ARIZONA HIGHWAY USER REVENUE FUND Forecasting Process & Results FY 2018-2027 Financial Management Services September 2017 TABLE OF CONTENTS Introduction 1 Background 1 Risk Analysis Panel 2 Model Results 3 Summary 4 Supplementary Information 1. HURF Official Revenue Forecast 2. HURF Revenue Risk Analysis Results by Probability 3. HURF Official Revenue Forecast Distribution 4. Panel Data Values 5. Panel Members Inputs by Independent Variable 6. Independent Variable Historical Values 5 6 7 8-11 12-16 17-21 ARIZONA HIGHWAY USER REVENUE FUND OFFICIAL FORECAST UPDATE RISK ANALYSIS OF EXPECTED VALUES Introduction This document presents the forecast of expected values for the Arizona Highway User Revenue Fund for the period FY 2018-2027, as prepared by the Arizona Department of Transportation. Background The State of Arizona taxes motor fuels and collects a variety of fees relating to the registration and operation of motor vehicles in the state. These collections include gasoline and use fuel taxes, motor carrier fees, vehicle license taxes, motor vehicle registration fees and other miscellaneous fees. These revenues are deposited in the Arizona Highway User Revenue Fund (HURF) and are then distributed to the cities, towns and counties of the State and to the State Highway Fund, which is administered by the Department. These taxes and fees represent a source of revenues available to the state for highway related expenses. Since 1986, the Department has estimated highway user revenues using a comprehensive regression-based econometric model. In 1989, the model was updated by Dr. Alberta Charney of the University of Arizona. The model relied on the estimates of certain “independent variables” to predict future tax revenues. Any variability between estimated and actual values could lead to variances in the tax forecast. In order to deal with this variability, the Department introduced the Risk Analysis Process (RAP) in 1992. The RAP relies upon probability analysis and the independent evaluation of the model’s variables by an expert panel of economists. This results in a series of forecasts with specified probabilities of occurrence, rather than a single or “best guess” estimate. In 1997, Hickling Lewis Brod Inc. (HLB), working in conjunction with Dr. Dennis Hoffman of Arizona State University, developed a new forecasting model to incorporate certain economic data generated over the past ten years and evaluate the inclusion of independent variables absent from the 1989 model, to enhance the model’s forecasting accuracy. The new model also took into consideration 1997 legislation which eliminated the weight distance tax on motor carriers, increased weight and use fees for use class vehicles, and changed the point of taxation on fuel. In September 2000 and 2003, HLB reviewed the model and updated the equations. The independent variables contained in the model in 2003 included Arizona Real Income Growth Per Capita, Population Growth, Wage & Salary Employment Growth and Fleet Fuel Efficiency. September 2017 1 In 2005, HDR\HLB developed a new forecasting model to incorporate additional economic data that would enhance the model’s forecasting accuracy. The Arizona Real Gross Domestic Product Growth independent variable was added to the model to incorporate the impact of the Arizona economy on the commercial registration activities. In September 2008, HDR\HLB reviewed the forecasting model and added the Arizona Real Gas Price Growth independent variable to improve the model’s forecasting accuracy for changes in Arizona gasoline consumption. In September 2009, HDR\HLB reviewed the forecasting model and added the West Coast No. 2 Real Diesel Price Growth independent variable to improve the model’s forecasting accuracy for changes in Arizona use fuel (diesel) consumption. In September 2011, the income, gross domestic product, gas price and diesel price variables were converted to nominal dollars at the request of the panel members from the August 2010 RAP panel meeting. The September 2011 RAP panel recommended the Arizona nominal Gross Domestic Product independent variable be eliminated from the model. The current model includes: 1. 