The City of Philadelphia 2018 Investor Conference General Obligation and Other Tax Backed Credits July 18-19, 2018 1
Disclaimer This Presentation is provided as of July 18, 2018 in connection with the City of Philadelphia (the “City”) Investor Conference. If you are viewing this presentation after July 18, 2018 there may have been events that occurred subsequent to such date that could have a material adverse effect on the information, financial or otherwise, that is presented herein. The City has not undertaken any obligation to update this Presentation beyond the aforementioned date thereof. Financial data, including revenues, expenditures, demographic statistics, debt service and other information provided herein are not warranted as to completeness or accuracy and are e e ues, e pe d tu es, de og ap c stat st cs, debt se ce a d ot e o at o p o ded e e a e ot a a ted as to co p ete ess o accu acy a d a e subject to change without notice. This Presentation is provided for your information and convenience only. If and to the extent the City issues bonds after the date of this Presentation, any investment decisions regarding such bonds should only be made after a careful review of the complete Preliminary Official Statement prepared in connection therewith. You agree not to duplicate, copy, download, screen capture, electronically store or record this Presentation, nor to produce, publish or distribute this Investor Presentation in any form whatsoever. This Presentation does not constitute a recommendation or an offer or solicitation for the purchase or sale of any security or other financial instrument, including any planned issuance of bonds by the City, or to adopt any investment strategy as it relates to any planned issuance of bonds by the City or any outstanding debt of the City. Any offer or solicitation with respect to future bonds will be made solely by means of the Preliminary Official Statement, which shall describe the actual terms of such bonds. In no event shall the City 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 relating to bonds issued by, or on behalf of, the City. The City makes no representations as to the legal, tax, credit or accounting treatment of any transactions relating to bonds issued by, or on behalf of, the City, or any other effects such transactions may have on you and your affiliates or any other parties to such transactions and their respective affiliates. You should consult with your own advisors as to such matters and the consequences of the purchase and ownership of any bonds. To the extent any underwriter or financial advisor has participated in the preparation of this Presentation, they shall not be liable for any misinformation or misstatements contained herein, unless the information is explicitly sourced to such entity. Furthermore, no underwriter or financial advisor that has participated in the preparation of this Presentation has undertaken any obligation to update this Presentation beyond the aforementioned date thereof nor have, or will, they take any steps to verify the completeness or d t k bli ti t d t thi P t ti b d th f ti d d t th f h ill th t k t t if th l t accuracy of the information contained herein. Past performance is not indicative of future results, which will vary. This Presentation contains information on proposed budgets and financial plans as well as estimated financial results for current fiscal year. Information that is shown as “Estimated” or “Proposed” is subject to change in its entirety and subsequent proposals or final versions may deviate materially from the proposed information contained herein. There is no assurance that estimated financial results will be realized and actual financial results may differ, perhaps materially, from the estimates contained herein. By providing such information in this Presentation, the City has not undertaken any obligation to update such information or to update any changes in the events, circumstances or conditions on which such information is based. ndertaken an obligation to pdate s ch information or to pdate an changes in the e ents circ mstances or conditions on hich s ch information is based 2
Presentation Speakers Rob Dubow – Director of Finance Anna Adams – Budget Director Rasheia Johnson – City Treasurer Anne Bovaird Nevins Anne Bovaird Nevins – Chief Strategy and Communications Officer Chief Strategy and Communications Officer 3
Agenda Credit Highlights Economic Data Financial Update Update on Current Matters Update on Current Matters Debt Overview Q&A 4
5 Credit Highlights
Philadelphia Continues to be “A City On The Move” The nation’s sixth largest city based on population with 1.58 million residents in 2018* Philadelphia’s population grew by 52 436 residents from 2010 to 2017 3 43% and has continually Philadelphia s population grew by 52,436 residents from 2010 to 2017, 3.43%, and has continually increased since 2000 From 2006 to 2012, the percentage of the population aged 20 – 34 years old grew from 20% to 26% Unemployment Rates nearing 2006 and 2007 levels at 5.2% in April 2018 The City is the center of the nation’s seventh largest metropolitan statistical area (11-county area encompassing the City, Camden, NJ, and Wilmington, DE) which represents approximately 6.07 million residents 2018 1972 * Estimated Source: Bureau of Labor Statistics, 2018. 6
Proactive Financial Management The City’s financial management has been rooted in adhering to best practices, responsible budgeting, efficient operation and a focus on maintaining positive fund balances − Deep bench of financial managers; institutionalized financial controls that have incorporated disciplined budgeting and planning that meets the goals of independent fiscal oversight authority − For FY17, the City’s General Fund reported a combined ending fund balance of $189.2 million (on a budgetary basis), an increase of $40.9 million from FY16 ) − The City now has “A” category ratings for its General Obligation debt from all three major rating agencies: “A2” (negative outlook) Moody’s, “A” (stable outlook) S&P, “A-” (stable outlook) Fitch − The City estimates that the General Fund will end FY18 with a fund balance of $228.5 million (on a budgetary basis), which is approximately 5.1% of the total budget b i ) hi h i i t l 5 1% f th t t l b d t − As of July 1 st , all Labor contracts have been negotiated and all contracts now include pension reform that allows the City to reach 80% funding by 2030 Sources: City Records; Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017; Quarterly City Manager’s Report for period ended March 31, 2018. 7
8 Economic Data
Philadelphia’s Key Economic Growth Philadelphia has experienced population growth and stabilization of income over the past several years Population – City, MSA, Pennsylvania & Nation % Change % Change 2000 2010 2015 2017 2000 - 2017 2010-2017 Philadelphia p 1,517,550 , , 1,526,006 , , 1,570,507 , , 1,580,863 , , 4.17% 3.59% Philadelphia- Camden-Wilmington 5,687,147 5,965,343 6,066,589 6,096,120 7.19% 2.19% MSA Pennsylvania 12,281,054 12,702,379 12,791,124 12,805,537 4.27% 0.81% Increases in population from 2000 to 2017; United States 281,421,906 308,745,538 321,039,839 325,719,178 15.74% 5.50% increase of median i f di Source: U.S. Census Bureau as of July 1, 2017, Census 2010, Census 2000 . household income at a faster pace then the Median Household Income for Selected Geographical Areas, 2012-2016 state and the nation. % Change Geographical Area g p 2012 2013 2014 2015 2016 2012 2016 2012-2016 Philadelphia 37,192 37,192 37,460 38,253 39,770 7.4% Philadelphia- Camden-Wilmington 61,923 61,923 62,169 62,513 63,952 3.3% MSA Pennsylvania 52,267 52,548 53,115 53,599 54,895 5.0% United States 53,046 53,046 53,482 53,889 55,322 4.3% Source: U.S. Census Bureau, 2012-2016 American Community Survey 5-Year Estimates 9
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