Economic Conditions Houston MSA

Economic Conditions Houston MSA Houston Unemployment Rate -1.2% U.S. 5.8% Texas 4.3% Houston MSA 4.3% 4.2% 120,600 new jobs created in 2014 Job Growth Houston MSA 38,319 Annual SF Permits Houston MSA 3,764 more than 2013 2

Houston Economic Overview A Cooling in the Oil Boom The price of oil has dropped by more than half since summer 2014 The U.S. crude oil production is at its highest rates in three decades Oil prices expected to remain sideways through 2015 Texas will see a decrease in rig counts through summer 2015, as lower producing rigs are shut down for more profitable and reliable options Texas accounts for 36% of all US crude oil production, approximately 3.2 million bpd The Houston Association of Realtors expects a 10-12% drop in home sales in 2015 Housing prices will continue to rise, and inventory will rise as demand is cooled slightly Houston builders are still forecasted to build 32,500 homes in 2015, compared to 30,000 homes in 2014 Current Houston housing demand is for 35,000 homes a year 3

Local Economic Overview Grand Parkway Segment G is currently under construction with the segments from US 290 to IH-45 Current scheduled completion is late 2015 Caters to major employment centers including new Exxon Mobil Campus 4

Thousands 5,400 5,200 5,000 4,800 4,600 4,400 4,200 4,000 3,800 Texas Enrollment Trends Total State Enrollment 5,076 4,934 4,750 4,593 4,399 5,232 2014 State Enrollment Total Enrollment 5,232,065 Total Growth 80,140 140,000 120,145 120,000 100,000 80,000 60,000 40,000 20,000 Enrollment Change 78,644 98,273 77,261 80,140 64,962 0 2005/06 2007/08 2009/10 2011/12 2013/14 5

Regions 4 and 6 Enrollment Trends 6

Regions 4 and 6 Enrollment Trends Region 4 Region 6 Rank District 2009/10 Enrollment 2014/15 Enrollment 5-YEAR Change (09/10-14/15) 1 Houston ISD 202,773 215,215 12,442 2 Katy ISD 59,078 70,330 11,252 3 Cypress-Fairbanks ISD 104,231 113,018 8,787 4 Aldine ISD 62,792 69,717 6,925 5 Humble ISD 34,923 39,522 4,599 6 Klein ISD 44,824 49,397 4,573 7 Lamar Cons ISD 23,864 28,319 4,455 8 Alvin ISD 16,788 20,861 4,073 9 Pasadena ISD 52,303 55,579 3,276 10 Clear Creek ISD 37,611 40,807 3,196 11 Tomball ISD 10,266 13,234 2,968 12 Fort Bend ISD 69,374 72,147 2,773 13 Spring Branch ISD 32,502 35,114 2,612 14 Pearland ISD 18,308 20,549 2,241 15 Goose Creek ISD 20,954 23,167 2,213 16 Alief ISD 45,553 47,204 1,651 17 Spring ISD 35,350 36,948 1,598 18 Dickinson ISD 8,878 10,418 1,540 19 Sheldon ISD 6,570 7,962 1,392 20 Galena Park ISD 21,536 22,735 1,199 Rank District 2009/10 Enrollment 2014/15 Enrollment 5-YEAR Change (09/10-14/15) 1 Conroe ISD 49,629 56,363 6,734 2 New Caney ISD 9,609 12,979 3,370 3 College Station ISD 10,102 12,534 2,432 4 Montgomery ISD 6,714 7,936 1,222 5 Magnolia ISD 11,691 12,458 767 6 Willis ISD 6,264 6,915 651 7 Huntsville ISD 6,291 6,699 408 8 Bryan ISD 15,579 15,984 405 9 Splendora ISD 3,382 3,629 247 10 Sealy ISD 2,612 2,803 191 11 Navasota ISD 2,883 3,055 172 12 Anderson-Shiro Cons ISD 686 823 137 13 Cameron ISD 1,606 1,684 78 14 Latexo ISD 450 527 77 15 Buffalo ISD 889 953 64 16 Mumford ISD 551 612 61 17 Livingston ISD 3,999 4,059 60 18 New Waverly ISD 905 964 59 19 Franklin ISD 1,049 1,103 54 20 Burton ISD 340 388 48 7