2. 3. 4. 5. 6. Arizona nominal personal income Arizona population Arizona non-farm employment Arizona fleet fuel efficiency (Not part of RAP Process) Arizona nominal gas price West Coast No. 2 nominal diesel price Beginning in September 2017, the Gas Tax revenue category forecast includes the distributions of 1.6 percent of gas tax revenues to the State Lake Improvement Fund per Arizona Revised Statutes (ARS) 28-5926 and 0.55 percent of gas tax revenues to the Off-Highway Vehicle Recreation Fund per ARS 28-5927. Prior to September 2017, these gas tax revenues were not part of the RAP process and ADOT’s HURF Official Forecast. Risk Analysis Panel The Risk Analysis Process relies heavily on the judgments of an expert panel of economic and financial participants to provide information critical to the forecasting process. In August 2017, a panel of thirteen economic and finance experts representing public, private, and academic sectors submitted their individual estimates of the model’s independent variables and comments on the future economic outlook. The information gathered from the panelists was input into the model to produce a series of forecasts with associated probabilities of occurrence. The panelists’ inputs are reflected in the attached tables at the back of this report. September 2017 2 Model Results This year’s panel inputs produced a mean forecast of $17,569.1 million for the period FY 20182027 with a compound growth rate of 3.7 percent. The Department’s Official Forecast for FY 2018-2027 amounts to $17,135.2 million with a compound growth rate of 3.4 percent. The Official Forecast incorporates the 50 percent confidence interval for all revenue categories. The FY 2018 forecast of $1,462.5 million was developed in July 2017 by ADOT staff using time-series techniques, historical and projected growth rates and recent legislative changes. FY 2018 Official Forecast (Dollars in Millions) Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total Ave. CGR Mean Forecast $1,475.3 1,541.6 1,603.7 1,663.7 1,723.9 1,784.9 1,847.0 1,910.6 1,975.8 2,042.5 $17,569.1 3.7% Official Forecast $1,462.5 1,517.4 1,572.2 1,625.9 1,681.1 1,736.7 1,793.5 1,853.4 1,914.9 1,977.7 $17,135.2 3.4% Confidence Level 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% For comparison purposes, the September 2016 Official Forecast and the September 2017 Official Forecast are shown below: FY 2018-2027 Comparative Forecast (Dollars in Millions) Sep. 16 Sep. 17 Fiscal Official Official Year Forecast /1 Forecast Difference 2018 $1,487.9 $1,462.5 ($25.4) 2019 1,544.5 1,517.4 (27.1) 2020 1,599.5 1,572.2 (27.3) 2021 1,652.2 1,625.9 (26.4) 2022 1,705.2 1,681.1 (24.1) 2023 1,760.2 1,736.7 (23.5) 2024 1,814.8 1,793.5 (21.3) 2025 1,874.1 1,853.4 (20.7) 2026 1,936.1 1,914.9 (21.3) 2027 1,997.4 1,977.7 (19.7) Total $17,371.9 $17,135.2 ($236.7) Ave. CGR 3.3% 3.4% Note: 1. Revised to include the distributions of 1.6 percent of gas tax revenues to the State Lake Improvement Fund and 0.55 percent of the gas tax revenues to the Off-Highway Vehicle Recreation Fund. September 2017 3 Summary The Department’s September 2017 Official Forecast for FY 2018-2027 totals $17,135.2 million, a decrease of $236.7 million from the September 2016 Official Forecast. The Risk Analysis Process panel members continue to see only modest growth for the Arizona economy going forward. The panel modestly lowered their future growth rates for all the independent variables including Arizona gasoline and use fuel prices when compared to last year’s estimates. The main reason for the decrease in the September 2017 revenue forecast from the September 2016 revenue forecast is the weaker than expected FY 2017 revenues which set a lower revenue base for the FY 2018 forecast and beyond. Supplementary Information The remaining pages of this report present supplementary information on the detailed results of the Risk Analysis Process, the Department’s model and the values of the independent variables forecast by the expert