Investor Presentation

October 2017

City of Phoenix Civic Improvement Corporation

Senior Lien Airport Revenue Bonds, Series 2017A

(AMT) $199,585,000*

Senior Lien Airport Revenue Refunding Bonds, Series 2017B

(Non-AMT) $180,710,000*

* Preliminary, Subject to Change.

Senior Lien Airport Revenue Refunding Bonds, Taxable

Series 2017C $35,955,000*

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Disclaimer

This electronic Investor Presentation that you are about to view is provided as of 10/03/2017 for a proposed offering by the City of Phoenix Civic Improvement Corporation (the “Issuer”) of $199,585,000* Senior Lien Airport Revenue Bonds, Series 2017A (AMT), $180,710,000* Senior Lien Airport Revenue Refunding Bonds, Series 2017B (Non-AMT), $35,955,000* Senior Lien Airport Revenue Refunding Bonds, Series 2017C (Taxable) together the “Bonds.” Market prices, financial data, and other information provided herein are not warranted as to completeness or accuracy and are subject to change without notice. If you are viewing this presentation after October 3, 2017, there may have been subsequent events that could have a material adverse effect on the financial information that is presented herein. Neither the City of Phoenix Civic Improvement Corporation nor the Underwriters have undertaken any obligation to update this electronic presentation. This Investor Presentation is provided for your information and convenience only. By accessing this presentation, you agree not to duplicate, copy, download, screen capture, electronically store or record this Investor Presentation, or to produce, publish or distribute this Investor Presentation in any form whatsoever. This Investor Presentation does not constitute an offer to sell or the solicitation of an offer to buy any security or other financial instrument, including the Bonds, or to adopt any investment strategy. Any offer or solicitation with respect to the Bonds will be made solely by means of the Preliminary Official Statement or Official Statement, which describe the actual terms of such Bonds. Neither the Issuer nor the Underwriters make any representations as to the legal, tax, credit or accounting treatment of any transactions mentioned herein, or any other effects such transactions may have on you and your affiliates or any other parties to such transactions and their respective affiliates. In no event shall the Underwriters or the Issuer be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction mentioned herein. Nothing in these materials constitutes a commitment by the Issuer or the Underwriters or any of their affiliates to enter into any transaction. No assurance can be given that any transaction mentioned herein could in fact be executed. Any investment decision regarding the Bonds should only be made after a careful review of the complete Preliminary Official Statement. You will be responsible for consulting with your own advisors and making your own independent investigation and appraisal of the risks, benefits, appropriateness and suitability of the proposed transaction and any other transactions contemplated by this presentation and neither the Issuer nor the Underwriters are making any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto. Transactions involving the Bonds may not be suitable for all investors. You should consult with your own advisors as to the suitability of the Bonds for your particular circumstances. Past performance is not indicative of future returns, which will vary. This Investor Presentation may contain “forward‐looking” statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results may differ materially from those expressed or implied by such forward‐looking statements. We caution you not to place undue reliance on these statements. All statements other than the statements of historical fact could be deemed forward‐looking. All opinions, estimates, projections, forecasts and valuations are preliminary, indicative and are subject to change without notice. Prospective investors should contact their salesperson at, and execute transactions through, an underwriter for the Bonds who is qualified in their home jurisdiction unless governing law permits otherwise.

*Preliminary, subject to change

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Presentation Participants

City of Phoenix

Denise Olson, Chief Financial Officer

Jay DeWitt, Deputy Aviation Director

Senior Manager: Citigroup

Neal Attermann, Director

4

Series 2017 Bonds Financing Summary

Series $199,585,000* Senior Lien Airport Revenue Bonds, Series 2017A (AMT) $180,710,000* Senior Lien Airport Revenue Refunding Bonds, Series 2017B (Non-AMT) $35,955,000* Senior Lien Airport Revenue Refunding Bonds, Taxable Series 2017C

Purpose

Series 2017A: To pay costs or reimburse the City for costs of various improvements at the Airport, prepay bank revolving credit drawings, pay costs of issuance related to the Series 2017A Bonds and make a deposit to the Senior Lien Parity Reserve Fund. Series 2017B: To refund all of the Series 2008A Bonds, pay costs of issuance related to the Series 2017B Bonds and make a deposit to the Senior Lien Parity Reserve Fund. Series 2017C: To refund all of the Series 2008C Bonds, pay costs of issuance related to the Series 2017C Bonds and make a deposit to the Senior Lien Parity Reserve Fund.

