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Enterprise Florida Board Meeting

Rosen Shingle Creek 9939 Universal Blvd. Orlando, FL 32819 Hotel: 866.996.6338 November 8 9, 2012 TABLE OF CONTENTS ENTERPRISE FLORIDA BOARD EVENTS THURSDAY, NOVEMBER 8, 2012
11:15 A.M. 12:45 P.M. New Board Member Orientation Lunch

Tab 1 Agenda EFI Board Meeting Agenda

2 Floor St. Johns 23

nd

11:15 A.M. 12:45 P.M. Florida International Trade Partnership Lunch


2 Floor St. Johns 32/33
nd

Tab 2 Minutes Minutes: September 13, 2012

1:00 P.M. 2:00 P.M. Legislative Committee


2 Floor St. Johns 32/33
nd

Tab 3 Action Items Consent Agenda Audit Report

2:00 P.M. 4:30 P.M. Joint Audit & Finance Compensation Committees
2 Floor St. Johns 23
nd

2:00 P.M. 4:00 P.M. Marketing Task Force


2 Floor Wekiva 3
nd

Tab 4 Florida Jobs Progress Florida Jobs Graph Florida Economic Growth Graph

2:30 P.M. 4:30 P.M. Space Florida Board Meeting


2 Floor St. Johns 28/29
nd

5:00 P.M. - 6:00 P.M. Joint Enterprise Florida & Workforce Florida Partner Reception
1 Floor Butler Room
st

Tab 5 Appendix Board Member Directory 2012-2013 EFI Events 2013 EFI Legislative Agenda 2012 Florida Target Industry Competitiveness Study

6:00 P.M. - 6:15 P.M. Bus to Board Dinner


Lobby Level Bus Entrance

7:00 P.M. - 9:00 P.M. Board Dinner


Disneys Contemporary Resort, 4600 N. World Dr., Lake nd Buena Vista: Grand Republic Room B, 2 Floor

FRIDAY, NOVEMBER 9, 2012

Airport Shuttle: $19 www.mearstransportation.com


Includes: Self-parking, Gym & Wi-Fi Teleconference: Dial: 877.402.9753 Code: 6423569#
*6 to mute/unmute your phone

7:00 A.M. 8:30 A.M. Enterprise Florida Breakfast


1 Floor Gatlin E 4-5
st

Resort fee: $5

8:30 A.M. 11:00 A.M. Enterprise Florida Board Meeting


1 Floor Gatlin E 1-3
st

11:15 A.M. 12:30 P.M. Joint EFI Board & Stakeholders Lunch
1 Floor Gatlin E 4-5
st

ENTERPRISE FLORIDA ON-SITE STAFF CONTACTS:


Liefke Cox Director, Investor Relations Office: 407.956.5688 Cell: 407.375.2952 Email: lcox@eflorida.com Deb Melnick Mgr., Marketing Events Office: 407.956.5619 Cell: 407.580.8034 dmelnick@eflorida.com

1:00 P.M. 3:00 P.M. *Stakeholders Council


*Not required but board members are invited.

1 Floor Gatlin E 1-3

st

Enterprise Florida Board & Stakeholder Meetings:


January 30 - 31, 2013: Tallahassee May 8 - 9, 2013: Orlando (Board Meeting Only) August 7 - 8, 2013: Northwest Region October 30 - 31, 2013: Miami

Enterprise Florida Board Meetings | November 8 - 9, 2012

Enterprise Florida Board Meeting Agenda


Rosen Shingle Creek Orlando, FL November 9, 2012 8:30 A.M. 11:00 A.M. EDT

8:30 a.m. Welcome & Roll Call............................................................................... .Hal Melton, Vice Chair

8:35 a.m. Action Items & Vice-Chairs Report .......................................................... Hal Melton, Vice Chair
September Board Minutes Consent Agenda Annual Financials & Audit Report...Marshall Criser

8:40 a.m. Chairmans Report ......................................................................................... Governor Rick Scott

9:00 a.m. Project Overview: Digital Risk, LLC ....................... Peter Kassabov, CEO & Managing Director

9:10 a.m. Board Q&A on Project Overview ...................................................................... Board Members

9:15 a.m. Presidents Update ............................. Gray Swoope, Secretary of Commerce/President & CEO

9:25 a.m. Board Q&A with the President ..............................................................................Board Members

9:35 a.m. Floridas Business Branding ...................... Don McEachern, North Star Destination Strategies

10:00 a.m. Board Q&A Business Branding ..........................................................................Board Members

10:10 a.m. 2013 Legislative Agenda Approval ..................................................................... Fred Leonhardt

10:20 a.m. Recommendations from 2013 Fl Competitiveness Study ................... Kevin Gillen, Facilitator

10:50 a.m. Vice-Chair Appreciation........................................................................................... Gray Swoope

10:58 a.m. Other Board Comments .......................................................................................Board Members

11:00 a.m. Closing Remarks & Adjournment .............................................................. Governor Rick Scott
Save the Dates: Enterprise Florida & Stakeholders Meetings January 30 - 31, 2013: Tallahassee May 8 9, 2013: Orlando (Board Only) August 7 8, 2013: Northwest Region October 30 31, 2013: Miami
Enterprise Florida Board Meeting | November 9, 2012

Updated: 11/2/2012

DRAFT Minutes Enterprise Florida Board Meeting


September 13, 2012

A regular meeting of the Enterprise Florida, Inc. (EFI) Board of Directors was held on September 13, 2012 in St. Pete Beach, Florida. Members Present: CFO Jeff Atwater Alan Becker Jay Beyrouti Jesse Biter Pam Bondi Park Brady Ron Campbell Stan Connally Andrew Corty Brett Couch Marshall Criser Hayden Dempsey Vinny Dolan Bill Dymond Blake Gable Danny Gaekwad Kevin Gillen Gordon Gillette Bill Heavener Kevin Hyman Present Via Telephone: Debra Duvall Howard Halle Marshall Heard Cindy Kane (Harris Corporation) Andy Rosen Rick Wilson Dwayne Ingram Belinda Keiser Beth Kirkland Chris Kise Fred Leonhardt Bob McAdam Hal Melton Joseph Meterchick Deborah Millin Gilberto Neves Susan Pareigis Ernesto Perez Winfred Phillips Henry Rodriguez Denise Saiki Gene Schaefer Governor Rick Scott Kelly Smallridge Hal Valeche Mark Wilson Others Present: David Balloff (Gary Spulaks alternate) Brook McKnighton (Adam Putnams designee) Jeff Parrish (Dominic Calabros alternate) Mary Snow (Tony Villamils alternate) Michael Sole (Eric Silagys alternate) Gray Swoope

Agenda: I. Welcome & Roll Call II. Action Items & Vice-Chairmans Report Approval of May 10, 2012 Board of Directors Meeting Minutes Approval of Consent Agenda with 4th Quarter Financial Statements Approval of Finance & Compensation Committee Recommendations III. Chairmans Report IV. Project Overview from Tampa Bay Region V. Presidents Report VI. 2012 Competitiveness Study VII. Stakeholders Council Update VIII. New Business IX. Closing Remarks & Adjournment