panel. While the Official Forecast period is FY 2018-2027, panel inputs were requested for FY 2018-2022, 2027, 2032 and 2037. Data displayed for other than the requested years has been extrapolated. September 2017 4 57.8 $1,416.5 Total 177.9 Registration Other 421.9 Vehicle License Tax 201.7 Use Fuel Tax 42.1 $515.1 Gasoline Tax Motor Carrier Fee 2017 Actual Fiscal Year Percentile $1,462.5 58.4 183.0 448.5 43.8 209.6 $519.2 2018 N/A $1,517.4 60.7 185.9 476.6 44.7 219.0 $530.5 2019 50% $1,572.2 62.7 188.2 505.2 45.9 228.3 $541.9 2020 50% $1,625.9 64.4 192.5 534.9 47.3 236.9 $549.9 2021 50% $1,681.1 66.2 197.0 565.6 48.9 245.2 $558.2 2022 50% $1,736.7 67.9 201.5 597.4 50.4 253.1 $566.4 2023 50% $1,793.5 69.7 206.2 629.9 52.0 260.7 $575.0 2024 50% HURF OFFICIAL REVENUE FORECAST With Category Detail and Confidence Interval By Fiscal Year (Current Dollars in Millions) $1,853.4 71.6 211.1 664.4 53.6 269.1 $583.6 2025 50% $1,914.9 73.5 216.3 700.3 55.2 276.8 $592.8 2026 50% $1,977.7 75.3 221.3 737.2 56.9 285.2 $601.8 2027 50% Mean $1,475.3 1,541.6 1,603.7 1,663.7 1,723.9 1,784.9 1,847.0 1,910.6 1,975.8 2,042.5 $17,569.1 Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total $22,468.2 2,702.9 2,606.9 2,510.0 2,413.1 2,318.6 2,219.9 2,116.7 2,005.2 1,875.3 $1,699.6 10% $20,457.2 2,426.5 2,342.8 2,259.8 2,178.9 2,097.7 2,016.2 1,932.8 1,844.8 1,743.7 $1,614.1 20% $19,108.2 2,240.8 2,168.4 2,093.7 2,022.5 1,952.0 1,880.7 1,808.4 1,734.7 1,652.8 $1,554.2 30% $18,055.8 2,100.5 2,032.4 1,965.6 1,900.4 1,836.5 1,773.9 1,711.2 1,648.2 1,581.4 $1,505.8 40% $17,135.2 1,977.7 1,914.9 1,853.4 1,793.5 1,736.7 1,681.1 1,625.9 1,572.2 1,517.4 $1,462.5 50% $16,251.2 1,860.3 1,802.6 1,747.2 1,692.2 1,639.9 1,590.4 1,543.9 1,498.2 1,456.1 $1,420.4 60% HURF TOTAL TAX REVENUE RISK ANALYSIS RESULTS (Current Dollars in Millions) $15,348.8 1,741.1 1,688.3 1,638.7 1,590.1 1,543.3 1,499.5 1,458.3 1,421.9 1,391.7 $1,376.0 70% $14,400.0 1,617.7 1,569.0 1,524.4 1,481.0 1,440.0 1,403.0 1,369.5 1,342.9 1,324.3 $1,328.1 80% $13,246.9 1,466.7 1,427.6 1,386.6 1,351.6 1,317.4 1,286.3 1,259.9 1,243.4 1,239.2 $1,268.1 90% HURF $1,462.5 1,517.4 1,572.2 1,625.9 1,681.0 1,736.7 1,793.5 1,853.4 1,914.9 1,977.7 $17,135.2 ESP/DPS/ SLIF/OHVF /1 Net HURF $142.3 $1,320.2 52.4 1,465.0 82.7 1,489.5 22.8 1,603.1 23.0 1,658.0 23.2 1,713.5 23.4 1,770.1 23.5 1,829.9 23.7 1,891.2 23.9 1,953.8 $440.9 $16,694.3 DPS Parity Comp. Fund /2 ($3.4) (3.6) (3.9) (4.1) (4.3) (4.6) (4.8) (5.1) (5.3) (5.6) ($44.7) ADOT 50.5% /1,3 $660.2 732.9 748.6 797.2 824.2 851.5 879.3 908.7 938.9 969.7 $8,311.2 Cities/Towns 27.5% /1 $377.5 417.3 438.5 440.8 455.9 471.2 486.8 503.2 520.1 537.3 $4,648.6 Cities +300K 3% /1 $41.2 45.5 47.8 48.1 49.7 51.4 53.1 54.9 56.7 58.6 $507.1 Counties 19% /1 $260.8 288.3 303.0 304.6 315.0 325.6 336.3 347.7 359.3 371.2 $3,211.8 NOTES: FY 2018 HURF estimate based on July 2017 Forecast. FY 2019-2027 HURF estimate based on September 2017 Official Forecast. /1. - The DPS/ESP includes $1 million for Economic Strength Project (ESP) each year. - FY 2018 also includes a $656,100 appropriation to ADOT 3rd party program and operating. - The DPS transfer in FY 2018 is $99.399 million per JLBC Fiscal Year 2018 Appropriations Report and $10 million each year thereafter, which is subject to change. - Includes distributions of 1.6 percent of gas tax revenues to the State Lake Improvement Fund per ARS 28-5926 and 0.55 percent of the gas tax revenues to the Off-Highway Vehicle Recreation Fund per ARS 28-5927 for the full forecast period. Historically, these distributions were not shown as part of the HURF because the distributions were made before the distributions to the HURF recipients. - In addition, Laws 2014, 2nd Regular Session, Chapter 9 (SB 1487) appropriated $30 million in FY 2015 and FY 2016 and $60 million in FY 2017 to cities, towns and counties. A portion of these monies are distributed to the state highway fund for projects in Maricopa and Pima counties (Counties over 800,000). The distribution of SB 1487 appropriations are included in the columns ADOT 50.5%, Cities/Towns 27.5%, Cities