FY 2008 ANNUAL INVESTMENT REPORT

MARTHA O. HAYNIE, CPACOUNTY COMPTROLLER

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Investment Objectives

• Safety• Liquidity• Yield

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Agenda• Highlights• Benchmarks • Portfolio & Fed Rates• Treasury Yield Curves • Economic Conditions• September Turmoil• Investment Committee• Committee Discussions• Recommendations• FY 2007 Portfolio Composition• FY 2008 Portfolio Composition• Current Portfolio Composition

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Highlights

(in millions) 2008 2007

Interest earned $46.9 $67.2

Effective rate of return 3.24% 5.07%

Average daily balance $1,444 $1,325

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BenchmarksBenchmark FY 2008 Variance FY 2007 Variance

Portfolio 3.24% 5.07%

3-Month Treasury 2.18% 1.06% 4.86% 0.21%

6-Month Treasury 2.40% 0.84% 4.96% 0.11%

Merrill Lynch 0-1 Treasury Index 2.50% 0.74% 4.93% 0.14%

1-Year Treasury 2.48% 0.76% 4.86% 0.21%

2-Year Treasury 2.57% 0.67% 4.67% 0.40%

Effective Federal Funds 2.93% 0.31% 5.21% -0.14%

Committee Benchmark 2.49% 0.75% 5.00% 0.07%

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Portfolio and Fed Rates

PORTFOLIO AND FEDERAL FUNDS RATE

0.25

1.25

2.25

3.25

4.25

5.25

6.25

7.25

Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08

Fed Funds

Portfolio

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Treasury Yield Curves

AVERAGE U.S. TREASURY YIELD CURVES

1.00

2.00

3.00

4.00

5.00

6.00

3 Mo 6 Mo 1 Yr 2 Yr 5 Yr 10 Yr

2008

2007

2006

2005

2004

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Economic Conditions• Declining interest rates• Deteriorating housing market• Reduced lending• Higher energy costs• Rising unemployment• Crisis in September• Federal Reserve lowering interest rates• Congress passes $700 billion rescue package• Forecasts of negative GDP in 2009• Negative Treasury yields

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September Turmoil• 9/07 – U.S. government seizes control of Fannie

Mae and Freddie Mac• 9/15 – Lehman Brothers files for bankruptcy• 9/15 – Bank of America announces plans to

acquire Merrill Lynch• 9/16 – Reserve funds break buck• 9/16 – AIG rescued by Federal Government• 9/25 – Government seizes control of WaMu• 9/29 – FDIC brokers Citigroup acquisition of

Wachovia (Wachovia later agreed to be acquired by Wells Fargo)

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Investment CommitteeCommunity Volunteers

Ed ManningRetired Managing Partner of Ernst and Young, CPA

John Cheney, DBARetired Associate Professor of Finance, University of Central Florida

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Committee Discussions

•SBA crisis•Analysis of agency issuers•Review of the Florida QPD program•Evaluation of existing and potential money market mutual funds•Conservatorship of Fannie Mae and Freddie Mac•Impact of financial crisis

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Recommendations• Sold entire position in SBA

• Eliminated BAs and CP issued by financial companies

• Later suspended all CP

• Curtailed and later suspended agency investments

• Suspended all CD investments

• Minimized money market balances

• Maximized Treasury investments

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FY 2007 Portfolio Composition

FY 2007 AVERAGE PORTFOLIO COMPOSITION

Treasuries16.55%

CP10.63%

Instrumentalities28.92%

SBA29.93%

Money Markets5.28%

BAs5.05%

CDs3.64%

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FY 2008 Portfolio Composition

FY 2008 AVERAGE PORTFOLIO COMPOSITION

Treasuries68.75%

CP6.80%

Instrumentalities5.83%

SBA2.19%

Money Markets11.61%

BAs1.40%

CDs3.42%

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Current Portfolio Composition

FEBRUARY 2, 2009 PORTFOLIO COMPOSITION

Money Markets5.41%

Treasuries94.59%

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FY 2008 ANNUAL INVESTMENT REPORT

Interest earned $46.9 millionEffective rate of return 3.24%

The 2009 effective rate of return?

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REPORT ONLINE

FY 2008 ANNUAL INVESTMENT REPORT

WWW.OCCOMPT.COM