/31/19$1 PV ON 5000000.0000 0.0000 0.000000 31,250.00 0.00 0.00 SHARES DUE 9/30/2018 10/01/2018 912828SN1 INTEREST EARNED ON U S TREASURY NT 1.500% 3/31/19$1 PV ON 5000000.0000 0.0000 0.000000 37,500.00 0.00 0.00 SHARES DUE 9/30/2018 10/01/2018 912828,176 INTEREST EARNED ON U S TREASURY NT 1.750% 3/31/22$1 PV ON 5000000.0000 0.0000 0.000000 43,750.00 0.00 0.00 SHARES DUE 9/30/2018 10/01/2018 912828F39 INTEREST EARNED ON U S TREASURY NT 1.750% 9/30/19$1 PV ON 5800000.0000 0.0000 0.000000 50,750.00 0.00 0.00 SHARES DUE 9/30/2018 10/01/2018 9128281-57 INTEREST EARNED ON U S TREASURY NT 1.750% 9/30/22$1 PV ON 0.0000 0.000000 113,750.00 0.00 0.00 13000000.0000 SHARES DUE 9/30/2018 10/01/2018 9128284D9 INTEREST EARNED ON U S TREASURY NT 2.500% 3/31/23$1 PV ON 0.0000 0.000000 125,000.00 0.00 0.00 10000000.0000 SHARES DUE 9/30/2018 10/02/2018 3137EADM8 INTEREST EARNED ON F H L M C M T N 1.250% 10/02/19$1 PV ON 7500000.0000 0.0000 0.000000 46,875.00 0.00 0.00 SHARES DUE 10/2/2018 10/04/2018 525ESCOY6 Unknown LEHMAN BRTH HLD ESC PARTIAL LIQUIDATING DISTRIBUTION PAID @ 0.0000 0.000000 15,621.60 -15,621.60 0.00 7.810784 10/04/2018 525ESCIB7 Unknown LEHMAN BRTH MTN ES 0.00001% 1/24/13 PARTIAL LIQUIDATING 0.0000 0.000000 4,703.12 -4,703.12 0.00 DISTRIBUTION PAID @ 7.838529 10/05/2018 3135GOT45 INTEREST EARNED ON F N M A 1.875% 4/05/22$1 PV ON 5000000.0000 0.0000 0.000000 46,875.00 0.00 0.00 SHARES DUE 10/5/2018 10/05/2018 78009N2V7 INTEREST EARNED ON ROYAL BK CANADA C D 1.700% 10/05/18$1 PV ON 0.0000 0.000000 17,188.89 0.00 0.00 1000000.0000 SHARES DUE 10/5/2018 ACCRUED INTEREST ON 10/5/2018 MATURITY 10/11/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 2808.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/11/2018 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 2808.00 UNITS 0.0000 0.000000 0.00 2,808.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 9of18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/11/2018 912796NZ8 INTEREST EARNED ON U S TREASURY BILL 10/11/18$1 PV ON 10000000.0000 0.0000 0.000000 40,733.89 0.00 0.00 SHARES DUE 10/11/2018 10,000,000 PAR VALUE AT 100% 10/11/2018 912796NZ8 INTEREST EARNED ON U S TREASURY BILL 10/11/18$1 PV ON 5000000.0000 0.0000 0.000000 3,697.78 0.00 0.00 SHARES DUE 10/11/2018 5,000,000 PAR VALUE AT 100% 10/11/2018 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 2808.0000 UNITS 2,808.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/11/2018 912828WUO STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 2808.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/12/2018 313385K39 INTEREST EARNED ON F H L B DISC NTS 10/12/18$1 PV ON 6000000.0000 0.0000 0.000000 9,380.00 0.00 0.00 SHARES DUE 10/12/2018 6,000,000 PAR VALUE AT 100% 10/12/2018 912828B33 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.500% 1/31/19 0.0000 0.000000 -29,755.43 0.00 0.00 10/15/2018 02587AAJ3 INTEREST EARNED ON AMERICAN EXPRESS 1.930% 9/15/22$1 PV ON 10084.2400 0.0000 0.000000 10,084.24 0.00 0.00 SHARES DUE 10/15/2018$0.00161/PV ON 6,270,000.00 PV DUE 10/15/18 10/15/2018 31348SWZ3 INTEREST EARNED ON F H L M C#786064 3.427% 1/01/28$1 PV ON 5.8500 SHARES 0.0000 0.000000 5.85 0.00 0.00 DUE 10/15/2018 AUGUST FHLMC DUE 10/15/18 10/15/2018 43814QAC2 INTEREST EARNED ON HONDA AUTO 1.390% 4/15/20$1 PV ON 827.7000 0.0000 0.000000 827.70 0.00 0.00 SHARES DUE 10/15/2018$0.00116/PV ON 714,560.80 PV DUE 10/15/18 10/15/2018 47788MAC4 INTEREST EARNED ON JOHN DEERE OWNER 1.360% 4/15/20$1 PV ON 916.6100 0.0000 0.000000 916.61 0.00 0.00 SHARES DUE 10/15/2018$0.00113/PV ON 808,770.16 PV DUE 10/15/18 10/15/2018 47788NADO INTEREST EARNED ON JOHN DEERE OWNER 1.490% 5/15/23$1 PV ON 1429.1600 0.0000 0.000000 1,429.16 0.00 0.00 SHARES DUE 10/15/2018$0.00124/PV ON 1,151,000.00 PV DUE 10/15/18 10/15/2018 47787XAB3 INTEREST EARNED ON JOHN DEERE OWNER 1.500% 10/15/19$1 PV ON 241.0800 0.0000 0.000000 241.08 0.00 0.00 SHARES DUE 10/15/2018$0.00125/PV ON 192,866.98 PV DUE 10/15/18 10/15/2018 47788BABO INTEREST EARNED ON JOHN DEERE OWNER 1.590% 4/15/20$1 PV ON 580.2200 0.0000 0.000000 580.22 0.00 0.00 SHARES DUE 10/15/2018$0.00133/PV ON 437,905.04 PV DUE 10/15/18 10/15/2018 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820% 10/15/21 $1 PV ON 1023.7500 0.0000 0.000000 1,023.75 0.00 0.00 SHARES DUE 10/15/2018$0.00152/PV ON 675,000.00 PV DUE 10/15/18 10/15/2018 47788CAB8 INTEREST EARNED ON JOHN DEERE OWNER 2.420% 10/15/20$1 PV ON 3630.0000 0.0000 0.000000 3,630.00 0.00 0.00 SHARES DUE 10/15/2018$0.00202/PV ON 1,800,000.00 PV DUE 10/15/18 10/15/2018 47788CAC6 INTEREST EARNED ON JOHN DEERE OWNER 2.660% 4/18/22$1 PV ON 0.0000 0.000000 2,970.33 0.00 0.00 1340000.0000 SHARES DUE 10/15/2018 10/15/2018 47788EAC2 INTEREST EARNED ON JOHN DEERE OWNER 3.080% 11/15/22$1 PV ON 11883.6700 0.0000 0.000000 11,883.67 0.00 0.00 SHARES DUE 10/15/2018$0.00257/PV ON 4,630,000.00 PV DUE 10/15/18 10/15/2018 62479MKF9 INTEREST EARNED ON MUFG BANK LTD NY BRAN C P 10/15/18$1 PV ON 0.0000 0.000000 24,583.00 0.00 0.00 3100000.0000 SHARES DUE 10/15/2018 3,100,000 PAR VALUE AT 100% 10/15/2018 62479MKF9 INTEREST EARNED ON MUFG BANK LTD NY BRAN C P 10/15/18$1 PV ON 0.0000 0.000000 62,130.00 0.00 0.00 9000000.0000 SHARES DUE 10/15/2018 9,000,000 PAR VALUE AT 100% 10 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/15/2018 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15/21 $1 PV ON 1498.0400 0.0000 0.000000 1,498.04 0.00 0.00 SHARES DUE 10/15/2018$0.00110/PV ON 1,361,853.10 PV DUE 10/15/18 10/15/2018 654747ABO INTEREST EARNED ON NISSAN AUTO 1.470% 1/15/20$1 PV ON 417.2500 0.0000 0.000000 417.25 0.00 0.00 SHARES DUE 10/15/2018$0.00123/PV ON 340,612.63 PV DUE 10/15/18 10/15/2018 65477UAD2 INTEREST EARNED ON NISSAN AUTO 1.500% 9/15/21 $1 PV ON 2020.4300 0.0000 0.000000 2,020.43 0.00 0.00 SHARES DUE 10/15/2018$0.00125/PV ON 1,616,346.74 PV DUE 10/15/18 10/15/2018 65479GAD1 INTEREST EARNED ON NISSAN AUTO 3.060% 3/15/23$1 PV ON 9078.0000 0.0000 0.000000 9,078.00 0.00 0.00 SHARES DUE 10/15/2018$0.00255/PV ON 3,560,000.00 PV DUE 10/15/18 10/15/2018 674599CK9 INTEREST EARNED ON OCCIDENTAL PETROLEUM 2.600% 4/15/22$1 PV ON 0.0000 0.000000 43,550.00 0.00 0.00 3350000.0000 SHARES DUE 10/15/2018 10/15/2018 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100% 10/15/20$1 PV ON 9047.5000 0.0000 0.000000 9,047.50 0.00 0.00 SHARES DUE 10/15/2018$0.00175/PV ON 5,170,000.00 PV DUE 10/15/18 10/16/2018 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 3.587% 8/15/32$1 PV ON 46.0100 0.0000 0.000000 46.01 0.00 0.00 SHARES DUE 10/15/2018$0.00299/PV ON 15,013.80 PV DUE 10/15/18 10/16/2018 69353RCH9 PAID ACCRUED INTEREST ON PURCHASE OF PNC BANK NA MTN 2.200% 1/28/19 0.0000 0.000000 -4,909.67 0.00 0.00 10/18/2018 43814RACO INTEREST EARNED ON HONDA AUTO 1.210% 12/18/20$1 PV ON 2449.9700 0.0000 0.000000 2,449.97 0.00 0.00 SHARES DUE 10/18/2018$0.00101/PV ON 2,429,718.80 PV DUE 10/18/18 10/18/2018 43814PAB6 INTEREST EARNED ON HONDA AUTO 1.570% 1/21/20$1 PV ON 660.6000 0.0000 0.000000 660.60 0.00 0.00 SHARES DUE 10/18/2018$0.00131/PV ON 504,918.50 PV DUE 10/18/18 10/18/2018 43814PAC4 INTEREST EARNED ON HONDA AUTO 1.790% 9/20/21 $1 PV ON 4609.2500 0.0000 0.000000 4,609.25 0.00 0.00 SHARES DUE 10/18/2018$0.00149/PV ON 3,090,000.00 PV DUE 10/18/18 10/18/2018 43814UAG4 INTEREST EARNED ON HONDA AUTO 3.010% 5/18/22$1 PV ON 1710000.0000 0.0000 0.000000 4,289.25 0.00 0.00 SHARES DUE 10/18/2018 10/22/2018 36225CAZ9 INTEREST EARNED ON G N M A 1 1#080023 3.125% 12/20/26$1 PV ON 49.1800 0.0000 0.000000 49.18 0.00 0.00 SHARES DUE 10/20/2018 SEPTEMBER GNMA DUE 10/20/18 10/22/2018 36225CC20 INTEREST EARNED ON G N M A 1 1#080088 3.625% 6/20/27$1 PV ON 63.4600 0.0000 0.000000 63.46 0.00 0.00 SHARES DUE 10/20/2018 SEPTEMBER GNMA DUE 10/20/18 10/22/2018 36225CNM4 INTEREST EARNED ON G N M A 1 1#080395 3.625% 4/20/30$1 PV ON 23.6900 0.0000 0.000000 23.69 0.00 0.00 SHARES DUE 10/20/2018 SEPTEMBER GNMA DUE 10/20/18 10/22/2018 36225CN28 INTEREST EARNED ON G N M A 1 1#080408 3.625% 5/20/30$1 PV ON 183.2900 0.0000 0.000000 183.29 0.00 0.00 SHARES DUE 10/20/2018 SEPTEMBER GNMA DUE 10/20/18 10/22/2018 36225DCB8 INTEREST EARNED ON G N M A 1 1#080965 2.750% 7/20/34$1 PV ON 134.5400 0.0000 0.000000 134.54 0.00 0.00 SHARES DUE 10/20/2018 SEPTEMBER GNMA DUE 10/20/18 10/22/2018 43815HAC1 INTEREST EARNED ON HONDA AUTO 2.950% 8/22/22$1 PV ON 3970000.0000 0.0000 0.000000 9,759.58 0.00 0.00 SHARES DUE 10/21/2018 10/22/2018 94974BFU9 INTEREST EARNED ON WELLS FARGO COM MTN 2.125% 4/22/19$1 PV ON 0.0000 0.000000 15,937.50 0.00 0.00 1500000.0000 SHARES DUE 10/22/2018 11 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/24/2018 3133851-79 INTEREST EARNED ON F H L B DISC NTS 10/24/18$1 PV ON 5000000.0000 0.0000 0.000000 7,987.50 0.00 0.00 SHARES DUE 10/24/2018 5,000,000 PAR VALUE AT 100% 10/25/2018 03215PFN4 INTEREST EARNED ON AMRESCO 3.15585% 6/25/29$1 PV ON 351.7300 0.0000 0.000000 351.73 0.00 0.00 SHARES DUE 10/25/2018$0.00263/PV ON 133,743.29 PV DUE 10/25/18 10/25/2018 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20$1 PV ON 900000.0000 0.0000 0.000000 3,188.25 0.00 0.00 SHARES DUE 10/25/2018 10/25/2018 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9/25/43$1 PV ON 4280.5100 0.0000 0.000000 4,280.51 0.00 0.00 SHARES DUE 10/25/2018$0.00542/PV ON 790,248.18 PV DUE 10/25/18 10/25/2018 31371 NUC7 INTEREST EARNED ON F N M A#257179 4.500% 4/01/28$1 PV ON 67.7100 SHARES 0.0000 0.000000 67.71 0.00 0.00 DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31376KT22 INTEREST EARNED ON F N M A#357969 5.000% 9/01/35$1 PV ON 475.9100 0.0000 0.000000 475.91 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31381PDA3 INTEREST EARNED ON F N M A#466397 3.400% 11/01/20$1 PV ON 980.0200 0.0000 0.000000 980.02 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31403DJZ3 INTEREST EARNED ON F N M A#745580 5.000% 6/01/36$1 PV ON 463.5200 0.0000 0.000000 463.52 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31403GXF4 INTEREST EARNED ON F N M A#748678 5.000% 10/01/33$1 PV ON 10.7200 0.0000 0.000000 10.72 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31406PQY8 INTEREST EARNED ON F N M A#815971 5.000% 3/01/35$1 PV ON 819.8300 0.0000 0.000000 819.83 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31406XWT5 INTEREST EARNED ON F N M A#823358 3.481% 2/01/35$1 PV ON 349.8100 0.0000 0.000000 349.81 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31407BXH7 INTEREST EARNED ON F N M A#826080 5.000% 7/01/35$1 PV ON 93.1200 SHARES 0.0000 0.000000 93.12 0.00 0.00 DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31410F4V4 INTEREST EARNED ON F N M A#888336 5.000% 7/01/36$1 PV ON 915.5200 0.0000 0.000000 915.52 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 3138EG6F6 INTEREST EARNED ON F N M A#AL0869 4.500% 6/01/29$1 PV ON 46.2500 0.0000 0.000000 46.25 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31417YAY3 INTEREST EARNED ON F N M A#MA0022 4.500% 4/01/29$1 PV ON 75.2500 0.0000 0.000000 75.25 0.00 0.00 SHARES DUE 10/25/2018 SEPTEMBER FNMA DUE 10/25/18 10/25/2018 31397QREO INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 540.2700 0.0000 0.000000 540.27 0.00 0.00 SHARES DUE 10/25/2018$0.00241/PV ON 223,883.01 PV DUE 10/25/18 10/25/2018 78445JAA5 INTEREST EARNED ON S L M A 3.92054% 4/25/23$1 PV ON 263.4500 SHARES 0.0000 0.000000 263.45 0.00 0.00 DUE 10/25/2018$0.00980/PV ON 26,879.41 PV DUE 10/25/18 10/25/2018 912796QE2 INTEREST EARNED ON U S TREASURY BILL 10/25/18$1 PV ON 5000000.0000 0.0000 0.000000 23,697.83 0.00 0.00 SHARES DUE 10/25/2018 5,000,000 PAR VALUE AT 100% 10/25/2018 912828SD3 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.250% 1/31/19 0.0000 0.000000 -14,605.98 0.00 0.00 12 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 10/25/2018 25468PDL7 PAID ACCRUED INTEREST ON PURCHASE OF WALT DISNEY MTN 0.875% 7/12/19 0.0000 0.000000 -2,828.92 0.00 0.00 10/29/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 3120.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/29/2018 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 3120.00 UNITS 0.0000 0.000000 0.00 3,120.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/29/2018 89113X7B4 INTEREST EARNED ON TORONTO C D 2.260% 10/29/18$1 PV ON 1000000.0000 0.0000 0.000000 6,403.33 0.00 0.00 SHARES DUE 10/29/2018 ACCRUED INTEREST ON 10/29/2018 MATURITY 10/29/2018 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 3120.0000 UNITS 3,120.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/29/2018 912828WUO STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 3120.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 10/30/2018 58933YAF2 PAID ACCRUED INTEREST ON PURCHASE OF MERCK CO INC 2.800% 5/18/23 0.0000 0.000000 -25,200.00 0.00 0.00 10/31/2018 912828T67 INTEREST EARNED ON U S TREASURY NT 1.250% 10/31/21 $1 PV ON 6000000.0000 0.0000 0.000000 37,500.00 0.00 0.00 SHARES DUE 10/31/2018 10/31/2018 9128281-99 INTEREST EARNED ON U S TREASURY NT 1.375% 10/31/20$1 PV ON 0.0000 0.000000 68,750.00 0.00 0.00 10000000.0000 SHARES DUE 10/31/2018 10/31/2018 313383YJ4 PAID ACCRUED INTEREST ON PURCHASE OF F H L B DEB 3.375% 9/08/23 0.0000 0.000000 -24,843.75 0.00 0.00 11/01/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 10,874.80 0.00 0.00 10/31/2018 INTEREST FROM 10/1/18 TO 10/31/18 11/01/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 24,923.82 0.00 0.00 10/31/2018 INTEREST FROM 10/1/18 TO 10/31/18 11/01/2018 64971M5E8 INTEREST EARNED ON NEW YORK NY CITY 4.075% 11/01/20$1 PV ON 0.0000 0.000000 28,525.00 0.00 0.00 1400000.0000 SHARES DUE 11/1/2018 11/01/2018 96121T6G8 INTEREST EARNED ON WESTPAC BKING C D 2.060% 11/01/18$1 PV ON 0.0000 0.000000 15,678.89 0.00 0.00 1000000.0000 SHARES DUE 11/1/2018 ACCRUED INTEREST ON 11/1/2018 MATURITY 11/05/2018 00440EAUl INTEREST EARNED ON ACE INA HOLDINGS 2.875% 11/03/22$1 PV ON 0.0000 0.000000 59,929.38 0.00 0.00 4169000.0000 SHARES DUE 11/3/2018 11/07/2018 313385N51 INTEREST EARNED ON F H L B DISC NTS 11/07/18$1 PV ON 3000000.0000 0.0000 0.000000 1,248.33 0.00 0.00 SHARES DUE 11/7/2018 3,000,000 PAR VALUE AT 100% 11/07/2018 74005PBH6 INTEREST EARNED ON PRAXAIR INC 1.250% 11/07/18$1 PV ON 1205000.0000 0.0000 0.000000 7,531.25 0.00 0.00 SHARES DUE 11/7/2018 11/07/2018 912828V56 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.125% 1/31/19 0.0000 0.000000 -9,079.48 0.00 0.00 11/08/2018 65478GAD2 PAID ACCRUED INTEREST ON PURCHASE OF NISSAN AUTO 1.750% 10/15/21 0.0000 0.000000 -2,934.90 0.00 0.00 11/13/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6136.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/13/2018 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6136.00 UNITS 0.0000 0.000000 0.00 6,136.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 13 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/13/2018 06371ERK5 INTEREST EARNED ON BANK OF MONTREAL C D 1.750% 11/13/18$1 PV ON 0.0000 0.000000 56,357.29 0.00 0.00 2950000.0000 SHARES DUE 11/13/2018 ACCRUED INTEREST ON 11/13/2018 11/13/2018 369550BE7 INTEREST EARNED ON GENERAL DYNAMICS 3.000% 5/11/21 $1 PV ON 0.0000 0.000000 47,400.00 0.00 0.00 3160000.0000 SHARES DUE 11/11/2018 11/13/2018 4581XOCX4 INTEREST EARNED ON INTER AMER DEV BK 1.625% 5/12/20$1 PV ON 0.0000 0.000000 24,659.38 0.00 0.00 3035000.0000 SHARES DUE 11/12/2018 11/13/2018 166764AH3 PAID ACCRUED INTEREST ON PURCHASE OF CHEVRON CORP 3.191% 6/24/23 0.0000 0.000000 -43,122.82 0.00 0.00 11/13/2018 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6136.0000 UNITS 6,136.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/13/2018 912828WUO STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6136.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/15/2018 02587AAJ3 INTEREST EARNED ON AMERICAN EXPRESS 1.930% 9/15/22$1 PV ON 10084.2400 0.0000 0.000000 10,084.24 0.00 0.00 SHARES DUE 11/15/2018$0.00161/PV ON 6,270,000.00 PV DUE 11/15/18 11/15/2018 084664BT7 INTEREST EARNED ON BERKSHIRE HATHAWAY 3.000% 5/15/22$1 PV ON 0.0000 0.000000 60,000.00 0.00 0.00 4000000.0000 SHARES DUE 11/15/2018 11/15/2018 31348SWZ3 INTEREST EARNED ON F H L M C#786064 3.427% 1/01/28$1 PV ON 5.8100 SHARES 0.0000 0.000000 5.81 0.00 0.00 DUE 11/15/2018 SEPTEMBER FHLMC DUE 11/15/18 11/15/2018 3133TCE95 INTEREST EARNED ON F H L M C MLTCL MTG 3.587% 8/15/32$1 PV ON 43.5800 0.0000 0.000000 43.58 0.00 0.00 SHARES DUE 11/15/2018$0.00299/PV ON 13,988.10 PV DUE 11/15/18 11/15/2018 43814QAC2 INTEREST EARNED ON HONDA AUTO 1.390% 4/15/20$1 PV ON 723.1600 0.0000 0.000000 723.16 0.00 0.00 SHARES DUE 11/15/2018$0.00116/PV ON 624,307.38 PV DUE 11/15/18 11/15/2018 47788MAC4 INTEREST EARNED ON JOHN DEERE OWNER 1.360% 4/15/20$1 PV ON 790.1500 0.0000 0.000000 790.15 0.00 0.00 SHARES DUE 11/15/2018$0.00113/PV ON 697,190.71 PV DUE 11/15/18 11/15/2018 47788NADO INTEREST EARNED ON JOHN DEERE OWNER 1.490% 5/15/23$1 PV ON 1429.1600 0.0000 0.000000 1,429.16 0.00 0.00 SHARES DUE 11/15/2018$0.00124/PV ON 1,151,000.00 PV DUE 11/15/18 11/15/2018 47787XAB3 INTEREST EARNED ON JOHN DEERE OWNER 1.500% 10/15/19$1 PV ON 104.4200 0.0000 0.000000 104.42 0.00 0.00 SHARES DUE 11/15/2018$0.00125/PV ON 83,538.84 PV DUE 11/15/18 11/15/2018 47788BABO INTEREST EARNED ON JOHN DEERE OWNER 1.590% 4/15/20$1 PV ON 507.6800 0.0000 0.000000 507.68 0.00 0.00 SHARES DUE 11/15/2018$0.00132/PV ON 383,155.51 PV DUE 11/15/18 11/15/2018 47788BAD6 INTEREST EARNED ON JOHN DEERE OWNER 1.820% 10/15/21 $1 PV ON 1023.7500 0.0000 0.000000 1,023.75 0.00 0.00 SHARES DUE 11/15/2018$0.00152/PV ON 675,000.00 PV DUE 11/15/18 11/15/2018 47788CAB8 INTEREST EARNED ON JOHN DEERE OWNER 2.420% 10/15/20$1 PV ON 3630.0000 0.0000 0.000000 3,630.00 0.00 0.00 SHARES DUE 11/15/2018$0.00202/PV ON 1,800,000.00 PV DUE 11/15/18 11/15/2018 47788CAC6 INTEREST EARNED ON JOHN DEERE OWNER 2.660% 4/18/22$1 PV ON 2970.3300 0.0000 0.000000 2,970.33 0.00 0.00 SHARES DUE 11/15/2018$0.00222/PV ON 1,340,000.00 PV DUE 11/15/18 11/15/2018 47788EAC2 INTEREST EARNED ON JOHN DEERE OWNER 3.080% 11/15/22$1 PV ON 11883.6700 0.0000 0.000000 11,883.67 0.00 0.00 SHARES DUE 11/15/2018$0.00257/PV ON 4,630,000.00 PV DUE 11/15/18 14 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/15/2018 65478VAD9 INTEREST EARNED ON NISSAN AUTO 1.320% 1/15/21 $1 PV ON 1389.7700 0.0000 0.000000 1,389.77 0.00 0.00 SHARES DUE 11/15/2018$0.00110/PV ON 1,263,429.36 PV DUE 11/15/18 11/15/2018 654747ABO INTEREST EARNED ON NISSAN AUTO 1.470% 1/15/20$1 PV ON 317.3000 0.0000 0.000000 317.30 0.00 0.00 SHARES DUE 11/15/2018$0.00122/PV ON 259,017.38 PV DUE 11/15/18 11/15/2018 65477UAD2 INTEREST EARNED ON NISSAN AUTO 1.500% 9/15/21 $1 PV ON 1808.1900 0.0000 0.000000 1,808.19 0.00 0.00 SHARES DUE 11/15/2018$0.00125/PV ON 1,446,552.40 PV DUE 11/15/18 11/15/2018 65478GAD2 INTEREST EARNED ON NISSAN AUTO 1.750% 10/15/21 $1 PV ON 3828.1200 0.0000 0.000000 3,828.12 0.00 0.00 SHARES DUE 11/15/2018$0.00146/PV ON 2,625,000.00 PV DUE 11/15/18 11/15/2018 65479GAD1 INTEREST EARNED ON NISSAN AUTO 3.060% 3/15/23$1 PV ON 9078.0000 0.0000 0.000000 9,078.00 0.00 0.00 SHARES DUE 11/15/2018$0.00255/PV ON 3,560,000.00 PV DUE 11/15/18 11/15/2018 89238BAB8 INTEREST EARNED ON TOYOTA AUTO 2.100% 10/15/20$1 PV ON 8393.8200 0.0000 0.000000 8,393.82 0.00 0.00 SHARES DUE 11/15/2018$0.00175/PV ON 4,796,471.27 PV DUE 11/15/18 11/15/2018 913366EJ5 INTEREST EARNED ON UNIV OF CALIFORNIA 5.035% 5/15/21 $1 PV ON 400000.0000 0.0000 0.000000 10,070.00 0.00 0.00 SHARES DUE 11/15/2018 11/15/2018 69371 RN36 PAID ACCRUED INTEREST ON PURCHASE OF PACCAR FINANCIAL MTN 1.200% 0.0000 0.000000 -3,357.30 0.00 0.00 8/12/19 11/16/2018 166764BG4 INTEREST EARNED ON CHEVRON CORP 2.100% 5/16/21 $1 PV ON 2500000.0000 0.0000 0.000000 26,250.00 0.00 0.00 SHARES DUE 11/16/2018 11/19/2018 3137EAEK1 INTEREST EARNED ON F H L M C M T N 1.875% 11/17/20$1 PV ON 5000000.0000 0.0000 0.000000 46,875.00 0.00 0.00 SHARES DUE 11/17/2018 11/19/2018 43814RACO INTEREST EARNED ON HONDA AUTO 1.210% 12/18/20$1 PV ON 2269.6500 0.0000 0.000000 2,269.65 0.00 0.00 SHARES DUE 11/18/2018$0.00101/PV ON 2,250,889.34 PV DUE 11/18/18 11/19/2018 43814PAB6 INTEREST EARNED ON HONDA AUTO 1.570% 1/21/20$1 PV ON 563.9500 0.0000 0.000000 563.95 0.00 0.00 SHARES DUE 11/18/2018$0.00131/PV ON 431,043.97 PV DUE 11/18/18 11/19/2018 43814PAC4 INTEREST EARNED ON HONDA AUTO 1.790% 9/20/21 $1 PV ON 4609.2500 0.0000 0.000000 4,609.25 0.00 0.00 SHARES DUE 11/18/2018$0.00149/PV ON 3,090,000.00 PV DUE 11/18/18 11/19/2018 43814UAG4 INTEREST EARNED ON HONDA AUTO 3.010% 5/18/22$1 PV ON 4289.2500 0.0000 0.000000 4,289.25 0.00 0.00 SHARES DUE 11/18/2018$0.00251/PV ON 1,710,000.00 PV DUE 11/18/18 11/19/2018 58933YAF2 INTEREST EARNED ON MERCK CO INC 2.800% 5/18/23$1 PV ON 2000000.0000 0.0000 0.000000 28,000.00 0.00 0.00 SHARES DUE 11/18/2018 11/20/2018 36225CAZ9 INTEREST EARNED ON G N M A 1 1#080023 3.125% 12/20/26$1 PV ON 48.7200 0.0000 0.000000 48.72 0.00 0.00 SHARES DUE 11/20/2018 OCTOBER GNMA DUE 11/20/18 11/20/2018 36225CC20 INTEREST EARNED ON G N M A 1 1#080088 3.625% 6/20/27$1 PV ON 59.2000 0.0000 0.000000 59.20 0.00 0.00 SHARES DUE 11/20/2018 OCTOBER GNMA DUE 11/20/18 11/20/2018 36225CNM4 INTEREST EARNED ON G N M A 1 1#080395 3.625% 4/20/30$1 PV ON 23.5300 0.0000 0.000000 23.53 0.00 0.00 SHARES DUE 11/20/2018 OCTOBER GNMA DUE 11/20/18 11/20/2018 36225CN28 INTEREST EARNED ON G N M A 1 1#080408 3.625% 5/20/30$1 PV ON 177.4800 0.0000 0.000000 177.48 0.00 0.00 SHARES DUE 11/20/2018 OCTOBER GNMA DUE 11/20/18 15 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/20/2018 36225DCB8 INTEREST EARNED ON G N M A 1 1#080965 3.750% 7/20/34$1 PV ON 179.6900 0.0000 0.000000 179.69 0.00 0.00 SHARES DUE 11/20/2018 OCTOBER GNMA DUE 11/20/18 11/20/2018 747525AD5 INTEREST EARNED ON QUALCOMM INC 2.250% 5/20/20$1 PV ON 5000000.0000 0.0000 0.000000 56,250.00 0.00 0.00 SHARES DUE 11/20/2018 11/21/2018 43815HAC1 INTEREST EARNED ON HONDA AUTO 2.950% 8/22/22$1 PV ON 9759.5800 0.0000 0.000000 9,759.58 0.00 0.00 SHARES DUE 11/21/2018$0.00246/PV ON 3,970,000.00 PV DUE 11/21/18 11/26/2018 03215PFN4 INTEREST EARNED ON AMRESCO 3.43613% 6/25/29$1 PV ON 382.9700 0.0000 0.000000 382.97 0.00 0.00 SHARES DUE 11/25/2018$0.00286/PV ON 133,743.29 PV DUE 11/25/18 11/26/2018 31398VJ98 INTEREST EARNED ON F H L M C MLTCL MTG 4.251% 1/25/20$1 PV ON 900000.0000 0.0000 0.000000 3,188.25 0.00 0.00 SHARES DUE 11/25/2018 11/26/2018 31394JY35 INTEREST EARNED ON F H L M C MLTCL MTG 6.500% 9/25/43$1 PV ON 4207.1100 0.0000 0.000000 4,207.11 0.00 0.00 SHARES DUE 11/25/2018$0.00542/PV ON 776,697.69 PV DUE 11/25/18 11/26/2018 31371 NUC7 INTEREST EARNED ON F N M A#257179 4.500% 4/01/28$1 PV ON 60.7900 SHARES 0.0000 0.000000 60.79 0.00 0.00 DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31376KT22 INTEREST EARNED ON F N M A#357969 5.000% 9/01/35$1 PV ON 473.9900 0.0000 0.000000 473.99 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31381PDA3 INTEREST EARNED ON F N M A#466397 3.400% 11/01/20$1 PV ON 1010.5900 0.0000 0.000000 1,010.59 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31403DJZ3 INTEREST EARNED ON F N M A#745580 5.000% 6/01/36$1 PV ON 454.5600 0.0000 0.000000 454.56 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31403GXF4 INTEREST EARNED ON F N M A#748678 5.000% 10/01/33$1 PV ON 10.6800 0.0000 0.000000 10.68 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31406PQY8 INTEREST EARNED ON F N M A#815971 5.000% 3/01/35$1 PV ON 808.1800 0.0000 0.000000 808.18 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31406XWT5 INTEREST EARNED ON F N M A#823358 3.481% 2/01/35$1 PV ON 348.4600 0.0000 0.000000 348.46 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31407BXH7 INTEREST EARNED ON F N M A#826080 5.000% 7/01/35$1 PV ON 89.4400 SHARES 0.0000 0.000000 89.44 0.00 0.00 DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31410F4V4 INTEREST EARNED ON F N M A#888336 5.000% 7/01/36$1 PV ON 903.4900 0.0000 0.000000 903.49 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 3138EG6F6 INTEREST EARNED ON F N M A#AL0869 4.500% 6/01/29$1 PV ON 45.3700 0.0000 0.000000 45.37 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31417YAY3 INTEREST EARNED ON F N M A#MA0022 4.500% 4/01/29$1 PV ON 73.6800 0.0000 0.000000 73.68 0.00 0.00 SHARES DUE 11/25/2018 OCTOBER FNMA DUE 11/25/18 11/26/2018 31397QREO INTEREST EARNED ON F N M A GTD REMIC 1.113% 2/25/41 $1 PV ON 546.3900 0.0000 0.000000 546.39 0.00 0.00 SHARES DUE 11/25/2018$0.00247/PV ON 221,405.86 PV DUE 11/25/18 11/27/2018 78012UAX3 INTEREST EARNED ON ROYAL BK OF C D 2.320% 11/27/18$1 PV ON 1000000.0000 0.0000 0.000000 17,528.89 0.00 0.00 SHARES DUE 11/27/2018 ACCRUED INTEREST ON 11/27/2018 MATURITY 16 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 11/28/2018 912828WUO BOOK VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6448.