over 300,000 3% and Counties 19%. Per Laws 2015, 1st Regular Session, Chapter 10 (SB 1471) the $60 million appropriation for FY 2017 in Laws 2014, 2nd Regular Session, Chapter 9, (SB 1487) is reduced to $30 million. Per Laws 2016, 2nd Regular Session, Chapter 125, (HB 2708) adds an additional year for the $30.0 million distribution to cities, towns and counties to include FY 2018. Per Laws 2017, 1st Regular Session, Chapter 312 (SB 1531) adds a distrbution of $30.0 million in FY 2019 and $60.0 million in FY 2020 to cities, towns and counties. /2. Per Laws 2005, Chapter 306 (SB 1119), 1.51 percent of the state highway fund share of HURF VLT is transferred to the DPS Parity Compensation Fund. /3 Net of the DPS Parity Compensation Fund transfer and includes transfers per Laws 2011. 1st Regular Session, Chapter 28 (SB 1616) which transfers the state highway fund share of HURF VLT difference between the two-year registration and the five-year registration to the state general fund. Laws 2010, 7th Special Session, Chapter 12, (HB 2012) an amount equal to 90 percent of the fees collected under 28-4802 (A) and 60 percent of the fees collected under 28-4802 (B) shall be transferred from the state highway fund share of HURF VLT to the state general fund. Fiscal Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total HURF OFFICIAL REVENUE FORECAST DISTRIBUTION (Current Dollars in Millions) PANELIST DATA VALUES AZ Nominal Income Growth Arizona Population Growth Arizona Non-Farm Employ. Growth AZ Nominal Gas Price Growth West Coast Nominal Diesel Price Growth 4.85% 4.30% 5.52% 1.65% 1.39% 1.91% 2.51% 2.26% 2.88% 3.63% -3.52% 12.17% 3.90% -3.11% 11.49% 4.98% 4.28% 5.81% 1.66% 1.38% 1.90% 2.44% 2.09% 2.97% 4.31% -3.28% 12.96% 4.35% -3.29% 12.19% 4.90% 3.87% 5.99% 1.62% 1.28% 1.91% 2.28% 1.84% 2.87% 4.52% -2.69% 12.81% 4.63% -2.70% 11.90% 4.78% 3.79% 5.93% 1.58% 1.23% 1.94% 2.17% 1.48% 2.98% 4.06% -3.73% 12.94% 4.06% -3.79% 11.77% 4.68% 3.68% 5.98% 1.55% 1.20% 1.93% 2.13% 1.38% 3.08% 3.55% -4.16% 12.44% 3.73% -4.18% 11.53% 4.58% 3.30% 5.96% 1.45% 1.05% 1.94% 1.90% 0.63% 3.22% 2.43% -6.28% 12.11% 2.06% -6.12% 11.08% 4.40% 2.78% 6.11% 1.37% 0.82% 1.89% 1.83% 0.40% 3.27% 2.32% -7.50% 12.66% 1.91% -7.47% 11.70% 4.34% 2.21% 6.28% 1.33% 0.74% 1.91% 1.70% 0.05% 3.33% 2.27% -8.58% 13.37% 1.73% -8.23% 11.81% FY 2018 Median Lower 10% Upper 10% FY 2019 Median Lower 10% Upper 10% FY 2020 Median Lower 10% Upper 10% FY 2021 Median Lower 10% Upper 10% FY 2022 Median Lower 10% Upper 10% FY 2027 Median Lower 10% Upper 10% FY 2032 Median Lower 10% Upper 10% FY 2037 Median Lower 10% Upper 10% All data in the above table are percentage growth rates. September 2017 8 Arizona Nominal Personal Income Growth 10.0% 8.0% Growth Rate 6.0% 4.0% 2.0% 0.0% -2.0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year Median Lower 10% Upper 10% Arizona Population Growth 6.0% 5.0% Growth Rate 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year Median September 2017 Lower 10% Upper 10% 9 Arizona Non-Farm Employment Growth 8.0% 6.0% Growth Rate 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2026 2027 Fiscal Year Median Lower 10% Upper 10% Arizona Nominal Gas Price Growth 30.0% 20.0% Growth Rate 10.0% 0.0% -10.0% -20.0% -30.0% 2018 2019 2020 2021 2022 2023 2024 2025 Fiscal Year Median September 2017 Lower 10% Upper 10% 10 West Coast No. 2 Nominal Diesel Price Growth 30.0% 20.0% Growth Rate 10.0% 0.0% -10.0% -20.0% -30.0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Fiscal Year Median September 2017 Lower 10% Upper 10% 11 Arizona Nominal Personal Income Growth 2018 Panelist 1 Median Lower 10% Upper 10% Panelist 2 Median Lower 10% Upper 10% Panelist 3 Median Lower 10% Upper 10% Panelist 4 Median Lower 10% Upper 10% Panelist 5 Median Lower 10% Upper 10% Panelist 6 Median Lower 10% Upper 10% Panelist 7 Median Lower 10% Upper 10% Panelist 8 Median Lower 10% Upper 10% Panelist 9 Median Lower 10% Upper 10% Panelist 10 Median Lower 10% Upper 10% Panelist 11 Median Lower 10% Upper 10% Panelist 12 Median Lower 10% Upper 10% Panelist 13 Median Lower 10% Upper 10% 2019 