Houston New Home Ranking Report ISD Ranked by Annual Closings 4Q14 Rank District Name Annual Starts Annual Closings VDL Future 1 Katy ISD 3,611 3,519 3,145 20,781 2 Houston ISD 3,548 3,292 1,886 5,085 3 Fort Bend ISD 3,455 3,101 3,078 16,401 4 Cypress-Fairbanks ISD 2,873 2,962 3,463 6,814 5 Lamar CISD 2,295 2,216 2,545 8,714 6 Conroe ISD 2,318 2,093 2,852 7,514 7 Klein ISD 1,849 1,590 2,136 3,890 8 Humble ISD 1,273 1,375 1,570 9,420 9 Tomball ISD 1,289 1,040 1,946 2,286 10 Alvin ISD 912 799 1,146 15,132 11 Clear Creek ISD 731 698 1,423 1,575 12 New Caney ISD 674 596 547 6,341* 13 Aldine ISD 647 523 990 2,514 14 Magnolia ISD 407 431 609 2,883 15 Spring ISD 460 396 789 2,420 16 Montgomery ISD 454 390 659 1,851 17 Dickinson ISD 374 367 388 563 18 Goose Creek ISD 398 349 659 252 19 Spring Branch ISD 318 325 895 613 20 Pasadena ISD 268 243 273 520 *Numbers edited per TD research 8

New Housing Activity 450 400 350 300 250 200 150 100 50 0 New Caney ISD Housing Activity Starts Closings Inventory Starts 2010 2011 2012 2013 2014 Closings 2010 2011 2012 2013 2014 1Q 64 55 92 128 165 1Q 56 54 91 80 136 2Q 77 86 126 127 157 2Q 91 58 89 111 167 3Q 75 90 94 171 205 3Q 78 64 81 125 148 4Q 53 70 109 110 147 4Q 53 105 100 120 145 Total 269 301 421 536 674 Total 278 281 361 436 596 2014 starts are almost 675 units for the first time, up 138 units over 2013 Closings remain high with an 37% increase over 2013 Inventory is in a good position to sustain future growth with 415 units 9

Active Communities with Vacant Developed Lots 10

Active or Planned Communities with over 100 Future Lots 11

Active Single-Family Housing Activity Tavola Master planned community 3,142 total homes 2,970 future homes 60 homes completed 43 homes under construction 50 vacant developed lots 19 finished vacant homes 2014 housing activity Annual starts = 91 Estimated absorption rates: 2015 = 150 homes 2016 = 160 homes Lennar & Perry Homes are currently building in Tavola All future homes fall within Tavola Elementary 12

Active Single-Family Housing Activity Woodridge Forest 672 total homes 475 future homes (estimate) Cernus Group $200K s-$400k s Estimated absorption rates: 2015 = 160 homes 2016 = 140 homes 2017 = 140 homes $200K-$400K+ King s Manor Elementary 16 13

Active Single-Family Housing Activity King s Mill 272 future homes 550 occupied homes As of April 2015: 26 under construction 60 vacant developed lots 22 finished vacant homes Estimated absorption rates: 2015 = 70 2016 = 70 2017 = 70 243 current students $170K-$330K King s Manor Elementary 14

Active Single-Family Housing Activity Cumberland Crossing 362 total homes As of April 2015: 62 under construction 22 vacant developed lots 20 finished vacant homes 258 occupied Development likely to be builtout by late 2015/early 2016 124 current students $150K-$210K Crippen Elementary 15

