1) OUTLOOK ON 20l5 W H AT ’ S IN STO R E F O R T HE Y E A R A HE A D NEW YEAR’S EDITION 2015 

2) MISSION To provide a one-stop-shop for the latest news and valuable insight on Florida's economy and financial health RESOURCES Chief Financial Officer Jeff Atwater is committed to making Florida more consumer and business-friendly by ensuring consumer rights and protections, reducing regulatory burdens, and fighting fraud. PARTNERS Florida’s Bottom Line is produced by the Florida Department of Financial Services in association with: www.MyFloridaCFO.com www.MyFloridaCFO.com ACCESS EVEN MORE RESOURCES ONLINE >> For daily Florida economic updates, please visit MyFloridaCFO.com/FloridasBottomline 

3) CFO LETTER Dear Fellow Floridians: The beginning of a new year is an important time to reflect on what we have accomplished and what we want to achieve in the year ahead. Over the past year, Florida’s economy has seen profound growth in many areas and we entered 2015 well-positioned to take advantage of these gains and continue to grow. Looking back on 2014, we see that Florida’s economy is on the right track: Job growth increased and outpaced the nation; population growth returned with Florida surpassing New York to become the third most populous state in the nation in part because our sound policies and unbeatable climate attract businesses and people; business investment reached its post-recession high; and in every quarter, more visitors have come to Florida this year than they have ever in the past. This economic momentum, coupled with a commitment to fiscal discipline, sets the stage for Florida to continue reaping the rewards of its hard work throughout 2015. New industry is rapidly taking root and expansions in many industries, including in the aviation, life sciences, and technology sectors, will bring additional investment, businesses, and jobs to the state. Florida also began the New Year in prime financial condition with state debt at historic lows and an estimated budget surplus of $1 billion. This New Year’s edition of Florida’s Bottom Line is focused on the opportunities that lie ahead of us in the coming year as well as highlights of the progress that we have made in the past year. Inside, you will find economic forecasts and expert analysis on Florida from leading economists, insightful outlooks on key industries from the industry leaders themselves, and a look back on Florida’s economic achievements in 2014. As we embark on this New Year, it is important to acknowledge that Florida’s economic future will continue to be shaped by the hard work and perseverance of Floridians. It is your dedication that not only allows us to build upon our accomplishments, but reach new heights of economic success and prosperity. INSIDE STORIES FLORIDA'S ECONOMIC OUTLOOK BY CHRIS MCCARTY SEE PAGE 1 FLORIDA'S ECONOMIC OUTLOOK BY SEAN SNAITH SEE PAGE 2 INDUSTRY OUTLOOKS FOR 2015 SEE PAGE 3 I wish you and your family a Happy New Year. Sincerely, A LOOK BACK ON 2014 SEE PAGE 5 Jeff Atwater Chief Financial Officer State of Florida SUBSCRIBE TO FLORIDA’S BOTTOM LINE » SEND US YOUR COMMENTS!» 