Amortization* 2017A: July 1, 2018 – July 1, 2047 2017B: July 1, 2021 – July 1, 2038 2017C: July 1, 2018 – July 1, 2021

Tax Status Series 2017A: Tax-Exempt (AMT); Series 2017B: Tax-Exempt (Non-AMT); Series 2017C: Taxable

Optional Redemption To Be Determined

Security The Series 2017 Bonds are special revenue obligations of the Corporation payable solely from payments received under the City Purchase Agreement. The Purchase Payments relating to all of the Series 2017 Bonds are secured by a pledge of the Net Airport Revenues

Pricing Date* Week of October 30, 2017

Delivery Date* Week of November 20, 2017

Confirmed Ratings S&P: AA- (stable); Moody’s: Aa3 (stable)

Senior Managers Citigroup (Bookrunner) and Siebert Cisneros Shank & Co., L.L.C. (Co-Senior)

Co-Managers Goldman Sachs, Loop Capital Markets, Estrada Hinojosa, Fidelity Capital Markets and Raymond James

*Preliminary, subject to change

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PHX’s Key Credit Strengths

• Principal commercial service airport in a strong and diversified MSA

• Phoenix Sky Harbor International Airport (“PHX”) is an important airport for two major carriers: American and Southwest

• PHX continues to benefit from a competitive airfare environment and growing O&D market

• FY 2017 O&D ratio increased to 66.5%

• Seven consecutive years of growth in O&D enplanements (FY 2011-2017)

• Continued favorable financial performance

• Committed to maintaining exemplary financial metrics

• CIP Plan of Finance is demand-driven, manageable and modular

• Strong, capable and cohesive Aviation and Finance management team

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Cohesive Management Structure

• The City of Phoenix owns and operates PHX and two general aviation airports (Phoenix-Goodyear Airport and Phoenix-Deer Valley Airport)

• The Airports are operated as a self-supporting enterprise through the Aviation Department

• The Phoenix City Council adopts ordinances establishing rates and charges to be paid by tenants and users of the Airports

• The City Manager, appointed by the City Council, oversees all City Departments, including the Aviation Department

• The City’s Finance Department oversees the issuance of debt for the Aviation Department and performs certain accounting, financing, treasury and related functions for PHX

Management continues to refine and monitor its plan of finance for the Airport to maintain strong ratings

7

PHX Serves a Vibrant Urban Area

• Phoenix is 5th largest city in U.S. with 1.6 million residents(1)

• MSA is 12th most populous metropolitan area in U.S. with 2016 population estimate of 4.66 million residents

• Regional attributes well serve the Airport’s 14.5 million O&D enplanements in FY 2017(2)

• MSA’s unemployment rate remains below state and nation

Employment Jobs (‘000s)3 2000 2007 2010 2016

U.S. 132,024 137,999 130,361 144,306

Arizona 2,243 2,679 2,386 2,704 MSA 1,578 1,918 1,692 1,973

0%

2%

4%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Unemployment3

United States Arizona MSA

CAGR3 2000-2007 2007-2016 2010-2016 2000-2016

U.S. 0.6% 0.5% 1.7% 0.6%

Arizona 2.6% 0.1% 2.1% 1.2% MSA 2.8% 0.3% 2.6% 1.4%

Sources: (1) U.S. Census Bureau (2) Leigh Fisher estimate based upon data from City of Phoenix Aviation Department and U.S. DOT, Air Passenger Origin‐Destination Survey, reconciled to Schedule T100 (3) U.S. Department of Labor, Bureau of Labor Statistics website, Current Employment Statistics survey, www.bls.gov, accessed July 2017.

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The Employment Base in Phoenix is Large and Diverse

• The MSA is the headquarter location for four Fortune 500 companies • Abundant educational, community, recreational, arts and cultural amenities • Top tier convention and tourism destination

Major Employers in Phoenix • Intel – Technology • Banner Health – Health Care • State of Arizona - Government • Walmart – Retail • Wells Fargo – Financial • Dignity Health – Health Care • Honeywell – Technology • American Express – Financial • Mayo Clinic – Health Care • American Airlines – Airline • Apollo Group – Education • Charles Schwab – Financial

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• Geographic location of Phoenix results in a high reliance on airline travel

• Tucson – a small hub airport located 117 miles to the southeast

• Phoenix-Mesa Gateway Airport is the only other commercial service airport in the MSA and is located 30 miles SE with only 14 average daily departures(1)

Road miles from the Airport to:

Las Vegas 292

Los Angeles 371

Salt Lake City 656

Denver 809

Dallas / Fort Worth 1,056

PHX is of Unique Importance to the Phoenix MSA

Source: (1) Average daily departures for June 2017; OAG Analyzer database accessed May 2017