Master Planned Community- Valley Ranch Valley Ranch (North) 1080 Acres Valley Ranch Masterplan calls for 2,000 total homes sites 1,500 futures homes remain (estimate from developer) 1,000 future apartment units (estimate from developer) 7 homes under construction 4 finished vacant homes $140K-$400K s New roadwork is underway as Valley Ranch Parkway is being extended New Caney High Valley Ranch Elementary Forest Colony Valley Ranch (South) 278 Acres 16

Future Single-Family Housing Activity Brookwood Forest KB Homes 440 total homes Under construction (streets and lots) No homes on the ground as of April 2015 $170K-$220K s Estimated velocity rates: 2015 = 48 2016 = 96 2017 = 96 Bens Branch Elementary 17

Manufactured Housing Kings Colony Kings Colony Lots that were developed in the late 70 s and early 80 s Mostly manufactured housing but single-family homes are allowed to be constructed as well 1,500 lots remain to be developed Historical building history: 2010 = 80 homes 2011 = 120 homes 2012 = 60 homes 2013 = 60 homes 2014 = 40 homes 628 current students Unincorporated area making it difficult to track development Under new management (now refer to this development as New King s Colony) 352 new permits issued from January 2010- February 2015 283 manufactured home permits 69 single-family permits Tavola Elementary zone 18

New Single Family Housing Data By Elementary Attendance Zone Row Labels Annual Starts Quarterly Starts Annual Closings Quarterly Closings Inventory VDL Futures TAVOLA 45 28 1 1 44 81 3,016 BENS BRANCH 240 65 276 58 140 185 440 CRIPPEN 59 24 38 11 42 20 107 KINGS MANOR 150 61 124 39 103 185 747 NEW CANEY 0 0 0 0 0 0 0 OAKLEY 0 0 0 0 0 0 0 PORTER 0 0 0 0 0 0 0 SORTERS MILL 31 9 40 8 27 0 531 VALLEY RANCH 112 18 92 31 57 17 1,500 Grand Total 637 205 571 148 413 488 6,341 Highest activity in the category Second highest activity in the category Third highest activity in the category 19

Enrollment History Student Race/Ethnicity and Economically Disadvantaged Total Growth Year (OCT) K 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th Total 2010/11 771 815 805 844 783 828 782 756 730 780 748 599 407 10,106 2011/12 817 875 815 867 887 826 866 845 759 781 750 670 564 10,884 778 7.7% 2012/13 921 944 916 854 875 929 877 888 854 892 739 674 641 11,551 667 6.1% 2013/14 959 986 985 977 877 933 962 918 937 1,036 810 677 648 12,319 768 6.6% 2014/15 994 1,059 1,023 1,035 1,018 934 966 1,013 946 1,064 953 774 652 12,976 657 5.3% Black or African American % Hispanic % 2014-15 Student Race/Ethnicity Totals HISPANIC/LATIN O, 6926, 53.4% American Indian or Alaska Native % Asian % White % AM. INDIAN/ALASKA NATIVE, 47, 0.4% WHITE, 5214, 40.2% ASIAN, 189, 1.5% HAWAIIAN/PACI FIC ISLANDER, 15, 0.1% BLACK, 388, 3.0% % Growth *Yellow box = largest grade per year *Green box = second largest grade per year Two or more races % Native Hawaiian/ Other Pacific Islander % Year (Oct.) Total 2010/11 10,106 331 3.3% 4,294 42.5% 53 0.5% 138 1.4% 5,136 50.8% 136 1.3% 18 0.2% 2011/12 10,884 332 3.1% 5,025 46.2% 54 0.5% 160 1.5% 5,161 47.4% 138 1.3% 14 0.1% 2012/13 11,551 350 3.0% 5,621 48.7% 46 0.4% 163 1.4% 5,207 45.1% 146 1.3% 18 0.2% 2013/14 12,319 343 2.8% 6,330 51.4% 46 0.4% 181 1.5% 5,247 42.6% 157 1.3% 15 0.1% 2014/15 12,976 388 3.0% 6,926 53.4% 47 0.4% 189 1.5% 5,214 40.2% 197 1.5% 15 0.1% Year (Oct.) Economically Disadvantaged % ED 2010/11 6,241 61.8% 2011/12 6,930 63.7% 2012/13 7,286 63.1% 2013/14 7,672 62.3% 2014/15 8,100 62.4% MORE THAN ONE, 197, 1.5% 20