4) FLORIDA'S ECONOMIC OUTLOOK BY CHRIS MCCARTY Florida’s economy is recovering. By virtually any economic measure, we are far better off in January 2015 than we were when the recession ended in 2009. Annual population growth is getting closer to pre-recession levels as retirees once again been boosted by a rebound in tourism, which will continue to rise to record levels next year. A main driver of Florida’s economic recovery has been in housing; the economic sector that led to the recession. Home prices have gone up, increasing the net assets of 500,000 400,000 300,000 200,000 JANUARY 1/16/2014 FLORIDA’S REBOUND FROM GREAT RECESSION STRENGTHENS Miami Today FEBRUARY move to the Sunshine State. This trend should continue into 2015 as Bureau of Economic and Business Research (BEBR) demographers project population growth of more than 260,000 next year, not yet the average 300,000 growth we have seen over the last four decades, but getting there. Consumer sentiment as measured by BEBR’s monthly survey reached a post-recession high of 87.4 in December and will continue to rise to above 90 by the middle of next year. The recovery in Florida has 15 20 20 20 0 10 100,000 05 Chris McCarty, Ph.D., is the director of the Survey and Research Center and the director of the Bureau of Economic and Business Research at the University of Florida. Population Growth FLORIDA'S ANNUAL POPULATION CHANGE many Floridians. However, current prices are close to where they would have been had the housing bubble not occurred and, with 30 percent of Florida mortgages still underwater, negative equity is still a problem. Further, with the Federal Reserve expected to begin raising short-term interest rates in 2015, we should expect historically low mortgage rates to go up, which will make purchasing a home less affordable. While home prices are not expected to decline, they are not likely to increase at the pace of recent years in 2015. With the recovery in housing, we have regained some of the construction jobs lost during the Great Recession, but are still down 39 percent from their peak in 2006. However, gains in the Trade, Transportation, and Utilities, Professional and Business Services, Education and Health Services, and Leisure and Hospitality industries have offset this loss in construction jobs. Overall, the unemployment rate in Florida has declined to 5.8 percent and will likely be near 5.0 percent by the end of 2015. In this recovery, workers have generally been slow to return to the labor force. Despite strong labor force growth in 2014, Florida’s labor force participation rate of 60.6 is about where it was in 1986. As the job market expands in 2015 more people, particularly the long term unemployed are expected to come back into the labor force. Heading into the New Year, Florida is on the right track. Continued diversification of Florida’s economy will make it less dependent on cyclical employment, such as tourism and housing, and investment in new sectors of employment, such as manufacturing, biotechnology and health care, will create the kinds of jobs that will keep talent in the state and boost economic growth. 2/17/2014 FLORIDA RANKS 3RD FOR IT JOBS Infoworld FOR MORE INFORMATION, PLEASE VISIT WWW.BEBR.UFL.EDU Jeff Atwater | Chief Financial Officer Florida’s Bottom Line 1 

5) FLORIDA'S ECONOMIC OUTLOOK BY SEAN SNAITH In 2014 we learned that the recession in Florida was more severe than originally thought. New data on real GDP growth in Florida released this year showed that Florida’s economy continued to contract throughout 2010 and 2011. The official end of the national recession was June 2009, which means real output in Florida continued to contract for two and a half years after the Great Recession came to an end. While there are no official start or end dates assigned to state level recessions, Florida began to lose payroll jobs in April of 2007, suggesting that the economy slipped into recession earlier than the December 2007 start of the national recession. This new perspective on history makes Florida’s economic recovery look all the more impressive. Florida’s economy has, in a short amount of time, gone from lagging the U.S. recovery to solidly outpacing it. We expect that Florida’s economy will continue to do so in 2015. Job growth in Florida ended with a bang in 2014 and that momentum will carry over in the New Year. Florida’s payrolls should grow at a pace of 2.5% in 2015 with the Construction sector leading the way with annual growth of 8.7%. Other sectors expected to have strong payroll job growth in 2015 include Professional & Business Services at 3.7%, Trade, Transportation & Utilities at 2.6%, Education & Health Services at 2.4% and Leisure & Hospitality at 2.3%. Job growth in Florida will remain well above the growth rate nationally. Real GDP growth in Florida is also expected to outpace the growth of the nation’s real GDP. Real GDP growth in the United States has averaged just 2.2% for the five and a half years since the national recovery began. We expect Florida’s real GDP growth to be 2.7% in 2015 and to accelerate from there. Real GDP growth, like payroll job growth, is expected to be stronger in Florida than in the nation as a whole. Income growth in Florida will reflect the strength in both job growth and real GDP for 2015. Real personal income growth is expected to be 3.4% in 2015 while real disposable income growth is expected to be 3.2%. Both income measures will experience accelerating growth beyond 2015. Given the relative pace of economic and job growth in Florida, it should not come as a surprise that growth in real income in Florida will be higher than real income growth nationally in 2015 and several years thereafter. Florida’s housing market continues on its upward trek from the bottom of a residential real estate crevasse and will continue to do so in 2015. Home prices, sales, and housing starts will all continue to improve in 2015, though headwinds from low levels of mortgage availability and the Federal Reserve’s eventual tightening of monetary policy will stiffen growth through 2015 and beyond. Population growth in Florida will gain momentum in 2015 as domestic migration is bolstered by Baby Boomer retirements, an economic driver that will feed into Florida’s economic growth for many years. High levels of financial asset wealth and recovering home equity are both feeding into retirement decisions that were temporarily derailed by the housing and financial crises. There are several potential sources of turbulence that could alter Florida’s economic trajectory in 2015. The global economic recovery continues to weaken in many parts of the world with the increasing possibility of the Eurozone reentering recession, Japan in recession, China’s decelerating growth threatening defaults on construction debt, and Brazil fighting high inflation and slow growth, just to name a few sources of global weakness. This, coupled with a stronger dollar, will put a squeeze on export growth. Plunging oil prices are also putting the squeeze on many oil-dependent emerging economies as well those in as developed nations such as Canada and the United States, where the fracking oil boom could be undercut if prices stay too low for too long. The bottom line for Florida’s economy in 2015 will be a continuation of strong economic and job growth that outperforms the national economy. The economy has come a long way from the depths of the recession, even further than was initially thought. And given our history, this economic growth tastes even sweeter. Sean Snaith, Ph.D., is the director of the University of Central Florida’s Institute for Economic Competitiveness and a nationally recognized economist in the field of business and economic forecasting. MARCH 3/25/2014 FLORIDA NOW A ‘FRONT-RUNNER’ FOR U.S. ECONOMY Sun Sentinel APRIL 4/3/2014 FLORIDA BUSINESS OWNERS OUTLOOK BRIGHTENS Tampa Bay Business Journal FOR MORE INFORMATION, PLEASE VISIT WWW.IEC.UCF.EDU Jeff Atwater | Chief Financial Officer Florida’s Bottom Line 2 