2020 2021 2022 2027 2032 2037 5.0% 4.5% 6.1% 5.1% 4.4% 6.7% 5.1% 4.2% 6.7% 5.3% 4.3% 7.1% 4.8% 4.0% 7.1% 4.6% 3.7% 6.2% 4.6% 3.5% 6.7% 5.0% 2.0% 7.2% 5.1% 4.7% 5.4% 5.3% 4.7% 5.6% 5.4% 4.3% 5.7% 5.0% 4.2% 5.5% 5.0% 4.1% 5.5% 4.7% 3.8% 5.3% 4.5% 3.8% 5.2% 4.2% 3.6% 5.0% 5.0% 4.5% 5.5% 5.4% 4.8% 6.0% 5.4% 4.5% 6.0% 5.6% 4.5% 6.0% 5.0% 4.0% 6.0% 5.0% 3.0% 6.0% 4.8% 2.0% 6.0% 4.8% 2.0% 6.0% 5.0% 4.7% 5.3% 5.1% 4.8% 5.4% 5.2% 4.1% 6.3% 5.1% 4.0% 6.2% 5.1% 4.0% 6.2% 4.8% 3.5% 6.1% 4.2% 2.2% 6.2% 4.0% 1.3% 6.7% 4.5% 4.0% 5.3% 4.5% 4.0% 5.2% 4.5% 3.5% 5.3% 4.0% 3.5% 5.3% 3.7% 3.1% 5.3% 3.7% 3.1% 5.3% 3.7% 3.0% 5.3% 3.7% 2.5% 5.3% 5.4% 4.7% 6.0% 5.3% 4.6% 6.1% 5.2% 4.4% 6.3% 5.1% 4.2% 6.3% 5.0% 4.0% 6.3% 4.9% 3.5% 6.2% 4.7% 2.8% 6.5% 4.5% 1.5% 7.0% 5.0% 4.7% 5.5% 5.0% 4.7% 5.5% 4.5% 4.0% 5.5% 4.5% 4.0% 5.5% 4.5% 4.0% 6.0% 4.5% 3.5% 6.0% 4.5% 3.0% 6.5% 4.5% 3.0% 6.5% 4.6% 4.2% 5.0% 4.6% 4.2% 5.1% 4.6% 4.2% 5.1% 4.5% 4.2% 5.0% 4.5% 4.1% 4.8% 4.5% 4.1% 4.8% 4.0% 3.5% 4.5% 4.0% 3.0% 4.5% 5.0% 4.7% 5.3% 5.2% 4.8% 5.6% 5.1% 4.0% 6.1% 5.1% 4.0% 6.1% 5.0% 4.0% 6.1% 4.8% 3.5% 6.2% 4.6% 2.5% 6.5% 4.4% 1.5% 6.8% 3.8% 3.3% 4.8% 3.8% 3.3% 4.8% 3.4% 2.9% 4.4% 3.0% 2.5% 4.0% 3.0% 2.5% 4.0% 3.0% 2.5% 4.0% 3.0% 2.5% 4.0% 3.0% 2.5% 4.0% 4.8% 2.9% 6.8% 5.5% 2.3% 8.7% 5.9% 2.3% 9.5% 6.1% 2.4% 9.8% 6.2% 2.4% 10.0% 6.3% 2.4% 10.1% 6.1% 2.3% 10.0% 6.0% 2.1% 9.8% 5.0% 4.5% 5.5% 5.0% 4.5% 5.5% 4.5% 4.0% 5.0% 4.5% 4.0% 5.0% 4.6% 4.1% 5.1% 4.9% 4.6% 5.2% 5.0% 4.7% 5.3% 5.0% 4.0% 6.0% 4.4% 3.5% 5.3% 4.4% 3.5% 5.3% 4.2% 3.0% 5.4% 4.1% 2.3% 5.9% 4.0% 1.5% 6.5% All data in the above table are percentage growth rates. September 2017 12 Arizona Population Growth 2018 Panelist 1 Median Lower 10% Upper 10% Panelist 2 Median Lower 10% Upper 10% Panelist 3 Median Lower 10% Upper 10% Panelist 4 Median Lower 10% Upper 10% Panelist 5 Median Lower 10% Upper 10% Panelist 6 Median Lower 10% Upper 10% Panelist 7 Median Lower 10% Upper 10% Panelist 8 Median Lower 10% Upper 10% Panelist 9 Median Lower 10% Upper 10% Panelist 10 Median Lower 10% Upper 10% Panelist 11 Median Lower 10% Upper 10% Panelist 12 Median Lower 10% Upper 10% Panelist 13 Median Lower 10% Upper 10% 2019 2020 2021 2022 2027 2032 2037 1.7% 1.3% 2.0% 1.8% 1.2% 2.1% 1.7% 1.2% 2.2% 1.6% 1.1% 2.4% 1.6% 1.1% 2.4% 1.6% 1.0% 2.4% 1.5% 0.1% 2.5% 1.5% 0.8% 2.6% 1.9% 1.6% 2.2% 1.9% 1.6% 2.2% 1.8% 1.4% 2.0% 1.7% 1.4% 2.0% 1.7% 1.4% 2.0% 1.7% 1.3% 2.0% 1.5% 1.0% 1.8% 1.4% 0.8% 1.6% 1.7% 1.5% 1.8% 1.7% 1.5% 1.8% 1.6% 1.0% 2.0% 1.6% 1.0% 2.0% 1.5% 1.0% 2.0% 1.5% 0.8% 2.0% 1.4% 0.5% 1.8% 1.4% 0.2% 2.0% 1.7% 1.6% 1.8% 1.7% 1.6% 1.8% 1.7% 1.6% 1.8% 1.6% 1.4% 1.9% 1.6% 1.4% 1.8% 1.5% 1.1% 1.8% 1.4% 0.8% 1.9% 1.3% 0.5% 2.0% 1.7% 1.5% 2.0% 1.6% 1.6% 1.8% 1.7% 1.5% 1.9% 1.7% 1.5% 2.0% 1.8% 1.5% 2.0% 1.8% 1.5% 2.5% 1.8% 1.5% 2.2% 1.8% 1.5% 2.2% 1.6% 1.5% 1.8% 1.7% 1.5% 1.8% 1.7% 1.4% 1.9% 1.7% 1.4% 1.9% 1.6% 1.3% 2.0% 1.4% 1.0% 2.0% 1.3% 0.8% 2.0% 1.3% 0.5% 2.1% 1.7% 1.5% 1.9% 1.7% 1.5% 1.9% 1.7% 1.5% 1.9% 1.6% 1.4% 1.8% 1.5% 1.4% 1.8% 1.4% 1.2% 1.8% 1.3% 1.0% 1.6% 1.3% 1.0% 1.6% 1.7% 1.5% 2.0% 1.7% 1.5% 2.0% 1.7% 1.4% 2.0% 1.6% 1.3% 2.0% 1.6% 1.2% 2.0% 1.5% 1.2% 2.0% 1.5% 1.2% 2.0% 1.5% 1.2% 2.0% 1.7% 1.6% 1.8% 1.7% 1.5% 1.8% 1.7% 1.5% 1.8% 1.6% 1.4% 1.8% 1.6% 1.3% 1.8% 1.5% 1.0% 1.9% 1.4% 0.8% 2.0% 1.3% 0.6% 2.0% 1.0% 0.4% 1.6% 1.0% 0.4% 1.6% 1.0% 0.4% 1.6% 1.0% 0.4% 1.6% 0.9% 0.3% 1.5% 0.7% 0.3% 1.3% 0.7% 0.3% 1.3% 0.7% 0.3% 1.3% 1.7% 1.3% 2.1% 1.7% 1.3% 2.1% 1.7% 1.3% 2.0% 1.6% 1.3% 2.0% 1.6% 1.2% 2.0% 1.5% 1.1% 1.8% 1.4% 1.0% 1.7% 1.3% 0.9% 1.6% 1.6% 1.1% 2.0% 1.6% 1.1% 2.0% 1.5% 1.0% 2.0% 1.5% 1.0% 2.0% 1.6% 1.1% 2.0% 1.7% 1.6% 1.8% 1.7% 1.6% 1.8% 1.6% 1.5% 1.7% 1.6% 1.4% 1.8% 1.6% 1.4% 1.8% 1.4% 1.1% 1.7% 1.3% 0.8% 1.8% 1.2% 0.5% 1.9% All data in the above table are percentage growth rates. September 2017 13 Arizona Non-Farm Employment Growth 2018 2019 2020 2021 2022 2027 2032 2037 Panelist 1 Median Lower 10% Upper 10% Panelist 2 Median Lower 10% Upper 10% Panelist 3 Median Lower 10% Upper 10% Panelist 4 Median Lower 10% Upper 10% Panelist 5 Median Lower 10% Upper 10% Panelist 6 Median Lower 10% Upper 10% Panelist 7 Median Lower 10% Upper 