Investor Presentation General Obligation State Road Bonds, Series - PowerPoint PPT Presentation

Investor Presentation General Obligation State Road Bonds, Series 2019A November 21, 2019

Disclaimer This investor presentation that you are about to view is provided as of November 21, 2019 for a proposed offering of the State of West Virginia, General Obligation State Road Bonds (the “Bonds”). This presentation has been prepared for information purposes only and for your sole and exclusive use in connection with the proposed transaction. The information contained herein is subject to completion and amendment. Any offer or solicitation with respect to the Bonds will be made by means of a final official statement. If you are viewing this investor presentation after the date stated above, events may have occurred that have a material adverse effect on the financial information presented. This presentation does not constitute nor does it form part of an offer to sell or purchase, or the solicitation of an offer to sell or purchase, any securities or an offer or recommendation to enter into any transaction described herein nor does this presentation constitute an offer, commitment or obligation on the part of the issuer to provide, issue, arrange or underwrite any financing or enter into any other transaction. You will be responsible for 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 underwriter is making any recommendation (personal or otherwise) or giving any investment advice and will have no liability with respect thereto. The issuer makes no representation or warranty as to the (i) accuracy, adequacy or completeness of any information in this investor presentation or (ii) legal, tax or accounting treatment of any purchase of Bonds by you or any other effects such purchase may have on you and your affiliates. This investor presentation contains “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. Accordingly, 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. THE PRINTING, DUPLICATING, DOWNLOADING, SCREEN CAPTURING, ELECTRONIC STORING, RECORDING, PUBLISHING OR DISTRIBUTING OF THIS INVESTOR PRESENTATION IN ANY MANNER IS STRICTLY PROHIBITED. By viewing this investor presentation you acknowledge that you understand and agree to the provisions of this page. Investor Presentation 2

Transaction Summary Competitive 2019 A Bonds sale date is December 3 rd General Obligation State Road Bonds, Series 2019 A Par Amount $600,000,000 Method of Sale Competitive Use of Proceeds Highway, bridge and secondary road construction in the State Tax Status Federally Tax‐Exempt, State of West Virginia Tax‐Exempt Final Maturity June 1, 2044 Semi‐annual principal payments Maturities* Serial Bonds: 12/1/2022 – 6/1/2044 Denominations $5,000 December 1 st and June 1 st , commencing June 1, 2020 Interest Payment Dates Security See “Security” slide herein Optional Redemption* June 1, 2029 Current Ratings (M/S/F) Aa2 / AA‐ / AA Sale Date December 3, 2019 Closing Date December 17, 2019 Financial Advisor Public Resources Advisory Group, Inc. Investor Presentation 3

Overview of the State of West Virginia • The State of West Virginia, also known as the Mountain State, was created by Presidential proclamation effective on June 20, 1863 • Located in the South Atlantic region of the United States, West Virginia is bordered by the states of Maryland, Pennsylvania, Ohio, Kentucky and Virginia • Located within 500 miles of half of the United States population and a third of Canada's, West Virginia is well positioned as a desirable, affordable and easily accessible tourist destination • West Virginia has 24,077 square miles of land area, an average elevation of 1,500 feet and a population of approximately 1.82 million • The ancient geological events that created West Virginia's scenic mountains also endowed it with extensive deposits of high quality coal, natural gas, petroleum, limestone, salt and sand • West Virginia’s economy has a long tradition of mining and energy production, as well as related industries, such as chemicals, steel, cement and glass production Investor Presentation 4

Economic Highlights • West Virginia is in a state of transition with energy mix switching from coal to natural gas • Natural gas production up more than four‐fold since 2011 to nearly 1.8 trillion cubic feet • Growth in supply exceeds current pipeline infrastructure • Coal production down 40% since 2008: rebounded from 79.8 million tons in 2016 to 95.5 million tons by 2018; Easing back during last quarter of 2019 • The State’s real Gross Domestic Product (GDP) improved in three consecutive quarters, increasing 9.3%, 1.8% and 5.2% during the third, fourth and first quarters for 2018‐2019, respectively. • Seasonally adjusted non‐farm private sector payroll employment is up 10,500 jobs or 1.5% in 2018 over 2017. • State performance compared to the rest of the nation • WV personal income (nominal) rose by 5.1% in 2018 versus U.S. increase of 5.6% • WV ranked 6 th highest in per capita personal income growth in 2018 at 5.8% versus U.S. increase of 4.9% • State’s unemployment rate of 4.6% in August 2019 versus 3.7% for the U.S. Investor Presentation 5