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

PROCEEDINGS A quorum being present, Vice Chairman Hal Melton called the meeting to order at 8:34 a.m. Action Items & Vice Chairmans Report Hal Melton acknowledged current Enterprise Florida investors, and noted that 10 new private sector investors have joined the board since Governor Scott took office. Previous high is four new investors in one year. He announced the newest investor, IntegraClick, and introduced new board members: Stan Connally, Kelly Smallridge and Beth Kirkland. Alan Becker pointed out that the May 10, 2012 minutes should state that the Governor increased the education budget by $1 billion, not $1 million. The correction was noted in the record and staff instructed to amend minutes accordingly. Park Brady made a motion to approve the minutes of the May 10, 2012 board meeting as amended, which was seconded by Andy Corty, and approved unanimously. Approval of Consent Agenda 1. Approve New and Renewing At-Large Board Members Re-elect renewing at-large members for a term to end September 2013: Vinny Dolan, Progress Energy, Inc. Howard Halle, Wells Fargo Bank, N.A. Kevin Hyman, Bright House Networks, LLC Tony Villamil, Washington Economics Elect renewing at-large investor, new representative, for a term to end September 2013: Stan Connally, Gulf Power Company Elect new at-large member for a term to end September 2013: James Epstein, IntegraClick, LLC Approve new at-large appointment for a term to end January 2013: Kelly Smallridge, BDB of Palm Beach Approve new ex-officio appointment for a term to end June 2013: Beth Kirkland, FEDC Chair 2. Approve EFI Interim Financial Statements 3. Approve incentive compensation funds for staff not to exceed $427,500 in private sector funds for fiscal year 2011/12 Henry Rodriguez made a motion to approve the consent agenda, which was seconded by Fred Leonhardt, and approved unanimously. Alan Becker gave a report of the Finance & Compensation Committee. At the last meeting the bonus pool was approved. This bonus pool applies to everyone except the President/CEO. A separate meeting was held yesterday to approve the bonus compensation for the President/CEO. Gray Swoope has a base salary of $230,000. Under his contract, he has a bonus potential of $70,000. After reviewing several performance criteria as well as board member survey results, the Finance & Compensation Committee recommended the full bonus amount of $70,000.

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

The Finance & Compensation Committee has completed its evaluation of Gray Swoope as President and CEO of Enterprise Florida for fiscal year 2011/12 and recommends an incentive payment of $70,000, or 100% of the contract incentive payment, be awarded. Alan Becker made a recommendation to approve the Finance & Compensation Committee recommendation, which was seconded by Kevin Gillen, and approved unanimously. Chairmans Report Governor Scott reported that there is no better place in America to do business than Florida. Every economic indicator is good; we are headed in right direction. Scott took a moment to compliment Gray Swoope and Pam Bondi, State Attorney General, on the outstanding job they have both been doing for the state. Scott is currently on a listening tour for K-12 education. He said Florida has made a lot of progress, but there are still a lot of things that can improve. Project Overview from Tampa Bay Region Hal Melton and Governor Scott introduced Steve Haslam, CEO of StreetLinks LLC, to talk about a recent location announcement from the companys perspective. Haslam told the board that StreetLinks is the fastest growing appraisal management company in the country. The company is based in Indianapolis and had about 15 employees three-and-a-half years ago. StreetLinks located a facility in Tampa, and hired their first group of people a year ago this week. The business grew to 200 people and they knew they needed another facility. Tampa was a natural option as they had found a good labor pool, a good quality workforce, ease in hiring, and a low rate of turnover. Haslam stated that of all the states, Gray Swoope and his team was the absolute best organization they have ever worked with. Haslam reported that he has never worked with state officials that had the business minds and had the business interests as does the state of Florida. Florida gave assurances that it would do everything in its power to understand the nature of the company, the nature of the employees, and the nature of its needs, and bring that to the Governor. A week to ten days later the entire package was put together, customized to meet the needs of the company. Haslam projected that he will have another 100 employees down here for a company called Advent by December or January. A second company, Mango Moving, is going to start building its sales force down here over the next year and will have just over 100 employees by next summer. Haslam already has 250 employees in Tampa and projects that he will have 450 to 500 employees in Florida around the first quarter. Haslam concluded his comments about Floridas business climate, You have a message: you are business friendly. The people that we worked with knew business. The people that we worked with worked fast, they worked understanding our needs, they worked professionally, and I really, really felt like I was engaged with partners. And I think that thats your message. A question and answer period followed Haslams presentation. Presidents Update Swoope told the board that he has a professional team in economic development. Not only the team at Enterprise Florida, but also because we have a chief economic development leader that happens to be Governor. The team is the reason that we are successful.

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

Swoope gave a brief overview of key metrics that indicates Florida is moving in the right direction: 127,200 private sector jobs created 2.3% drop in the unemployment rate since June 2010 (largest drop of any state in the US during this timeframe) online job postings increased 11% since June 2011 building permits are up 36% over last year Swoope said that what he wanted to talk about today is how far we have come in a very short time. The Governor took office in January, Swoope came on board in March, and in July legislation was implemented that created the Department of Economic Opportunity. One of the biggest changes Swoope sees is how we use incentives. Instead of Enterprise Florida working a deal with a client, making a recommendation, and then handing it over to OTTED only to have the whole process start over, today representatives from EFI, DEO and any other player that needs to be there, like Workforce Florida, all sit down and talk about what it takes to be competitive. The team looks at the company, market risks, and the industry sector -- they talk about every part of the deal. And then they come to a consensus recommendation that includes the incentive amount and the recourse if the deal goes bad. This joint effort starts early in the business assistance process. Swoope then reported on end of fiscal year results. In Business Development, EFI achieved 127% of goal, creating 25,339 jobs; capital investment was 126% of goal at $1.513 million; jobs in targeted sectors were up 162%; and the number of referrals to communities was up 258%. In International Trade, trade leads are up 123%, trade consultations were up 124% of goal, export sales were 118% above goal, and the team achieved 142% of goal on international event participation. Bottom line is an increase in value of Florida origin exports from $59.9 billion to $66.9 billion. Last year 22 Sports Commissions hosted over 1,500 sports events, bringing over two million visitors to the state, a 47% increase over the previous fiscal year. The Strategic Partnerships division is strengthening our relations with partners. There is an excitement on the board and there are 10 new board investors for the fiscal year. Also in that division, there has been a lot of work with the Governor and Lt. Governor on military installations in the state. The Stakeholders Council not only meets quarterly, but also has monthly calls. There is a lot of work going on in this area. The Stakeholders Council has been expanded to include all primary partners and other economic development organizations. The Minority and Small Business, Entrepreneurship & Capital Programs (MaSBEC) division is establishing strong partnerships with existing minority focused organizations. Thye supported five minority business workshops last year. Swoope reported the establishment of a Small Business Capital Initiative, which has obligated approximately $50 million to date. The $36 million Clean Energy Investment Program managed by the Florida Opportunity Fund is now fully obligated. According to Swoope, the Marketing & Communications division has been working hard to engage business development with marketing so that they are working seamlessly. In this fiscal year Enterprise Florida held 11 relationship-building events, developing 446 prospective leads. There has been a 20% increase in projects opened as a result of marketing initiatives. Marketing & Communications continues work on a brand initiative. Space Florida established 15 projects resulting in about 2,000 jobs in the space sector with a capital investment of $387 million. Visit Florida reports that visitors are up 4% from last year, and international visitors are up 13.5% percent.