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2018 912828WUO FED BASIS OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6448.00 UNITS 0.0000 0.000000 0.00 6,448.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2018 912828WUO PAR VALUE OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6448.0000 UNITS 6,448.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/28/2018 912828WUO STATE COST OF U S TREASURY I P S 0.125% 7/15/24 ADJUSTED BY 6448.00 UNITS 0.0000 0.000000 0.00 0.00 0.00 INCREASE TO ADJUST FOR CHANGE IN CPI 11/29/2018 02665WCQ2 PAID ACCRUED INTEREST ON PURCHASE OF AMERICAN HONDA MTN 3.625% 0.0000 0.000000 -4,934.03 0.00 0.00 10/10/23 11/30/2018 3135GOF73 INTEREST EARNED ON F N M A 1.500% 11/30/20$1 PV ON 7500000.0000 0.0000 0.000000 56,250.00 0.00 0.00 SHARES DUE 11/30/2018 11/30/2018 912828XE5 INTEREST EARNED ON U S TREASURY NT 1.500% 5/31/20$1 PV ON 5000000.0000 0.0000 0.000000 37,500.00 0.00 0.00 11/30/2018 912828G61 INTEREST EARNED ON U S TREASURY NT 1.500% 11/30/19$1 PV ON 7500000.0000 0.0000 0.000000 56,250.00 0.00 0.00 SHARES DUE 11/30/2018 11/30/2018 912828R69 INTEREST EARNED ON U S TREASURY NT 1.625% 5/31/23$1 PV ON 5000000.0000 0.0000 0.000000 40,625.00 0.00 0.00 SHARES DUE 11/30/2018 11/30/2018 9128281.165 INTEREST EARNED ON U S TREASURY NT 1.750% 11/30/21 $1 PV ON 7000000.0000 0.0000 0.000000 61,250.00 0.00 0.00 SHARES DUE 11/30/2018 11/30/2018 912828M80 INTEREST EARNED ON U S TREASURY NT 2.000% 11/30/22$1 PV ON 8000000.0000 0.0000 0.000000 80,000.00 0.00 0.00 SHARES DUE 11/30/2018 11/30/2018 313383YJ4 PAID ACCRUED INTEREST ON PURCHASE OF F H L B DEB 3.375% 9/08/23 0.0000 0.000000 -11,339.06 0.00 0.00 11/30/2018 24422EUM9 PAID ACCRUED INTEREST ON PURCHASE OF JOHN DEERE MTN 3.650% 10/12/23 0.0000 0.000000 -6,083.33 0.00 0.00 12/03/2018 31846V567 INTEREST EARNED ON FIRST AM GOVT OB FD CL Z UNIT ON 0.0000 SHARES DUE 0.0000 0.000000 5,581.08 0.00 0.00 11/30/2018 INTEREST FROM 11/1/18 TO 11/30/18 12/12/2018 313385580 INTEREST EARNED ON F H L B DISC NTS 12/12/18$1 PV ON 5000000.0000 0.0000 0.000000 16,767.36 0.00 0.00 SHARES DUE 12/12/2018 5,000,000 PAR VALUE AT 100% 12/13/2018 24422ESF7 INTEREST EARNED ON JOHN DEERE MTN 1.950% 12/13/18$1 PV ON 1000000.0000 0.0000 0.000000 9,750.00 0.00 0.00 SHARES DUE 12/13/2018 ACCRUED INTEREST ON 12/13/2018 MATURITY 12/19/2018 CASH RECEIPT INCOMING WIRES RECD BANC OF CALIFORNIA A/C XXXXXX9645 0.0000 0.000000 101,000,000.00 0.00 0.00 12/20/2018 912828633 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.500% 1/31/19 0.0000 0.000000 -57,880.43 0.00 0.00 12/21/2018 3133782M2 PAID ACCRUED INTEREST ON PURCHASE OF F H L B DEB 1.500% 3/08/19 0.0000 0.000000 -12,875.00 0.00 0.00 12/21/2018 3133782M2 PAID ACCRUED INTEREST ON PURCHASE OF F H L B DEB 1.500% 3/08/19 0.0000 0.000000 -5,150.00 0.00 0.00 12/21/2018 912828TH3 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 0.875% 7/31/19 0.0000 0.000000 -34,001.36 0.00 0.00 12/24/2018 91282821<5 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.375% 7/31/19 0.0000 0.000000 -54,551.63 0.00 0.00 17 of 18 U.S. Bank Transaction History 10/01/2018 Thru 12/31/2018 Entry Date CUSIP Id Explanation Units Price Net Cash Amt Cost Gain/Loss 12/24/2018 912828B33 PAID ACCRUED INTEREST ON PURCHASE OF U S TREASURY NT 1.500% 1/31/19 0.0000 0.000000 -71,413.04 0.00 0.00 12/26/2018 69353REX2 PAID ACCRUED INTEREST ON PURCHASE OF PNC BANK MTN 1.450% 7/29/19 0.0000 0.000000 -11,190.38 0.00 0.00 12/31/2018 3137EACA5 PAID ACCRUED INTEREST ON PURCHASE OF F H L M C M T N 3.750% 3/27/19 0.0000 0.000000 -7,833.33 0.00 0.00 TOTAL OTHER TRANSACTIONS 18,512.0000 102,602,905.46 -1,812.72 0.00 18 of 18 Callan December 31, 2018 Orange County Sanitation District Investment Measurement Service Quarterly Review Information contained herein includes confidential,trade secret and proprietary information.Neither this Report nor any specific information contained herein is to be used other than by the intended recipient for its intended purpose or disseminated to any other person without Callan's permission.Certain information herein has been compiled by Callan and is based on information provided by a variety of sources believed to be reliable for which Callan has not necessarily verified the accuracy or completeness of or updated.This content may consist of statements of opinion,which are made as of the date they are expressed and are not statements of fact.This content is for informational purposes only and should not be construed as legal or tax advice on any matter.Any decision you make on the basis of this content is your sole responsibility.You should consult with legal and tax advisers before applying any of this information to your particular situation.Past performance is no guarantee of future results.For further information,please see Appendix for Important Information and Disclosures. Table of Contents December 31, 2018 Capital Market Review 1 Active Management Overview Market Overview 7 Domestic Fixed Income 8 Asset Allocation Investment Manager Asset Allocation 10 Investment Manager Returns 11 Asset Class Risk and Return 15 Manager Analysis Chandler-Long Term Operating Fund 17 Chandler-Liquid Operating Money 21 Callan Research/Education 23 Definitions 26 Disclosures 31 Callan Orange County Sanitation District Executive Summary for Period Ending December 31, 2018 Asset Allocation December 31, 2018 September 30, 2018 Market Value Weight Net New Inv. Inv. Return Market Value Weight Domestic Fixed Income Long Term Operating Fund* 498,839,336 73.84% 30,400,000 6,298,179 462,141,157 86.01% Liquid Operating Nbnies* 176,713,788 26 16% 101,000,000 525,433 75,188,355 13.99 Total Fund $675,553,123 100.0% $131,400,000 $6,823,612 $537,329,511 100.0% Performance Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund^ 1.34% 1.60% 1.45% 1.44% 1.20% Chandler 1.34% 1.60% 1.45% - - Blmbg Govt/Cred 1-5 Year Idx 1.46% 1.38% 1.40% 1.32% 1.30% ML 1-5 Govt/Corp 1.43% 1.40% 1.43% 1.37% 1.38% Liquid Operating Monies^ 0.58% 1.90% 1.09% 0.72% 0.55% Chandler 0.58% 1.90% 1.09% - - Citigroup 3-Month Treasury Bill 0.57% 1.86% 0.99% 0.60% 0.45% Total Fund 1.19% 1.72% 1.30% 1.28% 1.08% Target" 1.26% 1.49% 1.34% 1.22% 1.19% Current Quarter Target=80.0%ML 1-5 Govt/Corp and 20.0%Citi 3mo T-Bills. ^Assets were transferred in kind to Chandler on 12/1/2014.Previous performance reflects PIMCO. Recent Developments During the quarter, $101.0 million was contributed to the Liquid Operating Monies and another $30.4 million was contributed to the Long Term Operating Fund, for a total net new investment of$131.4 million. Organizational Issues N/A Fixed Income Market Snapshot Treasury yields finished the quarter lower for all maturities longer than one year. The 10-year U.S. Treasury closed the quarter at 2.69%, down sharply from the multi-year high of 3.24% hit in early November. Investors saw portions of the yield curve invert in the fourth quarter, but the widely watched spread between the 2- and 10- year remained positive at 21 basis points. The Federal Open Market Committee increased its federal funds rate target by 25 bps at the December meeting, bringing it to a range of 2.25% - 2.50%. The Fed reduced its projections for 2019 rate hikes from three to two. The year-end read of fed funds futures prices indicated a nearly 90% probability of no rate hikes in 2019. The 3-month Treasury rose 26 bps to 2.45%, CallanOrange County Sanitation District the 2-year Treasury fell 33 bps to 2.48%, the 10-year Treasury fell 36 bps to 2.69%, and the 30- year Treasury fell 17 bps to 3.02%. The longer end of the curve saw significant steepening during the quarter with the spread between the 10- and 30-year increasing from 14 to 33 bps. The Bloomberg Aggregate Index rose 1.6% for the quarter, with U.S. Treasuries (Bloomberg U.S. Treasury Index: +2.6%) leading the pack. TIPS (Bloomberg U.S. TIPS Index: -0.4%) sharply underperformed nominal treasuries on diminished expectations for inflation. Credit (Bloomberg Credit Index: +0.0%) underperformed as risk appetite faded and worries mounted over rising corporate leverage. Investment grade spreads widened by 48 bps to 153 bps, levels not seen since July 2016. High yield (ML U.S. High Yield Cash Pay Index: -4.6%) was also down sharply as demand and liquidity evaporated against the volatile equity backdrop. Leveraged loans (CS Leverage Loan Index) did not escape the carnage and sank 3.1% for the quarter as the sector saw record outflows. The Bloomberg Aggregate Index was up one basis point for the year. Manager Performance The Long Term Operating Fund returned 1.34% during the quarter which underperformed the MIL U.S. 1-5 Corp/Gov Index (+1.43%), but ranked the fund in the 9th percentile versus peers. The portfolio's duration remained lower than the benchmark's (2.27 years versus 2.65 years) in the fourth quarter, which hurt relative returns as interest rates decreased. Allocation within US Treasuries drove underperformance, while positive security selection in corporate bonds helped to partially offset the performance gap. In 2018, the fund gained 1.60%, outperforming the index by 20 basis points. The portfolio had less than 30% invested in credit (23%) and less than the permitted 20% invested in the combination of asset-backed securities (8%), commercial mortgage backed securities (0%), and CMOs (0%) as of December 31, 2018 (see page 20). The Liquid Operating Portfolio gained 0.55% (after fees) in the quarter, which narrowly trailed the return of the 3-month Treasury (+0.57%). The Portfolio returned 1.75% (after fees) for the full year 2018 and ranked in the 23rd percentile versus peers. Cordially, Gordon M. Weightman, CFA Senior Vice President 2 Capital Market Review Capital Market Overview December 31, 2018 U.S. EQUITY U.S. Equity: Quarterly Returns Large Cap U.S. Equity(S&P 500:-13.5%; Russell 1000: -13.8%) Russell3000 -14.3% Equity markets fell drastically in the fourth quarter,with all sectors,save Utilities(+1.4%), in negative territory. Russell 1000 -13.8% The decline was driven by broad-based de-risking. Russell 1000 Growth -15.9% Contributing factors included escalated trade tensions,rising interest rates,concern over slowing GDP/earnings growth, Russell 1000 Value -11.7% low oil prices,and the U.S.government shutdown. Anecdotal evidence suggests there was increased selling S&P 500 -13.5% pressure to fulfill year-end tax loss harvesting goals and to meet hedge funds'redemption requests. Russell Midcap -15.4% Markets nosedived following Fed Chairman Jerome Powell's October comments,which noted that monetary policy is a Russell 2500 -18.5% long way from neutral. Defensive sectors(Utilities:+1.4%; Real Estate:-3.8%; Russell 2000 -20.2% Consumer Staples:-5.2%)fared best. Cyclical sectors(Energy:-23.8%;Tech:-17.3%; Industrials: -17.3%)fared the worst on end-of-cycle fears. U.S. Equity: One-Year Returns 2018 marked the first time in 70 years that the S&P 500 Index finished the year in the red after rising in the first three quarters;the Index fell nearly 20%from its September peak. Russell 3000 -5.2% On the positive side,volatility was welcomed by active managers seeking better valuation entry points;the S&P 500 Russell 1000 4.8% forward P/E went from 16.8 on Sept.30 to 14.4 on Dec.31. Small Cap(Russell 2000:-20.2%; Russell 2000 Growth: Russell 1000 Growth -21.7%; Russell 2000 Value:-18.7%) Russell 1000 Value -8.3% Small cap stocks were hardest hit as margin pressure, excess leverage,slowing growth,and earnings expectations S&P 500 -4.4% concerned investors. The Russell 2000 Index fell over 22%from its Aug.31 peak. Russell Midcap -9.1% Growth vs.Value(Russell 1000 Growth:-15.9%; Russell Russell 2500 -10.0% 1000 Value:-11.7%) Growth fell further than value within both large and small cap Russell 2000 -11.0% due to its larger weightings in poor-performing sectors. Russell Sector Returns,Quarter ended December 31,2018 ■Russell 1000 ■Russell 2000 1.6% 5.7% i Utilities Consumer Health Care Financial Materials& Consumer Producer Technology Energy Staples Services Processing Discretionary Durables Sources:FTSE Russell,Standard&Poor's Callan Capital Market Overview(continued) December 31, 2018 NON-U.S./GLOBAL EQUITY Global Equity: Quarterly Returns Global/Non-U.S.Developed(MSCI EAFE:-12.5%; MSCI Europe:-12.7%;MSCI World ex USA:-12.8%) MSCI ACWI -12.8% Economic deceleration fueled by the global trade dispute MSCI World -13.4% and Brexit impasse drove markets down. The dollar rallied against the euro by 1.6%on weak growth MSCI ACWI ex USA -11.5% and fears of euro zone economic contraction. MSCI World ex USA -12.8% The yen gained against the dollar by 3.5%as investors sought safe haven. MSCI ACWI ex USA SC -14.4% All sectors were in negative territory. Defensive sectors fared MSCI World ex USA SC -16.2% better than cyclicals given the risk-off environment. Utilities, Real Estate,and Communication Services fared MSCI Europe ex UK -13.1% best. MSCI United Kingdom -11.8% Global growth concerns and falling oil prices challenged economically sensitive sectors. MSCI Pacific ex Japan -7.9% Energy, Information Technology,and Materials trailed. MSCI Japan -14.2% Value and quality outperformed growth and volatility factors as the market rewarded clear earners and stable MSCI Emerging Markets -7.5% businesses. MSCI China -10.7% - Emerging Markets(MSCI Emerging Markets Index:-7.5%) MSCI Frontier Markets -4.3% - China(-10.7%)posted its worst quarter since 2015 on the rising dollar, U.S.-China trade tension,and the slowing economy. China reported GDP growth of 6.5%,the slowest since Global Equity: One-Year Returns 2009. Brazil(+13.4%)was the best performer on shifting growth MSCI ACWI -9.4% and pension reform sentiment after its presidential election. MSCI World -8.7% The Asian Tech sector faces heightened regulation and concerns of a consumption slowdown. MSCI ACWI ex USA -14.2% Soft demand challenged Taiwan Semiconductor and MSCI World ex USA -14.1% Samsung Electronics. Defensively oriented Utilities fared best while Health Care, MSCI ACWI ex USA SC -18.2% Discretionary,and Tech faltered on fears of a China slowdown. MSCI World ex USA SC -18.1% Value outpaced growth and volatility factors. MSCI Europe ex UK -15.1% International Small Cap(MSCI World ex USA Small Cap: MSCI United Kingdom -14.2% -16.2%; MSCI EM Small Cap:-7.2%) Non-U.S.developed small cap was also negatively impacted MSCI Pacific ex Japan -10.3% by U.S.-China trade tension and global growth fears. MSCI Japan -12.9% All sectors declined,with Energy,Tech,and Industrials faring the worst on falling oil prices and the risk-off MSCI Emerging Markets -14.6% environment. MSCI China -18.9% Emerging market small cap slightly outperformed EM large cap due to Utilities,coupled with the Asian large cap tech MSCI Frontier Markets -16.4% sell-off. Value outpaced growth. Source:MSCI Callan Capital Market Overview(continued) December 31, 2018 U.S. FIXED INCOME U.S. Fixed Income:Quarterly Returns Market volatility rose in the last quarter of the year as investors grew increasingly concerned over slowing global economic Blmberg Barclays Gov/Cr 1-3 Yr , 1.2% growth,geo-political uncertainty,and hawkish Fed policy. Safe-haven securities,such as U.S.Treasuries and other developed market sovereign bonds,rallied while risk assets Blmberg Barclays Interm Gov/Cr . 1.7% sold off. U.S. Fixed Income(Bloomberg Barclays US Aggregate: Blmberg Barclays Aggregate 1.6% ° +1.6/o) Blmberg Barclays Long Gov/Cr 0 8% A flight to quality lowered the bellwether 10-year Treasury yield to a level not seen since January 2018;the yield fell Blmberg Barclays Universal 1.2% from a multi-year high of 3.24%in November to end the quarter at 2.69%. CS Leveraged Loans -3.1 U.S.Treasuries returned 2.6%. The yield curve continued to flatten with long-term rates Blmberg Barclays High Yield -4.5% declining faster than short-term rates;the spread between the 2-year and 10-year key rates remained positive though Blmberg Barclays TIPS -0.4% slightly tighter than a quarter ago. A portion of the yield curve(two year to five year)inverted for a few weeks during the quarter. U.S. Fixed Income: One-Year Returns TIPS underperformed nominal Treasuries as inflation expectations decreased. Blmberg Barclays Gov/Cr 1-3 Yr . 1.6% Investment-Grade Corporates(Bloomberg Barclays Corporate:-0.2%) Blmberg Barclays Interm Gov/Cr 0.9% Prices on investment-grade corporate bonds sank amid Blmberg Barclays Aggregate 0.0% concerns over elevated debt leverage. Headline risk increased on the growing size of the BBB-rated Blmberg Barclays Long Gov/Cr -4.7% _ market and the potential implications from ratings downgrades should economic growth slow. Blmberg Barclays Universal -0.3% More than 50%of new issuance came from BBB-rated issuers in 2018. CS Leveraged Loans Investment-grade spreads widened to+153 bps,a level not seen since July 2016, as a lack of new issuance supply Blmberg Barclays High Yield -2.1% ■ could not offset a lack of demand. ,High Yield(Bloomberg Barclays Corporate High Yield:-4.5%) Blmberg Barclays TIPS -1.3% High yield bond funds experienced$20 billion in outflows as market volatility increased. U.S.Treasury Yield Curves High yield's average yield-to-worst approached 8%. tDecember 31,2018 --*--September 30,2018 The Energy sector led the selloff amid volatile oil prices in December 31,2017 the fourth quarter;the sector makes up approximately 15% 4% of the Index. 3% This was the first December in 10 years in which there was no high yield bond issuance;year-over-year, new issuance 2% was down 40%in 2018. 1% 0% T 0 5 10 15 20 25 30 Maturity(Years) Sources:Bloomberg, Bloomberg Barclays,Credit Suisse Callan Capital Market Overview(continued) December 31, 2018 U.S. FIXED INCOME(continued) Global Fixed Income: Quarterly Returns Leveraged Loans(S&P/LSTA U.S. Leveraged Loan:-3.5%) , Leveraged loans experienced retail outflows($17 billion)as Blmberg Barclays GI Aggregate 1.2% changing interest rate projections caused the floating rate feature to be less attractive. Blmberg Barclays GI Agg(hdg) . 