Item No.:              ____7d_Supp___ 
Meeting Date:            March 8, 2016 
Annual Treasury And Investment
Portfolio Update for 2015 

Commission Briefing 
Presented by Diane Campbell
March 8, 2016

Treasury Management Update 

Background 
Portfolio Composition and Performance 
Appendix  Investment Policy Highlights 


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Treasury Functions 
Manage banking activities 
Cash and liquidity management & investing
funds 
Execute and fund payments 
Coordinates processes and controls with
Accounting & Financial Reporting and
Information & Communications Technology
departments complying with statute 

What we (Treasury) do 
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Background 
Authorized investments are made in accordance with
and subject to restrictions of the Revised Code of
Washington (RCW) 36.29.020. 
Commission resolution approved Port investment
policy, adopted as of June 11, 2002. 
The investment policy is reviewed periodically, and
amended as appropriate to follow best practices. Last
amendment: June 5, 2012. No changes requested at this
time. 

State laws limits who the Port can bank with and what the portfolio can invest in.
Highlights of the Port's investment policy in appendix. 
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Investments Update 

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Portfolio Composition 
12/31/2015 
MORTGAGEREPURCHASE
BACKED
AGREEMENTS 
SECURITIES - 
1.3% 
HIGH GRADE 
7.4% 


FEDERAL
AGENCIES 
40.4% 

TREASURY
NOTES 
37.4% 



FEDERAL
AGENCIES
MUNICIPAL           DISCOUNT
BONDS              NOTES 
0.4%                     13.1% 

High quality and diversified portfolio. 
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Interest Rates Trends 
By year-end 2015 interest rates across the
yield curve were higher than the previous year. 
The Federal Reserve increased the federal
funds target rate upper bound by 0.25% to
0.50% in December 2015, the first increase
since 2010, and may make additional
increases during 2016. 
Staff monitors market conditions, but does not
time the market. 

Rising interest rate environment. 
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Treasury Yield Curve 2015 
12/31/2015   12/31/2014
3.02% 
3.0%

2.5%                                                         2.27%    2.75% 
2.09% 
2.0%                                            1.76%           2.17% 
1.97% 
1.5%                                     1.31% 
1.65% 
1.05% 
1.0%
0.60%            1.07% 
0.48% 
0.5%
0.13%    0.17%                   0.67% 
0.0%                       0.22% 
0.04%    0.12% 
0.02% 
-0.5%
1 Month  3 Months  6 Months  1 Year   2 Years   3 Years   5 Years   7 Years  10 Years  30 Years
Source: Bloomberg 

Interest rates were higher than the previous year by the end of 2015. 
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2015 Select Interest Rates 
2-Yr Agencies     5-Yr Agencies     Fed Funds Target Rate maximum
2.25

2.00

1.75

1.50
(%)    1.25
Yield
1.00

0.75

0.50

0.25

0.00
Jan-15  Feb-15 Mar-15  Apr-15  May-15  Jun-15  Jul-15  Aug-15  Sep-15  Oct-15  Nov-15  Dec-15
Sources: Bloomberg;Federal Reserve 

Interest rates trended upwards throughout the year. 
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2015 Yield Comparison 
Benchmark     Port's Pool 
Q1-2015        0.57%        0.81% 
Q2-2015        0.64%        0.79% 
Q3-2015        0.64%        0.98% 
Q4-2015        1.07%        1.10% 
Annual        0.73%        0.94% 

Port's Pool outperformed the Benchmark by 0.21%. 
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Portfolio Earnings 2011  2015 
2015
0.94%  $9,995,976 
2014
0.86%  $8,241,675 
2013
Y
0.69%  $6,555,606 
e
2012
a
1.02% $9,547,173 
r
2011
1.67%  $15,069,955 
Interest Earnings - % Yield and $ 