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

Swoope advised the board that Enterprise Florida is working 321 active projects. If all of these projects came to fruition, the result would be just less than 80,000 jobs and a capital investment of $8.3 billion. Looking at established projects by industry, manufacturing and headquarters is by far the sector showing the most activity. Information technology, life sciences and financial/professional services are all about the same. Swoope reported that aviation has dropped off a little, possibly as a result of uncertainty in the defense industry.

Swoope closed by saying that in 22 months the organization has stayed on mission, building a professional team. 2012 Competitiveness Study Mike Sole introduced Mark Sweeney of McCallum Sweeney Consulting, who conducted a target competitiveness study for Enterprise Florida with funding assistance from FPL, Progress Energy, Gulf Power, TECO, PowerSouth and Seminole Electric. Sweeney informed the group that their partner on this project was Avalanche Consulting, a consulting firm that works with economic development organizations. The project consisted of a five-step process which included a review of current policies, practices and resources; talking to corporate decision makers and site selectors; talking to regional and local economic developers in Florida; analyzing and benchmarking against competitor locations; and developing a final report. Sweeney provided a summary of the study findings, reported by target sector. Aviation/Aerospace Key Competitive Issues: continually growing sector, competition is also growing, right in Floridas back yard; opportunities are across the board; aggressive, high-value incentives at state and local level will be important to win those big projects Enhancements for Florida: have ready sites, particularly with runway access; workforce training; incentive enhancements Clean Technology Key Competitive Issues: using cutting edge, often risky technologies; opportunities in solar and wind generation (ebbs and flows with federal tax policy, lot of uncertainty), energy storage; Florida presents a very large local market Enhancements for Florida: up-front costs and finance, Florida-focused capital funds, complete elimination of sales tax on machinery equipment; recruitment of specialty engineers and upper management; electric reliability and cost Financial/Professional Services Key Competitive Issues: large important office sector in which Florida has and continues to have success; cost savings relative to major finance centers; record of success in spite of disaster risk Enhancements for Florida: infrastructure costs will be focused on electric reliability; road infrastructure as is relates to commuting; job-based incentives will be impactful; continued improvement of Floridas business brand (reluctance of executives to put an operation in a location where everybody comes to play)

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

Homeland Security/Defense Key Competitive Issues: growing industry; lots of high-tech, often risky technologies; tied to direct/indirect federal funding; opportunities in aviation and IT; Floridas federal representatives will play an important role Enhancements for Florida: ready sites; large and small airport access; electric reliability; land incentives Information Technology Key Competitive Issues: strong presence of IT skills in the workforce, however no concentration of stand-alone IT firms; venture capital firms know there are good opportunities in Florida, but tend to tie investment to hubs in CA, MA Enhancements for Florida: enhance networking that is critical to entrepreneurs Life Sciences Key Competitive Issues: Florida appears poised for potential increase in activity in life sciences; capital sources find good opportunities in Florida, but tend to tie investment to hubs in CA, MA; natural disaster risk is front of mind for these firms Enhancements for Florida: better direct communication between universities and young life sciences companies; electric reliability; development of capital sources Manufacturing Key Competitive Issues: geography; Florida targets are operations that will serve Florida or products where shipping is a modest relative cost Enhancements for Florida: broad portfolio of ready sites are critically important for this sector; enhanced training; incentives matter in manufacturing increase funding and Governors authority over Quick Action Closing Fund; free land to large users (often provided at local level) Corporate Headquarters Key Competitive Issues: image (great place to have fun, not a place to move headquarters); not a high concentration of Fortune 500 companies; good location for hemispheric headquarters Enhancements for Florida: image and campaign; promotion of air service assets; promotion of quality of life assets (more than just visit, what its like to live here); relocation cost incentives (ability to mitigate those up-front costs) Global Logistics Key Competitive Issues: geography; targets are operations that serve Florida; locations in northern Florida can serve much of the southeast US Enhancements for Florida: development of ready sites; electric reliability; upgrade of the industrial training program; communities being in a position to offer incentivized property Sweeney then looked at competitiveness issues, which were graded as positive, neutral or negative by Companies/Consultants, Local/Regional EDOs, and state benchmark findings. Sweeney did note that interviewees often asked if they should respond relative to their recent experiences with Florida, or the Florida of three to four years ago. Consistent across the board, respondents said that Florida is so much better than it used to be.

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

Companies/ Consultants Cost of Doing Business Negative Recommendations: modernize taxes Real Estate and Infrastructure Negative Recommendations: portfolio of sites and buildings

Local/ Regional EDOs Neutral Negative

State Benchmark Findings Neutral Negative

Talent and Training Positive Neutral Negative Recommendations: improve QRT, funding for workforce training, recruit best program managers from other states that have put a lot of effort into training Incentives Neutral Negative Neutral Recommendations: continue to streamline authorization process; implement county tier system; improve flexibility and effectiveness of existing programs ED Strategy/Branding Negative Negative Recommendations: increase funding, promote business brand ED Administration Neutral Neutral Recommendations: EFI needs more project management resources Stakeholders Council Update Kelly Smallridge reiterated that there has been a dramatic improvement in economic development in the state: there is a tremendous amount of new communication; the relationship with stakeholders has improved dramatically. Smallridge reported on the four task forces that have been created by Enterprise Florida. The Community Competitiveness Task Force has developed a job readiness checklist for community evaluation in order to promote job creation and economic development. Enterprise Florida will introduce this as part of a more comprehensive program later in the fiscal year. The Innovation and Entrepreneurship Task Force concluded its original assignment to create a survey assessing all counties in the state of Florida to determine the resources that are available to grow and assist entrepreneurs in Florida. All of the information gathered from these surveys is now being put on a website, called the Florida Virtual Entrepreneurship Center that is managed by the Florida High Tech Corridor. Since the task force has completed its original mission it is dissolved per Council policy. A presentation was made by the Florida Research Consortium. The task force agreed with the recommendations to develop a seed fund and also to create a research fund. The Manufacturing, Supply Chain, and Logistics Task Force report focused on 2 items how Enterprise Florida is marketing the state to manufacturers. The second focus is to look at adding the sales and use tax exemption to the 2013 legislative agenda, specifically the tax on productivity. The Marketing Task Force, working with Enterprise Florida, has hired Northstar Destination Strategies to look at branding of the state of Florida from a business perspective. A second firm has been hired to work on the expression of that brand. The brand platform will be rolled out at the November board meeting, and the campaign will be rolled out in January. Neutral Neutral

Enterprise Florida Board Meeting Minutes | September 13, 2012

DRAFT Minutes of a Regular Meeting of the Enterprise Florida Board

New Business Gray Swoope introduced new Enterprise Florida staff members. Closing Remarks Chairman Scott challenged each board member to get to know at least one other person that they dont know on the board. He also asked that everyone write a letter that talks about why Florida is the best place to do business and get it out everybody you know. You never know where the next opportunity is going to come from. The next meeting of the Enterprise Florida Board of Directors will take place November 8-9, 2012 in Orlando, Florida. Hal Melton made a motion to adjourn the Enterprise Florida board meeting, which was seconded Alan Becker, and approved unanimously. The Enterprise Florida Board of Directors meeting adjourned at 11:00 a.m.