1.7% December was the worst monthly performance in seven Blmberg Barclays GI High Yield -3.5% - years and worst December since 2008,with the Index returning-2.6%. ' Demand was weaker than earlier in the year as CLO Blmberg Barclays GI Agg ex US 0.9% formation decreased in December. JPM EMBI Global Diversified -1.3% , NON-U.S. FIXED INCOME JPM GBI-EM Global Diversified ■ 2.1% Global Fixed Income(Bloomberg Barclays Global Aggregate: +1.2%; Global Aggregate(hdg): +1.7%) JPM EMBI GI Div/JPM GBI-EM GI Div 10.4% Other developed market sovereign bonds rallied in tandem with the rally in Treasuries,though the strength in the U.S. JPM CEMBI 10.3% dollar proved to be a headwind for unhedged non-U.S. developed assets. U.S dollar-denominated emerging market debt(EMD)(JPM Global Fixed Income: One-Year Returns EMBI Global Diversified:-1.3%), Local Currency-denominated EMD(JPM GBI-EM Global Diversified:+2.1%) Blmberg Barclays GI Aggregate -1.2% ' Various higher-yielding emerging market currencies(Turkey, Argentina,Brazil)appreciated against the greenback,adding Blmberg Barclays GI Agg(hdg) , 1.8% to a solid quarter for local emerging market debt. Performance was mixed across the EMBI's 60+countries. Blmberg Barclays GI High Yield -4.1% Blmberg Barclays GI Agg ex US -2.1% . JPM EMBI Global Diversified -4.3% JPM GBI-EM Global Diversified-6.2% JPM EMBI GI Div/JPM GBI-EM GI Div -5.2% JPM CEMBI -1.5% Change in 10-Year Global Government Bond Yields 3Q18 to 4Q18 U.S.Treasury -38 bps Germany -23 bps U.K. -30 bps Canada -46 bps Japan -13 bps - Sources:Bloomberg,Bloomberg Barclays,JP Morgan Callan Active Management Overview Market Overview Active Management vs Index Returns Market Overview The charts below illustrate the range of returns across managers in Callan's Separate Account database over the most recent one quarter and one year time periods. The database is broken down by asset class to illustrate the difference in returns across those asset classes.An appropriate index is also shown for each asset class for comparison purposes. As an example, the first bar in the upper chart illustrates the range of returns for domestic equity managers over the last quarter. The triangle represents the S&P 500 return. The number next to the triangle represents the ranking of the S&P 500 in the Large Cap Equity manager database. Range of Separate Account Manager Returns by Asset Class One Quarter Ended December 31,2018 10% 5% 0% (25)M� (40) (53) w (5%) c (10%) (33) (29) Of (15%) (20%) (55)KEI (25%) (30%) Large Cap Small Cap Non-US Domestic Non-US Real Equity Equity Equity Fixed Income Fixed Income Estate VS vs vs vs vs vs S&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index 10th Percentile (11.27) (17.57) (10.74) 1.88 2.17 2.98 25th Percentile (13.10) (18.94) (12.05) 1.63 1.69 2.40 Median (14.26) (20.00) (13.51) 1.44 0.94 1.79 75th Percentile (15.94) (21.37) (14.69) 1.20 (1.30) 1.10 90th Percentile (17.40) (23.01) (16.07) 0.97 (1.75) (0.35) Index ♦ (13.52) (20.20) (12.54) 1.64 1.31 1.67 Range of Separate Account Manager Returns by Asset Class One Year Ended December 31,2018 20% 15% 10% (64) 5% F 0% (31) 0) (5%) (45) (10%) (55) (15%) (35) (20%) (25%) Large Cap Small Cap Non-US Domestic Non-US Real Equity Equity Equity Fixed Income Fixed Income Estate VS vs vs vs vs vs S&P 500 Russell 2000 MSCI EAFE Blmbg Aggr Bd Citi Non-US Govt NCREIF Index 10th Percentile 3.22 0.11 (10.17) 0.65 1.32 12.95 25th Percentile (0.58) (4.65) (12.96) 0.36 (0.98) 9.77 Median (4.84) (10.58) (15.13) 0.14 (2.82) 7.75 75th Percentile (8.06) (14.35) (16.89) (0.14) (4.02) 6.07 90th Percentile (11.63) (16.78) (18.45) (0.41) (5.18) 1.13 Index ♦ (4.38) (11.01) (13.79) 0.01 (1.82) 7.03 CallanOrange County Sanitation District 7 Domestic Fixed Income Active Management Overview Fixed income markets benefited from a tumultuous equity market and concerns over slowing growth. In the U.S., the Bloomberg Barclays US Aggregate Bond rose 1.6% for the quarter, with U.S. Treasuries (Bloomberg Barclays US Treasury: +2.6%) leading the pack. The 10-year U.S.Treasury yield closed the quarter at 2.69%,down sharply from the multi-year high of 3.24% hit in early November. Portions of the yield curve inverted, but the widely watched spread between the 2- and 10-year Treasury note remained positive at 21 bps. TIPS (Bloomberg Barclays US TIPS: -0.4%) sharply underperformed nominal Treasuries on diminished expectations for inflation. Investment grade corporates (Bloomberg Barclays Corporate: -0.2%) underperformed in spite of muted supply as risk appetite faded and worries mounted over rising corporate leverage. Investment grade spreads widened to levels (+153 bps) not seen since July 2016. The high yield corporate bond market (Bloomberg Barclays High Yield: -4.5%) was also down sharply as demand and liquidity evaporated against the volatile equity backdrop. High yield corporates underperformed Treasuries by nearly 700 bps for the quarter as the sector's average yield-to-worst approached 8%. Leveraged loans did not escape the carnage and sank 3.5% (S&P LSTA) for the quarter as the sector saw record outflows. Separate Account Style Group Median Returns for Quarter Ended December 31,2018 Blmbg Aggregate: 1.64% 4% Blmbg High Yield: (4.53%) Blmbg Long Gov/Cred: 0.78% 2% 1.37 1.44 0.97 0.72 0.63 0% C L ry� LL (2%) ------------------------------------------------------- (4%) ----------------------------------------------------------(3.33) -- ------ (4.34) (6%) Defensive Intermed Core Core Plus Extended Bank High Yield Bond Maturity Loans Separate Account Style Group Median Returns for One Year Ended December 31,2018 Blmbg Aggregate: 0.01% 4% Blmbg High Yield: (2.08%) Blmbg Long Gov/Cred: (4.68%) 2% --------- r6g--------------------------------------------------------------------- 0.87 0.69 0.14 N 0% C � (0.25) ry (2%) ---------------------------------------------- ---------- ------ (2.23) (4%) (4.75) (6%) Defensive Intermed Core Core Plus Extended Bank High Yield Bond Maturity Loans CallanOrange County Sanitation District 8 Asset Allocation Investment Manager Asset Allocation The table below contrasts the distribution of assets across the Fund's investment managers as of December 31, 2018, with the distribution as of September 30, 2018. The change in asset distribution is broken down into the dollar change due to Net New Investment and the dollar change due to Investment Return. Asset Distribution Across Investment Managers December 31,2018 September 30,2018 Market Value Weight Net New Inv. Inv.Return Market Value Weight Domestic Fixed Income Long Term Operating Fund* 498,839,336 73.84% 30,400,000 6,298,179 462,141,157 86.01% Liquid Operating Monies* 176,713,788 26.16% 101,000,000 525,433 75,188,355 13.99% Total Fund $675,553,123 100.0% $131,400,000 $6,823,612 $537,329,511 100.0% *Chandler replaced PIMCO during the 4th quarter of 2014.Assets were transferred in-kind as of 12/01/2014. Callan Orange County Sanitation District 10 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2018. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2018 Last Last Last Last Last 3 5 7 Quarter Year Years Years Years Domestic Fixed Income Long Term Operating Fund 1.34% 1.60% 1.45% 1.44% 1.20% Chandler 1.34% 1.60% 1.45% - - Blmbg Govt/Cred 1-5 Year Idx 1.46% 1.38% 1.40% 1.32% 1.30% ML 1-5 Govt/Corp 1.43% 1.40% 1.43% 1.37% 1.38% Liquid Operating Monies" 0.58% 1.90% 1.09% 0.72% 0.55% Chandler 0.58% 1.90% 1.09% - - Citigroup 3-Month Treasury Bill 0.57% 1.86% 0.99% 0.60% 0.45% Total Fund 1.19% 1.72% 1.30% 1.28% 1.08% Target* 1.26% 1.49% 1.34% 1.22% 1.19% Current Quarter Target=80.0% ML US Corp/Govt 1-5Y and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Orange County Sanitation District 11 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods ended December 31, 2018. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. Returns for Periods Ended December 31,2018 Last Last Last 10 15 23-1/4 Years Year Years Domestic Fixed Income Long Term Operating Fund 2.28% 2.96% 4.20% Blmbg Govt/Cred 1-5 Year Idx 2.09% 2.71% 4.02% ML 1-5 Govt/Corp 2.17% 2.73% 4.05% Liquid Operating Monies^ 0.49% 1.47% 2.58% Citigroup 3-Month Treasury Bill 0.35% 1.26% 2.28% Total Fund 1.95% 2.67% 3.95% Target' 1.81% 2.44% 3.70% Current Quarter Target=80.0% ML US Corp/Govt 1-5Y and 20.0% FTSE 3 Mo T-Bill. ^Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Orange County Sanitation District 12 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2018 2017 2016 2015 2014 Domestic Fixed Income Long Term Operating Fund" 1.60% 1.18% 1.58% 0.85% 1.98% Chandler 1.60% 1.18% 1.58% 0.85% - Blmbg Govt/Cred 1-5 Year Idx 1.38% 1.27% 1.56% 0.97% 1.42% MIL 1-5 Govt/Corp 1.40% 1.28% 1.62% 1.05% 1.51% Liquid Operating Monies" 1.90% 0.91% 0.47% 0.22% 0.09% Chandler 1.90% 0.91% 0.47% 0.22% - Citigroup 3-Month Treasury Bill 1.86% 0.84% 0.27% 0.03% 0.03% Total Fund 1.72% 1.02% 1.15% 0.80% 1.73% Target* 1.49% 1.19% 1.35% 0.85% 1.21% Current Quarter Target=80.0% MIL US Corp/Govt 1-5Y and 20.0% FTSE 3 Mo T-Bill. "Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Orange County Sanitation District 13 Investment Manager Returns The table below details the rates of return for the Fund's investment managers over various time periods. Negative returns are shown in red, positive returns in black. Returns for one year or greater are annualized. The first set of returns for each asset class represents the composite returns for all the fund's accounts for that asset class. 2013 2012 2011 2010 2009 Domestic Fixed Income Long Term Operating Fund" (1.77%) 3.06% 4.59% 4.42% 5.52% Blmbg Govt/Cred 1-5 Year Idx 0.28% 2.24% 3.14% 4.08% 4.62% ML 1-5 Govt/Corp 0.32% 2.47% 3.10% 4.17% 4.88% Liquid Operating Monies" 0.13% 0.17% 0.24% 0.25% 0.58% Citigroup 3-Month Treasury Bill 0.05% 0.07% 0.08% 0.13% 0.16% Total Fund (1.49%) 2.70% 3.70% 3.68% 4.65% Target* 0.26% 1.99% 2.49% 3.36% 3.93% Current Quarter Target=80.0% ML US Corp/Govt 1-5Y and 20.0% FTSE 3 Mo T-Bill. "Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Callan Orange County Sanitation District 14 Asset Class Risk and Return The charts below show the seven year annualized risk and return for each asset class component of the Total Fund.The first graph contrasts these values with those of the appropriate index for each asset class. The second chart contrasts them with the risk and return of the median portfolio in each of the appropriate CAI comparative databases. In each case, the crosshairs on the chart represent the return and risk of the Total Fund. Seven Year Annualized Risk vs Return Asset Classes vs Benchmark Indices 1.6% 1.4% 1.2% • • •- u� 1.0% c a� 0.8% 0.6% 0.4% 0.2% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% Standard Deviation Seven Year Annualized Risk vs Return Asset Classes vs Asset Class Median 1.6% 1.4% 1.2% u� 1.0% c a� 0.8% 0.6% 0.4% 0.2% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 0.80% 0.90% 1.00% 1.10% 1.20% 1.30% Standard Deviation Callan Orange County Sanitation District 15 Manager Analysis Chandler-Long Term Operating Fund Period Ended December 31, 2018 Investment Philosophy Chandler Asset Management's Short Term Bond strategy is driven by quantitative models and focuses on active duration management, sector selection and term structure. The strategy seeks to achieve consistent above-benchmark returns with low volatility relative to the style's performance benchmark. The firm has a unique focus on high quality fixed income management, and places risk control as a higher objective than return. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Long Term Operating Fund's portfolio posted a 1.34% return Beginning Market Value $462,141,157 for the quarter placing it in the 9 percentile of the Callan Net New Investment $30,400,000 Short Term Fixed Income group for the quarter and in the 65 percentile for the last year. Investment Gains/(Losses) $6,298,179 • Long Term Operating Fund's portfolio underperformed the Ending Market Value $498,839,336 ML US Corp/Govt 1-5Y by 0.10% for the quarter and outperformed the ML US Corp/Govt 1-5Y for the year by 0.21%. Performance vs Callan Short Term Fixed Income(Gross) 5.0% 4.5% 4.0% 29) 63 3.5% 3.0% 2.5% 56) ° AA5 ) 1.5% (7) Af 9 88) g�g 4) B 7 �7)"A�7 #5)"A�5 �0)�B�6 ; B 5 ) 1.0% 0.5% 0.0% Last Qtr Last Last 3 Yrs Chandler Last 5 Yrs Last 7 Yrs Last 10 Yrs Since 9/30/95 Yr Inception 10th Percentile 1.31 1.99 2.16 1.96 1.93 2.28 3.78 4.35 25th Percentile 1.14 1.82 1.90 1.71 1.67 1.95 3.02 4.10 Median 0.97 1.69 1.64 1.48 1.45 1.50 2.31 3.84 75th Percentile 0.69 1.56 1.43 1.28 1.22 1.20 1.73 3.58 90th Percentile 0.49 1.35 1.28 1.15 1.09 0.98 1.12 3.09 Long Term Operating Fund •A 1.34 1.60 1.45 1.30 1.44 1.20 2.28 4.20 Blmbg Govt/Cred 1-5 Year Idx ■B 1.46 1.38 1.40 1.30 1.32 1.30 2.09 4.02 ML US Corp/Govt 1-5Y ♦ 1.43 1.40 1.43 1.33 1.37 1.38 2.17 4.05 Callan Short Term Fixed Income(Gross) Relative Return vs ML US Corp/Govt 1-5Y Annualized Seven Year Risk vs Return 1.5% 4.5% 4.0% 1.0% ----- ----- ----- ----- ---------- ----- 3.5 U) E 0.5% 3.0% N � E 2.5% N 0.0% > 2.0% (0.5%) - - ----- ----- ---------- ----- 1.5% 1.0% (1.0%) ----- - -- ----- ----- ---------- ----- • • - ••- 0.5 (1.5%) 0.0% 2012 2013 2014 2015 2016 2017 2018 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Standard Deviation - Long Term Operating Fund Callan Orange County Sanitation District 17 Long Term Operating Fund Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis. The first chart illustrates the manager's ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Performance vs Callan Short Term Fixed Income(Gross) ° 14 o 12% 180If S 2% 88T&A 7�6 7�A 3 B OVA 27®B� $;4�6�1;17�B�1 2 ♦ BI 2� f4�f� •A 10 ) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 10th Percentile 1.99 2.24 2.82 1.17 1.50 1.20 4.46 2.72 4.71 13.74 25th Percentile 1.82 1.74 2.17 1.01 1.27 0.81 2.60 2.30 4.01 8.60 Median 1.69 1.31 1.56 0.91 1.11 0.65 1.81 1.85 3.18 5.94 75th Percentile 1.56 0.95 1.18 0.75 0.87 0.40 1.45 1.65 2.72 2.53 90th Percentile 1.35 0.66 1.03 0.64 0.73 0.29 0.92 1.44 2.41 1.82 Long Term Operating Fund •A 1.60 1.18 1.58 0.85 1.98 (1.77) 3.06 4.59 4.42 5.52 Blmbg GovUCred 1-5 Year Idx ■B 1.38 1.27 1.56 0.97 1.42 0.28 2.24 3.14 4.08 4.62 ML US Corp/Govt 1-5Y ♦ 1.40 1.28 1.62 1.05 1.51 0.32 2.47 3.10 4.17 4.88 Cumulative and Quarterly Relative Return vs ML US Corp/Gout 1-5Y 4% 3% -------- ------- ------- -------- ------- ------- ---------------- ------- ------- Z 1% --- ---- -- - -- - --------------- ---- - ---- ---- ----- ----- > 0% (1%) ------ ------- ------- (2%) (3%) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Long Term Operating Fund 0 Blmbg GovUCred 1-5 Year Idx 0 Callan Short Fixed Inc Risk Adjusted Return Measures vs ML US Corp/Govt 1-5Y Rankings Against Callan Short Term Fixed Income(Gross) Seven Years Ended December 31,2018 2.5 2.0 1.5 1.0 0.5 A�96; 0.0(0.5) 411 A 97 A(74) (1.0) ■ B(98) (1.5) Alpha Sharpe Excess Return Ratio Ratio 10th Percentile 1.14 1.71 1.25 25th Percentile 0.81 1.47 0.72 Median 0.39 1.21 0.25 75th Percentile 0.23 0.95 (0.26) 90th Percentile 0.03 0.70 (0.66) Long Term Operating Fund *A (0.17) 0.52 (0.26) Blmbg GovUCred 1-5 Year ldx ■B (0.06) 0.68 (1.11) Callan Orange County Sanitation District 18 Long Term Operating Fund Bond Characteristics Analysis Summary Portfolio Characteristics This graph compares the manager's portfolio characteristics with the range of characteristics for the portfolios which make up the manager's style group. This analysis illustrates whether the manager's current holdings are consistent with other managers employing the same style. Fixed Income Portfolio Characteristics Rankings Against Callan Short Term Fixed Income as of December 31,2018 5- 4- 3- (20) (23) (89)04(93) (72) (2) • 2 �(14) E(88) 1 0 (1) Average Effective Coupon OA Duration Life Yield Rate Convexity 10th Percentile 2.33 3.28 3.75 3.67 0.08 25th Percentile 1.91 2.45 3.41 3.05 0.05 Median 1.75 2.11 3.16 2.77 0.02 75th Percentile 1.43 1.74 3.02 2.42 0.00 90th Percentile 0.89 0.94 2.82 2.03 (0.11) Long Term Operating Fund • 2.27 2.60 2.70 2.15 - Blmbg Gov/Cred 1-5 Yr ♦ 2.65 2.81 2.82 2.46 0.09 Sector Allocation and Quality Ratings The first graph compares the manager's sector allocation with the average allocation across all the members of the manager's style.The second graph compares the manager's weighted average quality rating with the range of quality ratings for the style. Sector Allocation Quality Ratings December 31,2018 > vs Callan Short Term Fixed Income 31.3 Trsy US Trsy 27.1 11 IT 23,0_________________ _ ____ AAA Gov Related 2.4 > 0.0 2 22.6 AA+ Corp(incl 144A) 265 51.1 Nm (11) 11.2 AA (53) Other so ABS 15.0 AA- 2.3 A+ Cash 0.9 0.9 Tax-Exempt US Muni A 0.4 CMOs 0.7 A- Weighted Average 0.3 Quality Rating CMBs j2.2 10th Percentile AA+ 25th Percentile AA RMBS 0.6 Median AA 75th Percentile A+ 90th Percentile A 0% 10% 20% 30% 40% 50% 60% 70% 80% Long Term Operating Fund 0 Callan Short Term Fixed Income Long Term Operating Fund • AA Blmbg Gov/Cred 1-5 Yr Blmbg Gov/Cred 1-5 Yr ♦ AA+ Callan Orange County Sanitation District 19 Long Term Operating Fund Portfolio Characteristics Summary As of December 31, 2018 Portfolio Structure Comparison The charts below compare the structure of the portfolio to that of the index from the three perspectives that have the greatest influence on return. The first chart compares the two portfolios across sectors. The second chart compares the duration distribution.The last chart compares the distribution across quality ratings. Sector Allocation US Trsy US Trsy 31% 63% CMBS ABS&41V0% Cash 2% 7;1 Gov Related23% OtherGov Related Tax-Exempt US M CMOs 10% 1% ° Corp(incl 144A) Corp(incl 144A) 0/0 2 23% 7% Long Term Operating Fund Blmbg Govt/Credit 1-5 Year Weighted Average: Duration Duration Distribution 0 Long Term Operating Fund: 2.27 80% 0 Blmbg Govt/Credit 1-5 Year: 2.65 .o 70% ------------ ------------- ------------- - 62.8 ----- ------------------------- ------------- 0050% ------------ ------ ------------- -------------------------- ------------- p 40% ------------ 40.5 36:T-- - -------- -------------------------- ------------- 31.7 30% --Z5 -------- - i20% ------ - ------------------------ - - - N d10% ----- - -------------------------- ------------- 0.5 2.2 - 0% <1 1-3 3-5 5-7 7-10 >10 Years Duration Weighted Average: Quality Quality Distribution 0 Long Term Operating Fund: AA 100% Blmbg Govt/Credit 1-5 Year: AA+ 0 p 80% -------------- ------ ------- - ----- -------------- -------------- 62.8 d 60% - --- ------ -------------- -------------- -------------- ------ ------- 0 40% --- --- ------ -------------- -------------- -------------- ------ ------- N U 20% T2. --- �g--- ---'I3� ---- ------ ------- a 11.3 g g 5.5 1.6 0% AAA AA A BBB BB B CCC CC C D N/R Quality Rating Callan Orange County Sanitation District 20 Chandler-Liquid Operating Money Period Ended December 31, 2018 Investment Philosophy Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Quarterly Summary and Highlights Quarterly Asset Growth • Liquid Operating Money Net's portfolio posted a 0.55% Beginning Market Value $75,188,355 return for the quarter placing it in the 12 percentile of the Net New Investment $101,000,000 Callan Money Market Funds group for the quarter and in the 23 percentile for the last year. Investment Gains/(Losses) $525,433 • Liquid Operating Money Net's portfolio underperformed the Ending Market Value $176,713,788 Citigroup 3-Month Treasury Bill by 0.02%for the quarter and underperformed the Citigroup 3-Month Treasury Bill for the year by 0.11%. Performance vs Callan Money Market Funds(Net) 3.0% 2.5% (12 25) 2.0% 12) (23 1.5% 1.0% 27) •(30 26) 0.5% (7) (12 (27 25) (30 24) (31 22) (24 0.0% Last Qtr Last Last 3 Yrs Chandler Last 5 Yrs Last 7 Yrs Last 10 Yrs Since 9/30/95 Yr Inception 10th Percentile 0.56 1.89 1.52 1.22 1.05 1.01 1.33 2.59 25th Percentile 0.51 1.72 1.01 0.76 0.60 0.44 0.33 2.28 Median 0.46 1.53 0.75 0.57 0.45 0.32 0.24 2.13 75th Percentile 0.37 1.31 0.61 0.45 0.36 0.26 0.19 2.00 90th Percentile 0.21 1.07 0.43 0.33 0.26 0.19 0.15 1.86 Liquid Operating Money Net • 0.55 1.75 0.94 0.72 0.57 0.40 0.34 2.43 Citigroup 3-Month Treasury Bill ♦ 0.57 1.86 0.99 0.75 0.60 0.45 0.35 2.28 Relative Returns vs Callan Money Market Funds(Net) Citigroup 3-Month Treasury Bill Annualized Seven Year Risk vs Return 0.10% 3.0% 0.08% ----- ----- ----- ----- ---------- ----- 2.5% 0.06% ----- ----- ----- - U) 2.0% E 0.04% ----- ----- ----- ----- --------- ----- a) 0.02% E 1.5% N 0 > 0.00% 1.0% Z (0.02%) - - ----- -------- - - -- - - - 0.5% • • • • - (0.04%) ----- ----- ----- ----- ---------- (0.06%) ----- ----- ----- 0.0% (0.08%) (0.5%) 2012 2013 2014 2015 2016 2017 2018 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Standard Deviation - Liquid Operating Money Net Callan Orange County Sanitation District 21 Liquid Operating Money Net Return Analysis Summary Return Analysis The graphs below analyze the manager's return on both a risk-adjusted and unadjusted basis. The first chart illustrates the manager's ranking over different periods versus the appropriate style group. The second chart shows the historical quarterly and cumulative manager returns versus the appropriate market benchmark. The last chart illustrates the manager's ranking relative to their style using various risk-adjusted return measures. Assets were transferred in kind to Chandler on 12/1/2014. Previous performance reflects PIMCO. Performance vs Callan Money Market Funds(Net) 2.5% 2.0% 12 23 1.5% 1.0% 30�35 0.5% 33♦ 30 17 0.0% 15 1 47 (0.5%) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 10th Percentile 1.89 1.42 1.32 0.28 0.35 0.30 0.85 0.12 0.24 0.63 25th Percentile 1.72 0.91 0.40 0.06 0.03 0.04 0.06 0.04 0.08 0.33 Median 1.53 0.61 0.14 0.01 0.01 0.01 0.01 0.01 0.02 0.15 75th Percentile 1.31 0.42 0.04 0.01 0.01 0.01 0.01 0.01 0.01 0.05 90th Percentile 1.07 0.24 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.02 Liquid Operating Money Net • 1.75 0.76 0.32 0.07 (0.06) (0.02) 0.02 0.09 0.10 0.43 Citigroup 3-Month Treasury Bill ♦ 1.86 0.84 0.27 0.03 0.03 0.05 0.07 0.08 0.13 0.16 Cumulative and Quarterly Relative Return vs Citigroup 3-Month Treasury Bill o.80% 0.70% -------- ------- ------- ---------------- ------- ---------------- ------- ------- 0.60%--------- ------- ------- ---------------- - 0.50%----------------- --------- N0.40%------- ------- ------- ---------------- ------- ---------------- ------- - ----- <Y 0.30% ----- -- ------- ------- ---------------- ------- ---------------- ------- --- -- 0.20% N 0.10% 0.00% (0.10%) -------- ---------------- (0.20%) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Liquid Operating Money Net 0 Callan Money Market Funds Risk Adjusted Return Measures vs Citigroup 3-Month Treasury Bill Rankings Against Callan Money Market Funds(Net) Seven Years Ended December 31,2018 2.0 1.5 1.0 0.5 0.0 (31) (0.5) (1.0) (31) (1.5) (2.0) (2.5) (3.0) Alpha Sharpe Excess Return Ratio Ratio 10th Percentile 0.51 1.01 1.19 25th Percentile (0.00) (0.10) (0.07) Median (0.13) (0.53) 1.68 75th Percentile (0.19) (0.87) 2.01 90th Percentile (0.27) (1.40) (2.23) Liquid Operating Money Net • (0.06) (0.22) (1.04) Callan Orange County Sanitation District 22 Callan Research/Education Callan I NSTITUTE 4th Quarter 2018 Education Research and Educational Programs The Callan Institute provides research to update clients on the latest industry trends and carefully structured educational programs to enhance the knowledge of industry professionals.Visit www.callan.com/library to see all of our publications,and www.callan.com/blog to view our blog"Perspectives."For more information contact Corry Walsh at 312.346.3536/institute@callan.com. New Research from Callan's Experts Puttin'on the Risk I For hedge funds,other multi-asset managers, Considering Currency Hedging: 10 Charts to Think About I In and fund-of-funds, managing investor expectations is just as impor- considering equity currency hedging, institutional investors should tant as managing returns.That's why Callan believes standardized consider context and rely upon a documented currency policy to risk reporting is an important tool to help managers,especially those guide decisions. with complex strategies, communicate better with their investors and thereby avoid misunderstandings.In this quarter's Hedge Fund workshop Summary I Callan's 2018 October Regional Workshop, Monitor, Callan's Jim McKee describes and discusses a standard- `Looking Beyond the Valley:Disciplined Risk Mitigation for the Long ized risk template called Open Protocol,which can help managers Term,"focused on how investors should consider their options for explain their strategies to investors. managing risk—or profiting from it. Among the questions it ad- dressed:Are modern portfolios insufficiently diversified to truly man- Reflecting on 30 Years at Callan I Greg Allen, age and mitigate risk?What tools and strategies should investors Callan's chief executive officer and chief re- be considering, and how do we measure effectiveness and cost? search officer,was interviewed by Executive Vice This paper summarizes the workshop. President Millie