10% Panelist 8 Median Lower 10% Upper 10% Panelist 9 Median Lower 10% Upper 10% Panelist 10 Median Lower 10% Upper 10% Panelist 11 Median Lower 10% Upper 10% Panelist 12 Median Lower 10% Upper 10% Panelist 13 Median Lower 10% Upper 10% 2.6% 2.4% 3.2% 2.7% 2.4% 3.2% 2.5% 2.2% 3.0% 2.0% 1.4% 2.9% 1.9% 1.4% 2.7% 1.8% 0.9% 2.6% 1.8% 0.3% 2.6% 1.7% -0.2% 2.6% 2.8% 2.4% 3.1% 2.8% 2.0% 3.1% 2.6% 1.9% 3.0% 2.5% 1.5% 3.0% 2.4% 1.5% 3.0% 2.3% 1.5% 3.0% 2.1% 1.1% 2.8% 1.8% 1.0% 2.5% 2.6% 2.4% 2.8% 2.6% 2.2% 2.8% 2.0% 1.0% 3.0% 2.4% 1.0% 3.0% 2.6% 1.0% 4.0% 2.6% -1.0% 5.0% 2.6% -1.0% 5.0% 2.6% -2.0% 6.0% 2.5% 2.3% 2.7% 2.3% 1.8% 2.8% 2.1% 1.6% 2.6% 2.1% 1.0% 3.2% 2.0% 0.9% 3.1% 1.6% 0.2% 3.0% 1.5% -0.1% 3.2% 1.3% -0.6% 3.2% 2.5% 2.1% 3.0% 2.0% 1.9% 3.1% 2.2% 1.9% 3.1% 2.0% 1.8% 3.2% 2.0% 1.7% 3.3% 2.0% 1.7% 3.3% 2.0% 1.7% 3.3% 2.0% 1.7% 3.3% 2.9% 2.5% 3.2% 2.7% 2.1% 3.3% 2.5% 1.9% 3.0% 2.5% 1.4% 3.6% 2.5% 1.3% 3.6% 2.5% 1.0% 3.8% 2.3% 0.3% 4.0% 2.3% -0.5% 4.2% 2.2% 2.0% 2.5% 2.2% 2.0% 2.5% 2.0% 1.8% 2.5% 2.0% 1.7% 3.0% 2.0% 1.6% 3.5% 1.8% 1.0% 3.6% 1.8% 1.0% 3.7% 1.8% 1.0% 3.7% 2.5% 2.4% 3.0% 2.5% 2.4% 3.0% 2.5% 2.3% 3.0% 2.5% 2.2% 2.8% 2.5% 2.0% 2.8% 2.4% 2.0% 2.8% 2.4% 2.0% 2.8% 2.0% 1.8% 2.5% 2.6% 2.4% 2.8% 2.5% 2.0% 2.8% 2.4% 1.8% 2.8% 2.3% 1.5% 3.0% 2.3% 1.3% 3.3% 2.2% 0.8% 3.5% 2.0% 0.5% 3.7% 1.8% 0.0% 3.7% 1.7% 1.5% 2.2% 2.0% 1.8% 2.5% 2.0% 1.8% 2.5% 1.5% 1.3% 2.0% 1.0% 0.8% 1.5% 1.0% 0.8% 1.5% 1.0% 0.8% 1.5% 1.0% 0.8% 1.5% 2.4% 1.9% 1.9% 1.9% 1.9% 0.9% -2.0% 3.8% 0.8% -2.2% 3.7% 0.6% -2.3% 3.6% 2.7% 2.2% 3.2% 2.8% 2.3% 3.3% 2.3% 1.8% 2.8% 2.3% 1.8% 2.8% 2.4% 1.9% 2.9% 2.6% 2.4% 2.8% 2.7% 2.2% 3.2% 2.6% 2.1% 3.1% 2.2% 1.2% 3.2% 2.2% 1.2% 3.2% 1.7% 0.7% 2.7% 1.6% 0.3% 2.9% 1.5% -0.1% 3.1% All data in the above table are percentage growth rates. September 2017 14 Arizona Nominal Gas Price Growth 2018 2019 2020 2021 2022 2027 2032 2037 Panelist 1 Median 3.0% 12.0% 11.3% 10.9% 9.8% 3.2% Lower 10% -2.0% 4.4% 3.7% 1.6% 0.5% -8.7% Upper 10% 10.0% 19.6% 18.8% 20.3% 19.2% 15.1% Panelist 2 Median 5.0% 5.0% 5.0% 4.0% 4.0% 3.0% Lower 10% 0.0% -1.0% -1.0% 0.0% 1.0% 1.0% Upper 10% 14.0% 11.0% 10.0% 10.0% 10.0% 11.0% Panelist 3 Median 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Lower 10% -4.0% -5.0% -6.0% -7.0% -8.0% -9.0% Upper 10% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Panelist 4 Median 2.3% 2.2% 2.2% 2.1% 2.1% 1.8% Lower 10% -4.5% -4.6% -4.6% -5.7% -5.7% -8.3% Upper 10% 9.1% 9.0% 9.0% 9.9% 9.9% 11.9% Panelist 5 Median 3.0% 1.0% 1.0% 1.0% 1.0% 1.0% Lower 10% -0.5% -2.0% -1.0% -1.0% -1.0% -1.0% Upper 10% 15.0% 10.0% 10.0% 10.0% 10.0% 10.0% Panelist 6 Median 6.0% 5.0% 5.0% 5.0% 5.0% 4.0% Lower 10% -1.0% -3.0% -2.0% -4.0% -4.0% -7.0% Upper 10% 15.0% 15.0% 15.0% 15.0% 15.0% 16.0% Panelist 7 Median 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Lower 10% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Upper 10% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% Panelist 8 Median 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Lower 10% -5.0% -5.0% -5.0% -5.0% -5.0% -5.0% Upper 10% 5.0% 5.0% 5.0% 5.0% 5.0% 4.0% Panelist 9 Median 7.5% 7.5% 7.5% 7.0% 5.0% 3.0% Lower 10% 0.0% -2.0% -2.0% -3.0% -5.0% -7.5% Upper 10% 15.0% 15.0% 15.0% 15.0% 13.0% 12.0% Panelist 10 Median 5.0% 8.0% 10.0% 5.0% 4.6% 4.6% Lower 10% -5.0% 3.0% 5.0% 0.0% -0.4% -0.4% Upper 10% 15.0% 18.0% 20.0% 15.0% 14.6% 14.6% Panelist 11 Median 1.5% 1.4% 1.3% 1.2% 1.1% 0.6% Lower 10% -21.7% -21.9% -22.1% -22.3% -22.5% -23.6% Upper 10% 24.6% 24.6% 24.6% 24.6% 24.6% 24.7% Panelist 12 Median 1.0% 1.0% 1.5% 1.5% 1.0% Lower 10% Upper 10% Panelist 13 Median 6.9% 7.0% 8.0% 9.1% 6.6% 2.0% Lower 10% 0.5% -3.3% 1.8% 0.7% -0.8% -6.9% Upper 10% 13.3% 17.3% 14.2% 17.5% 14.0% 10.9% 2.2% 2.2% -12.1% -14.5% 16.5% 18.9% 3.0% 1.0% 11.0% 3.0% 1.0% 11.0% 2.3% 2.5% -10.0% -10.0% 10.0% 10.0% 1.7% 1.5% -10.4% -12.6% 13.8% 15.6% 1.0% -1.0% 10.0% 1.0% -1.0% 10.0% 4.0% 4.0% -10.0% -15.0% 18.0% 20.0% 3.0% 1.0% 5.0% 3.0% 1.0% 5.0% 2.0% -5.0% 4.0% 2.0% -5.0% 4.0% 2.0% 2.0% -10.0% -10.0% 12.0% 12.0% 4.6% -0.4% 14.6% 4.6% -0.4% 14.6% 0.1% -0.4% -24.8% -26.1% 24.9% 25.3% 1.9% 1.9% -8.3% -10.3% 