Submitted by: Gray Swoope, President & CEO

Enterprise Florida Board Meeting Minutes | September 13, 2012

Enterprise Florida Board Meeting Consent Agenda


November 9, 2012

Board members should notify Vice Chair of any item they wish to review before voting on the Consent Agenda. These items will be pulled from the agenda to be discussed and voted on after the rest of the consent agenda is approved. Board members are not allowed to vote on their own re-appointment or any issues for which they have a conflict of interest and those present for the vote will be considered recused from these votes. The Executive Committee reviewed the following items at their October 10, 2012 meeting and recommends their approval to the Board: 1. At-large members Re-appointment of these at-large members for a term to November, 2013 o o o o o The St. Joe Company: Park Brady, CEO Walt Disney Parks & Resorts, Anthony Connelly, SVP & CFO U.S. TD Bank: Kevin Gillen, Regional President Florida JPMorgan Chase & Co. : Mark Bensabat, CEO, Middle Market Banking FLF, LLC: Howell Melton, Jr., Co-Chairman & CEO

2. Appointments of Rick Rosen and Ken Wright to Florida Opportunity Fund Board of Directors for a three year term starting in November 2012.

3. Interim Financial Report: FY 2012-13 reporting period July 1, 2012 to September 30, 2012

Enterprise Florida Board Meetings | November 9, 2012

Enterprise Florida Financial Report


Quarter Ending September 30, 2012 - Unaudited

The following financial information for the quarter ending September 30, 2012 and 2011, is unaudited, and is derived from internally generated financial statements. This report is provided to the Board of Directors to assist in its understanding and analysis of EFIs financial performance and accountability. These statements have been generated by management and the fairness of their presentation is the responsibility of management.

Statement of Financial Position (Attachment A) The Statement of Financial Position provides a comparison of the assets, liabilities and net assets of EFI as of September 30, 2012 and 2011, and is presented in a combined format on Attachment A-1. Attachment A-2 provides the detail of EFIs Financial Position by category or activity. Operations are directly related to our agreement with the Florida Department of Economic Opportunity. Administered are funds awarded by the State to various grantees and administered by EFI. Corporate is investor activity and the use of those funds. Restricted is funding earmarked for a specific use only for programs such as Base Protection, Florida Defense Support Task Force, Small Business Technology Growth Fund, Rural Strategic Marketing, Technology related programs, and the State Small Business Credit Initiative (SSBCI). Statement of Activities (Attachment B) The Statement of Activities provides a comparison of EFI's revenues and expenses compared to the budget approved by the Board. Information for the prior year is presented for comparative purposes. Information is presented for the quarter ending September 30, 2012 and 2011 on Attachment B-1. Attachment B-2 provides the detail for the three months, formatted in the same manner as EFIs Financial Position. Revenues Revenues include state funding, investor contributions, program fees, and interest. The revenues are either collected or billed by quarter end. For the quarter ending September 30, 2012, the first quarter revenue from the state has been recorded and is expected to be received in November. EFIs corporate contributions were budgeted at $1,400,000 for FY 2012/13. Contributions are budgeted on a straight-line basis throughout the fiscal year, with collections varying based on the anniversary dates of the investors. Revenue in total for the three months in the fiscal year is slightly lower than the budget related to the timing of the receipts of the corporate contributions and the Sports division with collections related to the tag revenue slightly lower than the amount budgeted. Expenses Year-to-date, EFI has incurred expenses of $4.1 million compared to $3.3 million in 2011 but is under budget for the year largely in the Operating, General and Administrative category. Expenses were budgeted on straight-line basis similar to revenue, whereas the actual spending fluctuates throughout the year. Payroll and Related Costs have also increased over the prior year to reflect the addition of the staff from these entities, as well as for the increase in staff hired over the past fiscal year to fill several key program positions previously left vacant. Additional Schedules In addition, to assist in the analysis of EFIs financial performance, included on the last page is a schedule of the administered activity detailing the category of programs by award year. The first column, the Contract Award, is a memo column indicating the expected total to be awarded. The next three columns track the actual flow of funds from the State to EFI, then to the Recipients. The last column total supports the Administered category of activity included in the detail of EFIs Financial Position included on Attachment A-2 for September 30, 2012.
For additional information, contact: Pamela Murphy, Vice President, Finance and Accounting T 407-956-5644 pmurphy@eflorida.com

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

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Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Financial Statements For the Quarter Ending September 30, 2012 Statement of Financial Position, Unaudited

Attachment A-1 Attachment A-2

September 30, 2012 & 2011 Comparative September 30, 2012 & 2011 Detail

Statement of Activities for the Three Months Ending, Unaudited Attachment B-1 Attachment B-2 September 30, 2012 & 2011 Comparative September 30, 2012 & 2011 Detail

Administered Activity by Program as of September 30, 2012

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Statement of Financial Position, Unaudited Attachment A-1


($ in Thousands)

September 30
2012
1 2 3 4 5 6

2011 $ 12,106 3,648 35,673 3,605 1,163 56,195

$ Change $ (953) 12,444 (17,450) 2,815 (500) $ (3,644)

% Change -7.87% 341.12% -48.92% 78.09% -42.99% -6.48%


(A) (B) (C) (D) (E)

Assets Cash and Cash Equivalents - unrestricted Cash and Cash Equivalents - restricted Cash and Cash Equivalents - escrow Accounts Receivable Other Assets Total Assets

11,153 16,092 18,223 6,420 663 52,551

Liabilities and Net Assets Accounts Payable and Other Liabilities 8 Deferred Revenue 9 Escrow Payable 10 Total Liabilities
7

1,499 4,432 18,214 24,145

2,083 5,342 35,663 43,088

(584) (910) (17,449) (18,943)

-28.04% (F) -17.03% (G) -48.93% (C) -43.96%

11

Net Assets Temporarily Restricted 12 Unrestricted 13 Total Net Assets Total Liabilities and Net Assets $

18,485 9,921 28,406 52,551 $

3,801 9,306 13,107 56,195

14,684 615 15,299 $ (3,644)

386.32% (B) 6.61% (H) 116.72% -6.48%

14

(A) Unrestricted funds for operations and administered programs. (B) Restricted funds were received and recorded as revenue in prior years with funds expended in the current year. New funds were received related to the FL Defense Support Task Force and State Small Business Credit Support Initiative, accounting for the majority of the increase . (C) Escrow funds received from the state to be paid to several companies once DEO certifies the contract deliverables are met. The cash asset is offset by a related liability with the difference being the interest earned and payable to the State of Florida on a quarterly basis. (D) Accounts receivable includes the first quarter appropriation, trade accounts receivable, and program related income related to the SSBCI program. (E) Other assets decreased for depreciation expense recorded at 6/30/12. (F) Accounts payable decreased related to operations and FL Sports grants awarded. (G) Deferred Revenue is largely composed of funds received from the State of Florida, to be paid for EFI administered grants. The balance fluctuates throughout the year based on when funds are received from the State, as well as, when payments are made to the grantees. (H) (I) (J) (K) (L) (M) The increase in unrestricted net assets correlates to the inclusion of the Sports and Minority Business divisions. Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis. Revenue related to events is higher than the budget and the prior year. These fees directly offset event expenses. Increase in payroll and benefits is from the addition of the new program staff and the merger of the Sports division. Operating, general and administrative costs are relatively on track with the budget but higher than last year due to the inclusion of the Sports program expenses. Trade show expenses are higher than budget and prior year results but are offset with higher participation fees since all events are priced to break-even. There was much higher activity during the year related to the Team Florida missions.