Viqueira, head of Callan's Fund Sponsor Consulting Group, to mark Greg's 30th Quarterly Periodicals anniversary with the firm. They discussed his Private Equity Trends I Quarterly newsletter on private equity ac- start at Callan, what has changed in the industry and how he has tivity, covering both the fundraising cycle(investments to exits)and changed over the last 30 years, his passion for research and edu- performance over time. cation, and his thoughts on maintaining Callan's distinctive culture and on ensuring the firm continues to be an attractive place to work. Market Pulse Flipbook I A quarterly market reference guide cover- 2018 Nuclear Decommissioning Funding Study I Callan's an- ing trends in the U.S. economy, developments for fund sponsors, nual Nuclear Decommissioning Funding Study offers key insights and the latest data for U.S.and non-U.S.equities and fixed income, into the status of nuclear decommission- alternatives,and defined contribution plans. EM� ing funding in the U.S. to make peer com- Active vs. Passive Charts I This series of charts compares active .,.,o..e parisons more accurate and relevant. The managers alongside relevant benchmarks over the long term. 2017 study covers 27 investor-owned and 26 public power utilities (excluding public Capital Market Review I Provides analysis and a broad overview power owners with small shares)with an ownership interest in the of the economy and public and private market activity each quarter 99 operating nuclear reactors and 10 of the non-operating reactors across a wide range of asset classes. in the U.S. The Center for Investment Training Events Educational Sessions Miss out on a Callan conference or workshop? Event summa- The Center for Investment Training, better known as the "Callan ries and speakers' presentations are available on our website: College," provides a foundation of knowledge for industry profes- www.callan.com/library/ sionals who are involved in the investment decision-making pro- cess.It was founded in 1994 to provide clients and non-clients alike Callan's 2019 Regional Workshop dates are set! Please mark your with basic-to intermediate-level instruction.Our next sessions are: calendar and look forward to upcoming invitations. Introduction to Investments June Regional Workshops: San Francisco,April 16-17, 2019 June 4, 2019—Atlanta San Francisco, July 16-17, 2019 June 5, 2019—San Francisco Chicago, October 22-23, 2019 October Regional Workshops: This program familiarizes fund sponsor trustees, staff, and asset October 22, 2019—Denver management advisers with basic investment theory, terminology, October 24, 2019—Chicago and practices. It lasts one-and-a-half days and is designed for in- Please also keep your eye out for upcoming Webinars in 2019! We dividuals who have less than two years of experience with asset- will be sending invitations for these and also will have registration management oversight and/or support responsibilities.Tuition for links on our website at www.callan.com/events. the Introductory "Callan College" session is $2,350 per person. Tuition includes instruction, all materials, breakfast and lunch on For more information about events, please contact Barb each day,and dinner on the first evening with the instructors. Gerraty: 415.274.3093/gerraty@callan.com Customized Sessions The "Callan College" is equipped to customize a curriculum to meet the training and educational needs of a specific organization. These tailored sessions range from basic to advanced and can take place anywhere—even at your office. Learn more at www.callan.com/events/callan-college-intro or contact Kathleen Cunnie:415.274.3029/cunnie@callan.com Education: By the Numbers 525 Attendees(on average)of the 50+ Unique pieces of research the Institute's annual National Conference Institute generates each year 3 700 Total attendees of the"Callan 1980 Year the Callan Institute College"since 1994 was founded "Research is the foundation of all we do at Callan, and sharing our best thinking with the investment community is our way of helping to foster dialog to raise the bar across the industry." Greg Allen,Chief Executive Officer and Chief Research Officer Callan V @CallanLLC ® Callan Definitions Risk/Reward Statistics The risk statistics used in this report examine performance characteristics of a manager or a portfolio relative to a benchmark (market indicator) which assumes to represent overall movements in the asset class being considered. The main unit of analysis is the excess return, which is the portfolio return minus the return on a risk free asset (3 month T-Bill). Alpha measures a portfolio's return in excess of the market return adjusted for risk. It is a measure of the manager's contribution to performance with reference to security selection. A positive alpha indicates that a portfolio was positively rewarded for the residual risk which was taken for that level of market exposure. Beta measures the sensitivity of rates of portfolio returns to movements in the market index. A portfolio's beta measures the expected change in return per 1% change in the return on the market. If a beta of a portfolio is 1.5, a 1 percent increase in the return on the market will result, on average, in a 1.5 percent increase in the return on the portfolio. The converse would also be true. Downside Risk stems from the desire to differentiate between "good risk" (upside volatility) and "bad risk" (downside volatility). Whereas standard deviation punishes both upside and downside volatility, downside risk measures only the standard deviation of returns below the target. Returns above the target are assigned a deviation of zero. Both the frequency and magnitude of underperformance affect the amount of downside risk. Excess Return Ratio is a measure of risk adjusted relative return. This ratio captures the amount of active management performance (value added relative to an index) per unit of active management risk (tracking error against the index.) It is calculated by dividing the manager's annualized cumulative excess return relative to the index by the standard deviation of the individual quarterly excess returns. The Excess Return Ratio can be interpreted as the manager's active risk/reward tradeoff for diverging from the index when the index is mandated to be the"riskless"market position. Information Ratio measures the manager's market risk-adjusted excess return per unit of residual risk relative to a benchmark. It is computed by dividing alpha by the residual risk over a given time period. Assuming all other factors being equal, managers with lower residual risk achieve higher values in the information ratio. Managers with higher information ratios will add value relative to the benchmark more reliably and consistently. R-Squared indicates the extent to which the variability of the portfolio returns are explained by market action. It can also be thought of as measuring the diversification relative to the appropriate benchmark. An r-squared value of .75 indicates that 75% of the fluctuation in a portfolio return is explained by market action. An r-squared of 1.0 indicates that a portfolio's returns are entirely related to the market and it is not influenced by other factors. An r-squared of zero indicates that no relationship exists between the portfolio's return and the market. Relative Standard Deviation is a simple measure of a manager's risk(volatility) relative to a benchmark. It is calculated by dividing the manager's standard deviation of returns by the benchmark's standard deviation of returns. A relative standard deviation of 1.20, for example, means the manager has exhibited 20% more risk than the benchmark over that time period. A ratio of .80 would imply 20% less risk. This ratio is especially useful when analyzing the risk of investment grade fixed-income products where actual historical durations are not available. By using this relative risk measure over rolling time periods one can illustrate the "implied" historical duration patterns of the portfolio versus the benchmark. Residual Portfolio Risk is the unsystematic risk of a fund,the portion of the total risk unique to the fund (manager) itself and not related to the overall market. This reflects the "bets"which the manager places in that particular asset market. These bets may reflect emphasis in particular sectors, maturities (for bonds), or other issue specific factors which the manager considers a good investment opportunity. Diversification of the portfolio will reduce or eliminate the residual risk of that portfolio. Callan 27 Risk/Reward Statistics Rising Declining Periods refer to the sub-asset class cycles vis-a-vis the broader asset class. This is determined by evaluating the cumulative relative sub-asset class index performance to that of the broader asset class index. For example, to determine the Growth Style cycle, the S&P 500 Growth Index (sub-asset class) performance is compared to that of the S&P 500 Index(broader asset class). Sharpe Ratio is a commonly used measure of risk-adjusted return. It is calculated by subtracting the "risk-free" return (usually 3 Month Treasury Bill)from the portfolio return and dividing the resulting "excess return" by the portfolio's risk level (standard deviation).The result is a measure of return gained per unit of risk taken. Sortino Ratio is a downside risk-adjusted measure of value-added. It measures excess return over a benchmark divided by downside risk. The natural appeal is that it identifies value-added per unit of truly bad risk. The danger of interpretation, however, lies in these two areas: (1)the statistical significance of the denominator, and (2) its reliance on the persistence of skewness in return distributions. Standard Deviation is a statistical measure of portfolio risk. It reflects the average deviation of the observations from their sample mean. Standard deviation is used as an estimate of risk since it measures how wide the range of returns typically is. The wider the typical range of returns,the higher the standard deviation of returns, and the higher the portfolio risk. If returns are normally distributed (ie. has a bell shaped curve distribution) then approximately 2/3 of the returns would occur within plus or minus one standard deviation from the sample mean. Total Portfolio Risk is a measure of the volatility of the quarterly excess returns of an asset. Total risk is composed of two measures of risk: market(non-diversifiable or systematic) risk and residual (diversifiable or unsystematic) risk. The purpose of portfolio diversification is to reduce the residual risk of the portfolio. Tracking Error is a statistical measure of a portfolio's risk relative to an index. It reflects the standard deviation of a portfolio's individual quarterly or monthly returns from the index's returns. Typically, the lower the Tracking Error, the more "index-like"the portfolio. Treynor Ratio represents the portfolio's average excess return over a specified period divided by the beta relative to its benchmark over that same period. This measure reflects the reward over the risk-free rate relative to the systematic risk assumed. Note:Alpha,Total Risk, and Residual Risk are annualized. Callan 28 Fixed Income Portfolio Characteristics All Portfolio Characteristics are derived by first calculating the characteristics for each security, and then calculating the market value weighted average of these values for the portfolio. Allocation by Sector- Sector allocation is one of the tools which managers often use to add value without impacting the duration of the portfolio. The sector weights exhibit can be used to contrast a portfolio's weights with those of the index to identify any significant sector bets. Average Coupon-The average coupon is the market value weighted average coupon of all securities in the portfolio. The total portfolio coupon payments per year are divided by the total portfolio par value. Average Moody's Rating for Total Portfolio- A measure of the credit quality as determined by the individual security ratings. The ratings for each security, from Moody's Investor Service, are compiled into a composite rating for the whole portfolio. Quality symbols range from Aaa+ (highest investment quality- lowest credit risk) to C (lowest investment quality- highest credit risk). Average Option Adjusted(Effective)Convexity-Convexity is a measure of the portfolio's exposure to interest rate risk. It is a measure of how much the duration of the portfolio will change given a change in interest rates. Generally, securities with negative convexities are considered to be risky in that changes in interest rates will result in disadvantageous changes in duration. When a security's duration changes it indicates that the stream of expected future cash-flows has changed, generally having a significant impact on the value of the security. The option adjusted convexity for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Option Adjusted(Effective) Duration- Duration is one measure of the portfolio's exposure to interest rate risk. Generally, the higher a portfolio's duration, the more that its value will change in response to interest rate changes. The option adjusted duration for each security in the portfolio is calculated using models developed by Lehman Brothers and Salomon Brothers which determine the expected stream of cash-flows for the security based on various interest rate scenarios. Expected cash-flows take into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Price-The average price is equal to the portfolio market value divided by the number of securities in the portfolio. Portfolios with an average price above par will tend to generate more current income than those with an average price below par. Average Years to Expected Maturity- This is a measure of the market-value-weighted average of the years to expected maturity across all of the securities in the portfolio. Expected years to maturity takes into account any put or call options embedded in the security, any expected sinking-fund paydowns or any expected mortgage principal prepayments. Average Years to Stated Maturity- The average years to stated maturity is the market value weighted average time to stated maturity for all securities in the portfolio. This measure does not take into account imbedded options, sinking fund paydowns, or prepayments. Current Yield-The current yield is the current annual income generated by the total portfolio market value. It is equal to the total portfolio coupon payments per year divided by the current total portfolio market value. Callan 29 Fixed Income Portfolio Characteristics Duration Dispersion- Duration dispersion is the market-value weighted standard deviation of the portfolio's individual security durations around the total portfolio duration. The higher the dispersion, the more variable the security durations relative to the total portfolio duration ("barbellness"), and the smaller the dispersion, the more concentrated the holdings' durations around the overall portfolio's ("bulletness"). The purpose of this statistic is to gauge the "bulletness" or "barbellness"of a portfolio relative to its total duration and to that of its benchmark index. Effective Yield-The effective yield is the actual total annualized return that would be realized if all securities in the portfolio were held to their expected maturities. Effective yield is calculated as the internal rate of return, using the current market value and all expected future interest and principal cash flows. This measure incorporates sinking fund paydowns, expected mortgage principal prepayments, and the exercise of any"in-the-money"imbedded put or call options. Weighted Average Life- The weighted average life of a security is the weighted average time to payment of all remaining principal. It is calculated by multiplying each expected future principal payment amount by the time left to the payment. This amount is then divided by the total amount of principal remaining. Weighted average life is commonly used as a measure of the investment life for pass-through security types for comparison to non-pass-through securities. Callan 30 Disclosures Callan l Quarterly List as of December 31, 2018 List of Callan's Investment Manager Clients Confidential—For Callan Client Use Only Callan takes its fiduciary and disclosure responsibilities to clients very seriously.We recognize that there are numerous potential conflicts of interest encountered in the investment consulting industry and that it is our responsibility to manage those conflicts effectively and in the best interest of our clients. At Callan,we employ a robust process to identify,manage,monitor and disclose potential conflicts on an on-going basis. The list below is an important component of our conflicts management and disclosure process. It identifies those investment managers that pay Callan fees for educational,consulting,software,database or reporting products and services. We update the list quarterly because we believe that our fund sponsor clients should know the investment managers that do business with Callan,particularly those investment manager clients that the fund sponsor clients may be using or considering using.Please note that if an investment manager receives a product or service on a complimentary basis(e.g. attending and educational event),they are not included in the list below.Callan is committed to ensuring that we do not consider an investment manager's business relationship with Callan,or lack thereof,in performing evaluations for or making suggestions or recommendations to its other clients. Please refer to Callan's ADV Part 2A for a more detailed description of the services and products that Callan makes available to investment manager clients through our Institutional Consulting Group,Independent Adviser Group and Fund Sponsor Consulting Group. Due to the complex corporate and organizational ownership structures of many investment management firms,parent and affiliate firm relationships are not indicated on our list. Fund sponsor clients may request a copy of the most currently available list at any time.Fund sponsor clients may also request specific information regarding the fees paid to Callan by particular fund manager clients. Per company policy,information requests regarding fees are handled exclusively by Callan's Compliance Department. Manager Asset Management LLC Bridgeway Capital Management, Inc. ACR—Alpine Capital Research BrightSphere Investment Group(FKA Old Mutual Asset) AEGON USA Investment Management Brown Brothers Harriman&Company Aether Investment Partners Cambiar Investors,LLC AEW Capital Management Capital Group Affiliated Managers Group,Inc. Carillon Tower Advisers Alcentra CastleArk Management,LLC AllianceBernstein Causeway Capital Management Allianz Global Investors Chartwell Investment Partners Allianz Life Insurance Company of North America Christian Brothers Investment Services Altrinsic Global Advisors,LLC ClearBridge Investments,LLC American Century Investments Cohen&Steers Capital Management, Inc. Amundi Pioneer Asset Management Columbia Threadneedle Investments Apollo Global Management Columbus Circle Investors AQR Capital Management Credit Suisse Asset Management Ares Management LLC DePrince,Race&Zollo,Inc. Ariel Investments,LLC Diamond Hill Capital Management, Inc. Aristotle Capital Management Dimensional Fund Advisors LP Artisan Partners Limited Partnership Doubleline Atlanta Capital Management Co.,LLC Duff&Phelps Investment Management Co. Aviva Investors Americas DWS(Formerly Deutsche Asset Management) AXA Investment Managers EAM Investors,LLC Baillie Gifford International,LLC EARNEST Partners,LLC Baird Advisors Eaton Vance Management Baron Capital Management,Inc. Epoch Investment Partners,Inc. Barrow,Hanley,Mewhinney&Strauss,LLC Fayez Sarofim&Company Bentall Kennedy(U.S.)Limited Partnership Federated Investors BlackRock Fidelity Institutional Asset Management BMO Global Asset Management Fiera Capital Corporation BNP Paribas Asset Management First Eagle Investment Management,LLC BNY Mellon Asset Management First Hawaiian Bank Wealth Management Division Boston Partners Fisher Investments Brandes Investment Partners,L.P. Franklin Templeton Brandywine Global Investment Management,LLC Fred Alger Management, Inc. Callan I Knowledge. Experience. Integrity. Page 1 of 2 Manager Name Manager Name Fulcrum Asset Management LLP PFM Asset Management LLC Gaillard Capital Management PGIM GAM(USA)Inc. PGIM Fixed Income GlobeFlex Capital,L.P. Pacific Investment Management Company GMO LLC Pathway Capital Management Goldman Sachs Asset Management Peregrine Capital Management,Inc. Green Square Capital LLC Perkins Investment Management Guggenheim Investments PineBridge Investments GW&K Investment Management PNC Capital Advisors,LLC Harbor Capital Group Trust Principal Global Investors Hartford Funds Private Advisors,LLC Hartford Investment Management Co. Putnam Investments,LLC Heitman LLC QMA Hotchkis&Wiley Capital Management,LLC RBC Global Asset Management HSBC Global Asset Management Regions Financial Corporation IFM Investors Riverbridge Partners LLC Income Research+Management,Inc. Robeco Institutional Asset Management,US Inc. Insight Investment Management Limited Rockefeller Capital Management Intech Investment Management,LLC Rothschild Asset Management Inc. Invesco Russell Investments Investec Asset Management Santander Global Facilities Ivy Investments Schroder Investment Management North America Inc. J O Hambro Capital Management Limited Securian Asset Management J.P.Morgan Shenkman Capital Management, Inc. Janus Silvercrest Asset Management Group Jennison Associates LLC Smith Graham&Co.Investment Advisors,L.P. Jensen Investment Management Smith Group Asset Management Jobs Peak Advisors South Texas Money Management,Ltd. KeyCorp Standard Life Investments Limited Lazard Asset Management State Street Global Advisors Legal&General Investment Management America Stone Harbor Investment Partners,L.P. Lincoln National Corporation Sun Life Investment Management LMCG Investments,LLC T.Rowe Price Associates,Inc. Longview Partners The Boston Company Asset Management,LLC Loomis,Sayles&Company,L.P. The London Company Lord Abbett&Company The TCW Group, Inc. Los Angeles Capital Management Thompson,Siegel&Walmsley LLC LSV Asset Management Thornburg Investment Management,Inc. MacKay Shields LLC Tri-Star Trust Bank Macquarie Investment Management(MIM) UBS Asset Management Manulife Asset Management VanEck