West Virginia Wage and Income Figures Continue to Grow Civilian Unemployment Rates – WV – U.S. Per Capita Income Ratio – 2010 ‐ 2018 1990‐2018 Source: U.S. Bureau of Economic Analysis 10.0% 84.0% 9.0% 82.0% 80.1% 8.0% 80.0% 78.0% 7.0% 75.1% 76.0% 6.0% 74.0% 74.4% 74.1% 5.0% 72.8% 72.0% 4.0% 70.0% 3.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 West Virginia United States WV‐U.S. Ratio Source: West Virginia Workforce; United States Department of Labor, Bureau of Labor Statistics. Investor Presentation 6

Personal Income and Consumers Sales Tax Growth Improved in Recent Years Personal Income and Consumer Sales Tax Revenue Personal Income and Consumer Sales Tax Growth Rate $2,400 11.0% Millions 9.9% 9.2% 2,155 $2,200 9.0% 2,097 $2,000 7.0% 1,920 5.8% 1,814 1,803 $1,800 5.0% 2.8% $1,600 3.0% 2.0% 1.5% 1,390 1,370 0.6% $1,400 1.0% 0.3% 1,247 1,231 1,222 $1,200 ‐1.0% ‐0.7% ‐2.0% $1,000 ‐3.0% FY2016 FY2017 FY2018 FY2019 FY2020 FY2016 FY2017 FY2018 FY2019 FY2020 ACTUAL ACTUAL ACTUAL ACTUAL* BUDGET ACTUAL ACTUAL ACTUAL ACTUAL* BUDGET Personal Income Taxes Consumer Sales Taxes Personal Income Taxes Consumer Sales Taxes Source: State Budget Office ‐ Reports and Charts. *The actual dollar amounts for Fiscal Year 2019 are unaudited. Investor Presentation 7

Severance Taxes Improved from the low in 2016 Severance Tax Revenues $462 $500 Millions $450 $377 $400 $346 $350 $321 $300 $250 $276 FY2016 FY2017 FY2018 FY2019 FY2020 ACTUAL ACTUAL ACTUAL ACTUAL BUDGET Source: State Budget Office ‐ Reports and Charts. *The actual dollar amounts for Fiscal Year 2019 are unaudited. Gains in Natural Gas are Offsetting Reduced Coal Production WV Natural Gas Production WV Coal Production Million Cubic Feet Total Tons Produced 1,799,097 2,000,000 157,778,087 160,000,000 1,500,000 1,000,000 110,000,000 95,364,743 394,125 500,000 0 60,000,000 2011 2012 2013 2014 2015 2016 2017 2018 2008 2010 2012 2014 2016 2018 Source: United States Energy Information Administration, Natural Gas Wellhead Value and Marketed Production Report. Source: U. S. Energy Information Administration 2016 Coal Report (November 2017) and Coal Data Browser (Aggregate Coal Mine Production ‐ Total 2016). Investor Presentation 8

Economic Growth and New Revenue Measures have Contributed to Higher Gen Rev Fund Revenues FY2016‐2020 General Revenue Fund – Budgetary Basis Statement of Revenues, Expenditures & Changes in Fund Balance (In Thousands) FY2016 FY2017 FY2018 FY2019 FY2020 COMPONENT ACTUAL ACTUAL ACTUAL ACTUAL* BUDGET Personal Income Taxes $1,803,311 $1,813,866 $1,919,570 $2,096,807 $2,154,880 Consumer Sales Taxes 1,231,044 1,222,283 1,247,031 1,370,157 1,390,260 Severance Taxes 276,440 321,031 345,914 462,451 376,800 Corporate Taxes 143,605 116,306 110,068 198,032 136,980 Business & Occupation Taxes 119,174 111,885 115,003 124,523 123,000 Other Taxes 245,211 344,062 331,431 329,693 338,300 Excess Lottery Transfer 84,164 65,464 65,457 65,364 65,000 Licenses, Permits & Fees 8,743 8,666 8,161 8,395 37,280 Departmental Charges 19,029 19,134 22,554 22,756 24,000 Investment Earnings 2,509 6,045 7,846 27,776 30,000 Other 169,445 137,768 72,223 50,382 33,700 TOTAL $4,102,675 $4,166,510 $4,245,258 $4,756,336 $4,710,200 Source: State Budget Office ‐ Reports and Charts. *The actual dollar amounts for Fiscal Year 2019 are unaudited. Investor Presentation 9