(N) International offices are relatively on track with prior year-to-date numbers and the budget for the year. (O) Professional Fees are in line with the budget. The increase over prior year relates to the merger of the Sports and Minority Business divisions. (P) Advertising & marketing was budgeted at $1 million for both FY 2010/11 and 2011/12 on a straight-line basis, although not fully expended in the current fiscal year. (Q) The travel budget was increased for FY 2012/13 to meet the needs of the organization. (R) Temporarily restricted revenue was received and recorded in prior years with payments made in the current year for the Base Protection, Florida International Business Expansion Initiative, Technology, and Rural Strategic Marketing Programs. Current year new programs related to SSBCI, Defense Task Force, and

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Statement of Financial Position, Unaudited Attachment A-2


($ in Thousands) September 30, 2012
Operations
15 16 17 18 19 20

Administered $ 4,364 4,364

Corporate $ 2,157 2,157 $

Restricted 16,092 2,393 18,485 $

Total 11,153 16,092 18,223 6,420 663 52,551

Assets Cash and Cash Equivalents - unrestricted Cash and Cash Equivalents - restricted Cash and Cash Equivalents - escrow Accounts Receivable Other Assets Total Assets

4,632 18,223 4,027 663 27,545

Liabilities and Net Assets Accounts Payable and Other Liabilities 22 Deferred Revenue 23 Escrow Payable 24 Total Liabilities
21

1,497 70 18,214 19,781

2 4,362 4,364

1,499 4,432 18,214 24,145

Net Assets Temporarily Restricted 26 Unrestricted 27 Total Net Assets


25 28

7,764 7,764 $ 27,545 $

4,364 $

2,157 2,157 2,157 $

18,485 18,485 18,485 $

18,485 9,921 28,406 52,551

Total Liabilities and Net Assets

September 30, 2011


Operations
29 30 31 32 33 34

Administered $ 5,324 5,324

Corporate $ 2,598 2,598 $

Restricted 3,648 153 3,801 $

Total 12,106 3,648 35,673 3,605 1,163 56,195

Assets Cash and Cash Equivalents - unrestricted Cash and Cash Equivalents - restricted Cash and Cash Equivalents - escrow Accounts Receivable Other Assets Total Assets

4,184 35,673 3,605 1,010 44,472

Liabilities and Net Assets Accounts Payable and Other Liabilities 36 Deferred Revenue 37 Escrow Payable 38 Total Liabilities
35

2,083 18 35,663 37,764

5,324 5,324

2,083 5,342 35,663 43,088

Net Assets Temporarily Restricted 40 Unrestricted 41 Total Net Assets


39 42

6,708 6,708 $ 44,472 $

5,324 $

2,598 2,598 2,598 $

3,801 3,801 3,801 $

3,801 9,306 13,107 56,195

Total Liabilities and Net Assets

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Statement of Activities For the Three Months Ending, Unaudited Attachment B-1
($ in Thousands)

September 30, 2012


Actual Budget Difference

September 30, 2011


Actual Budget Difference

43 44 45 46

Revenues: State Appropriations Private Cash Contributions Other Revenues Total Revenues Expenses: Payroll and Related Costs Operating, General and Administrative Trade Shows International Offices Professional Fees Advertising & Marketing Travel Total Expenses Change in net assets - operations Change in net assets - temp restricted Net assets, beginning of period Net assets, end of period Revenue - Pass Throughs & Grants Expenses - Grants to Other Organizations Revenue - Temporarily Restricted Expenses -Temporary Restricted

3,950 210 570 4,729

3,962 486 463 4,910

(12) (276) 107 (181)

(D) (I) (J)

2,960 318 3,278

3,400 300 421 4,121

(440) (300) (103) (843)

47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62

1,901 882 703 341 180 11 83 4,102 627 252 27,527 28,406 945 945 8,350 8,098

1,920 1,439 561 339 227 266 130 4,882 28 28 -

(19) (557) 142 3 (47) (255) (47) (782) 599 252 27,527 28,379 945 945 8,350 8,098

(K) (L) (M) (N) (O) (P) (Q)

1,652 570 414 327 238 19 46 3,266

2,076 777 321 346 246 266 89 4,121 13,129 13,129 -

(424) (207) 93 (19) (8) (247) (43) (855) 12 (34) (22) 165 165 34

(R)

12 (34) 13,129 13,107 $ 165 165

(R) (R)

34

(A) Unrestricted funds for operations and administered programs. (B) Restricted funds were received and recorded as revenue in prior years with funds expended in the current year. New funds were received related to the FL Defense Support Task Force and State Small Business Credit Support Initiative, accounting for the majority of the increase . (C) Escrow funds received from the state to be paid to several companies once DEO certifies the contract deliverables are met. (D) (E) (F) (G) (H) (I) (J) (K) (L) (M) The cash asset is offset by a related liability with the difference being the interest earned and payable to the State of Florida on a quarterly basis. Accounts receivable includes the fourth quarter appropriation, trade accounts receivable, and program related income related to the SSBCI program. Other assets increased for new fixed assets purchased in FY 2011/12, as well as the new loan programs administered under the Capital programs. Accounts payable decreased related to operations and FL Sports grants awarded. Deferred Revenue is largely composed of funds received from the State of Florida, to be paid for EFI administered grants. The balance fluctuates throughout the year based on when funds are received from the State, as well as, when payments are made to the grantees. The increase in unrestricted net assets correlates to the inclusion of the Sports and Minority Business divisions. Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis. Revenue related to events is higher than the budget and the prior year. These fees directly offset event expenses. Increase in payroll and benefits is from the addition of the new program staff and the merger of the Sports and Minority Business divisions. Operating, general and administrative costs are relatively on track with the budget but higher than last year due to the inclusion of the Sports program expenses. Trade show expenses are higher than budget and prior year results but are offset with higher participation fees since all events are priced to break-even. There was much higher activity during the year related to the Team Florida missions.

(N) International offices are relatively on track with prior year-to-date numbers and the budget for the year. (O) Professional Fees are in line with the budget. The increase over prior year relates to the merger of the Sports and Minority Business divisions. (P) Advertising & marketing was budgeted at $1 million for both FY 2010/11 and 2011/12 on a straight-line basis, although not fully expended in the current fiscal year. (Q) The travel budget was increased for FY 2012/13 to meet the needs of the organization. (R) Temporarily restricted revenue was received and recorded in prior years with payments made in the current year for the Base Protection, Florida International Business Expansion Initiative, Technology, and Rural Strategic Marketing Programs. Current year new programs related to SSBCI, Defense Task Force, and Minority Business account for the major increase.