Marathon Asset Management,L.P. Velanne Asset Management Ltd. McKinley Capital Management,LLC Versus Capital Group MFS Investment Management Victory Capital Management Inc. MidFirst Bank Virtus Investment Partners,Inc. Mondrian Investment Partners Limited Vontobel Asset Management,Inc. Montag&Caldwell,LLC Voya Morgan Stanley Investment Management Wasatch Advisors, Inc. Mountain Lake Investment Management LLC WCM Investment Management MUFG Union Bank,N.A. WEDGE Capital Management Natixis Investment Managers Wellington Management Company,LLP Neuberger Berman Wells Fargo Asset Management Newton Investment Management Western Asset Management Company LLC Nikko Asset Management Co.,Ltd. Westfield Capital Management Company,LP Northern Trust Asset Management William Blair&Company LLC Nuveen Investments,Inc. Windhaven Investment Management OR Global Asset Management WisdomTree Asset Management O'Shaughnessy Asset Management,LLC P/E Investments Callan I Knowledge. Experience. Integrity. Page 2 of 2 December 31,2018 I INVES'IM ENT REPO RT Cill CHANDLER ASSET MANAGEMENT Orange County Sanitation District Period Ending December 31, 2018 CHANDLER ASSET MANAGEMENT, INC. 1 800.317.47471 www.chandlerasset.com ITable of Contents As of December 31, 2018 SECTION 1 Economic Update SECTION 2 Account Profile SECTION 3 Consolidated Information SECTION 4 Portfolio Holdings SECTION 5 Transactions 1 cill K,I Section 1 Economic Update 1 C IEconomic Update ■ The Federal Open Market Committee (FOMC) raised the fed funds target rate by 25 basis points in December to a range of 2.25%-2.50%. Although recent economic data has softened, the rate hike was widely expected. The Fed's long run fed funds rate target was lowered to 2.8% from the previous estimate of 3.0%. However, the Fed did little to acknowledge the changing market dynamics and tightening financial conditions, reaffirming their strong economic forecast for 2019 and emphasizing the balance sheet reduction strategy remains on track. Although the modest adjustment in the Fed's projections was a step in the right direction, some market participants were expecting a more dovish tone from the Fed Chair. We continue to believe the terminal fed funds rate will be below 3.0% and believe the Fed is at risk of making a policy error if monetary policy continues to tighten at the same quarterly pace of 2018. We believe there is a high probability that the Fed will keep monetary policy on hold at least through the first quarter. ■ Interest rate sensitive sectors such as housing and autos have softened, and financial conditions have tightened in recent months as equity prices have declined, borrowing costs have increased, and the US dollar has strengthened. Although labor market conditions remain tight, we expect the pace of job growth is likely to slow as the economy is at or near full employment. Meanwhile, inflation pressures remain subdued. Though we don't foresee a recession in the near-term, economic growth has eased. The economy is expected to grow 2.6%this year versus 2.9% in 2018. ■ Treasury yields declined in December. At month-end, the 2-year Treasury yield was down nearly 30 basis points to 2.49%, while the 10-year Treasury yield was down slightly more than 30 basis points to 2.68%. The spread between 2- and 10-year Treasury yields was just 20 basis points at year-end. 3 c�„ Employment Nonfarm Payroll (000's) Unemployment Rate 350 12.0% — 11.0% —Underemployment Rate(U6) 300 — — 10.0% —Unemployment Rate(U3) c 250 9.0% 0 200 A AA A A0 8.0% 7.0% c o 150 — 6.0% 0 100 — 5.0% 4.0% — 50 3.0% 0 2.0% �Pa �dr, ✓�'l, SPa, ��°a �drs�', �Pa ��Oc, �dr ✓4�. SPa, �EOa �dr, ✓4h. SPa, ��Oa jb I) 1j d5 1> 1'p 18a 19 18 16 1) 1) Ij 1) 1�p 1cp 4 14 Source:US Department of Labor Source:US Department of Labor U.S. payrolls rose by 312,000 in December, well above the consensus forecast of 184,000. October and November payrolls were revised up by a total of 58,000. On a trailing 3-month and 6-month basis payrolls increased by an average of 254,000 and 222,000 per month, respectively, more than enough to absorb new entrants into the labor market. The unemployment rate increased to 3.9% in December from 3.7% in November as the labor participation rate increased to 63.1%from 62.9%. A broader measure of unemployment called the U-6, which includes those who are marginally attached to the labor force and employed part time for economic reasons, was unchanged at 7.6%. Wages jumped 0.4°% in December on a month-over-month basis, exceeding expectations of 0.3%. Wages were up 3.2% on a year-over-year basis in December, versus up 3.1% year-over-year in November. The average workweek increased to 34.5 hours in Decemberfrom 34.4 hours in November. 4 CJ„ Inflation Consumer Price Index(CPI) Personal Consumption Expenditures(PCE) 3.5% 3.5% 3.0% 3.0 /000--\ 2.5% 2.5% — v no o c a t 2.0% r 2.0 0 U U } 1.5% 1.5% 20� O } } O 1.0% } 1.0% 0.5% 0.5 CPI YOY%Change —PCE Price Deflator YOY%Change Core CPI YOY% Change PCE Core Deflator YOY%Change 0.0% 0.0% OPT 4,7dr ✓�' SPp OPT 4.-r ✓q' S OPT 4iok '06 2jdy q4� 0k xO6 44 -q4, iyok 4 78 ,46 Zj Z) 4 Source:US Department of Labor Source:US Department of Commerce The Consumer Price Index (CPI) was up just 1.9% year-over-year in December, versus up 2.2% year-over-year in November, as energy prices pulled down the index month-over-month. Core CPI (CPI less food and energy) was up 2.2%year-over-year in December, unchanged on a year- over-year basis from November. The Personal Consumption Expenditures (PCE) index was up 1.8% year-over-year in November, versus up 2.0% year-over-year in October. Core PCE (excluding food and energy) was up 1.9% on a year-over-year basis in November, versus up 1.8°% in October. Core PCE inflation, which is the Fed's primary inflation gauge remains below the Fed's 2.0%target. 5 cJ„ IConsumer Retail Sales YOY % Change Consumer Confidence 7.0% 145 6.0% 140 — 135 5.0% — 130 c 4.0% > 125 J 0 � 3.0% y 120 _77 0 115 2.0% 110 — 1.0 105 0.0% 100 tiokZ X0 61� 2'd�1 9G°p1� �Okdj �P618 2jd�1 9G°Q1 tio`1 �P0 j6�P61j gbr7j�4h j, qG�Z,���j,�Pc 7j�P61�gdr1��Gh1� gG j8 Oct jd'OPc18 6 8 8 8 Source:US Department of Commerce Source:The Conference Board On a year-over-year basis, retail sales were up 4.2% in November, versus up 4.8% year-over-year in October. On a month-over-month basis, retail sales increased 0.2% in November, above expectations for a 0.1% increase, following growth of 1.1% in October. October sales were likely boosted in part by a hurricane-related rebound in auto sales and building materials. Lower gas prices held back monthly retail sales growth in November, but sales growth excluding autos and gas was solid. The Consumer Confidence Index remains strong but eased to 128.1 in December from 136.4 in November. Looking ahead, labor market strength should continue to support consumer confidence and spending trends. 6 c, IEconomic Activity Leading Economic Indicators(LEI) Chicago Fed National Activity Index(CFNAI) 1.4% 0.80 1.2% 0.60 1.0% 0.8% 0.40 M L u 0.6% AA A a s 0.20 -- 0.4% 2 VV0 0.2% 0.00 -0.20 -0.2% -0.4% -0.40 tiok� xP6 jj �d`1 9G�°1) °k1) �Pb 2�d`1 �G�1 °k1 •y°k '06 •�dy y4a° •y°k �P61 •�dy y4a° •y°k 6 � 8 8 8 16 ;Ij ,Zj d) 1> 8 1� 18 18 Source:The Conference Board Source:Federal Reserve Bank of Chicago The Index of Leading Economic Indicators (LEI) rose 0.2% month-over-month in November, following a downwardly revised 0.3% decline in October. Based on the index, the Conference Board believes the US economy will continue to grow at a pace of about 2.8% in early 2019 and then moderate in the second half of the year. The Chicago Fed National Activity Index (CFNAI) increased to 0.22 in November from a sharply downwardly revised 0.0 in October (previously 0.24). On a 3-month moving average basis, the index declined to 0.12 in November from 0.23 in October. Q1 IHousing Housing Starts S&P/CaseShiIIer 20 City Composite Home Price Index 1800 7.5% 1600 ■Multi Family Housing Starts c ■Single Family Housing Starts 0% 1400 0 c 1200 6.5% m ao 3 1000 M u 6.0% 800 0 600 o 5.5% 400 gEMMMM MMMMMMMMMMI5.0% o 200 MMM 0 4.5% iLok16 cPbZ, 2�d`1, qG�Z, iLok1, �P618 �d`18 18 �0`18 Oc�7G ✓d�1, gpr1, ✓4/Z, Oc�1, ✓d�1� gprZ� ✓4/Z� Oc�Z� Source:US Department of Commerce Source:S&P Total housing starts were stronger than expected in November, up 3.2% to a 1.256 million annualized rate. The growth was driven by multi- family starts which rose 22.4%. Single-family starts declined 4.6% in November. Permits rose 5.0% in the month. According to the Case-Shiller 20- City home price index, home prices were up 5.0% year-over-year in October, versus up 5.2% in September. The housing sector has softened as mortgage rates have increased. 8 Q11 Manufacturing Institute of Supply Management Purchasing Industrial Production Manager Index 64 6.0% Expanding 62 5.0% 60 4.0% V. v W 58 3.0% L V 56 0 2.0% 54 01.0% 52 0.0% 50 — Contracting -1.0% 48 V -2.0% — OPczG 2�dr�j ✓Gh1, SPp1j OPcz, 2,dr1� ✓Ghz� SPp18 OPCZ� �Okz6 �Pb1j 1, y� Z, �Ok �P61� d`1� y��Z� �Ok1� Source:Institute for Supply Management Source:Federal Reserve The Institute for Supply Management (ISM) manufacturing index fell to 54.1 in December from 59.3 in November. Despite the large decline, a reading above 50.0 suggests the manufacturing sector is expanding. The Industrial Production index was up 3.9% year-over-year in November versus up 3.8% year-over-year in October. On a month-over-month basis, the manufacturing component of the index was flat in November, following a 0.1% decline in October. Capacity Utilization increased to 78.5% in November from 78.1% in October, but remains below the long- run average of 79.8% indicating there is still excess capacity for growth. 9 cill IGross Domestic Product (GDP) Components of GDP 12/17 3/18 6/18 9/18 Gross Domestic Product(GDP) 6.0 Personal Consumption Expenditures 2.6% 0.4% 2.6% 2.4% 5.0% - Gross Private Domestic Investment 0.1% 1.6% -0.1% 2.5% 4.0 3.0% Net Exports and Imports JMK1:2:?%/o: -2.0% 2.0% 1.0% - Federal Government Expenditures 0.3% 0.2% 0.2% 0.2% 0.0 State and Local(Consumption and GDP QCQ%Change Gross Investment) 0.2% 0.1% 0.2% 0.2% -1.0o� -GDP YCY% Change -2.0% Total 2.3% 2.2% 4.2% 3.4% SP,o, far SP;0 far SP,a, far SPa, far SPa, far SPa, far SOb 1� 7� 1Q dQ IS 1s d6 16 1> dj 16, 1719 Source: US Department of Commerce Source: US Department of Commerce Third quarter GDP grew at an annualized rate of 3.4% (revised down slightly from the second estimate of 3.5%). This follows growth of 4.2% in the second quarter. Inventories and consumer spending drove growth in the third quarter, while net exports were a drag. The consensus forecast calls for GDP growth of 2.6% in the fourth quarter, 2.3% in the current quarter, and 2.6% in 2019. 10 C1„ Bond Yields US Treasury Note Yields US Treasury Yield Curve 4.0% 4.0% 3.5% 3.5% — 3.0% 3.0% 2.5% 2.5% 2.0% 2 2.0% — s s 1.5% 1.5% 1.0% 2-Year o Dec-18 5-Year 1.0% — — 0.5% 10-Yea r —Sep-18 0.5% — Dec-17 0.0% � ✓�, SP � � ✓4 SP � 0.0% OPC7G drdj �Zj aIj Polj d~1cP �18 a18 Pc78 ��s�o Syr syr ,fir Z0!r ��yr Source:Bloomberg Source:Bloomberg On a year-over-year basis, Treasuryyields have increased and the Treasuryyield curve has flattened. The spread between 2-year and 10-year Treasuryyields narrowed from 52 basis points to 20 basis points in 2018.Rate hikes by the Federal Reserve have put upward pressure on rates, while supply and demand imbalances, technical factors, weakening global economic growth, and subdued inflation expectations have contributed to the curve flattening. 11 Ci„ Section 2 Account Profile C Objectives As of December31, 2018 Investment Objectives The investment objectives of the Orange County Sanitation District are first, to provide safety of principal to ensure the preservation of capital in the overall portfolio; second, to provide sufficient liquidity to meet all operating requirements; and third, to earn a commensurate rate of return consistent with the constraints imposed by the safety and liquidity objectives. Chandler Asset Management Performance Objective Liquid Operating Monies — will be compared to the 3-month T-Bill rate and operate with a maximum maturity of one year. Long-Term Operating Monies — will be compared to the ICE BAML 1-5 Year Corporate Government Rated AAA— A Index. Strategy In order to achieve these objectives, the portfolio invests in high quality fixed income securities consistent with the investment policy and California Government Code. 13 Q compliance As of December 31, 2018 Orange County Sanitation District Long Term Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 5 years maxmaturity; Minimum allocation of 10% Complies* U.S.Agencies 20%max issuer; 5 years max maturity Complies "AA"rated or better by a NRSRO; 30%maximum; 5 years max maturity; USD denominated senior unsecured Supra national Complies unsubordinated obligations issued or unconditionally guaranteed by IBRD,IFC,or IADB "A"rated or better long term debt by a NRSRO; 30%maximum;5%max issuer; 5 years max maturity; Issued by Corporate(MTNs) Complied at time of purchase** corporations organized and operating within the U.S.or issued by depository institutions licensed by the U.S. Municipal Securities "A"rated or higher by a NRSRO;10%maximum; 5%max issuer; 5 years max maturity Complies Asset Backed/CMOs/Mortgage-backed "AA"rated or better by a NRSRO; "A"or higher issuer rating by a NRSRO; 20%maximum; 5%max issuer(excluding Complies* govt agency/mbs);5 years max maturity Negotiable CDs "A"rated or better long term debt by a NRSRO;or"A-1"/highest short term rating by a NRSRO; 30%maximum;5%max Complies issuer;5 years max maturity Certificates of Deposit 5%max issuer; 5 years max maturity; Secured/collateralized Complies Banker's Acceptances A-1 rated or equivalent shortterm rating by a NRSRO; 40%maximum; 5%max issuer;180 days max maturity Complies A-1 rated or equivalent shortterm rating by a NRSRO; "A"or better long term debt issuer by a NRSRO; Issued by a Commercial Paper domestic corporation organized and operating in the US with AUM>$500million; 25%maximum; 5%max issuer; Complies 270 days max maturity Mutual Fund&Money Market Mutual Highest rating or"AAA"rated by two NRSROs;SEC registered adviser with AUM>$500 million and experience greater Fund than 5 years;10%per one Mutual Fund; 20%max per issuer on Money Market Mutual Funds; 20%max of the Complies District's surplus money Repurchase Agreements 102%collateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies OCIP Not used by investment adviser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Max Per Issuer 5%of portfolio(except Supranationals,U.S.Government,Agencies,Mutual Fund) Complies Maximum Maturity 5 years maximum maturity Complies* *The portfolio has twenty-one(21)securities with maturities greater than 5 years including four(4)CMOs,sixteen(16)MBS and one(1)treasury. All securities were inherited from the previous manager and complied at time of purchase. **GE(36962G7M0)was downgraded by Moody's(Baal)and S&P(BBB+)in October2018 and by Fitch(888+)in November2018;complied at time of purchase. Q1 14 Portfolio Characteristics As of December 31, 2018 Orange County Sanitation District Long Term Benchmark* Portfolio Portfolio Average Maturity(yrs) 2.68 2.60 2.74 Average Modified Duration 2.53 2.27 2.37 Average Purchase Yield n/a 2.27% 2.18% Average Market Yield 2.69% 2.70% 2.85% Average Quality" AAA AA/Aa2 AA/Aa1 Total Market Value 498,783,575 462,099,738 *ICE BAML 1-5 Vr US Corp/Govt Rated AAA-A Index **Benchmark is a blended rating of S&P,Moody's,and Fitch. Portfolio is S&P and Moody's respectively. A diversified mix of securities were purchased during the quarter across the Treasury, Agency, Supranational,Asset Backed, Commercial Paper and Corporate sectors of the market to keep the asset allocation of the strategy consistent with Chandler objectives. The purchased securities ranged in maturity from January 2019 to December 2023. A $30.4 million contribution into the portfolio late in the year was partially invested in short maturity notes to await more liquid markets in the beginning of the year. 15 CI,J ISector Distribution As of December 31, 2018 Orange County Sanitation District Long Term December 31, 2018 September 30, 2018 ABS 8.0% ABS 9.0% US Treasury 31.3% Agency US Treasury 23.0% 32.3% Agency 23.5% CM0 0.4% CMO Commercial Paper 0.5% 1.8% Commercial Paper Foreign Corporate 2.0% 0.9% US Corporate ` US Corporate Foreign Corporate 22.6% Money Market 21.6% 1.0% Fund FI 2.3% Money Market Mortgage Pass Fund FI Supranational Thru Supranational 2.1% Municipal Bonds 0.3% Mortgage Pass 8.5% 6.90 0,9°� Municipal Bonds Thru 1.0% 0.3% The sector allocation was relatively stable. Some of the modest changes include increases in the Corporate and Supranational allocations offset by declines in the Treasury and Asset Backed allocations. 16 Clit, IIssuers As of December 31, 2018 Orange County Sanitation District Long Term -Account #10268 Issue Name Investment Type %Portfolio Government of United States US Treasury 31.29% Federal National Mortgage Association Agency 8.53% Federal Home Loan Bank Agency 8.41% Federal Home Loan Mortgage Corp Agency 6.02% Intl Bank Recon and Development Supranational 3.99% Inter-American Dev Bank Supranational 3.46% First American Govt Obligation Fund Class-Z Money Market Fund FI 2.29% Honda ABS ABS 2.28% John Deere ABS ABS 2.02% MUFG Bank Ltd/NY Commercial Paper 1.80% Nissan ABS ABS 1.68% Wells Fargo Corp US Corporate 1.59% Honda Motor Corporation US Corporate 1.38% Berkshire Hathaway US Corporate 1.30% Deere&Company US Corporate 1.26% American Express ABS ABS 1.24% Chubb Corporation US Corporate 1.23% Bank of New York US Corporate 1.22% PNC Financial Services Group US Corporate 1.20% ChevronTexaco Corp US Corporate 1.19% 1P Morgan Chase&Co US Corporate 1.17% IBM Corp US Corporate 1.13% International Finance Corp Supranational 1.08% General Electric Co US Corporate 1.00% US Bancorp US Corporate 1.00% Qualcomm Inc US Corporate 0.99% HSBC Holdings PLC Foreign Corporate 0.89% Eli Lilly&Co US Corporate 0.80% Apple Inc US Corporate 0.80% Toyota ABS ABS 0.79% Wal-Mart Stores US Corporate 0.79% Occidental Petroleum Corporation US Corporate 0.66% General Dynamics Corp US Corporate 0.64% Morgan Stanley US Corporate 0.60% Exxon Mobil Corp US Corporate 0.60% Microsoft US Corporate 0.60% Oracle Corp US Corporate 0.59% Port Authority of New York and New Jersey Municipal Bonds 0.50% 17 C1„ IIssuers As of December 31, 2018 Orange County Sanitation District Long Term —Account #10268 Issue Name Investment Type %Portfolio HSBC Holdings PLC US Corporate 0.50% Merck&Company US Corporate 0.40% Federal Home Loan Mortgage Corp CMO 0.36% New York City Transitional Finance Authority Municipal Bonds 0.29% Federal National Mortgage Association Mortgage Pass Thru 0.24% University of California Municipal Bonds 0.08% Federal National Mortgage Association CIVIC) 0.04% GNMA Mortgage Pass Thru 0.03% AMRESCO Residental Securities Corp CMO 0.03% SLM Corp ABS 0.01% Small Business Administration ABS 0.00% Federal Home Loan Mortgage Corp Mortgage Pass Thru 0.00% TOTAL 100.00% 18 Q1 Quality Distribution As of December 31, 2018 Orange County Sanitation District Long Term December 31, 2018 vs.September 30,2018 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% MMMM AAA AA A <A NR 0 12/31/2018 ■9/30/2018 12/31/18 12.8% 62.8% 13.9% 1.6% 9.0% 09/30/18 11.6% 63.8% 14.5% 0.6% 9.5% Source:S&P Ratings 19 Q11 Duration Distribution As of December 31, 2018 Orange County Sanitation District Long Term Portfolio Compared to the Benchmark as of December 31, 2018 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% - - 0-0.25 0.25-0.50 0.50-1 1-2 2-3 3-4 4-5 5+ ■Orange County Sanitation District Long Term 0-0.25 i Portfolio 13.9% 2.3% 9.4% 15.7% 24.8% 19.8% 11.9% 2.2% Benchmark* 0.2% 0.0% 1.5% 33.5% 29.9% 22.3% 12.6% 0.0% *ICE BAML 1-5 Yr US Corp/6ovt Rated AAA-A Index The duration of the portfolio contracted during the quarter, predominately due to the aforementioned investment late in the year, which the Chandler team chose to tactically invest in shorter maturity notes. The overall duration of the portfolio will be moving closer to the benchmark in Q1, although the bias is still to remain modestly below the index duration. Investment Performance As of December 31, 2018 Orange County Sanitation District Long Term Total Rate of Return Annualized Since Inception 11/30/2014 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 12 months 2 years 3 years 5 years 10 years Since Inception ■Orange County Sanitation District Long Term ■ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index Annualized TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception Orange County Sanitation District Long Term 1.32% 1.51% 1.34% 1.38% N/A N/A 1.17% ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index 1.57% 1.49% 1.25% 1.27% N/A N/A 1.11% Total rate of return:A measure of a portfolio's performance over time.It is the internal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. 21 C11% Icompliance As of December 31, 2018 Orange County Sanitation District Liquid Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 1 year max maturity; Minimum allocation of 10% Complies U.S.Agencies 20%max issuer; 1 year max maturity Complies "AA" rated or better by a NRSRO; 30%maximum; 1 year max maturity; USD denominated senior unsecured Supra nati ona I Complies unsubordinated obligations issued or unconditionally guaranteed by IBRD,IFC,or IADB "A" rated or better long term debt by a NRSRO; 30%maximum;5%max issuer; 1 year max maturity; Issued by Corporate(MTNs) Complies corporations organized and operating within the U.S.or issued by depository institutions licensed by the U.S. Asset Backed/CMOs "AA" rated or better by a NRSRO; "A"or higher issuer rating by a NRSRO; 20%maximum; 5%max issuer; 1 year max Complies maturity Negotiable CDs "A" rated or better long term debt by a NRSRO;or"A-1"/highest short term rating by a NRSRO; 30%maximum;5%max Complies issuer;1 year max maturity Certificates of Deposit 5%max issuer;1 year max maturity; Secured/collateralized Complies Banker's Acceptances A-1 rated or equivalent shortterm rating by a NRSRO; 40%maximum; 5%max issuer;180 days max maturity Complies A-1 rated or equivalent short term rating by a NRSRO; "A"or better long term debt issuer by a NRSRO; Issued by a Commercial Paper domestic corporation organized and operating in the US with AUM >$500milIion; 25%maximum; 5%max issuer; Complies 270 days max maturity Mutual Fund& Money Market Mutual Highest rating or"AAA"rated by two NRSROs;SEC registered adviser with AUM>$500 million and experience greater Fund than 5 years;10%per one Mutual Fund; 20%max per issuer on Money Market Mutual Funds; 20%max of the Complies District's surplus money Repurchase Agreements 102%collateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAI F Not used by investment adviser Complies OCI P Not used by investment adviser Complies Prohibited Municipal Securities Complies Prohibited Mortgage Securities Complies Avg Duration Notto exceed 180 days; Max duration of 1/2 year Complies Max Per Issuer 5%of portfolio(except Supranationals,U.S.Government,Agencies,Mutual Fund) Complies Maximum Maturity 1 year maximum maturity Complies 22 C1„ Portfolio Characteristics As of December 31, 2018 Orange County Sanitation District Liquid Benchmark* Portfolio Portfolio Average Maturity(yrs) 0.17 0.19 0.22 Average Modified Duration 0.16 0.19 0.22 Average Purchase Yield n/a 2.43% 2.23% Average Market Yield 2.37% 2.42% 2.25% Average Quality" AAA AAA/Aaa AA+/Aa1 Total Market Value 176,671,592 75,177,285 *ICE BAML 3-Month US Treasury Bill Index **Benchmark is a blended rating of S&P,Moody's,and Fitch. Portfolio is S&P and Moody's respectively. Many securities were purchased across the Treasury,Agency, Certificate of Deposit, Commercial Paper and Corporate sectors of the market to keep the portfolio fully invested. The heavy transactional activity was driven by both the large number of maturing notes, totaling$43.3 million, as well as the large contribution late in the quarter totaling$101.0 million. 