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Overview of PHX Sky Harbor Airport

• Three terminals – 81 gates in Terminal 4, 101 gates overall • Three parallel runways:

o 8/26 – 11,490 feet o 7L/25R – 10,300 feet o 7R/25L – 7,800 feet

• PHX Sky Train connects regional light rail system to the Airport’s largest parking areas and Terminals 3 & 4, with a walkway to Terminal 2

• 22,000 public parking spaces • Consolidated Rental Car Center near the Airport

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62% 60% 59% 57%

59% 59% 59% 59% 61%

66%

38% 40% 41% 43% 41% 41% 41%

41% 39% 34%

0

5,000

10,000

15,000

20,000

25,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(000s) Enplaned Passengers

Origination & Destination (O&D) Connecting

Positive Historical Traffic Patterns

Source: City of Phoenix Aviation Department

• The Airport’s FY 2008 to FY 2017 compound annual growth rate (CAGR) is 0.6%

• O&D passengers averaged about 60% during the period shown below, but increased to 66% in 2017

19,096 18,912 19,681 20,278 20,236 20,519 21,489 20,668

22,056 21,784

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A Stronger Airport: Two Primary Carriers Provide Competition

• American Airlines is the world’s largest airline and the largest carrier at the Airport

• Southwest, the second largest carrier at the Airport, accounted for 32% of total enplanements and 26% of connecting traffic at the Airport in FY 2016

• As of June, 2017 airlines at Sky Harbor provided nonstop passenger service to 111 airports – 97 domestic and 14 international

Source: City of Phoenix Aviation Department

American 46.4%

Southwest 33.9%

Delta 6.4% United

5.2% Alaska 1.9%

Frontier 2.1%

WestJet 1.1%

Spirit 0.7%

All Other 2.4%

FY 2017 Airline Market Share

O&D Resident

30.3%

O&D Visitor 36.2%

Connecting 33.5%

FY 2017 Enplaned Passengers

66.5% Total O&D

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Changes in Passengers at American Airlines’ Hubs

• The decreases in connecting traffic at PHX are primarily attributable to American Airlines

• From 2015 to 2016, five other American Airlines’ hubs recorded decreases greater than or equal to the decline at PHX

• At PHX, American Airlines’ originating passengers increased 7% between 2015 and 2016

CONNECTING PASSENGERS ON AMERICAN AIRLINES at American's U.S. Hub Airports

(calendar years 2015 and 2016)

Note: Percentage shown represent change from 2015 to 2016 Sources: USDOT Air Passenger Origin-Destination Survey reconciled to Schedule T-100

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Solid Historical Financial Results

Financial Operations

($000s) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017*

Total Revenues $319,790 $343,551 $354,221 $360,164 $370,841

Total Expenditures $214,469 $224,563 $226,165 $230,236 $245,116

Net Revenues Available for Debt Service $105,321 $118,988 $128,056 $129,928 $125,725

Total Senior Lien Debt Service $51,639 $50,030 $48,732 $48,775 $48,797

Senior Lien Bond Coverage 2.04x 2.38x 2.63x 2.66x 2.58x 52,587

*Estimated

• Revenues continued their upward trend in FY 2017 primarily due to increases in landing fees as well as parking, car rentals and ground transportation

• Increases in maintenance contracts regarding computer software and technology support services, as well as an increase for maintenance of Sky Harbor elevators, escalators and moving walkways resulted in higher operating expenses in FY 2017

• Management remains very focused on operations and capital cost controls

• Airline revenues on average have been 38.5% of total operating revenue since FY 2015

Breakdown of Operating Revenues ($000s)1 FY 2015 FY 2016 FY 2017

Airline $131,653 $130,603 $134,052

Non-Airline 175,109 177,998 182,258

Other 31,129 33,634 34,163

Total Operating Revenue $337,891 $342,235 $350,474 1 Source: Report of the Airport Consultant. Non-Airline Revenues include Non-Airline Terminal Revenues, Misc. Other Landing and Terminal Fees as well as Ground Transportation. Totals may not add due to rounding

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THE PHOENIX WAY – Management Maintains Strong Financial Targets

• FY 2017 – Management exceeded all financial targets

• Financial Planning includes pro forma modeling of downside scenarios

Financial Targets & Management Policies

Debt Service Coverage Targets: Senior Lien: 1.75-2.00x Aggregate (PFC Offset): 1.50x

PFC Leveraging 65%-75% of Annual Collections Utilize Junior Lien for PFC Leveraging

Days Cash on Hand: 475 Days

Maintain Competitive CPE, with Increases Targeted to Maintain Metrics and Develop Facilities