6) MAY 5/8/2014 FLORIDA RANKED 2ND BEST STATE FOR BUSINESS IN 2014 Chief Executive INDUSTRY OUTLOOKS FOR 2015 LIFE SCIENCES The life sciences is a vibrant and critical component of our state’s economy. Florida has made great progress and is now recognized as a leading hub with world-renowned universities and research institutes, award-winning incubators and research parks, and a growing base of emerging and established companies in the biotech, pharmaceutical, medical device and bioagriculture fields. JUNE 6/5/2014 FLORIDA WINS SILVER SHOVEL AWARD FOR JOB CREATION, ECONOMIC IMPACT SUCCESS Orlando Business Journal NANCY BRYAN President & CEO BioFlorida This next year promises to be very exciting with significant opportunity to leverage this infrastructure to drive investment, scientific and business innovation and growth. Recently, we have seen increases in venture funding and companies expanding across the state. These trends will continue in 2015 with additional companies choosing to locate in Florida and existing companies expanding their operations. This growth positively impacts the economy, job creation and ultimately improves health. JULY 7/17/2014 FORECLOSURES FALL TO LOWEST LEVEL IN 8 YEARS Daily Finance AUGUST 8/19/2014 RETAIL There’s no denying the face of retail is changing. Gone are the days of music and hors d’oeuvres at Burdines. Today, shoppers prefer convenience and value. If a retailer isn’t online already, they will be soon- doing so is equivalent to adding 10 new stores. In Florida, we are extremely blessed with great beaches, tourist attractions and four of the 10 largest malls in America. 2015 will bring an even stronger surge of travel and consumer confidence, and with it, spending. New lifestyle centers will continue to pop up, featuring fast fashion alongside staple grocers and niche retailers. Brick and mortar will maintain their loyal customer base, for those who favor a touch-and-feel shopping experience. Unemployment will continue to drop, and retailers will play their role in providing every one in five jobs here in Florida. RECORD NUMBER OF TOURISTS VISITED FLORIDA LAST SPRING CBS Miami Jeff Atwater | Chief Financial Officer RICHARD A. MCALLISTER President & CEO Florida Retail Federation (FRF) Florida’s Bottom Line 3 