23 Ci„ ISector Distribution As of December 31, 2018 Orange County Sanitation District Liquid December 31, 2018 September 30, 2018 Agency Agency 5.9% Commercial Paper 8.0% 2.8% Commercial Paper Money Market 4.1% Fund FI 2.3% Money Market Negotiable CD Fund FI 3.1% 1 8% Supranational 2.8% Negotiable CD 12.1% US Corporate 5.2% Supranational 2.7% US Treasury US Treasury 77.9% 63.1% US Corporate 8.3% The sector allocation evolved with the large contribution into the portfolio late in the quarter. Notably the Treasury allocation remains higher than the historical experience due to the increased issuance of the Treasury sector, improving valuations, offset by the light funding needs of both Fannie Mae and Freddie Mac, which is leading to unattractive valuations in the Agency sector. 24 C11% IIssuers As of December 31, 2018 Orange County Sanitation District Liquid —Account #10282 Issue Name Investment Type %Portfolio Government of United States US Treasury 77.89% Federal Home Loan Bank Agency 5.41% Intl Bank Recon and Development Supranational 2.83% First American Govt Obligation Fund Class-Z Money Market Fund FI 2.30% PNC Financial Services Group US Corporate 1.66% Toronto Dominion Holdings Negotiable CD 1.15% Bank of Montreal Chicago Negotiable CD 1.13% Rabobank Nederland NV NY Commercial Paper 1.11% Bank of America Corp US Corporate 0.85% Westpac Banking Corp NY Negotiable CD 0.85% Wells Fargo Corp US Corporate 0.85% Toyota Motor Corp Commercial Paper 0.85% MUFG Bank Ltd/NY Commercial Paper 0.85% Walt Disney Company US Corporate 0.64% Paccar Financial US Corporate 0.61% JP Morgan Chase&Co US Corporate 0.57% Federal Home Loan Mortgage Corp Agency 0.46% TOTAL 100.00% 25 Q1 Quality Distribution As of December 31, 2018 Orange County Sanitation District Liquid December 31, 2018 vs. September 30,2018 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% AAA AA A <A NR ■12/31/2018 ■9/30/2018 12/31/18 38.6% 55.6% 5.2/ 0.0% 0.6% 09/30/18 45.7% 44.6% 8.3% 0.0% 1.3/0 u Source:S&P Ratings 26 c�„ IDuration Distribution As of December 31, 2018 Orange County Sanitation District Liquid Portfolio Compared to the Benchmark as of December 31, 2018 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% 0-0.25 0.25-0.50 0.50-1 1-1.5 1.5-2 2-2.5 2.5-3 3+ ■Orange County Sanitation District Liquid ICE BAML 3-Month US Treasury Bill Index 0-0.25 i Portfolio 81.9% 2.6% 15.6% 0.0% 0.0% 0.0% 0.0% 0.0% Benchmark* 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% "ICE BAML 3-Month US Treasury Bill Index The duration of the portfolio was little changed, currently 0.19 versus 0.22 at the end of the prior reporting period. 27 Qj Investment Performance As of December 31, 2018 Orange County Sanitation District Liquid Total Rate of Return Annualized Since Inception 11/30/2014 2.00% 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 12 months 2 years 3 years 5 years 10 years Since Inception ■Orange County Sanitation District Liquid ■ICE BAML 3-Month US Treasury Bill Index Annualized TOTAL RATE OF RETURN 3 months 12 months 2 years 3 years 5 years 10 years Since Inception Orange County Sanitation District Liquid 0.57% 1.90% 1.40% 1.09% N/A N/A 0.86% ICE BAML 3-Month US Treasury Bill Index 0.56% 1.87% 1.36% 1.02% N/A N/A 0.76% Total rate of return:A measure of a portfolio's performance over time.It is the internal rate of return,which equates the beginning value of the portfolio with the ending value;it includes interest earnings,realized and unrealized gains and losses in the portfolio. 28 C1„ Icompliance As of December 31, 2018 OCSD Lehman Exposure Assets managed by Chandler Asset Management are in full compliance with state law and with the investment policy Category Standard Comment Treasury Issues 5 years maximum maturity Complies Supranational CAA"or better by 1 of 3 NRSROs; 30%maximum; 5%max; 5 years maturity; Includes only: IADB,IBRD,and IFC per Complies GC U.S.Agencies 20%max issuer; 5 years maximum maturity Complies U.S.Corporate(MTNs) "A"or better long term rating by 1 of 3 NRSROs; 30%maximum;5%max issuer; 5 years max maturity Complies* Municipal Securities "A"or higher by 1 of NRSROS;10%maximum; 5%max issuer; 5 years maximum maturity Complies Asset Backed/CMOs/Mortgage-backed AA or better by 1 of 3 NRSROs; "A"or higher issuer rating by 1 of 3 NRSROs; 20%maximum; 5%max issuer Complies (excluding MBS/govt agency);5 years max maturity "A"or better on its long term debt by 1 of 3 NRSROs ; "A1/P1"or highest short term ratings by 1 of 3 NRSROs; 30% Negotiable CDs Complies maximum;5%max issuer; 5 years max maturity CDs/TDS 5%max issuer; 5 years max maturity Complies Banker's Acceptances A-1,or equivalent highest short term rating by 1 of 3 NRSROS; 40%maximum; 5%max issuer;180 days max maturity Complies Commercial Paper A-1,or equivalent by 1 of 3 NRSROS; "A"or better by 1 of 3 NRSROs,if longterm debt issued; 25%maximum; 5%max Complies issuer; 270 days max maturity Money Market Fund Highest rating by 2 of 3 NRSROs; 20%maximum;10%max issuer Complies Repurchase Agreements 102%col lateral ization Complies Reverse Repurchase Agreements 5%maximum,90 days max maturity Complies LAIF Not used by investment adviser Complies Avg Duration Not to exceed 60 months - (80%to 120%of the benchmark) Complies Maximum Maturity 5 years maximum maturity Complies *Account holds$2 million face value(cusip 525ESCOY6)and$600,000 face value(cusip 525ESC1B7)of defaulted Lehman Bros Holdings that were purchased by the previous manager. Complied at time of purchase. 29 C11% Portfolio Characteristics As of December 31, 2018 OCSD Lehman Exposure Portfolio Portfolio Average Maturity(yrs) 15.63 17.72 Modified Duration 0.00 0.00 Average Purchase Yield 0.00% 0.00% Average Market Yield 0.00% 0.00% Average Quality* NR/NR NR/NR Total Market Value 75,021 98,541 *Portfolio is S&P and Moody's,respectively. 30 ci„ Section 3 Consolidated Information C Portfolio Characteristics As of December 31, 2018 Orange County Sanitation District Consolidated PortfolioPortfolio Average Maturity(yrs) 1.98 2.39 Modified Duration 1.73 2.07 Average Purchase Yield 2.31% 2.18% Average Market Yield 2.63% 2.76% Average Quality* AA+/Aa1 AA+/Aa1 Total Market Value 675,530,188 537,375,564 *Portfolio is S&P and Moody's respectively. 32 c1„ ISector Distribution As of December31, 2018 Orange County Sanitation District Consolidated December 31, 2018 September 30, 2018 ABS 5.9% ABS 7.7% US Treasury Agency 36.6% US Treasury 18.5% Agency 43.5% 21.3% CMO 0.3% CMO Commercial Paper 0.4% 2.1% Commercial Paper wo Foreign Corporate 2.3% 0.7% Foreign Corporate Money Market 0.8% Fund FI Money Market blbbl- 2.3% lir Fund FI Municipal Bonds 2.0% 410Mortgage Pass 0.6% Municipal Bonds Thru US Corporate Mortgage Pass 0.8% US Corporate Supranational 0 2% 19.7% Thru 18.1% 7.0% 0.3% Negotiable CD Supranational Negotiable CD 0.8% 6.3% 1.7% 33 C11% Section 4 Portfolio Holdings C IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration ABS 654747ABO Nissan Auto Receivables 2017-AA2A 78,074.38 03/21/2017 78,073.98 99.95 78,038.50 0.02% Aaa/NR 1.04 1.470% Due 01/15/2020 1.47% 78,074.23 2.98% 51.01 (35.73) AAA 0.03 43814PAB6 Honda Auto Receivables Owner T 17-3 A2 284,988.93 09/25/2017 284,963.60 99.77 284,325.97 0.06% NR/AAA 1.06 1.570% Due 01/21/2020 1.58% 284,977.38 2.97% 161.57 (651.41) AAA 0.17 47788MAC4 John Deere Owner Trust 2016-AA3 441,203.81 02/23/2016 441,134.37 99.77 440,169.99 0.09% Aaa/NR 1.29 1.360% Due 04/15/2020 1.37% 441,182.12 2.93% 266.68 (1,012.13) AAA 0.15 43814QAC2 Honda Auto Receivables 2016-2 A3 451,323.73 05/24/2016 451,314.97 99.60 449,537.62 0.09% Aaa/NR 1.29 1.390% Due 04/15/2020 1.40% 451,320.82 3.12% 278.82 (1,783.20) AAA 0.23 47788BABO John Deere Owner Trust 2017-B A2A 262,773.56 07/11/2017 262,750.73 99.81 262,271.48 0.05% Aaa/NR 1.29 1.590% Due 04/15/2020 1.60% 262,762.85 2.95% 185.69 (491.37) AAA 0.14 89238BAB8 Toyota Auto Receivables Owner 2018-AA2A 3,973,491.12 01/23/2018 3,973,085.03 99.61 3,958,006.15 0.79% Aaa/AAA 1.79 2.100% Due 10/15/2020 2.12% 3,973,222.72 3.07% 3,708.59 (15,216.57) NR 0.40 47788CAB8 John Deere Owner Trust 2018-AA2 1,584,682.42 03/16/2018 1,581,463.53 99.81 1,581,680.75 0.32% Aaa/NR 1.79 2.420% Due 10/15/2020 2.59% 1,582,446.32 2.94% 1,704.41 (765.57) AAA 0.38 43814RACO Honda Auto Receivables 2016-4A3 1,893,324.61 02/07/2018 1,872,542.41 99.10 1,876,275.17 0.38% NR/AAA 1.97 1.210% Due 12/18/2020 2.58% 1,879,038.09 3.04% 827.28 (2,762.92) AAA 0.49 65478VAD9 NAROT 2016-B A3 1,051,134.72 02/12/2018 1,042,717.43 99.20 1,042,731.90 0.21% Aaa/NR 2.04 1.320% Due 01/15/2021 1.87% 1,045,252.09 3.10% 154.17 (2,520.19) AAA 0.45 83162CUO Small Business Administration 2001-20C 23,619.21 03/06/2001 23,619.21 102.17 24,131.11 0.00% Aaa/AA+ 2.17 6.340% Due 03/01/2021 6.34% 23,619.21 4.91% 499.15 511.90 AAA 1.05 65477UAD2 NAROT 2015-A4 1,092,704.96 02/09/2018 1,085,875.55 99.58 1,088,139.64 0.22% Aaa/NR 2.71 1.500% Due 09/15/2021 1.86% 1,087,554.23 3.11% 728.47 585.41 AAA 0.26 43814PAC4 Honda Auto Receivables Owner 17-3 A3 3,090,000.00 06/28/2018 3,040,994.53 98.78 3,052,159.86 0.61% NR/AAA 2.72 1.790% Due 09/20/2021 2.78% 3,048,725.67 2.99% 1,997.34 3,434.19 AAA 1.03 47788BAD6 John Deere Owner Trust 2017-B A3 675,000.00 07/11/2017 674,950.59 98.87 667,373.85 0.13% Aaa/NR 2.79 1.820% Due 10/15/2021 1.83% 674,967.55 2.99% 546.00 (7,593.70) AAA 0.97 65478GAD2 Nissan Auto Receivables Owner 2017-BA3 2,625,000.00 11/06/2018 2,584,291.99 98.84 2,594,500.13 0.52% Aaa/NR 2.79 1.750% Due 10/15/2021 3.10% 2,586,342.58 2.91% 2,041.67 8,157.55 AAA 1.01 47788CAC6 John Deere Owner Trust 2016-B A4 1,340,000.00 02/21/2018 1,339,903.65 99.68 1,335,659.71 0.27% Aaa/NR 3.30 2.660% Due 04/18/2022 2.68% 1,339,923.24 2.90% 1,584.18 (4,263.53) AAA 1.42 43814UAG4 Honda Auto Receivables 2018-2 A3 1,710,000.00 05/22/2018 1,709,962.72 100.10 1,711,699.74 0.34% NR/AAA 3.38 3.010% Due 05/18/2022 3.03% 1,709,968.28 2.97% 1,858.68 1,731.46 AAA 1.81 43815HAC3 Honda Auto Receivables Owner 2018-3 A3 3,970,000.00 08/21/2018 3,969,455.32 100.06 3,972,497.09 0.80% Aaa/NR 3.64 2.950% Due 08/22/2022 2.98% 3,969,502.49 2.94% 3,253.19 2,994.60 AAA 1.95 35 Q1 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 02587AAJ3 American Express Credit 2017-1 6,270,000.00 Various 6,174,085.15 98.82 6,195,844.65 1.24% Aaa/NR 3.71 1.930% Due 09/15/2022 2.91% 6,185,817.15 3.03% 5,378.27 10,027.50 AAA 1.09 47788EAC2 John Deere Owner Trust 2018-B A3 4,630,000.00 07/18/2018 4,629,649.05 100.49 4,652,617.50 0.93% Aaa/NR 3.88 3.080% Due 11/15/2022 3.10% 4,629,684.72 2.87% 6,337.96 22,932.78 AAA 2.15 65479GAD1 Nissan Auto Receivables Owner 2018-13A3 3,560,000.00 07/17/2018 3,559,884.66 100.39 3,573,741.60 0.72% Aaa/AAA 4.21 3.060% Due 03/15/2023 3.08% 3,559,895.55 2.91% 4,841.60 13,846.05 NR 2.25 78445JAA5 SLMA 2008-9 A 25,862.21 08/22/2008 25,757.28 100.52 25,997.21 0.01% Baa3/A 4.32 4.009% Due 04/25/2023 4.09% 25,831.34 4.15% 195.86 165.87 B 3.33 47788NADO John Deere Owner Trust 2016-B A4 1,151,000.00 06/27/2018 1,131,936.56 98.85 1,137,756.59 0.23% Aaa/NR 4.37 1.490% Due 05/15/2023 2.19% 1,133,927.46 3.02% 762.22 3,829.13 AAA 0.76 39,938,412.31 40,005,156.21 8.03% Aaa/AAA 3.10 TOTAL ABS 40,184,183.66 2.70% 39,974,036.09 2.98% 37,362.81 31,120.12 Aaa 1.23 Agency 3133782M2 FHLB Note 7,500,000.00 Various 7,589,190.00 99.82 7,486,822.50 1.51% Aaa/AA+ 0.18 1.500% Due 03/08/2019 1.14% 7,504,717.83 2.44% 35,312.50 (17,895.33) AAA 0.19 3137EADM8 FHLMC Note 7,500,000.00 Various 7,399,650.00 98.97 7,422,502.50 1.49% Aaa/AA+ 0.75 1.250% Due 10/02/2019 1.61% 7,480,234.99 2.64% 23,177.08 (57,732.49) AAA 0.74 313383HU8 FHLB Note 5,000,000.00 08/13/2015 5,008,950.00 98.85 4,942,320.00 0.99% Aaa/AA+ 1.45 1.750% Due 06/12/2020 1.71% 5,002,678.91 2.57% 4,618.06 (60,358.91) NR 1.42 3135GOD75 FNMA Note 5,000,000.00 11/16/2015 4,955,650.00 98.54 4,926,855.00 0.99% Aaa/AA+ 1.48 1.500% Due 06/22/2020 1.70% 4,985,788.98 2.52% 1,875.00 (58,933.98) AAA 1.45 3137EAEK1 FHLMC Note 5,000,000.00 Various 4,986,225.00 98.75 4,937,740.00 0.99% Aaa/AA+ 1.88 1.875% Due 11/17/2020 1.97% 4,991,218.45 2.56% 11,458.33 (53,478.45) AAA 1.83 3135GOF73 FNMA Note 7,500,000.00 Various 7,370,726.00 98.02 7,351,380.00 1.48% Aaa/AA+ 1.92 1.500% Due 11/30/2020 1.87% 7,450,091.82 2.57% 9,687.50 (98,711.82) AAA 1.87 3137EAEL9 FHLMC Note 7,500,000.00 02/26/2018 7,484,475.00 99.65 7,473,960.00 1.51% Aaa/AA+ 2.13 2.375% Due 02/16/2021 2.45% 7,488,882.10 2.54% 66,796.88 (14,922.10) AAA 2.04 3130A7CV5 FHLB Note 5,365,000.00 02/17/2016 5,343,325.40 97.68 5,240,301.31 1.06% Aaa/AA+ 2.14 1.375% Due 02/18/2021 1.46% 5,355,758.34 2.50% 27,253.45 (115,457.03) AAA 2.07 3135GOJ20 FNMA Note 10,000,000.00 Various 10,040,950.00 97.56 9,756,340.00 1.97% Aaa/AA+ 2.16 1.375% Due 02/26/2021 1.28% 10,019,231.20 2.54% 47,743.06 (262,891.20) AAA 2.09 313379RB7 FHLB Note 4,000,000.00 08/30/2017 4,030,160.00 98.14 3,925,596.00 0.79% Aaa/AA+ 2.45 1.875% Due 06/11/2021 1.67% 4,019,494.72 2.67% 4,166.67 (93,898.72) AAA 2.37 3135GOU35 FNMA Note 7,500,000.00 06/28/2018 7,515,225.00 100.56 7,542,082.50 1.51% Aaa/AA+ 2.48 2.750% Due 06/22/2021 2.68% 7,512,624.59 2.51% 5,156.25 29,457.91 AAA 2.38 36 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 3135GOS38 FNMA Note 3,000,000.00 01/30/2017 2,994,570.00 98.52 2,955,609.00 0.60% Aaa/AA+ 3.02 2.000% Due 01/05/2022 2.04% 2,996,681.67 2.51% 29,333.33 (41,072.67) AAA 2.87 3135GOT45 FNMA Note 5,000,000.00 05/05/2017 4,972,500.00 97.99 4,899,375.00 0.99% Aaa/AA+ 3.26 1.875% Due 04/05/2022 1.99% 4,981,748.47 2.52% 22,395.83 (82,373.47) AAA 3.12 3135GOT94 FNMA Note 5,000,000.00 Various 4,910,990.00 99.25 4,962,580.00 1.01% Aaa/AA+ 4.05 2.375% Due 01/19/2023 2.78% 4,924,454.37 2.57% 53,437.50 38,125.63 AAA 3.79 313383QR5 FHLB Note 5,000,000.00 08/28/2018 5,083,350.00 102.53 5,126,710.00 1.03% Aaa/AA+ 4.44 3.250% Due 06/09/2023 2.87% 5,077,379.37 2.64% 9,930.56 49,330.63 NR 4.11 3137EAEN5 FHLMC Note 10,000,000.00 Various 9,956,500.00 100.58 10,058,430.00 2.02% Aaa/AA+ 4.47 2.750% Due 06/19/2023 2.84% 9,960,693.91 2.61% 9,166.66 97,736.09 AAA 4.18 313383YJ4 FHLB Note 6,475,000.00 Various 6,566,064.50 103.00 6,669,347.13 1.35% Aaa/AA+ 4.69 3.375% Due 09/08/2023 3.06% 6,563,287.24 2.69% 68,594.53 106,059.89 NR 4.28 3130AOF70 FHLB Note 8,125,000.00 Various 8,342,143.75 103.05 8,373,210.63 1.68% Aaa/AA+ 4.94 3.375% Due 12/08/2023 2.79% 8,341,535.78 2.71% 17,519.54 31,674.85 AAA 4.52 114,550,644.65 114,051,161.57 22.96% Aaa/AA+ 2.69 TOTAL Agency 114,465,000.00 2.13% 114,656,502.74 2.58% 447,622.73 (605,341.17) Aaa 2.54 CMO 31398VJ98 FHLMC FHMS K006 A2 900,000.00 11/23/2010 951,046.88 100.89 908,015.40 0.18% Aaa/AA+ 1.07 4.251% Due 01/25/2020 3.54% 905,938.17 2.96% 3,188.25 2,077.23 AAA 0.88 03215PFN4 AMRESCOResidential Securities 1999-1A 133,743.29 05/20/2011 100,432.85 97.48 130,372.96 0.03% NR/A+ 10.49 3.446% Due 06/25/2029 7.28% 114,443.70 3.98% 89.61 15,929.26 BBB 5.85 3133TCE95 FHLMC FSPC E3 A 12,390.75 03/11/1998 12,403.72 101.27 12,547.80 0.00% Aaa/AA+ 13.63 3.896% Due 08/15/2032 3.86% 12,395.90 3.00% 40.23 151.90 AAA 2.00 31397QREO FNMA FNR 2011-3 FA 214,903.65 12/20/2010 214,836.49 100.95 216,943.09 0.04% Aaa/AA+ 22.17 3.186% Due 02/25/2041 3.19% 214,854.19 3.00% 114.10 2,088.90 AAA 4.92 31394JY35 FHLMC FSPC T-58 2A 771,463.19 06/09/2011 873,682.05 112.69 869,369.58 0.17% Aaa/AA+ 24.75 6.500% Due 09/25/2043 5.40% 849,772.32 3.85% 835.75 19,597.26 AAA 4.74 2,152,401.99 2,137,248.83 0.43% Aaa/AA+ 13.48 TOTAL CMO 2,032,500.88 4.49% 2,097,404.28 3.39% 4,267.94 39,844.55 Aaa 3.17 37 C11% IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration Commercial Paper 62479MPK3 MUFG Bank Ltd/NY Discount CP 9,000,000.00 10/16/2018 8,921,565.00 99.66 8,969,497.50 1.80% P-1/A-1 0.14 2.490% Due 02/19/2019 2.55% 8,969,497.50 2.55% 0.00 0.00 NR 0.14 8,921,565.00 8,969,497.50 1.80% P-1/A-1 0.14 TOTAL Commercial Paper 9,000,000.00 2.55% 8,969,497.50 2.55% 0.00 0.00 NR 0.14 Foreign Corporate 404280BF5 H5BC Holdings PLC Note 4,500,000.00 Various 4,429,980.00 97.01 4,365,576.00 0.89% A2/A 3.02 2.650% Due 01/05/2022 3.08% 4,445,397.08 3.71% 58,300.00 (79,821.08) AA- 2.82 4,429,980.00 4,365,576.00 0.89% A2/A 3.02 TOTAL Foreign Corporate 4,500,000.00 3.08% 4,445,397.08 3.71% 58,300.00 (79,821.08) AA- 2.82 Money Market Fund FI 31846V567 First American Govt Obligation MMKT Class-Z 11,433,011.69 Various 11,433,011.69 1.00 11,433,011.69 2.29% P-1/A-1+ 0.00 2.32% 11,433,011.69 2.32% 0.00 0.00 F-1 0.00 11,433,011.69 11,433,011.69 2.29% Aaa/AAA 0.00 TOTAL Money Market Fund FI 11,433,011.69 2.32% 11,433,011.69 2.32% 0.00 0.00 AA 0.00 Mortgage Pass Thru 31381PDA3 FNMA FN 466397 343,782.85 12/01/2010 336,343.19 100.94 347,005.81 0.07% Aaa/AA+ 1.84 3.400% Due 11/01/2020 3.80% 342,405.14 2.82% 227.28 4,600.67 AAA 1.77 36225CAZ9 GNMA Pool#G2 80023 18,348.30 08/08/1997 18,652.19 102.97 18,892.86 0.00% Aaa/AA+ 7.98 3.230% Due 12/20/2026 3.12% 18,430.88 3.34% 49.39 461.98 AAA 3.01 36225CC20 GNMA Pool#G2 80088 17,864.76 08/11/1997 18,255.56 102.32 18,278.87 0.00% Aaa/AA+ 8.47 3.860% Due 06/20/2027 3.72% 17,975.71 3.35% 57.46 303.16 AAA 2.12 31348SWZ3 FHLMC FH 786064 1,998.85 02/18/2000 1,950.19 102.17 2,042.15 0.00% Aaa/AA+ 9.01 4.737% Due 01/01/2028 4.96% 1,983.13 4.17% 7.89 59.02 AAA 4.12 31371NUC7 FNMA FN 257179 15,951.31 12/05/2011 16,870.08 103.79 16,556.47 0.00% Aaa/AA+ 9.26 4.500% Due 04/01/2028 3.72% 16,472.49 3.14% 59.82 83.98 AAA 3.13 31417YAY3 FNMA Pool#FN MA0022 19,087.02 12/05/2011 20,186.40 103.83 19,818.76 0.00% Aaa/AA+ 10.26 4.500% Due 04/01/2029 3.76% 19,738.12 3.08% 71.58 80.64 AAA 3.25 3138EG6F6 FNMA FN AL0869 11,744.21 12/05/2011 12,420.66 103.83 12,194.08 0.00% Aaa/AA+ 10.42 4.500% Due 06/01/2029 3.77% 12,147.47 3.11% 10.28 46.61 AAA 3.33 36225CNM4 GNMA Pool#G2 80395 7,439.07 03/15/2000 7,371.62 103.18 7,675.47 0.00% Aaa/AA+ 11.31 3.860% Due 04/20/2030 3.94% 7,413.59 3.38% 23.93 261.88 AAA 3.46 38 Q1 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 36225CN28 GNMA Pool#G2 80408 57,165.66 03/15/2000 56,585.06 103.19 58,987.47 0.01% Aaa/AA+ 11.39 3.860% Due 05/20/2030 3.95% 56,945.30 3.19% 183.88 2,042.17 AAA 2.78 31403GXF4 FNMA Pool#FN 748678 1,859.92 06/10/2013 1,999.42 105.12 1,955.23 0.00% Aaa/AA+ 14.76 5.000% Due 10/01/2033 4.16% 1,961.71 3.30% 7.75 (6.48) AAA 3.96 36225DCB8 GNMA Pool#G2 80965 55,669.55 07/19/2004 55,634.76 103.84 57,805.03 0.01% Aaa/AA+ 15.56 4.100% Due 07/20/2034 4.12% 55,651.46 3.18% 190.20 2,153.57 AAA 3.16 31406XWT5 FNMA Pool#FN 823358 113,183.28 01/11/2006 112,299.04 104.43 118,202.73 0.02% Aaa/AA+ 16.10 3.502% Due 02/01/2035 3.57% 112,693.19 3.82% 330.34 5,509.54 AAA 4.53 31406PQY8 FNMA Pool#FN 815971 184,549.40 06/10/2013 198,390.62 106.14 195,885.16 0.04% Aaa/AA+ 16.18 5.000% Due 03/01/2035 4.21% 194,893.08 3.47% 768.96 992.08 AAA 4.23 31407BXH7 FNMA Pool#FN 826080 20,825.16 06/10/2013 22,387.04 106.23 22,122.55 0.00% Aaa/AA+ 16.51 5.000% Due 07/01/2035 4.22% 21,998.37 3.47% 86.77 124.18 AAA 4.22 31376KT22 FNMA FN 357969 110,535.89 06/10/2013 118,826.06 106.22 117,407.24 0.02% Aaa/AA+ 16.68 5.000% Due 09/01/2035 4.22% 116,778.90 3.48% 107.47 628.34 AAA 4.25 31403DJZ3 FNMA Pool#745580 105,151.30 06/10/2013 113,037.66 106.17 111,639.14 0.02% Aaa/AA+ 17.43 5.000% Due 06/01/2036 4.26% 111,154.07 3.49% 438.13 485.07 AAA 4.29 3141OF4V4 FNMA Pool#FN 888336 207,540.48 06/10/2013 223,106.02 106.19 220,377.48 0.04% Aaa/AA+ 17.51 5.000% Due 07/01/2036 4.25% 219,401.62 3.48% 864.75 975.86 AAA 4.26 1,334,315.57 1,346,846.50 0.27% Aaa/AA+ 12.13 TOTAL Mortgage Pass Thru 1,292,697.01 4.00% 1,328,044.23 3.30% 3,485.88 18,802.27 Aaa 3.44 Municipal Bonds 73358WAG9 Port Authority of NY&NJ TE-REV 2,440,000.00 Various 2,507,633.89 102.35 2,497,315.60 0.50% Aa3/AA- 0.92 5.309% Due 12/01/2019 4.97% 2,445,939.26 2.69% 10,794.97 51,376.34 AA- 0.89 64971M5E8 New York NY TE-REV 1,400,000.00 10/27/2010 1,400,000.00 101.54 1,421,574.00 0.29% Aa1/AAA 1.84 4.075% Due 11/01/2020 4.08% 1,400,000.00 3.20% 9,508.33 21,574.00 AAA 1.75 91336605 Univ of California Rgts Med TE-REV 400,000.00 11/09/2010 400,000.00 104.86 419,452.00 0.08% Aa3/AA- 2.37 5.035% Due 05/15/2021 5.04% 400,000.00 2.90% 2,573.44 19,452.00 AA- 2.22 4,307,633.89 4,338,341.60 0.87% Aa2/AA 1.36 TOTAL Municipal Bonds 4,240,000.00 4.68% 4,245,939.26 2.88% 22,876.74 92,402.34 AA 1.30 Supranational 459052AP1 IBRD Discount Note 10,000,000.00 12/24/2018 9,985,825.00 99.91 9,991,225.00 2.00% P-1/A-1+ 0.04 2.430% Due 01/14/2019 2.47% 9,991,225.00 2.47% 0.00 0.00 F-1+ 0.04 4581XOCX4 Inter-American Dev Bank Note 3,035,000.00 04/05/2017 3,027,807.05 98.72 2,996,082.20 0.60% Aaa/AAA 1.36 1.625% Due 05/12/2020 1.70% 3,031,825.14 2.59% 6,712.83 (35,742.94) AAA 1.33 39 C11% IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 45950KCMO International Finance Corp Note 2,970,000.00 01/18/2018 2,961,268.20 99.34 2,950,507.89 0.60% Aaa/AAA 2.07 2.250% Due O1/25/2021 2.35% 2,963,984.94 2.58% 28,957.50 (13,477.05) NR 1.99 4581XOCS5 Inter-American Dev Bank Note 5,000,000.00 Various 5,059,610.00 98.51 4,925,685.00 0.99% Aaa/AAA 2.21 1.875% Due 03/15/2021 1.68% 5,020,050.24 2.57% 27,604.17 (94,365.24) AAA 2.13 45950KCJ7 International Finance Corp Note 2,500,000.00 