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FLORIDA DEVELOPMENT FINANCE CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2017 This discussion and analysis of Florida Development Finance Corporation's (FDFC) financial performance provides an overview of its financial activities for the fiscal year ended June 30, 2017. Please read it in conjunction with the report of independent auditor and the basic financial statements. Financial Highlights FDFC facilitated the authorization and issuance of $170,580,000 in seven (7) new money bonds for the fiscal year ending June 30, 2017. It received application and issuance fees of $612,894. In the past, FDFC primarily issued bonds for small manufacturers, but over time, it has served a variety of 501(c)3 not-for-profit institutions, including health-care, educational and foundations. In fiscal year ending June 30, 2017, the types of borrowers served by the FDFC bond process were entirely educational facilities where six (6) were for charter schools and one (1) for a private school. Current applications for the next fiscal year are comprised of one (1) charter school, one (1) solid waste disposal and one (1) manufacturer. The FDFC's Property Assessed Clean Energy (PACE) Program was launched on June 29, 2017. No taxable PACE bonds have closed so far although FDFC staff have started the process of reviewing applications. Applications for new traditional bonds involving the use of tax-exempt bonds are projected to dramatically decrease for the upcoming fiscal year due to changes in the (i) Conduit Issuance Policy that increased minimum denominations to levels above industry standards for comparable conduit issuers and (ii) TEFRA approval process. It is also unknown if the All Aboard Florida project will continue to seek bond financing through the FDFC or apply for a low-interest loan through the U.S. Department of Transportation Railroad Rehabilitation & Improvement Financing Loan Program. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to FDFC's basic financial statements. The basic financial statements also include notes that explain in more detail some of the information in the financial statements. Required Basic Financial Statements FDFC utilizes an enterprise fund for financial reporting purposes. This fund includes all activities of FDFC The financial statements of FDFC report information about FDFC using accounting methods similar to those used by private sector companies. These statements offer short-term and long-term financial information about its activities. The statement of net position includes all of FDFC's assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and the obligations to FDFC's creditors (liabilities). The statement of net position also provides the basis for computing rate of return, evaluating the capital structure of FDFC and assessing liquidity and financial flexibility of FDFC. All of the current year's revenues and expenses are accounted for in the statement of revenues, expenses, and changes in net position. This statement measures the success of FDFC's operations over the past year and can be used to determine whether FDFC has successfully recovered all of its costs through its services provided, as well as its profitability, and credit worthiness. The final required financial statement is the statement of cash flows. The primary purpose of this statement is to provide information about FDFC's cash receipts and payments during the reporting period. The statement reports cash receipts, cash payments, and net changes in cash resulting from operating, investing, non -capital financing and financing activities and provides answers to such questions as where did cash come from, what was cash used for, and what was the change in the cash balance during the reporting period.