Ten Year Forecast By Grade Level Total Growth Year (OCT) EE PK K 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th Total 2010/11 33 425 771 815 805 844 783 828 782 756 730 780 748 599 407 10,106 2011/12 38 524 817 875 815 867 887 826 866 845 759 781 750 670 564 10,884 778 7.7% 2012/13 41 506 921 944 916 854 875 929 877 888 854 892 739 674 641 11,551 667 6.1% 2013/14 51 563 959 986 985 977 877 933 962 918 937 1,036 810 677 648 12,319 768 6.6% 2014/15 44 501 994 1,059 1,023 1,035 1,018 934 966 1,013 946 1,064 953 774 652 12,976 657 5.3% 2015/16 44 501 1,030 1,096 1,090 1,062 1,069 1,049 997 1,007 1,038 1,083 955 897 726 13,642 666 5.1% 2016/17 44 501 1,085 1,139 1,137 1,138 1,107 1,111 1,106 1,038 1,038 1,181 980 895 841 14,342 700 5.1% 2017/18 44 501 1,150 1,210 1,192 1,186 1,191 1,162 1,173 1,149 1,064 1,168 1,061 923 840 15,015 673 4.7% 2018/19 44 501 1,215 1,290 1,258 1,241 1,233 1,233 1,231 1,221 1,184 1,211 1,048 997 876 15,784 769 5.1% 2019/20 44 501 1,281 1,359 1,345 1,318 1,298 1,278 1,301 1,280 1,258 1,331 1,090 985 948 16,617 833 5.3% 2020/21 44 501 1,327 1,434 1,417 1,406 1,370 1,340 1,351 1,353 1,317 1,412 1,196 1,023 937 17,428 811 4.9% 2021/22 44 501 1,390 1,485 1,487 1,479 1,460 1,414 1,416 1,405 1,391 1,478 1,268 1,124 973 18,315 887 5.1% 2022/23 44 501 1,452 1,552 1,545 1,555 1,540 1,509 1,497 1,473 1,445 1,552 1,328 1,191 1,070 19,254 939 5.1% 2023/24 44 501 1,512 1,619 1,613 1,612 1,614 1,592 1,600 1,556 1,515 1,613 1,392 1,248 1,132 20,163 909 4.7% 2024/25 44 501 1,576 1,687 1,682 1,684 1,675 1,670 1,688 1,664 1,600 1,690 1,448 1,309 1,187 21,105 942 4.7% % Growth *Yellow box = largest grade per year *Green box = second largest grade per year New Caney ISD may reach 15,000 in 2017/18 5 year growth = 3,641 students 2019/20 enrollment = 16,617 10 year growth = 5,632 students 2024/25 enrollment = 21,105 21

Summary The state's unemployment rate has been at or below the national rate for 8 consecutive years. Texas $18.7 billion in exports for November 2013 represented more than 18% of all U.S. exports. Housing market showing strong growth in new construction and increasing values. 2014 starts are over 670 units for the first time, a 25% increase from 2013. Bens Branch and Kings Manor Elementary are the most active areas for new housing growth, representing 61.2% of the district s annual starts. New Caney ISD may reach 14,000 students by 2016. Five-year enrollment growth of 3,641, with fall 2019 enrollment of 16,617. Ten-Year enrollment growth of 8,129, with fall 2024 enrollment of 21,105. 22