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Statement of Activities For the Three Months Ending, Unaudited Attachment B-2
($ in Thousands)
September 30, 2012
Operations Revenues: State Appropriations Private Cash Contributions Other Revenues Total Revenues Expenses: Payroll and Related Costs Operating, General and Administrative Trade Shows International Offices Professional Fees Advertising & Marketing Travel Total Expenses Change in net assets - operations Change in net assets - temp restricted Net assets, beginning of period Net assets, end of period Revenue - Pass Throughs & Grants Expenses - Grants to Other Organizations Revenue - Temporarily Restricted Expenses -Temporary Restricted Administered Corporate Restricted Total

63 64 65 66

3,950 570 4,520

210 210

3,950 210 570 4,729

67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82

1,901 819 703 341 180 11 83 4,039 481 7,283 7,764 -

945 945 -

63 63 147 2,010 2,157 -

252 18,233 18,485 8,350 8,098

1,901 882 703 341 180 11 83 4,102 627 252 27,526 28,406 945 945 8,350 8,098

September 30, 2011


Operations Revenues: State Appropriations Private Cash Contributions Other Revenues Total Revenues Expenses: Payroll and Related Costs Operating, General and Administrative Trade Shows International Offices Professional Fees Advertising & Marketing Travel Total Expenses Change in net assets - operations Change in net assets - temp restricted Net assets, beginning of period Net assets, end of period Revenue - Pass Throughs & Grants Expenses - Grants to Other Organizations Revenue - Temporarily Restricted Expenses -Temporary Restricted Administered Corporate Restricted Total

83 84 85 86

2,960 317 3,277

1 1

2,960 318 3,278

87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102

1,652 326 414 327 238 19 46 3,022 255 6,453 6,708 -

165 165 -

244 244 (243) 2,841 2,598 -

(34) 3,835 3,801 34

1,652 570 414 327 238 19 46 3,266 12 (34) 13,129 13,107 165 165 34

Enterprise Florida Board Meetings | November 9, 2012

Financial Report

Enterprise Florida, Inc. Detail of Administered Activities by Program


Funds Received From State Funds In House 9/30/12

Contract Awarded Base Protection: Awarded in 11/12 103 Awarded in 10/11


102

Funds Paid To Recipients

18,950 117,400

18,950 117,400

92,557

18,950 24,843

104 105 106 107 108 109 110 111 112

Defense Infrastructure: Awarded in 12/13 Awarded in 11/12 Awarded in 10/11 Awarded in 09/10 Awarded in 08/09 Awarded in 07/08 Awarded in 06/07 Awarded in 05/06 Awarded in 04/05

400,000 1,181,245 5,000,000 1,367,325 10,600,000 2,782,000 5,314,500 3,498,165 3,550,000

445,311 3,367,797 1,385,457 10,600,000 2,113,344 3,635,718 3,203,404 3,020,000

200,000 2,163,155 921,321 10,400,000 1,375,589 3,533,729 3,199,713 2,567,380

245,311 1,204,642 464,136 200,000 737,755 101,989 3,691 452,620

Defense Reinvestment: Awarded in 11/12 114 Awarded in 10/11


113

850,000 850,000

850,000 850,000

181,773 774,809

668,227 75,191

115

Rural Development: Awarded in 10/11 Rural Infrastructure: Awarded in 10/11 Interest (payable to the State of Florida) Earned

587,500

587,500

534,022

53,478

116

1,100,000

958,062

846,974

111,088

117

37,217,085

31,152,943

26,791,022

2,424 4,364,345

118 Ending Balance

Enterprise Florida Board Meetings | November 9, 2012

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES


Consolidated Financial Statements For the Year Ended June 30, 2012

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES

Table of Contents
Page Independent Auditors Report CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Financial Position Consolidated Statement of Activities Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements SUPPLEMENTARY INFORMATION AND OTHER INDEPENDENT AUDITORS REPORTS Consolidating Statement of Financial Position Consolidating Statement of Activities Schedule of Activities by Consolidated Entity 24 25 26 3 4 5 6 23 12

Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 27 28 Independent Auditors Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Awards Program and State Financial Assistance Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and Chapter 10.650, Rules of the Florida Auditor General Schedule of Expenditures of Federal Awards and State Financial Assistance Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings and Corrective Action Plan

29 30 31 32 33 34 36 37

Independent Auditors' Report

To the Board of Directors, Enterprise Florida, Inc.: We have audited the accompanying consolidated statement of financial position of Enterprise Florida, Inc. and consolidated entities (the Organization), as of June 30, 2012, and the related consolidated statements of activities and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Organization's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Enterprise Florida, Inc. and consolidated entities as of June 30, 2012, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, Florida Sports Foundation, Inc., the Florida Sports Charitable Foundation Inc., and the Florida Black Business Investment Board, Inc. were merged into Enterprise Florida, Inc. during August 2011. As discussed in Notes 1 and 6, the financial statements include investments in venture capital partnerships and direct investments valued at $9,436,448 and $11,874,750, respectively, representing 23% of net assets at June 30, 2012, whose values have been estimated by the Organization in the absence of readily determinable market values. The Organizations estimates are based on information provided by the venture capital partnerships and the investment manager of the direct investments. Due to the inherent uncertainty of these estimates, these values may differ significantly from the values that would have been used had a readily market for these investments existed, and the differences could be material. In accordance with Government Auditing Standards, we have also issued our report dated September 17, 2012 on our consideration of the Organization's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The consolidating financial statements and schedule of activities by consolidated entity listed in the foregoing table of contents are presented for the purposes of additional analysis and are not a required part of the consolidated financial statements. The accompanying schedule of expenditures of federal awards and state financial assistance is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A133, Audits of States, Local Governments, and Non-Profit Organizations, and Chapter 10.650, Rules of the Florida Auditor General, and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Orlando, Florida September 17, 2012

CONSOLIDATED FINANCIAL STATEMENTS

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Consolidated Statement of Financial Position June 30, 2012

Assets

Cash and cash equivalents: Operating Limited as to use Due from State of Florida Accounts and loans receivable Loan receivable under the State Small Business Credit Initiative Due from Cypress Equity Fund, Ltd. Prepaid and other assets Leaseholds, furniture and equipment, net Florida Opportunity Fund Clean Energy Program loans receivable Florida Opportunity Fund investments in venture capital partnerships Florida Opportunity Fund direct investments Investment in limited partnership Total Assets

4,435,431 86,586,341 12,933,064 571,107 586,427 14,922 854,437 481,960 1,530,000 9,436,448 11,874,750 6,214 129,311,101

Liabilities and Net Assets Liabilities: Accounts and grants payable Accrued liabilities Escrow payable Deferred revenue Total Liabilities Net Assets: Unrestricted Temporarily restricted Total Net Assets Total Liabilities and Net Assets $

1,618,208 1,077,130 31,138,200 4,304,201 38,137,739

6,959,509 84,213,853 91,173,362 129,311,101

See notes to consolidated financial statements.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Consolidated Statement of Activities Year Ended June 30, 2012

Unrestricted Revenues: State operating assistance State Small Business Credit Initiative Capital grant to Florida Opportunity Fund, Inc. Private investment contributions Trade show revenue Federal grant assistance In-kind contributions Management and administration fees Net realized gain on investments Net unrealized gain on investments Other income Net assets released from restrictions Total Revenues Expenses: General and administrative Payroll and related costs Professional fees Grants to sub-recipients Depreciation Miscellaneous Total Expenses Change in Net Assets Before Acquisitions Excess of assets acquired over liabilities assumed in acquired entities Change in Net Assets Net Assets, Beginning of Year Net Assets, End of Year $