12.1% 14.1% All data in the above table are percentage growth rates. September 2017 15 West Coast No. 2 Nominal Gas Price Growth 2018 2019 2020 2021 2022 2027 2032 2037 Panelist 1 Median 3.0% 12.0% 11.3% 10.9% 9.8% 3.2% Lower 10% -2.0% 4.4% 3.7% 1.6% 0.5% -8.7% Upper 10% 10.0% 19.6% 18.8% 20.3% 19.2% 15.1% Panelist 2 Median 5.0% 5.0% 5.0% 4.0% 4.0% 3.0% Lower 10% 0.0% -1.0% -1.0% 0.0% 1.0% 1.0% Upper 10% 14.0% 11.0% 10.0% 10.0% 10.0% 11.0% Panelist 3 Median 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Lower 10% -4.0% -5.0% -6.0% -7.0% -8.0% -9.0% Upper 10% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% Panelist 4 Median 2.3% 2.2% 2.2% 2.1% 2.1% 1.8% Lower 10% -4.5% -4.6% -4.6% -5.7% -5.7% -8.3% Upper 10% 9.1% 9.0% 9.0% 9.9% 9.9% 11.9% Panelist 5 Median 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Lower 10% -1.0% -1.0% -1.0% -2.0% -2.0% -2.0% Upper 10% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% Panelist 6 Median 6.0% 5.0% 5.0% 5.0% 5.0% 4.0% Lower 10% -1.0% -3.0% -2.0% -4.0% -4.0% -7.0% Upper 10% 15.0% 15.0% 15.0% 15.0% 15.0% 16.0% Panelist 7 Median 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Lower 10% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Upper 10% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% Panelist 8 Median 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Lower 10% -5.0% -5.0% -5.0% -5.0% -5.0% -5.0% Upper 10% 5.0% 5.0% 5.0% 5.0% 5.0% 4.0% Panelist 9 Median 7.5% 7.5% 7.5% 7.0% 5.0% 3.0% Lower 10% 0.0% -2.0% -2.0% -3.0% -5.0% -7.5% Upper 10% 15.0% 15.0% 15.0% 15.0% 13.0% 12.0% Panelist 10 Median 3.0% 4.0% 8.0% 3.0% 2.6% 2.6% Lower 10% -1.5% -0.5% 3.5% -1.5% -1.9% -1.9% Upper 10% 8.0% 11.0% 13.0% 8.0% 7.6% 7.6% Panelist 11 Median 0.6% 0.3% 0.0% -0.3% -0.6% -2.1% Lower 10% -19.2% -19.5% -19.8% -20.1% -20.4% -21.9% Upper 10% 20.3% 20.0% 19.7% 19.5% 19.2% 17.8% Panelist 12 Median 7.3% 7.0% 8.0% 8.0% 8.0% Lower 10% Upper 10% Panelist 13 Median 8.0% 5.5% 5.2% 5.0% 4.5% 1.2% Lower 10% -0.1% -3.3% 0.8% 0.2% -0.7% -4.1% Upper 10% 15.4% 13.6% 9.2% 9.6% 9.5% 6.5% 2.2% 2.2% -12.1% -14.5% 16.5% 18.9% 3.0% 1.0% 11.0% 3.0% 1.0% 11.0% 2.3% 2.5% -10.0% -10.0% 10.0% 10.0% 1.7% 1.5% -10.4% -12.6% 13.8% 15.6% 1.0% -2.0% 15.0% 1.0% -2.0% 15.0% 4.0% 4.0% -10.0% -15.0% 18.0% 20.0% 4.0% 1.0% 6.0% 4.0% 1.0% 6.0% 2.0% -5.0% 4.0% 2.0% -5.0% 4.0% 2.0% 2.0% -10.0% -10.0% 12.0% 12.0% 2.6% -1.9% 7.6% 2.6% -1.9% 7.6% -3.5% -4.9% -23.4% -24.9% 16.4% 15.0% 1.6% -6.9% 10.2% 0.9% -4.9% 6.7% All data in the above table are percentage growth rates. September 2017 16 HISTORICAL DATA ARIZONA NOMINAL PERSONAL INCOME GROWTH (Annual Percent Change) HISTORICAL DATA BY FISCAL YEAR (July 1 through June 30) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 15.1% 14.0% 10.0% 9.5% 11.9% 15.3% 17.8% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 16.4% 14.7% 9.8% 7.9% 11.7% 12.1% 10.3% 8.8% 7.9% 7.6% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 6.1% 4.9% 5.9% 7.2% 8.7% 9.3% 8.6% 8.5% 9.0% 7.6% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 7.4% 6.4% 4.0% 4.9% 7.6% 10.3% 11.1% 8.0% 3.5% -1.4% 2010 2011 2012 2013 2014 2015 2016 2017 * 2018 2019 -2.1% 2.7% 4.8% 3.5% 4.1% 5.1% 4.4% 4.6% BEA for FY 1973-2016, Western Blue Chip, June 2017 for FY 2017* and FY 2018, and ADOT staff for FY 2019-37. Percent Change HISTORICAL DATA - GRAPHED 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Fiscal Year HISTORICAL DATA - ANALYSIS Period 5 Years 10 Years Full Period September 2017 Historical Min. Max. 3.5% 5.1% -2.1% 5.1% -2.1% 17.8% Mean 4.3% 2.9% 8.1% Std. 80% Range Dev. Lower Upper 0.6% 3.8% 4.9% 2.6% -1.5% 4.8% 4.3% 3.7% 14.4% 17 HISTORICAL DATA ARIZONA POPULATION GROWTH (Annual Percent Change) HISTORICAL DATA BY FISCAL YEAR (July 1 through June 30) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 3.3% 5.6% 5.9% 5.8% 4.6% 2.8% 2.7% 3.4% 3.7% 4.8% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 3.9% 2.6% 2.8% 2.7% 3.3% 3.8% 3.9% 3.9% 2.9% 2.5% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 1.7% 2.8% 3.4% 3.8% 4.4% 4.4% 3.5% 3.3% 3.1% 2.9% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3.0% 