7) INDUSTRY HIGHLIGHTS FOR 2015 (CONTINUED) SEPTEMBER TOURISM I am constantly amazed at how far Florida’s tourism industry has come in the last 20 years and how much potential we have to continue growing. The ceiling for Florida's tourism industry is very high with the combination of: visionary public sector leadership; passionate and engaged private sector leadership; the best tourism product in the world; over 1 million Floridians who provide exceptional experiences to our guests every day; and, the innovative marketing from VISIT FLORIDA and our industry partners across the state. Given the power of the industry’s momentum, I have no doubt that 2015 will be another record year for visitors, visitor spending and hospitality jobs. WILL SECCOMBE President & CEO Visit Florida 9/3/2014 FLORIDA EXPORTS CREATE 275,000 JOBS, FEDS SAY Palm Beach Post OCTOBER 10/20/2014 REAL ESTATE & CONSTRUCTION FLORIDA POPULATION SURGING AGAIN Sun Sentinel The Florida real estate and construction industry is poised for a strong 2015. Four factors converge: (1) improving underlying demand; (2) continued low interest rate environment; (3) favorable conditions for business expansion in Florida; and, (4) low energy costs. 2015 should be the best year since the recession and I am bullish on the long-term future for Florida. NOVEMBER STEVEN T. HALVERSON Chief Executive Officer Haskell Company TRADE & TRANSPORTATION Florida’s seaports play a critical role in the lives of our citizens and are a key driver of the economy. They support more than 680,000 direct and indirect jobs, and contribute $96 billion in economic value to Florida through maritime activities. However, a re-alignment of global trade routes is underway, and Florida's ports are focused on investing in the infrastructure needed to remain competitive, with the goal of becoming a global trade hub. In 2015, we hope to advance that goal by investing in projects that capture a larger share of containerized imports serving Florida, and that attract manufacturing and other industries to Florida. DOUG WHEELER President & CEO Florida Ports Council Jeff Atwater | Chief Financial Officer 11/25/2014 FLORIDA RETAIL SALES OUTPACE THE NATION Florida Trend DECEMBER 12/15/2014 ECONOMISTS PROJECT NEARLY $1 BILLION SURPLUS FOR FLORIDA BUDGET Tampa Bay Times Florida’s Bottom Line 4 

8) NEW YEAR'S 2015 A LOOK BACK ON FLORIDA RANKED 2ND FOR NEW HOME PERMITS GAS PRICES FELL BY 37% 150,000 Source: U.S. Census As of November 2014 GAS PRICES HAVE FALLEN 79,000 BY 28.3% APR 2014 DEC 2014 $03.42 $03.73 $02.35 46,000 Texas Florida 3RD FLORIDA BECAME THE MOST POPULOUS STATE IN U.S. FLORIDA IS THE 2ND BEST STATE FOR BUSINESS - Chief Executive Magazine JEFF ATWATER Jeff Atwater | Chief OFFICER CHIEF FINANCIAL Financial Officer 6.6% UNEMPLOYMENT RATE FLORIDA RANKED 5TH BEST BUSINESS TAX CLIMATE IN NATION - Tax Foundation North Carolina Georgia CONSUMER CONFIDENCE AT 7-YEAR HIGH Source: U.S. Energy Information Administration As of December 29th FLORIDA HAS THE 3RD BEST WORKFORCE IN THE NATION -CNBC California 33,000 FLORIDA CREATED 229,900 NEW JOBS IN 12 MONTHS ECONOMIC PROSPERITY BOLSTERED JOB MARKET 9.7 9.6 6.3% 9.5 6.0% 9.4 FL UNEMPLOYMENT RATE FL LABOR FORCE 5.7% NOV JAN MAR 2013 2014 2014 Source: Bureau of Labor Statistics As of November 2014 9.3 MAY 2014 JUL 2014 SEP 2014 LABOR FORCE (Millions) JAN 2014 76,000 NOV 2014 For more information about Florida’s economy, please visit Florida’s Bottom Line 5 www.MyFloridaCFO.com/FloridasBottomLine/