11/09/2016 2,441,600.00 96.43 2,410,725.00 0.49% Aaa/AAA 2.55 1.125% Due 07/20/2021 1.64% 2,468,260.13 2.58% 12,578.13 (57,535.13) NR 2.48 4581XOCW6 Inter-American Dev Bank Note 3,000,000.00 01/10/2017 2,996,310.00 98.56 2,956,854.00 0.60% Aaa/NR 3.05 2.125% Due O1/18/2022 2.15% 2,997,750.84 2.62% 28,864.58 (40,896.84) AAA 2.90 459058FY4 Intl.Bank Recon&Development Note 10,000,000.00 Various 10,006,350.00 98.24 9,824,340.00 1.99% Aaa/NR 3.07 2.000% Due O1/26/2022 1.99% 10,002,944.56 2.60% 86,111.12 (178,604.56) AAA 2.93 4581XOCZ9 Inter-American Dev Bank Note 6,500,000.00 Various 6,249,655.00 96.81 6,292,871.00 1.27% NR/NR 3.71 1.750% Due 09/14/2022 2.65% 6,297,197.57 2.66% 33,809.02 (4,326.57) AAA 3.53 42,728,425.25 42,348,290.09 8.54% Aaa/AAA 2.13 TOTAL Supranational 43,005,000.00 2.16% 42,773,238.42 2.57% 224,637.35 (424,948.33) Aaa 2.04 US Corporate 532457131`4 Eli Lilly&Co Note 4,000,000.00 Various 4,009,675.00 99.77 3,990,912.00 0.80% A2/AA- 0.20 1.950% Due 03/15/2019 1.89% 4,000,453.85 3.04% 22,966.67 (9,541.85) A 0.20 02665WAH4 American Honda Finance Note 4,000,000.00 Various 4,046,640.00 99.53 3,981,204.00 0.80% A2/A+ 0.62 2.250% Due 08/15/2019 1.93% 4,007,578.94 3.02% 34,000.00 (26,374.94) NR 0.61 06406HCW7 Bank of New York Callable Note Cont 8/11/2019 2,120,000.00 02/10/2016 2,142,175.20 99.48 2,108,980.24 0.43% Al/A 0.70 2.300% Due 09/11/2019 1.99% 2,123,870.20 3.06% 14,898.89 (14,889.96) AA- 0.68 24422ESS9 John Deere Capital Corp Note 5,000,000.00 Various 5,046,984.00 99.43 4,971,650.00 1.00% A2/A 0.71 2.300% Due 09/16/2019 2.07% 5,007,575.16 3.11% 33,541.67 (35,925.16) A 0.69 36962G7MO General Electric Capital Corp Callable Note 1X 5,000,000.00 Various 5,014,950.00 98.54 4,927,190.00 1.00% Baal/BBB+ 1.02 12/9/2019 2.13% 5,002,953.19 3.66% 52,555.55 (75,763.19) BBB+ 0.99 2.200% Due 01/09/2020 46625HKA7 JP Morgan Chase Callable Note Cont 12/23/2019 2,000,000.00 02/06/2015 1,994,880.00 99.00 1,980,080.00 0.40% A2/A- 1.06 2.250% Due 01/23/2020 2.30% 1,998,903.46 3.21% 19,750.00 (18,823.46) AA- 1.03 40428HPR7 HSBC USA Inc Note 2,500,000.00 Various 2,472,287.50 98.99 2,474,760.00 0.50% A2/A 1.18 2.350% Due 03/05/2020 2.64% 2,491,869.48 3.23% 18,930.56 (17,109.48) AA- 1.14 747525AD5 Qualcomm Inc Note 5,000,000.00 05/19/2015 4,995,195.40 98.61 4,930,500.00 0.99% A2/A- 1.39 2.250% Due 05/20/2020 2.27% 4,998,670.51 3.28% 12,812.51 (68,170.51) NR 1.35 94974BGM6 Wells Fargo Corp Note 5,000,000.00 07/16/2015 5,001,650.00 99.03 4,951,535.00 1.00% A2/A- 1.56 2.600% Due 07/22/2020 2.59% 5,000,512.97 3.24% 57,416.67 (48,977.97) A+ 1.50 40 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description T- Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 037833BS8 Apple Inc Callable Note Cont 1/23/2021 4,000,000.00 05/23/2016 4,050,840.00 98.83 3,953,136.00 0.80% Aal/AA+ 2.15 2.250% Due 02/23/2021 1.96% 4,022,479.46 2.81% 32,000.00 (69,343.46) NR 2.06 30231GAV4 Exxon Mobil Corp Callable Note Cont 2/1/2021 3,000,000.00 Various 3,016,097.40 98.56 2,956,806.00 0.60% Aaa/AA+ 2.17 2.222% Due 03/01/2021 2.10% 3,007,312.79 2.91% 22,220.00 (50,506.79) NR 2.08 369550BE7 General Dynamics Corp Note 3,160,000.00 05/08/2018 3,138,038.00 100.08 3,162,556.44 0.64% A2/A+ 2.36 3.000% Due 05/11/2021 3.24% 3,142,747.01 2.96% 13,166.67 19,809.43 NR 2.26 166764BG4 Chevron Corp Callable Note Cont 4/15/2021 2,500,000.00 05/20/2016 2,485,350.00 98.07 2,451,740.00 0.49% Aa2/AA 2.38 2.100% Due 05/16/2021 2.23% 2,493,017.67 2.94% 6,562.50 (41,277.67) NR 2.29 61747WAL3 Morgan Stanley Note 2,800,000.00 06/06/2014 3,200,848.00 104.80 2,934,358.00 0.60% A3/BBB+ 2.58 5.500% Due 07/28/2021 3.24% 2,944,545.42 3.53% 65,450.00 (10,187.42) A 2.35 594918BP8 Microsoft Callable Note Cont 7/8/21 3,045,000.00 Various 3,041,385.15 97.15 2,958,117.02 0.60% Aaa/AAA 2.61 1.550% Due 08/08/2021 1.57% 3,043,119.33 2.69% 18,747.89 (85,002.31) AA+ 2.51 68389XBKO Oracle Corp Callable Note Cont 8/01/21 3,000,000.00 06/28/2018 2,892,240.00 97.02 2,910,621.00 0.59% Al/AA- 2.71 1.900% Due 09/15/2021 3.08% 2,909,312.71 3.05% 16,783.33 1,308.29 A 2.59 06406RAA5 Bank of NY Mellon Corp Callable Note Cont 1/7/2022 2,500,000.00 02/08/2017 2,504,475.00 98.23 2,455,747.50 0.50% Al/A 3.11 2.600% Due 02/07/2022 2.56% 2,502,756.54 3.20% 26,000.00 (47,009.04) AA- 2.92 69353RFB9 PNC Bank Callable Note Cont 1/18/2022 1,000,000.00 03/26/2018 974,940.00 97.74 977,371.00 0.20% A2/A 3.13 2.625% Due 02/17/2022 3.32% 979,856.84 3.39% 9,770.83 (2,485.84) A+ 2.94 674599CK9 Occidental Petroleum Callable Note Cont 3/15/2022 3,350,000.00 04/25/2017 3,354,589.50 97.54 3,267,512.95 0.66% A3/A 3.29 2.600% Due 04/15/2022 2.57% 3,353,010.73 3.39% 18,387.78 (85,497.78) A 3.10 084664BT7 Berkshire Hathaway Note 4,000,000.00 05/23/2017 4,131,120.00 99.77 3,990,824.00 0.80% Aa2/AA 3.37 3.000% Due 05/15/2022 2.30% 4,088,858.18 3.07% 15,333.33 (98,034.18) A+ 3.17 95000U2138 WELLS FARGO&COMPANY Note 3,000,000.00 Various 2,954,520.00 96.43 2,892,783.00 0.59% A2/A- 3.56 2.625% Due 07/22/2022 2.99% 2,963,993.77 3.71% 34,781.26 (71,210.77) A+ 3.32 00440EAUl Chubb INA Holdings Inc Callable Note Cont 9/3/2022 4,169,000.00 Various 4,232,453.17 99.15 4,133,696.91 0.83% A3/A 3.84 2.875% Due 11/03/2022 2.54% 4,217,441.27 3.11% 19,310.58 (83,744.36) A 3.59 90331HNL3 US Bank NA Callable Note Cont 12/23/22 5,000,000.00 01/29/2018 4,981,600.00 98.29 4,914,665.00 1.00% Al/AA- 4.07 2.850% Due 01/23/2023 2.93% 4,984,990.54 3.30% 62,541.67 (70,325.54) AA- 3.75 06406RAE7 Bank of NY Mellon Corp Callable Note Cont 12/29/2022 1,500,000.00 02/26/2018 1,486,065.00 98.43 1,476,393.00 0.30% Al/A 4.08 2.950% Due 01/29/2023 3.16% 1,488,446.98 3.37% 18,683.33 (12,053.98) AA- 3.76 44932HAH6 IBM Credit Corp Note 5,670,000.00 Various 5,603,264.40 98.08 5,561,345.80 1.13% Al/A 4.10 3.000% Due 02/06/2023 3.26% 5,613,558.47 3.51% 68,512.50 (52,212.67) A 3.77 41 Q1 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 00440EAP2 Chubb INA Holdings Inc Note 2,000,000.00 05/24/2018 1,937,000.00 97.72 1,954,402.00 0.40% A3/A 4.20 2.700% Due 03/13/2023 3.42% 1,944,816.47 3.28% 16,200.00 9,585.53 A 3.90 084670BR8 Berkshire Hathaway Callable Note Cont 1/15/2023 2,500,000.00 04/20/2018 2,440,950.00 98.17 2,454,187.50 0.50% Aa2/AA 4.21 2.750% Due 03/15/2023 3.28% 2,449,281.80 3.22% 20,243.06 4,905.70 A+ 3.90 58933YAF2 Merck&Co Note 2,000,000.00 10/26/2018 1,948,640.00 98.65 1,973,070.00 0.40% Al/AA 4.38 2.800% Due 05/18/2023 3.41% 1,950,588.03 3.13% 6,688.89 22,481.97 A+ 4.07 46625HRL6 JP Morgan Chase Callable Note Cont 3/18/2023 4,000,000.00 12/20/2018 3,832,440.00 96.05 3,842,120.00 0.77% A2/A- 4.38 2.700% Due 05/18/2023 3.74% 3,833,274.67 3.68% 12,900.00 8,845.33 AA- 4.07 69353RFL7 PNC Bank Callable Note Cont 5/9/2023 5,000,000.00 Various 4,993,318.05 100.20 5,009,900.00 1.01% A2/A 4.44 3.500% Due 06/08/2023 3.53% 4,994,066.49 3.45% 11,180.56 15,833.51 NR 4.00 166764AH3 Chevron Corp Callable Note Cont 3/24/2023 3,500,000.00 11/08/2018 3,441,095.00 99.84 3,494,515.50 0.70% Aa2/AA 4.48 3.191% Due 06/24/2023 3.59% 3,442,808.98 3.23% 2,171.65 51,706.52 NR 4.14 931142EK5 Wal-Mart Stores Callable Note Cont 5/26/2023 3,880,000.00 Various 3,878,991.40 101.03 3,919,983.40 0.79% Aa2/AA 4.49 3.400% Due 06/26/2023 3.41% 3,879,095.30 3.15% 1,832.22 40,888.10 AA 4.06 02665WCJ8 American Honda Finance Note 845,000.00 07/11/2018 843,538.15 100.03 845,240.83 0.17% A2/A+ 4.54 3.450% Due 07/14/2023 3.49% 843,673.60 3.44% 13,361.56 1,567.23 NR 4.10 02665WCQ2 American Honda Finance Note 2,000,000.00 Various 1,998,320.00 100.71 2,014,174.00 0.41% A2/A+ 4.78 3.625% Due 10/10/2023 3.64% 1,998,373.25 3.46% 16,312.50 15,800.75 NR 4.32 24422EUM9 John Deere Capital Corp Note 1,250,000.00 11/28/2018 1,250,237.50 101.05 1,263,083.75 0.26% A2/A 4.78 3.650% Due 10/12/2023 3.64% 1,250,233.22 3.41% 10,012.15 12,850.53 A 4.32 113,336,792.82 112,085,161.84 22.64% Al/A+ 2.79 TOTAL US Corporate 113,289,000.00 2.73% 112,974,047.28 3.24% 826,026.78 (888,885.44) A+ 2.60 US Treasury 912796UK3 US Treasury Bill 10,000,000.00 12/31/2018 9,986,250.00 99.87 9,986,875.00 2.00% P-1/A-1+ 0.06 2.250% Due 01/22/2019 2.28% 9,986,875.00 2.28% 0.00 0.00 F-1+ 0.06 9128281333 US Treasury Note 11,000,000.00 Various 11,042,439.19 99.93 10,992,696.00 2.22% Aaa/AA+ 0.08 1.500% Due 01/31/2019 1.37% 11,001,123.99 2.28% 69,048.91 (8,427.99) AAA 0.08 912828SN1 US Treasury Note 5,000,000.00 12/28/2016 5,016,423.00 99.77 4,988,710.00 1.00% Aaa/AA+ 0.25 1.500% Due 03/31/2019 1.35% 5,001,778.16 2.41% 19,162.09 (13,068.16) AAA 0.25 912828WS5 US Treasury Note 2,000,000.00 Various 1,996,861.44 99.55 1,990,938.00 0.40% Aaa/AA+ 0.50 1.625% Due 06/30/2019 1.66% 1,999,686.42 2.54% 89.78 (8,748.42) AAA 0.49 912828WW6 US Treasury Note 5,000,000.00 Various 5,012,388.70 99.46 4,973,240.00 1.00% Aaa/AA+ 0.58 1.625% Due 07/31/2019 1.57% 5,001,443.13 2.55% 34,001.36 (28,203.13) AAA 0.57 912828F39 US Treasury Note 5,800,000.00 10/27/2014 5,873,186.87 99.35 5,762,392.80 1.16% Aaa/AA+ 0.75 1.750% Due 09/30/2019 1.48% 5,811,071.65 2.63% 25,932.69 (48,678.85) AAA 0.73 42 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 912828G61 US Treasury Note 7,500,000.00 12/19/2014 7,449,634.50 98.97 7,422,660.00 1.49% Aaa/AA+ 0.92 1.500% Due 11/30/2019 1.64% 7,490,703.04 2.65% 9,890.11 (68,043.04) AAA 0.90 912828XE5 US Treasury Note 5,000,000.00 12/21/2016 4,966,423.00 98.53 4,926,560.00 0.99% Aaa/AA+ 1.42 1.500% Due 05/31/2020 1.70% 4,986,205.63 2.56% 6,593.41 (59,645.63) AAA 1.39 912828L99 US Treasury Note 10,000,000.00 Various 9,850,311.40 97.97 9,796,880.00 1.97% Aaa/AA+ 1.84 1.375% Due 10/31/2020 1.81% 9,923,930.32 2.52% 23,549.73 (127,050.32) AAA 1.79 912828N89 US Treasury Note 6,000,000.00 Various 5,895,840.41 97.71 5,862,420.00 1.18% Aaa/AA+ 2.09 1.375% Due O1/31/2021 1.81% 5,947,633.50 2.51% 34,524.45 (85,213.50) AAA 2.02 912828T34 US Treasury Note 7,000,000.00 Various 6,757,914.08 96.45 6,751,444.00 1.36% Aaa/AA+ 2.75 1.125% Due 09/30/2021 1.88% 6,861,612.59 2.47% 20,120.19 (110,168.59) AAA 2.67 912828T67 US Treasury Note 6,000,000.00 12/13/2016 5,813,691.98 96.66 5,799,846.00 1.17% Aaa/AA+ 2.84 1.250% Due 10/31/2021 1.92% 5,891,895.35 2.48% 12,845.30 (92,049.35) AAA 2.75 912828U65 US Treasury Note 7,000,000.00 12/28/2016 6,900,492.20 97.98 6,858,908.00 1.38% Aaa/AA+ 2.92 1.750% Due 11/30/2021 2.06% 6,941,081.64 2.47% 10,769.23 (82,173.64) AAA 2.81 912828V72 US Treasury Note 3,000,000.00 02/27/2017 3,004,814.74 98.22 2,946,564.00 0.60% Aaa/AA+ 3.09 1.875% Due 01/31/2022 1.84% 3,003,015.24 2.48% 23,539.40 (56,451.24) AAA 2.95 912828J76 US Treasury Note 5,000,000.00 04/25/2017 4,976,383.94 97.76 4,887,890.00 0.98% Aaa/AA+ 3.25 1.750% Due 03/31/2022 1.85% 4,984,452.76 2.47% 22,355.77 (96,562.76) AAA 3.12 912828XW5 US Treasury Note 5,000,000.00 07/25/2017 4,973,454.25 97.58 4,878,905.00 0.98% Aaa/AA+ 3.50 1.750% Due 06/30/2022 1.86% 4,981,182.01 2.48% 241.71 (102,277.01) AAA 3.37 912828L24 US Treasury Note 6,000,000.00 09/27/2017 5,987,832.60 97.86 5,871,564.00 1.18% Aaa/AA+ 3.67 1.875% Due 08/31/2022 1.92% 5,990,945.51 2.49% 38,225.14 (119,381.51) AAA 3.49 912828L57 US Treasury Note 13,000,000.00 Various 12,763,554.69 97.36 12,656,722.00 2.55% Aaa/AA+ 3.75 1.750% Due 09/30/2022 2.15% 12,814,789.15 2.49% 58,125.00 (158,067.15) AAA 3.58 912828M80 US Treasury Note 8,000,000.00 12/22/2017 7,907,500.00 98.18 7,854,376.00 1.58% Aaa/AA+ 3.92 2.000% Due 11/30/2022 2.25% 7,926,565.28 2.49% 14,065.93 (72,189.28) AAA 3.73 912828N30 US Treasury Note 5,000,000.00 01/24/2018 4,926,562.50 98.59 4,929,490.00 0.99% Aaa/AA+ 4.00 2.125% Due 12/31/2022 2.44% 4,940,467.10 2.50% 293.51 (10,977.10) AAA 3.81 9128284D9 US Treasury Note 10,000,000.00 Various 9,887,265.63 100.01 10,001,170.00 2.02% Aaa/AA+ 4.25 2.500% Due 03/31/2023 2.75% 9,903,122.33 2.50% 63,873.63 98,047.67 AAA 3.98 912828R69 US Treasury Note 5,000,000.00 05/30/2018 4,757,226.56 96.34 4,816,990.00 0.97% Aaa/AA+ 4.42 1.625% Due 05/31/2023 2.67% 4,785,811.60 2.51% 7,142.86 31,178.40 AAA 4.22 43 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. ... Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 912828WUO US Treasury Inflation Index Note 11,075,584.00 Various 10,961,937.66 95.89 10,620,676.54 2.13% Aaa/AA+ 5.54 0.125% Due 07/15/2024 0.23% 11,012,402.01 0.89% 6,395.59 (391,725.47) AAA 5.50 156,708,389.34 155,577,917.34 31.29% Aaa/AA+ 2.53 TOTAL US Treasury 158,375,584.00 1.84% 157,187,793.41 2.37% 500,785.79 (1,609,876.07) Aaa 2.44 499,841,572.51 496,658,209.17 100.00% Aa1/AA 2.60 TOTAL PORTFOLIO 501,816,977.24 2.28% 500,084,911.98 2.70% 2,125,366.02 (3,426,702.81) Aaa 2.27 TOTAL MARKET VALUE PLUS ACCRUALS 498,783,575.19 44 C1„ IHoldings Report As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration Agency ' 313384BF5 FHLB Discount Note 3,012,000.00 11/13/2018 2,996,848.58 99.81 3,006,366.78 1.70% P-1/A-1+ 0.08 2.322% Due 01/30/2019 2.37% 3,006,366.78 2.37% 0.00 0.00 F-1+ 0.08 313384CC1 FHLB Discount Note 1,700,000.00 12/27/2018 1,693,740.69 99.67 1,694,309.72 0.96% P-1/A-1+ 0.14 2.410% Due 02/20/2019 2.45% 1,694,309.72 2.45% 0.00 0.00 F-1+ 0.14 313384CE7 FHLB Discount Note 650,000.00 12/28/2018 647,555.13 99.65 647,729.76 0.37% P-1/A-1+ 0.15 2.418% Due 02/22/2019 2.46% 647,729.76 2.46% 0.00 0.00 F-1+ 0.14 3133782M2 FHLB Note 4,200,000.00 12/20/2018 4,191,684.00 99.82 4,192,620.60 2.38% Aaa/AA+ 0.18 1.500% Due 03/08/2019 2.42% 4,192,872.00 2.44% 19,775.00 (251.40) AAA 0.19 3137EACA5 FHLMC Note 800,000.00 12/28/2018 802,376.00 100.31 802,467.20 0.46% Aaa/AA+ 0.24 3.750% Due 03/27/2019 2.48% 802,348.37 2.43% 7,833.33 118.83 AAA 0.24 10,332,204.40 10,343,494.06 5.87% Aaa/AAA 0.15 TOTAL Agency 10,362,000.00 2.42% 10,343,626.63 2.42% 27,608.33 (132.57) Aaa 0.15 Commercial Paper 89233HP65 Toyota Motor Credit Discount CP 1,500,000.00 11/07/2018 1,490,331.25 99.75 1,496,175.00 0.85% P-1/A-1+ 0.10 2.550% Due 02/06/2019 2.60% 1,496,175.00 2.60% 0.00 0.00 NR 0.10 62479MPK3 MUFG Bank Ltd/NY Discount CP 1,500,000.00 10/16/2018 1,486,927.50 99.66 1,494,916.25 0.85% P-1/A-1 0.14 2.490% Due 02/19/2019 2.55% 1,494,916.25 2.55% 0.00 0.00 NR 0.14 21687BWD9 Rabobank Nederland NV NY Discount CP 2,000,000.00 12/18/2018 1,957,864.44 98.00 1,959,908.33 1.11% P-1/A-1 0.70 2.830% Due 09/13/2019 2.92% 1,959,908.33 2.92% 0.00 0.00 NR 0.69 4,935,123.19 4,950,999.58 2.80% P-1/A-1 0.35 TOTAL Commercial Paper 5,000,000.00 2.71% 4,950,999.58 2.71% 0.00 0.00 NR 0.34 Money Market Fund FI 31846V567 First American Govt Obligation MMKT Class-Z 4,056,666.32 Various 4,056,666.32 1.00 4,056,666.32 2.30% P-1/A-1+ 0.00 2.32% 4,056,666.32 2.32% 0.00 0.00 F-1 0.00 4,056,666.32 4,056,666.32 2.30% Aaa/AAA 0.00 TOTAL Money Market Fund FI 4,056,666.32 2.32% 4,056,666.32 2.32% 0.00 0.00 AA 0.00 Negotiable CD 89113XUZ5 Toronto Dominion NY Yankee CD 1,000,000.00 05/11/2018 997,312.00 99.98 999,757.55 0.58% NR/NR 0.07 2.150% Due 01/24/2019 2.52% 999,757.55 2.52% 20,305.56 0.00 NR 0.06 89113X3W2 Toronto Dominion NY Yankee CD 1,000,000.00 06/21/2018 1,000,000.00 100.00 1,000,000.00 0.57% P-1/A-1+ 0.43 2.700% Due 06/07/2019 2.70% 1,000,000.00 2.70% 14,475.00 0.00 F-1+ 0.43 45 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 06370RQY8 Bank of Montreal Chicago Yankee CD 2,000,000.00 12/10/2018 2,000,000.00 100.00 2,000,000.00 1.13% P-1/A-1 0.44 2.860% Due 06/11/2019 2.86% 2,000,000.00 2.86% 3,336.67 0.00 F-1+ 0.44 96130ABJ6 Westpac Banking Corp NY Yankee CD 1,500,000.00 12/13/2018 1,500,000.00 100.00 1,500,000.00 0.85% P-1/A-1+ 0.70 2.970% Due 09/13/2019 2.97% 1,500,000.00 2.97% 2,227.50 0.00 F-1+ 0.69 5,497,312.00 5,499,757.55 3.14% Aaa/AAA 0.44 TOTAL Negotiable CD 5,500,000.00 2.80% 5,499,757.55 2.80% 40,344.73 0.00 Aaa 0.44 Supranational 459052AP1 IBRD Discount Note 5,000,000.00 12/24/2018 4,992,912.50 99.91 4,995,612.50 2.83% P-1/A-1+ 0.04 2.430% Due 01/14/2019 2.47% 4,995,612.50 2.47% 0.00 0.00 F-1+ 0.04 4,992,912.50 4,995,612.50 2.83% Aaa/AAA 0.04 TOTAL Supranational 5,000,000.00 2.47% 4,995,612.50 2.47% 0.00 0.00 Aaa 0.04 US Corporate 46625HJR2 JP Morgan Chase Note 1,000,000.00 05/03/2018 998,810.00 99.95 999,506.00 0.57% A2/A- 0.08 2.350% Due 01/28/2019 2.51% 999,879.21 2.98% 9,987.50 (373.21) AA- 0.07 69353RCH9 PNC Bank Callable Note Cont 12/29/2018 1,030,000.00 10/12/2018 1,028,805.20 99.95 1,029,476.76 0.59% A2/A 0.08 2.200% Due 01/28/2019 2.60% 1,029,689.81 2.79% 9,630.50 (213.05) A+ 0.07 06051GFD6 Bank of America Corp Note 1,500,000.00 07/20/2018 1,499,910.00 99.90 1,498,429.50 0.85% A3/A- 0.25 2.650% Due 04/01/2019 2.66% 1,499,967.73 3.05% 9,937.50 (1,538.23) A+ 0.25 94974BFU9 Wells Fargo Corp Note 1,500,000.00 07/20/2018 1,494,090.00 99.70 1,495,572.00 0.85% A2/A- 0.31 2.125% Due 04/22/2019 2.66% 1,497,588.20 3.08% 6,109.38 (2,016.20) A+ 0.31 25468PDL7 Walt Disney Company Note 1,130,000.00 10/23/2018 1,114,812.80 98.91 1,117,649.10 0.64% A2/A+ 0.53 0.875% Due 07/12/2019 2.79% 1,118,784.84 2.97% 4,641.63 (1,135.74) A 0.52 69353REX2 PNC Bank Callable Note Cont 6/29/2019 1,890,000.00 12/21/2018 1,872,668.70 99.14 1,873,753.56 1.07% A2/A 0.58 1.450% Due 07/29/2019 3.02% 1,873,152.36 2.96% 11,571.00 601.20 A+ 0.57 69371RN36 Paccar Financial Corp Note 1,083,000.00 11/13/2018 1,069,484.16 98.90 1,071,100.00 0.61% Al/A+ 0.61 1.200% Due 08/12/2019 2.91% 1,071,836.92 3.02% 5,017.90 (736.92) NR 0.60 9,078,580.86 9,085,486.92 5.17% A2/A 0.36 TOTAL US Corporate 9,133,000.00 2.76% 9,090,899.07 2.99% 56,895.41 (5,412.15) A+ 0.36 US Treasury 912796UK3 US Treasury Bill 5,000,000.00 12/31/2018 4,993,125.00 99.87 4,993,437.50 2.83% P-1/A-1+ 0.06 2.250% Due 01/22/2019 2.28% 4,993,437.50 2.28% 0.00 0.00 F-1+ 0.06 912796PP8 US Treasury Bill 5,000,000.00 09/19/2018 4,958,270.17 99.81 4,990,657.50 2.82% P-1/A-1+ 0.08 2.242% Due 01/31/2019 2.29% 4,990,657.50 2.29% 0.00 0.00 F-1+ 0.08 46 Q11 IHoldings Report As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration 912828SD3 US Treasury Note 5,000,000.00 10/25/2018 4,984,765.63 99.91 4,995,705.00 2.84% Aaa/AA+ 0.08 1.250% Due 01/31/2019 2.39% 4,995,336.42 2.26% 26,154.89 368.58 AAA 0.08 912828V56 US Treasury Note 3,000,000.00 11/07/2018 2,991,328.13 99.90 2,997,129.00 1.70% Aaa/AA+ 0.08 1.125% Due 01/31/2019 2.38% 2,996,939.34 2.25% 14,123.64 189.66 AAA 0.08 912828633 US Treasury Note 54,500,000.00 Various 54,382,226.57 99.93 54,463,812.00 31.02% Aaa/AA+ 0.08 1.500% Due 01/31/2019 2.35% 54,462,249.50 2.28% 342,105.98 1,562.50 AAA 0.08 912796UN7 US Treasury Bill 20,000,000.00 12/28/2018 19,939,433.33 99.72 19,944,700.00 11.29% P-1/A-1+ 0.12 2.370% Due 02/12/2019 2.41% 19,944,700.00 2.41% 0.00 0.00 F-1+ 0.12 912796QZ5 US Treasury Bill 20,000,000.00 12/27/2018 19,909,000.00 99.58 19,915,500.00 11.27% P-1/A-1+ 0.18 2.340% Due 03/07/2019 2.38% 19,915,500.00 2.38% 0.00 0.00 F-1+ 0.18 912828W97 US Treasury Note 5,000,000.00 07/27/2018 4,965,429.69 99.71 4,985,725.00 2.83% Aaa/AA+ 0.25 1.250% Due 03/31/2019 2.30% 4,987,390.34 2.40% 15,968.41 (1,665.34) AAA 0.25 912828TH3 US Treasury Note 10,000,000.00 12/20/2018 9,898,437.50 99.04 9,903,910.00 5.63% Aaa/AA+ 0.58 0.875% Due 07/31/2019 2.56% 9,903,469.88 2.54% 36,616.85 440.12 AAA 0.57 91282821<5 US Treasury Note 10,000,000.00 12/21/2018 9,928,515.63 99.32 9,931,640.00 5.65% Aaa/AA+ 0.58 1.375% Due 07/31/2019 2.58% 9,931,126.93 2.56% 57,540.76 513.07 AAA 0.57 136,950,531.65 137,122,216.00 77.89% Aaa/AAA 0.18 TOTAL US Treasury 137,500,000.00 2.39% 137,120,807.41 2.36% 492,510.53 1,408.59 Aaa 0.18 175,843,330.92 176,054,232.93 100.00% Aaa/AAA 0.19 TOTAL PORTFOLIO 176,551,666.32 2.43% 176,058,369.06 2.42% 617,359.00 (4,136.13) Aaa 0.19 TOTAL MARKET VALUE PLUS ACCRUALS 176,671,591.93 47 c1„ Holdings Report As of December 31, 2018 OCSD Lehman Exposure - Account#10284 CUSIP Security Description Par Value/Units Purchase Date Cost Value Mkt Price Market Value %of Port. Moody/S&P Maturity Book Yield Book Value Mkt YTM Accrued Int. Gain/Loss Fitch Duration Common Stock SLHOPNTA4 Lehman Brothers,Inc Open Position Long Exposure 60,641.49 11/21/2014 57,842.64 0.42 25,621.03 34.15% NR/NR 0.00 0.000% Due 12/31/2018 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 57,842.64 25,621.03 34.15% NR/NR 0.00 TOTAL Common Stock 60,641.49 0.00% 57,842.64 0.00% 0.00 (32,221.61) NR 0.00 US Corporate 525ESCIB7 Lehman Brothers Note-Defaulted 600,000.00 09/19/2008 322,755.11 1.90 11,400.00 15.20% NR/NR 0.07 0.000% Due 01/24/2019 0.00% 322,755.11 0.00% 0.00 (311,355.11) NR 0.00 525ESCOY6 Lehman Brothers Note-Defaulted 2,000,000.00 09/18/2008 1,040,394.96 1.90 38,000.00 50.65% NR/NR 30.83 0.000% Due 10/22/2049 0.00% 1,040,394.96 0.00% 0.00 (1,002,394.96) NR 0.00 1,363,150.07 49,400.00 65.85% NR/NR 23.73 TOTAL US Corporate 2,600,000.00 0.00% 1,363,150.07 0.00% 0.00 (1,313,750.07) NR 0.00 1,420,992.71 75,021.03 100.00% NR/NR 15.63 TOTAL PORTFOLIO 2,660,641.49 0.00% 1,420,992.71 0.00% 0.00 (1,345,971.68) NR 0.00 TOTAL MARKET VALUE PLUS ACCRUALS 75,021.03 48 Q1 Section 5 Transactions C Transaction Ledger As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 September 30,2018 through December 31,2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold ACQUISITIONS Purchase 10/10/2018 02665WCQ2 1,000,000.00 American Honda Finance Note 99.918 3.64% 999,180.00 0.00 999,180.00 0.00 3.625%Due:10/10/2023 Purchase 10/16/2018 62479MPK3 9,000,000.00 MUFG Bank Ltd/NY Discount CP 99.129 2.55% 8,921,565.00 0.00 8,921,565.00 0.00 2.49%Due:02/19/2019 Purchase 10/30/2018 58933YAF2 2,000,000.00 Merck&Co Note 97.432 3.41% 1,948,640.00 25,200.00 1,973,840.00 0.00 2.8%Due:05/18/2023 Purchase 10/31/2018 313383YJ4 5,000,000.00 FHLB Note 101.331 3.08% 5,066,550.00 24,843.75 5,091,393.75 0.00 3.375%Due:09/08/2023 Purchase 11/08/2018 65478GAD2 2,625,000.00 Nissan Auto Receivables Owner 2017-B A3 98.449 3.10% 2,584,291.99 2,934.90 2,587,226.89 0.00 1.75%Due:10/15/2021 Purchase 11/13/2018 166764AH3 3,500,000.00 Chevron Corp Callable Note Cont 3/24/2023 98.317 3.59% 3,441,095.00 43,122.82 3,484,217.82 0.00 3.191%Due:06/24/2023 Purchase 11/29/2018 02665WCQ2 1,000,000.00 American Honda Finance Note 99.914 3.64% 999,140.00 4,934.03 1,004,074.03 0.00 3.625%Due:10/10/2023 Purchase 11/30/2018 24422EUM9 1,250,000.00 John Deere Capital Corp Note 100.019 3.64% 1,250,237.50 6,083.33 1,256,320.83 0.00 3.65%Due:10/12/2023 Purchase 11/30/2018 313383YJ4 1,475,000.00 FHLB Note 101.662 3.00% 1,499,514.50 11,339.06 1,510,853.56 0.00 3.375%Due:09/08/2023 Purchase 12/13/2018 3130AOF70 2,500,000.00 FHLB Note 101.974 2.95% 2,549,350.00 1,171.88 2,550,521.88 0.00 3.375%Due:12/08/2023 Purchase 12/24/2018 459052AP1 10,000,000.00 IBRD Discount Note 99.858 2.47% 9,985,825.00 0.00 9,985,825.00 0.00 2.43%Due:01/14/2019 Purchase 12/24/2018 46625HRL6 4,000,000.00 JP Morgan Chase Callable Note Cont 3/18/2023 95.811 3.74% 3,832,440.00 