2.2% 2.3% 2.6% 3.1% 3.5% 3.2% 2.6% 1.5% 0.3% 2010 2011 2012 2013 2014 2015 2016 2017 * 2018 2019 0.2% 0.6% 0.9% 1.3% 1.3% 1.4% 1.1% 1.7% Census Bureau FY 1970-2000. FY 2001-2037 from AZ Office of Economic Opportunity. The grow th rates from the December 11, 2015 OEO Population Projections w ere used for FY 2017 and beyond. * FY 2017 Projected. HISTORICAL DATA - GRAPHED 7.0% Percent Change 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Fiscal Year HISTORICAL DATA - ANALYSIS Period 5 Years 10 Years Full Period September 2017 Historical Min. Max. 1.1% 1.7% 0.2% 1.7% 0.2% 5.9% Mean 1.4% 1.0% 2.9% Std. Dev. 0.2% 0.5% 1.3% 80% Range Lower Upper 1.2% 1.6% 0.3% 1.5% 1.2% 4.5% 18 HISTORICAL DATA ARIZONA TOTAL NON-FARM EMPLOYMENT GROWTH (Annual Percent Change) HISTORICAL DATA BY FISCAL YEAR (July 1 through June 30) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 4.0% 9.6% 10.9% 8.6% -0.5% 1.4% 4.8% 9.0% 10.9% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 6.6% 2.3% 1.1% 0.0% 9.0% 8.9% 6.4% 3.7% 3.3% 2.2% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2.3% 1.1% 1.1% 3.1% 5.7% 6.4% 5.7% 5.2% 4.7% 4.4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4.0% 2.3% 0.5% 0.7% 2.6% 4.6% 5.2% 3.2% -0.3% -4.7% 2010 2011 2012 2013 2014 2015 2016 2017 * 2018 2019 -4.7% -0.4% 1.6% 2.2% 2.1% 2.3% 2.6% 2.5% Bureau of Labor Statistics for FY 1971-2016, UA Economic and Business Research Center, June 2017 Quarterly Forecast for 2017*-2020 and ADOT staff estimates for FY 2021-2036. HISTORICAL DATA - GRAPHED 14.0% 12.0% Percent Change 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Fiscal Year HISTORICAL DATA - ANALYSIS Period 5 Years 10 Years Full Period September 2017 Historical Min. Max. 2.1% 2.6% -4.7% 2.6% -4.7% 10.9% Mean 2.4% 0.3% 3.6% Std. 80% Range Dev. Lower Upper 0.2% 2.2% 2.6% 2.9% -4.7% 2.5% 3.5% -0.2% 8.9% 19 HISTORICAL DATA ARIZONA NOMINAL GAS PRICE GROWTH (Annual Percent Change) HISTORICAL DATA BY FISCAL YEAR (July 1 through June 30) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 -0.3% -9.2% -25.2% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 13.8% -16.0% 14.2% -3.3% -0.5% 7.2% 9.0% -10.3% -16.8% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 37.2% 20.2% -21.9% 25.4% 21.6% 17.4% 32.1% 0.5% 20.2% -19.3% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 4.7% 20.1% 16.1% -0.5% -3.9% -20.9% -23.9% 1.4% U.S. Department of Energy (EIA Administration) for FY 1985-2011, AAA Arizona for FY 2012-2017 and Global Insight, 1st Quarter 2017, Trend Forecast report for FY 2018-37. HISTORICAL DATA - GRAPHED 50.0% 40.0% Percent Change 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Fiscal Year HISTORICAL DATA - ANALYSIS Period 5 Years 10 Years Full Period September 2017 Historical Min. Max. -23.9% 1.4% -23.9% 20.2% -23.9% 37.2% Mean -9.5% -0.6% 4.6% Std. Dev. 11.9% 16.6% 17.3% 80% Range Lower Upper -22.7% 0.7% -21.2% 20.2% -19.9% 23.1% 20 HISTORICAL DATA WEST COAST NO. 2 NOMINAL DIESEL PRICE GROWTH (Annual Percent Change) HISTORICAL DATA BY FISCAL YEAR (July 1 through June 30) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 2.7% 6.4% 43.3% 31.4% 5.8% 10.0% 9.1% 22.4% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 48.1% 30.2% 4.3% -8.0% -6.8% 0.1% -4.0% 2.1% 2.3% 1.2% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 14.2% 4.6% -3.2% 3.1% 2.7% -3.4% 4.9% 5.8% -11.8% -5.9% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 25.0% 16.4% -16.4% 12.4% 13.6% 27.8% 25.5% 2.7% 25.8% -17.2% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 -3.4% 23.5% 14.2% 0.0% -2.0% -14.1% -25.3% 7.5% U.S. Department of Energy (EIA Administration) for FY 1972-2017 and Global Insight, 1st Quarter 2017, Trend Forecast report for FY 2018-37. HISTORICAL DATA - GRAPHED 50.0% 40.0% Percent Change 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Fiscal Year HISTORICAL DATA - ANALYSIS Period 5 Years 10 Years Full Period September 2017 Historical Min. Max. -25.3% 7.5% -25.3% 25.8% -25.3% 48.1% Mean -6.8% 0.9% 7.1% Std. 80% Range Dev. Lower Upper 12.9% -20.8% 4.5% 17.1% -18.0% 23.7% 15.4% -9.9% 26.8% 21