The annual earnings rate is increasing. 
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Yield History 
Year(s)  Benchmark Port's Pool 
2002 - 2006   3.13%    3.69%
2007 - 2011   1.73%    3.08%
2012    0.31%    1.02%
2013    0.35%    0.69%
2014    0.55%    0.86%
2015    0.73%    0.94%
14 years    1.87%    2.67%
Port's Pool has outperformed the Benchmark by 0.80% over the long term. 
During certain time periods, e.g., a rising interest rate environment, the Port's Pool may
underperform. 
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Yield History 
Benchmark   Port's Pool
5.00% 
5.0%                    4.78% 
4.45% 
4.08%     4.07%          4.04% 
4.0%                3.72% 4.33% 
2.64%                 2.76% 
3.0% 2.50%         3.57% 
2.17% 
2.50% 
2.0%                                  1.67% 
2.01% 
1.02% 
1.58%                                         0.86% 0.94% 
1.0%                                         0.69% 
1.12% 
0.72% 0.48%             0.73% 
0.0%                                      0.31% 0.35% 0.55% 
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Port's Pool outperforms, on aggregate , over the long term, but may underperform
during a rising interest rate environment. 
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Investment Portfolio Size Fluctuates 
$1.25 billion as of 12/31/2015 versus $900
million at prior year's end 
Over the most recent 5 years, the size has
ranged from $879 million to $1.27 billion 
Fluctuations are mostly tied to capital
funding and spending: 
bond issues to fund projects increase the
portfolio 
capital project spending reduces the portfolio
size 

More than half of the portfolio represents funds for special and restricted uses. 
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Investment Pool Participating Funds 
as of 12/31/2015 
Reserves &
Minimum
Security 
Operating Fund
16% 
Balance 
21% 
Special Use 
16% 
Operating Cash
Programmed for
Capital 
29% 
Bond Funds 
18% 
Examples: 
Minimum Operating Fund Balance: General & Airport Development = 9 months O&M expense 
Operating Funds for Capital: General, Airport, Tax Levy funds programmed to be spent over the next
few years. 
Bond Funds: Capital projects 
Reserves & Security: Bond reserves, customer lease security 
Special Use (primarily for capital projects): Passenger & Customer Facility Charges, Transportation &
Infrastructure 
More than half of the pool's funds are for special and restricted uses. 
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Appendix: 
Investment Policy Highlights 

The complete Investment Policy is attached. 
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Investment Policy Highlights 
Emphasis on preservation of principal 
Priority of policy objectives 
1) Safety 
2) Liquidity 
3) Yield 
Covers all capital and operating funds 
Does not cover funds held separately in trust,
e.g. deferred compensation plans and pension
trusts 

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Investment Policy Highlights 
To meet the policy's primary investment objectives, additional
risk controls are included that impose further restrictions on the
types of securities. These include: 
limit maturity date - no more than 10 years from settlement date,
and 
portfolio target modified duration of 2.0 years, plus or minus 
year. 
Benchmark  Bank of America Merrill Lynch Treasury/Agency 1-3
Years Index 
Long term strategy: do not forecast interest rates; balance
RETURN and RISK over cycles 
this strategy outperforms the market when rates are falling and
underperforms when rates are rising 
State laws limits what the portfolio can invest in. 
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Investment Policy Highlights 
Establishes prudence, ethics, conflict of
interest and disclosure requirements for
investment officials 
Port's CFO and appointed Treasurer is
responsible for managing the Port's
investment program 
Authorizes Treasurer to delegate day-to-day
duties and responsibilities related to
investment program 
Provides for safekeeping and custody of
portfolio securities 
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Investment Policy Highlights 
Establishes criteria for eligible depositories
and broker/dealers 
Sets out allowed investment instruments;
subject to State law 
Establishes portfolio diversification
parameters 
Establishes maturity restrictions 

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Investment Policy Highlights 
Sets portfolio performance standards 
Allows for independent review of the
investment program 
State Auditor 
External Auditors 
Internal Auditor 
Establishes reporting standards 

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