Temporarily Restricted

Total

15,074,302 1,425,000 838,327 206,237 204,822 265,638 7,007,657 25,021,983

7,429,000 11,252,499 8,779,873 272,699 634,407 330,000 267,277 630,573 574,314 (7,007,657) 23,162,985

22,503,302 11,252,499 8,779,873 1,425,000 1,111,026 634,407 536,237 204,822 267,277 630,573 839,952 48,184,968

8,156,033 7,493,330 4,959,510 3,974,302 278,542 2,504 24,864,221 157,762

23,162,985

8,156,033 7,493,330 4,959,510 3,974,302 278,542 2,504 24,864,221 23,320,747

157,762 6,801,747 6,959,509 $

2,478,340 25,641,325 58,572,528 84,213,853 $

2,478,340 25,799,087 65,374,275 91,173,362

See notes to consolidated financial statements.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Consolidated Statement of Cash Flows Year Ended June 30, 2012

Cash Flows From Operating Activities: Increase in net assets Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation Loss on disposal of assets Funding of venture capital partnerships investments Net unrealized gain from investments Proceeds from investment distributions Net realized gain from investments Equity in earnings of affiliate Changes in: Due from State of Florida Accounts and loans receivable Due from Cypress Equity Fund, Ltd. Prepaid and other assets Investment in limited partnership Accounts and grants payable Accrued liabilities Escrow payable Deferred revenue Net Cash Provided by Operating Activities Cash Flows From Investing Activities: Purchases of equipment Funding of loans receivable Funding of direct investments Repayment of loan receivable Distributions from Cypress Equity Fund, Ltd. Net Cash Used in Investing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

25,799,087

277,093 2,504 (2,895,631) (630,573) 484,638 (267,277) (1,499) 836,372 (905,335) (20,621) (388,815) 10,764 (1,407,532) (16,909) 274,866 565,203 21,716,335

(88,289) (2,695,000) (9,625,000) 1,165,000 7,926 (11,235,363) 10,480,972 80,540,800 $ 91,021,772

Classified in Consolidated Statement of Financial Position: Cash and cash equivalents - operating Cash and cash equivalents - limited as to use Cash and Cash Equivalents, End of Year Supplemental Schedule of Noncash Investing Activities: Conversion of loan to equity

4,435,431 86,586,341 91,021,772

1,000,000

See notes to consolidated financial statements.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies
Organization Enterprise Florida, Inc. ("Enterprise Florida") is a not-for-profit corporation created by Chapter 288, Florida Statutes and incorporated on February 18, 1993 as a public-private partnership responsible for leading Florida's statewide economic development efforts. Its mission is to facilitate job growth for Floridas businesses and citizens leading to a vibrant statewide economy. Enterprise Florida is a discretely presented component unit of the State of Florida (the State), included in state-wide financial statements, as it is legally separate but has a significant relationship with the State of Florida. All revenues in excess of expenditures remain committed to further the purpose of Enterprise Florida. On July 1, 2011, a new Florida Law became effective that required the Florida Sports Foundation, Inc., the Florida Sports Charitable Foundation, Inc., and the Florida Black Business Investment Board, Inc., which provide supporting services to the State, to be merged and/or transferred to Enterprise Florida. Subsequent to this legislation, mergers were consummated and Enterprise Florida became the sole member of the Florida Black Business Investment Board, Inc., the Florida Sports Foundation and the Florida Sports Charitable Foundation. The excess of assets acquired over liabilities assumed on the date of merger is separately presented on the consolidated statement of activities. Activities of the merged entities are included on the consolidated statement of activities subsequent to the date of merger. The accompanying consolidated financial statements include the accounts of Enterprise Florida, and the following organizations controlled by Enterprise Florida: Cypress Equity Fund Management Corporation, Florida Sports Foundation and Florida Opportunity Fund, Inc. (the FOF) (collectively, the Organization). All significant intercompany accounts and transactions have been eliminated. Cypress Equity Fund Management Corporation was incorporated on October 5, 1995 as a not-forprofit corporation for the purpose of acting as the general partner of Cypress Equity Fund Limited Partnership, a private partnership, and serving as administrator of a private group trust. Enterprise Florida is the sole member of Cypress Equity Fund Management Corporation and controls its majority voting interest through membership of its Board of Directors. The Florida Sports Foundation, Inc. and Florida Sports Charitable Foundation, Inc. promote and develop sports related industries, amateur sports activities, and physical fitness. These non-profit corporations merged into the Organization on August 29, 2011 pursuant to new legislation contained in Florida Statute 288.901, and now comprise the Sports Development division of Enterprise Florida. The mergers were accounted for under the acquisition method, which provides that assets acquired and liabilities assumed be recognized at fair value on the date of the merger and that operations be presented for the period subsequent to the merger date. For this purpose, fair value approximated the cost basis of assets acquired and liabilities assumed. There was no consideration transferred by Enterprise Florida in connection with the mergers. Subsequent to the mergers, the Florida Sports Charitable Foundation was dissolved and its operations became part of the Florida Sports Foundation, Inc. (the Foundation)

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
As a result of 2011 legislation, Florida Black Business Investment Board, Inc. was merged into Enterprise Florida on August 23, 2011, with Enterprise Florida as its sole member and transferred similar to the Foundation. This merger was accounted for under the acquisition method, fair value approximated cost basis, and no consideration was transferred by Enterprise Florida. Subsequent to the mergers, the Minority Business Development Board was dissolved and its operations became part of the Enterprise Florida Minority and Small Business Entrepreneurship and Capital Division. FOF was created on July 13, 2007 by Enterprise Florida pursuant to the Florida Capital Formation Act under Florida Statutes 288.9621-288.9625. Enterprise Florida facilitated the creation of FOF, is its sole member, and controls its majority voting interest through appointment of its Board of Directors. Enterprise Florida also provided FOFs initial capital through funds received from the State of Florida Department of Economic Opportunity. FOF is not a public corporation or instrumentality of the State. FOFs initial purpose was to provide seed capital and early stage venture equity capital for emerging companies in the State, including, without limitation, enterprises in life sciences, information technology, advanced manufacturing processes, aviation and aerospace, and homeland security and defense, as well as other strategic technologies. During fiscal 2010, pursuant to an agreement with the Florida Energy and Climate Commission, FOF began to receive and invest capital for the Clean Energy Investment Program. During fiscal 2012, FOF began its role of receiving and investing capital for the Florida Venture Capital Program under the State Small Business Credit Initiative. Enterprise Florida is related through common purpose, Florida Statute or management, with Florida Development Finance Corporation and Cypress Equity Fund, Ltd., entities which are not included in these consolidated financial statements. Enterprise Florida provides management and accounting services to these related parties, which may not always be conducted on an arm's-length basis (See Note 9). Due to the 2011 legislation, Enterprise Florida also has operating relationships with Visit Florida, through contracting for tourism-related marketing services and governing board appointments, and with Space Florida, where governmentally appointed Directors on Enterprise Floridas Board of Directors also serve as Directors of Space Florida. The 2011 legislation also affected Enterprise Floridas primary State partner, the Office of Tourism, Trade and Economic Development, which was dissolved and its roles and responsibilities were assigned to a new state agency, the Department of Economic Opportunity (DEO). DEO was formed to focus on improving the economic development process by eliminating roadblocks and redundancies that have frustrated business growth in the past. This new agency includes all or parts of the former Department of Community Affairs the Agency for Workforce Innovation and oversight of public private partnerships through the Division of Strategic Business Development.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
Enterprise Florida operates through divisions, each headed by a senior officer who reports to the chief executive officer. These are:

Administrative Support - provides all administrative services to the Organization such as the
executive office, human resources, information technology and accounting.