10,800.00 3,843,240.00 0.00 2.7%Due:05/18/2023 Purchase 12/31/2018 3130AOF70 5,625,000.00 FHLB Note 102.983 2.72% 5,792,793.75 12,128.91 5,804,922.66 0.00 3.375%Due:12/08/2023 Purchase 12/31/2018 912796UK3 10,000,000.00 US Treasury Bill 99.863 2.28% 9,986,250.00 0.00 9,986,250.00 0.00 2.25%Due:01/22/2019 Subtotal 58,975,000.00 58,856,872.74 142,558.68 58,999,431.42 0.00 50 c1„ ITransaction Ledger As of December 31, 2018 Orange County Sanitation District Long Term - Account #10268 September 30, 2018 through December 31, 2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold Security 10/31/2018 912828WUO 5,928.00 US Treasury Inflation Index Note 100.000 5,928.00 2.17 5,930.17 0.00 Contribution 0.125%Due:07/15/2024 Security 11/30/2018 912828WUO 12,584.00 US Treasury Inflation Index Note 100.000 12,584.00 0.00 12,584.00 0.00 Contribution 0.125%Due:07/15/2024 Security 12/31/2018 912828WUO 19,344.00 US Treasury Inflation Index Note 100.000 19,344.00 11.10 19,355.10 0.00 Contribution 0.125%Due:07/15/2024 Subtotal 37,856.00 37,856.00 13.27 37,869.27 0.00 TOTAL ACQUISITIONS 59,012,856.00 58,894,728.74 142,571.95 59,037,300.69 0.00 DISPOSITIONS Maturity 10/11/2018 912796NZ8 5,000,000.00 US Treasury Bill 100.000 5,000,000.00 0.00 5,000,000.00 0.00 2.048%Due:10/11/2018 Maturity 10/15/2018 62479MKF9 9,000,000.00 MUFG Bank Ltd/NY Discount CP 99.310 9,000,000.00 0.00 9,000,000.00 0.00 2.28%Due:10/15/2018 Maturity 10/24/2018 3133851-79 5,000,000.00 FHLB Discount Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 2.13%Due:10/24/2018 Maturity 12/14/2018 3135GOG72 5,000,000.00 FNMA Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 1.125%Due:12/14/2018 Subtotal 24,000,000.00 24,000,000.00 0.00 24,000,000.00 0.00 TOTAL DISPOSITIONS 24,000,000.00 24,000,000.00 0.00 24,000,000.00 0.00 51 Ci" Transaction Ledger As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 September 30,2018 through December 31,2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold ACQUISITIONS Purchase 10/12/2018 91282SB33 10,000,000.00 US Treasury Note 99.754 2.31% 9,975,390.63 29,755.43 10,005,146.06 0.00 1.5%Due:01/31/2019 Purchase 10/16/2018 62479MPK3 1,500,000.00 MUFG Bank Ltd/NY Discount CP 99.129 2.55% 1,486,927.50 0.00 1,486,927.50 0.00 2.49%Due:02/19/2019 Purchase 10/16/2018 69353RCH9 1,030,000.00 PNC Bank Callable Note Cont 12/29/2018 99.884 2.60% 1,028,805.20 4,909.67 1,033,714.87 0.00 2.2%Due:01/28/2019 Purchase 10/18/2018 313385S80 5,000,000.00 FHLB Discount Note 99.665 2.23% 4,983,232.64 0.00 4,983,232.64 0.00 2.195%Due:12/12/2018 Purchase 10/25/2018 25468PDL7 1,130,000.00 Walt Disney Company Note 98.656 2.79% 1,114,812.80 2,828.92 1,117,641.72 0.00 0.875%Due:07/12/2019 Purchase 10/25/2018 912828SD3 5,000,000.00 US Treasury Note 99.695 2.39% 4,984,765.63 14,605.98 4,999,371.61 0.00 1.25%Due:01/31/2019 Purchase 10/31/2018 313385N51 3,000,000.00 FHLB Discount Note 99.9S8 2.17% 2,998,751.67 0.00 2,998,751.67 0.00 2.14%Due:11/07/2018 Purchase 11/07/2018 89233HP65 1,500,000.00 Toyota Motor Credit Discount CP 99.355 2.60% 1,490,331.25 0.00 1,490,331.25 0.00 2.55%Due:02/06/2019 Purchase 11/07/2018 912828V56 3,000,000.00 US Treasury Note 99.711 2.38% 2,991,328.13 9,079.48 3,000,407.61 0.00 1.125%Due:01/31/2019 Purchase 11/13/2018 313384BF5 512,000.00 FHLB Discount Note 99.495 2.37% 509,415.25 0.00 509,415.25 0.00 2.33%Due:01/30/2019 Purchase 11/13/2018 313384BF5 2,500,000.00 FHLB Discount Note 99.497 2.36% 2,487,433.33 0.00 2,487,433.33 0.00 2.32%Due:01/30/2019 Purchase 11/15/2018 69371RN36 1,083,000.00 Paccar Financial Corp Note 98.752 2.91% 1,069,484.16 3,357.30 1,072,841.46 0.00 1.2%Due:08/12/2019 Purchase 12/11/2018 06370RQY8 2,000,000.00 Bank of Montreal Chicago Yankee CD 100.000 2.86% 2,000,000.00 0.00 2,000,000.00 0.00 2.86%Due:06/11/2019 Purchase 12/14/2018 96130ABJ6 1,500,000.00 Westpac Banking Corp NY Yankee CD 100.000 2.97% 1,500,000.00 0.00 1,500,000.00 0.00 2.97%Due:09/13/2019 Purchase 12/19/2018 21687BWD9 2,000,000.00 Rabobank Nederland NV NY Discount CP 97.893 2.92% 1,957,864.44 0.00 1,957,864.44 0.00 2.83%Due:09/13/2019 Purchase 12/20/2018 912828633 10,000,000.00 US Treasury Note 99.895 2.41% 9,989,453.13 57,880.43 10,047,333.56 0.00 1.5%Due:01/31/2019 52 C11% ITransaction Ledger As of December31, 2018 Orange County Sanitation District Liquid - Account #10282 September 30, 2018 through December 31, 2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold Purchase 12/21/2018 3133782M2 1,200,000.00 FHLB Note 99.802 2.42% 1,197,624.00 5,150.00 1,202,774.00 0.00 1.5%Due:03/08/2019 Purchase 12/21/2018 3133782M2 3,000,000.00 FHLB Note 99.802 2.42% 2,994,060.00 12,875.00 3,006,935.00 0.00 1.5%Due:03/08/2019 Purchase 12/21/2018 912828TH3 10,000,000.00 US Treasury Note 98.984 2.56% 9,898,437.50 34,001.36 9,932,438.86 0.00 0.875%Due:07/31/2019 Purchase 12/24/2018 459052AP1 5,000,000.00 IBRD Discount Note 99.858 2.47% 4,992,912.50 0.00 4,992,912.50 0.00 2.43%Due:01/14/2019 Purchase 12/24/2018 91282821<5 10,000,000.00 US Treasury Note 99.285 2.58% 9,928,515.63 54,551.63 9,983,067.26 0.00 1.375%Due:07/31/2019 Purchase 12/24/2018 912828633 12,000,000.00 US Treasury Note 99.902 2.43% 11,988,281.25 71,413.04 12,059,694.29 0.00 1.5%Due:01/31/2019 Purchase 12/26/2018 69353REX2 1,890,000.00 PNC Bank Callable Note Cont 6/29/2019 99.083 3.02% 1,872,668.70 11,190.38 1,883,859.08 0.00 1.45%Due:07/29/2019 Purchase 12/27/2018 313384CC1 1,700,000.00 FHLB Discount Note 99.632 2.45% 1,693,740.69 0.00 1,693,740.69 0.00 2.41%Due:02/20/2019 Purchase 12/27/2018 912796QZ5 20,000,000.00 US Treasury Bill 99.545 2.38% 19,909,000.00 0.00 19,909,000.00 0.00 2.34%Due:03/07/2019 Purchase 12/28/2018 313384CE7 650,000.00 FHLB Discount Note 99.624 2.46% 647,555.13 0.00 647,555.13 0.00 2.418%Due:02/22/2019 Purchase 12/28/2018 912796UN7 20,000,000.00 US Treasury Bill 99.697 2.41% 19,939,433.33 0.00 19,939,433.33 0.00 2.37%Due:02/12/2019 Purchase 12/31/2018 3137EACA5 800,000.00 FHLMC Note 100.297 2.48% 802,376.00 7,833.33 810,209.33 0.00 3.75%Due:03/27/2019 Purchase 12/31/2018 912796UK3 5,000,000.00 US Treasury Bill 99.863 2.28% 4,993,125.00 0.00 4,993,125.00 0.00 2.25%Due:01/22/2019 Subtotal 141,995,000.00 141,425,725.49 319,431.95 141,745,157.44 0.00 TOTAL ACQUISITIONS 141,995,000.00 141,425,725.49 319,431.95 141,745,157.44 0.00 53 Ci" ITransaction Ledger As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 September 30, 2018 through December 31, 2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold DISPOSITIONS Maturity 10/02/2018 4595151-196 2,000,000.00 IFC Discount Note 100.000 2,000,000.00 0.00 2,000,000.00 0.00 2%Due:10/02/2018 Maturity 10/05/2018 78009N2V7 1,000,000.00 Royal Bank of Canada Yankee CD 100.000 1,000,000.00 17,188.89 1,017,188.89 0.00 1.7%Due: 10/05/2018 Maturity 10/11/2018 912796NZ8 10,000,000.00 US Treasury Bill 100.000 10,000,000.00 0.00 10,000,000.00 0.00 1.93%Due:10/11/2018 Maturity 10/12/2018 313385K39 6,000,000.00 FHLB Discount Note 100.000 6,000,000.00 0.00 6,000,000.00 0.00 2.01%Due:10/12/2018 Maturity 10/15/2018 62479MKF9 3,100,000.00 MUFG Bank Ltd/NY Discount CP 99.207 3,100,000.00 0.00 3,100,000.00 0.00 2.34%Due:10/15/2018 Maturity 10/25/2018 912796QE2 5,000,000.00 US Treasury Bill 100.000 5,000,000.00 0.00 5,000,000.00 0.00 1.961%Due:10/25/2018 Maturity 10/29/2018 89113X7B4 1,000,000.00 Toronto Dominion NY Yankee CD 100.000 1,000,000.00 6,403.33 1,006,403.33 0.00 2.26%Due:10/29/2018 Maturity 11/01/2018 96121T6G8 1,000,000.00 Westpac Banking Corp Yankee CD 100.000 1,000,000.00 15,678.89 1,015,678.89 0.00 2.06%Due:11/01/2018 Maturity 11/07/2018 313385N51 3,000,000.00 FHLB Discount Note 100.000 3,000,000.00 0.00 3,000,000.00 0.00 2.14%Due:11/07/2018 Maturity 11/07/2018 74005PBH6 1,205,000.00 Praxair Note 100.000 1,205,000.00 0.00 1,205,000.00 0.00 1.25%Due:11/07/2018 Maturity 11/13/2018 06371ERK5 2,950,000.00 Bank of Montreal Chicago Yankee CD 100.000 2,950,000.00 56,357.29 3,006,357.29 0.00 1.75%Due:11/13/2018 Maturity 11/27/2018 78012UAX3 1,000,000.00 Royal Bank of Canada Yankee CD 100.000 1,000,000.00 17,528.89 1,017,528.89 0.00 2.32%Due:11/27/2018 Maturity 12/12/2018 313385S80 5,000,000.00 FHLB Discount Note 100.000 5,000,000.00 0.00 5,000,000.00 0.00 2.195%Due:12/12/2018 54 C1„ ITransaction Ledger As of December 31, 2018 Orange County Sanitation District Liquid - Account #10282 September 30, 2018 through December 31, 2018 Transaction Settlement CUSIP Quantity Security Description Price Acq/Disp Amount Interest Total Amount Gain/Loss Type Date Yield Pur/Sold Maturity 12/13/2018 24422ESF7 1,000,000.00 John Deere Capital Corp Note 100.000 1,000,000.00 0.00 1,000,000.00 0.00 1.95%Due:12/13/2018 Subtotal 43,255,000.00 43,255,000.00 113,157.29 43,368,157.29 0.00 TOTAL DISPOSITIONS 43,255,000.00 43,255,000.00 113,157.29 43,368,157.29 0.00 55 Ci" ITransaction Ledger As of December 31, 2018 OCSD Lehman Exposure - Account#10284 September 30, 2018 through December 31, 2018 Transaction Settlement CLISIP Quantity Security Description Price Acq/Disp Amount I nterest Total Amount Gain/Loss Type Date Yield Pur/Sold Other Transactions Cash Capital 10/04/2018 525ESCOY6 0.00 Lehman Brothers Note-Defaulted 0.000 15,621.60 0.00 15,621.60 0.00 Distribution Due: 10/22/2049 Cash Capital 10/04/2018 525ESCIB7 0.00 Lehman Brothers Note-Defaulted 0.000 4,703.12 0.00 4,703.12 0.00 Distribution Due:01/24/2019 Subtotal 0.00 20,324.72 0.00 20,324.72 0.00 TOTAL Other Transactions 0.00 20,324.72 0.00 20,324.72 0.00 56 cill IImportant Disclosures As of December 31, 2O18 2018 Chandler Asset Management,Inc,An Independent Registered Investment Adviser. Information contained herein is confidential. Prices are provided by IDC,an independent pricing source. In the event IDC does not provide a price or if the price provided is not reflective of fair market value,Chandler will obtain pricing from an alternative approved third party pricing source in accordance with our written valuation policy and procedures.Our valuation procedures are also disclosed in Item 5 of our Form ADV Part 2A. Performance results are presented gross-of-advisory fees and represent the client's Total Return.The deduction of advisory fees lowers performance results.These results include the reinvestment of dividends and other earnings. Past performance may not be indicative of future results.Therefore,clients should not assume that future performance of any specific investment or investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Economic factors, market conditions or changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Index returns assume reinvestment of all distributions. Historical performance results for investment indexes generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee,the incurrence of which would have the effect of decreasing historical performance results. It is not possible to invest directly in an index. Source ice Data Indices, LLC("ICE"),used with permission.ICE permits use of the ICE indices and related data on an"as is"basis;ICE,its affiliates and their respective third party suppliers disclaim any and all warranties and representations,express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE data, its affiliates or their respective third party providers guarantee the quality, adequacy, accuracy,timeliness or completeness of the indices or the index data or any component thereof,and the indices and index data and all components thereof are provided on an"as is"basis and licensee's use it at licensee's own risk.ICE data,its affiliates and their respective third party do not sponsor,endorse,or recommend chandler asset management,or any of its products or services. This report is provided for informational purposes only and should not be construed as a specific investment or legal advice.The information contained herein was obtained from sources believed to be reliable as of the date of publication, but may become outdated or superseded at any time without notice.Any opinions or views expressed are based on current market conditions and are subject to change.This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as indicator of future results. Past performance is not indicative of future results.This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk:the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk:the bond market in general could decline due to economic conditions,especially during periods of rising interest rates. Ratings information have been provided by Moody's,S&P and Fitch through data feeds we believe to be reliable as of the date of this statement,however we cannot guarantee its accuracy. Security level ratings for U.S.Agency issued mortgage-backed securities("MBS")reflect the issuer rating because the securities themselves are not rated.The issuing U.S.Agency guarantees the full and timely payment of both principal and interest and carries a AA+/Aaa/AAA by S&P,Moody's and Fitch respectively. 57 c,,, Benchmark Disclosures As of December 31, 2O18 ICE BAML 3-Month US Treasury Bill Index The ICE BAML US 3-Month Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month.At the end of the month that issue is sold and rolled into a newly selected issue. The issue selected at each month-end rebalancing is the outstanding Treasury Bill that matures closest to, but not beyond, three months from the rebalancing date. (Index:G0O1. Please visit www.mlindex.ml.com for more information) ICE BAML 1-5 Yr US Corp/Govt Rated AAA-A Index The ICE BAML US Issuers 1-5 Year AAA-A US Corporate& Government Index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market including US Treasury, US agency,foreign government,supranational and corporate securities. Qualifying securities must issued from US issuers and be rated AAA through A3(based on an average of Moody's,S&P and Fitch). In addition, qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity, at least 18 months to final maturity at point of issuance, a fixed coupon schedule and a minimum amount outstanding of$1 billion for US Treasuries and$250 million for all other securities. (Index:BV10. Please visit www.mlindex.ml.com for more information) ICE BAML US 1-5 Yr US Corp/Govt Rated AAA-BBB Indx The ICE BAML 1-5 Year US Corporate& Government Index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market, including US Treasury, US agency,foreign government,supranational and corporate securities. Qualifying securities must have an investment grade rating(based on an average of Moody's,S&P and Fitch). In addition, qualifying securities must have at least one year remaining term to final maturity and less than five years remaining term to final maturity, at least 18 months to final maturity at point of issuance, a fixed coupon schedule and a minimum amount outstanding of$1 billion for US Treasuries and$250 million for all other securities. (Index:BVAO.Please visit www.mlindex.ml.com for more information) 58 C11% Rating Agency Comparisons A summary of investment grade ratings are listed below. More complete descriptions of Moody's and Standard & Poor's ratings are included in the following pages. Quality/Grade Moody's Standard & Poor's Fitch Best Quality Aaa AAA AAA High Quality Aal AA+ AA+ Aa2 AA AA Aa3 AA- AA- Upper Medium Grade Al A+ A+ A2 A A A3 A- A- Medium Grade Baal BBB+ BBB+ Baa2 BBB BBB Baa3 BBB- BBB1 Moody's - Investment Grade "Aaa" - Bonds rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk. Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. "Aa" - Bonds which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. "A" - Bonds which are rated A possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. "Baa" - Bonds which are rated Baa are considered as medium grade obligations; i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Bonds in the Aa, A, and Baa are also assigned "V, "2", or "Y based on the strength of the issue within each category. Accordingly, "Al" would be the strongest group of A securities and "AY would be the weakest A securities. Ba, B, Caa, Ca, and C - Bonds that possess one of these ratings provide questionable protection of interest and principal ("Ba" indicates some speculative elements; "B" indicates a general lack of characteristics of desirable investment; "Caa" represents a poor standing; "Ca" represents obligations which are speculative in a high degree; and "C" represents the lowest rated class of bonds). "Caa", "Ca" and "C" bonds may be in default. Standard and Poor's-Investment Grade AAA- Debt rated "AAA" has the highest rating assigned by S&P. Capacity to pay interest and repay principal Is extremely strong. AA - Debt rated "AX has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in small degree. A - Debt rated "A" has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated "BBB" is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Standard and Poor's - Speculative Grade Ratinq Debt rated "BB", "B", "CCC", "CC" and "C" is regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay principal. "BB" indicates the least degree of speculation and "C" the highest. While such debt will likely have some quality and protective characteristics these are outweighed by major uncertainties or major exposures to adverse conditions. BB - Debt rated "BB" has less near-term vulnerability to default than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to inadequate capacity to meet timely interest and principal payments. The "BB" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BBB" rating. B - Debt rated "B" has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments. Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal. The "B" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "BB" or "BB" rating. CCC - Debt rated "CCC" has a currently identifiable vulnerability to default, and is dependent upon favorable business, financial, and economic conditions to meet timely payment of interest and repayment of principal. In the event of adverse business, financial, or economic conditions, it is not likely to have the capacity to pay interest and repay principal. The "CCC" rating category is also used for debt subordinated to senior debt that is assigned an actual or implied "B" or "B" rating. CC - The rating "CC" typically is applied to debt subordinated to senior debt that is assigned an actual or implied "CCC' debt rating. C -The rating "C"typically is applied to debt subordinated to senior debt which is assigned an actual or implied "CCC" debt rating. The "C" rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued. Cl - The rating "Cl" is reserved for income bonds on which no interest is being paid. D - Debt rated "D" is in payment default. The "D" rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized. Plus (+) or Minus (-) - The ratings from "AX to "CCC" may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. NR- Indicates no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular type of obligation as a matter of policy. FY 2018-19 Mid-Year Report This Page Intentionally Left Blank O�JNjv S A N I TgT�2 � � O N� _ � 9 ti �FPTiNG._�E ENv\P�� January 31, 2019 STAFF REPORT Certificates of Participation (COP) Mid-Year Report for the Period Ended December 31, 2018 Summary The District began issuing Certificates of Participation (COPs) in 1990. These COPs were a part of our long-term financing plan that included both variable interest rate and traditional fixed rate borrowing. Following are the current outstanding debt issues of the District: In May 2009, the District issued $200 million of fixed rate COPs, Series 2009A at a true interest cost of 4.72 percent for the issue. In May 2010, the District issued $80 million of fixed rate BABs, Series 2010A at a true interest cost of 3.68 percent for the issue. In December 2010, the District issued $157 million of fixed rate BABs, Series 2010C at a true interest cost of 4.11 percent for the issue. In October 2011, the District issued $147.595 million of fixed rate COPs, Series 2011A refunding a portion of the Series 2000 variable rate debt and a portion of the Series 2003 fixed rate debt. The true interest cost for the issue is 2.61 percent. In March 2012, the District issued $100.645 million of fixed rate COPs, Series 2012A refunding the Series 2003 fixed rate debt. The true interest cost for the issue is 3.54 percent. In August 2012, the District issued $66.395 million of fixed rate COPs, Series 2012B refunding the Series 2000 variable rate debt. The true interest cost for the issue is 1.50 percent. With the issuance of Series 201213, there remains no variable interest rate COPs at the District. OCSD ♦ P.O.Box 8127 ♦ Fountain Valley,CA 92728-8127 ♦ (714)962-2411 COP Mid-Year Report For the Period Ended December 31, 2018 Page 2 of 2 In August 2014, the District issued $85.09 million of fixed rate COPs, Series 2014A, refunding a portion of Series 2007B debt. The true interest cost for the issue is 2.34 percent. In February 2015, the District issued $127.51 million of fixed rate COPs, Series 2015A, refunding $152.99 million of the Series 2007B debt. The true interest cost for the issue is 3.30 percent. In March 2016, the District issued $145.88 million of fixed rate CANs, Series 2016A, refunding $162.78 million of the Series 2009A fixed rate debt. The true interest cost for the issue is 3.02 percent. In February 2017, the District issued $66.37 million of fixed rate COPs, Series 2017A, refunding $91.885 million of the Series 2007A debt. The true interest cost for the issue is 2.55 percent. In November 2018, the District issued $102.2 million of fixed rate CANs, Series 2018A, refunding the Series 2016B CANs. The true interest cost for the issue is 2.02 percent. Additional Information The graph entitled, "OCSD COP Rate History Report," shows the various fixed interest rates of the District's eleven debt issues. Attachments 1. Graph - OCSD COP Rate History Report Prepared by Finance, 1/31/2019, 10:16 AM OCSD COP RATE HISTORY REPORT DECEMBER 2018 5.00 4.00 3.00 w a 2.00 1.00 0.00 6. u u c o" a LL a a 7 7 a', a' a', ° " Q Q z° z° o 0 DATE N M r M N N N n N N N N N N —��—Series 2009A Fixed Series 2010A Fixed t Series 2010C Fixed t Series 2011A Fixed t Series 2012A Fixed --Series 2012E Fixed t Series 2014A Fixed —*--Series 2015A Fixed —x—Series 2016A Fixed Series 2017A Fixed f Series 2018A Fixed H:\dept\asd\220\Common\Monthly and Quarterly Treasurer's Report\FY 18-19\COP Rate History Report FY 18-19 FY 2018-19 Mid-Year Report This Page Intentionally Left Blank ORANGE COUNTY SANITATION DISTRICT FINANCIAL MANAGEMENT DIVISION 10844 Ellis Avenue Fountain Valley, California 92708-7018 714.962.2411 www.ocsd.com 12/31/18