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Capital Improvement Program through FY 2023

• Majority of CIP is related to the modular, demand-driven terminal improvements

Group/Category Through FY 2023

Major Capital Projects (in ‘000s)

Terminal 3 Modernization $ 560,000

Terminal 4 International Facility Improvements $ 27,000

Terminal 4 Concourse S1 $ 250,000

PHX Sky Train Stage 2 $ 700,000 Other Capital Projects1 $ 402,631

Total Capital Projects $1,939,631

Sources: City of Phoenix & LeighFisher 1Includes $60 million of contingency for projects 2 Includes the 2017A Bonds

• Well balanced funding sources mitigate cost structure impact

• Compensatory rate setting methodology results in strong cash funding of CIP

Capital Grants

8%

PFC Pay-as-you-go

13%

PFC Future Bonds 18%

CFC Pay-as-you-go and

Bonds 15%

Non-PFC Future Bonds2

31%

Airport Operating

Funds 15%

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Steady Passenger Growth Forecasted

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Connecting Originating

ACTUAL FORECAST

Sources: Actual—U.S. DOT, Air Passenger Origin-Destination Survey, reconciled to Schedules T100; City of Phoenix Aviation Department; Forecast—LeighFisher, July 2017

Average Annual Percent Increase (Decrease)

% Change CAGR 2012-2016 2016-2017 2017-2023

O&D 3.2% 7.0% 1.5%

Connecting 0.5% (14.3%) 0.6%

Total 2.1% (1.2%) 1.2%

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Reasonable Financial Forecast

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

ENPLANED PASSENGERS (‘000s) 22,025 22,300 22,575 22,850 23,125 23,400

Cost Per Enplaned Passenger (CPE) $6.54 $6.73 $7.08 $7.83 $7.94 $7.91

Debt Service Coverage Ratios Per Bond Documents

Senior Lien Obligations 2.38x 2.32x 2.07x 2.12x 2.13x 2.11x

Junior Lien Obligations 13.05x 13.46x 12.92x 14.50x 14.61x 5.23x

Aggregate Debt Service Coverage Ratios

Senior and Junior Lien Obligations 2.16x 2.11x 1.91x 1.97x 1.98x 1.74x

Source: City of Phoenix Aviation Department and LeighFisher.

• Airport consultant report forecasts enplanement annual growth of 1.2% from 2018-2023

• Consultant report assumes future bond issuances of:

• CPE tops out at $7.94 with aggregate coverage no lower than 1.74x during projected period

Series 2018 $431 million Junior Lien Bonds

Series 2019 $275 million Senior Lien Bonds

Series 2020 $212 million Senior Lien Bonds

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Downside Scenario Stress Test – Contingency Planning Financial Forecast

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

ENPLANED PASSENGERS (‘000s) 20,240 18,725 18,725 19,000 19,275 19,550

Cost Per Enplaned Passenger (CPE) $ 7.08 $ 7.93 $ 8.44 $ 9.31 $ 9.43 $ 9.36

Debt Service Coverage Ratios Per Bond Documents

Senior Lien Obligations 2.25x 2.07x 1.84x 1.90x 1.90x 1.87x

Junior Lien Obligations 11.82x 10.94x 10.15x 11.60x 11.60x 4.07x

Aggregate Debt Service Coverage Ratios

Senior and Junior Lien Obligations 2.04x 1.89x 1.70x 1.76x 1.76x 1.54x

Source: City of Phoenix Aviation Department and LeighFisher.

• Downside traffic scenario analyzes the potential effect of a more substantial hub downsizing by American than occurred between FY 2016 and FY 2017

• FY 2023 originating passengers are forecasted to be 10% lower and connecting passengers are forecasted to be 30% lower relative to the base case forecast

• CPE still remains well below similarly situated airports (industry medians for large hubs)

• Senior lien and aggregate debt service coverage remain within management’s financial targets

• No management actions are included in this downside scenario

20 20

Series 2017 Bonds – Plan of Finance*

New Money

2017A Size: $199,585,000 Senior Lien Airport Revenue Bonds Tax Status: Tax-Exempt AMT Purpose: T3 Modernization project, including refunding of short-term borrowing

program and deposit to debt serve reserve fund Structure: Fixed Rate Bonds maturing from 2018 to 2047; No capitalized interest

$13.0M level annual debt service

Refunding

2017B Size: $180,710,000 Senior Lien Airport Revenue Refunding Bonds Tax Status: Tax-Exempt Non-AMT Purpose: Refund the all of the Series 2008A Bonds Structure: Fixed Rate Bonds maturing from 2021 to 2038

2017C Size: $35,960,000 Senior Lien Airport Revenue Refunding Bonds Tax Status: Taxable Purpose: Refund the all of the Series 2008C Bonds Structure: Fixed Rate Bonds maturing from 2018 to 2021

Combined Savings Gross Savings: $48.76 million PV Savings: $25.93 million (10.27%) Annual Savings: $11.0 million 2021 and 2022

$1.4 million 2019-2020 and 2023-2038 *Preliminary, subject to change, based on market rates as of September 18, 2017 +50 bps

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Senior Lien Bond Legal Structure

• Security: First lien pledge of Net Airport Revenues (Airport Revenues less Costs of Maintenance and Operation)

• Rate Covenant: Net Airport Revenues must exceed 125% of Senior Lien Debt Service, net of Other Available Funds deposited in the Bond Fund and any PFC Credit applicable to Senior Lien Obligations (at this time, there are no Senior Lien Obligations to which PFCs have been committed)

• Additional Bonds Test (ABT): Historical 125% MADS and prospective rate covenant compliance

• Debt Service Reserve Fund (DSRF) Requirement: Lesser of MADS and the highest amount permitted by the Internal Revenue Code

o Series 2017ABC reserve requirement to be funded with bond proceeds deposited into a Senior Lien Parity Reserve Fund

o At issuance, Series 2017ABC will be the only obligations secured by the Senior Lien Parity Reserve Fund

o All senior and junior lien DSRFs are 100% funded with cash and investments

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Ordinance Amendment and Consent

• Airport staff intends to request that the City Council approve an amendment to the Airport Revenue Bond Ordinance that would provide future flexibility for the City to enter into long-term net lease agreements or other privatization arrangements for certain Airport facilities

• Each original purchaser of the Series 2017 Bonds will be required to provide consent to the amendment, the form of which is provided in Appendix I of the POS

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Aggregate Debt Service Schedule

• The Airport’s debt policy supports a conservative debt profile with appropriate financial metrics

• $1.172 billion in Airport Revenue Bonds outstanding, including bonds being refunded and not including Series 2017 Bonds

• $447.66 million of Senior Lien Obligations

• $724.41 million of Junior Lien Obligations

• $180 million of Junior Subordinate Lien Revolving Credit Loan

• New Money Principal Amortization: 30% payout in 10 years and 48% in 15 years

-

20

40

60

80

100

120

$M

illio

ns

Aggregate Annual Debt Service*

Senior Lien 2017 Bonds Junior Lien

*Preliminary, subject to change. Senior Lien debt service shown net of refunded bonds

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PHX’s Key Credit Strengths

• Principal commercial service airport in a strong and diversified MSA

• PHX is an important airport for two major carriers: American and Southwest

• PHX continues to benefit from a competitive airfare environment and growing O&D market

• FY 2017 O&D ratio increased to 66.5%

• Seven consecutive years of growth in O&D enplanements (FY 2011-2017)

• Continued solid financial performance

• Committed to maintaining exemplary financial metrics

• CIP Plan of Finance is demand-driven, affordable and modular

• Strong, capable and cohesive Aviation and Finance management team

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Schedule

• POS/Investor Presentation Posting: Week of October 2, 2017

• Pricing: Week of October 30, 2017

• Closing: Week of November 20, 2017

Preliminary Financing Timeline*

October 2017 November 2017

S M T W T F S S M T W T F S

1 2 3 4 5 6 7 1 2 3 4

8 9 10 11 12 13 14 5 6 7 8 9 10 11

15 16 17 18 19 20 21 12 13 14 15 16 17 18

22 23 24 25 26 27 28 19 20 21 22 23 24 25

29 30 31 26 27 28 29 30

*Preliminary, subject to change

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Contacts for Further Information

City of Phoenix (Issuer)

Denise Olson, Chief Financial Officer denise.olson@phoenix.gov | (602) 262–7166

Kathleen Gitkin, City Treasurer

kathleen.gitkin@phoenix.gov | (602) 495-0732

Citigroup (Senior Manager)

Neal Attermann, Director neal.attermann@citi.com | (212) 723-5646

Frasca & Associates (Financial Advisor)

Ken Cushine, Principal kcushine@frascallc.com | (212) 355-4050

For the Series 2017A-C Preliminary Official Statement, please visit: https://www.sendd.com/~webdrop/netdistro/413809_035_Preliminary_OS.pdf

For the City of Phoenix’s CAFR and PHX’s CAFR and other investor information,

please visit: www.phoenix.gov/finance/investor