Business Development - responsible for coordinating national and international business


development by managing projects to increase capital investment and jobs in Florida. It facilitates the most effective use of business incentives and assists existing business expand jobs and capital investment.

International Trade and Development focuses on international trade programs to expand the number of Florida companies exporting Florida products and services. It coordinates Team Florida events for marketing and promotion of Florida for trade and investment. It also manages key international relationships to improve Floridas international business and global reputation in the following countries: Brazil, Canada, China, Czech Republic, Germany, Israel, Japan, Mexico, France, South Africa, Spain, Taiwan and the United Kingdom. Marketing, Information, and Communications - responsible for establishing and building a probusiness image for the state by identifying and marketing Florida to targeted industry decision makers and business leaders. It develops, coordinates, and implements a statewide strategic plan for Florida brand recognition. The division also manages all corporate communications. Minority and Small Business, Entrepreneurship and Capital - responsible for identifying resource
providers for underserved minority and small businesses. It also administers special capital programs such as those of FOF, and supports the Florida Development Finance Corporation, Cypress Equity Fund Management Corporation, Cypress Equity Fund Limited, and Cypress Equity Fund Group Trust.

Sports Development works to strengthen the economic impact of sports events through grants and identifies business expansion or development opportunities linked to sports development. It also develops, fosters and coordinates services and programs for amateur sports through the Sunshine State Games and the Florida Senior Games State Championships. Sports Development is doing business as Florida Sports Foundation, Inc. Strategic Partnerships maintains and enhances relationships with primary partners and
stakeholders to strengthen support of economic development initiatives and increase job growth. It maintains and expands investor support and Board participation. It assists communities to increase their competitiveness when vying for job creation projects. It retains and maximizes opportunities to enhance the Department of Defense investment in Florida through management of defense grant programs and the Florida Defense Support Task Force activities.

Tourism Marketing works to promote travel and drive visitation to and within Florida. This role is contracted with Visit Florida, which serves as the sole statewide destination marketing organization representing the entire Florida tourism industry.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as temporarily restricted (see Note 9) or unrestricted net assets. Cash and Cash Equivalents Cash and cash equivalents include the operating accounts of Enterprise Florida and cash and cash equivalents limited as to use. The Organization considers all highly liquid financial investments purchased with an original maturity date of three months or less to be cash equivalents. The Organization places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for substantially all depository accounts and temporarily provides unlimited coverage through December 31, 2012 for certain qualifying and participating non-interest bearing transaction accounts. During the year, the Organization from time to time may have had amounts on deposit in excess of the insured limits. As of year-end, the Organization had a balance of $90,498,836 on deposit in excess of insured amounts; $40,331,610 of which were FOF deposits. Bank deposits include $41,725,163 held for the State of Florida. Management believes the associated risk is minimized by placing such assets with quality financial institutions. The Organization has not experienced any losses on such accounts. Cash and Cash Equivalents Limited as to Use In order to ensure compliance with grant documents and/or performance contracts, Enterprise Florida has limitations on funds held in escrow and for grant funds received in advance of expenditure. In addition, cash and cash equivalents for FOF and the Foundation are limited for specific use by each entity in accordance with their designated purpose and contractual arrangements. Leaseholds, Furniture and Equipment Leaseholds, furniture and equipment are stated at cost, if purchased, or estimated market value at date of receipt, if acquired by gift. Depreciation is provided using the straight-line method over the estimated economic useful lives of the related assets which are as follows: Leasehold improvements Office furniture Office equipment Computers and software 5-7 years 5-7 years 5 years 3-5 years

Additions or improvements in excess of $500 for the Foundation and $1,000 for the other entities, with an estimated useful life exceeding a year, are capitalized. Repairs and maintenance costs are charged to expense as incurred.

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
Investments in Venture Capital Partnerships FOF has investments in six partnerships, which invest in venture capital limited partnerships. These investments are stated at estimated fair value based on net asset value information received from the limited partnerships. Direct Investments Direct investments are provided through the FOF Clean Energy Investment Program and Florida Venture Capital Program and are presented in the accompanying financial statements at estimated fair value, as determined by management based on information provided by the investment manager. The values assigned to direct investments are based on available information and do not necessarily represent amounts that might ultimately be realized. Such amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated. Direct investments consist of $11,374,750 in four privately-held companies of the Clean Energy Investment Program and $500,000 in one privately-held company of the Florida Venture Capital Program. The nature of these investments provides risk of loss due to most being in early stages of operations and in the portion of the energy industry not yet well established. Investment in Limited Partnership Cypress Equity Fund Management Corporations ownership interest in Cypress Equity Fund, Ltd., (the Limited Partnership) is accounted for under the equity method, as more fully described in Note 7. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported time period. Actual results could differ from those estimates. Compensated Absences Vacation pay is accrued as earned by employees. Unused accumulated vacation pay is paid upon an employee's separation from service up to a maximum of 120 hours. Deferred Revenue Enterprise Florida recognizes its pass-through grants to sub-recipients in the consolidated statement of activities as the amounts that have been requested for reimbursement by the sub-recipients. Enterprise Florida records deferred revenue for the difference in the amount received from the State of Florida and the amount requested for reimbursement by the sub-recipients as this amount is considered a conditional promise to give and, therefore, does not meet the criteria for revenue recognition.

10

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
State Operating Assistance Revenue State operating assistance revenue represents State appropriations for the Organizations operating funds, consisting of the following: unconditional promises to give that are available for unrestricted use; unconditional promises to give that are temporarily restricted for program use; and pass-through grants administered by Enterprise Florida that are recognized as revenue and expense when passthrough sub-recipients incur associated costs. State Small Business Credit Initiative Revenue During fiscal 2012, Enterprise Florida began to receive funding under an agreement with the DEO for the State Small Business Credit Initiative (SSBCI). The SSBCI is available to qualifying Florida small businesses to increase available capital by providing direct investments and other instruments, so long as the proposed activities are consistent with the purpose of the funding. The SSBCI is directly funded by the DEO in total appropriations of $97,662,349 from a contract awarded by DEO through Title III of the Small Business Jobs Act of 2010. Of this amount, $85,723,033 has been allocated to Enterprise Florida, including $42,040,133 to fund the Small Business Loan Program administered by Enterprise Florida, $41,907,900 to be passed through to FOF for the Florida Venture Capital Program and $1,775,000 in administrative funding. State Small Business Credit Initiative revenue represents restricted use funding received through the SSBCI funding agreement, including $10,000,000 of initial capital contribution and funding to support investing and loan activity and administrative costs. In addition to revenue recognized, $2,090,000 has been received by Enterprise Florida and paid in an agency capacity to Florida Export Finance Corporation. Private Investment Contributions Private investment contributions made to Enterprise Florida are recognized as revenues in the period received. Private investment contributions to Enterprise Florida are available for unrestricted use by Enterprise Florida whereas capital contributions provided to Enterprise Florida by DEO are for unrestricted use within the SSBCI. Private investment contributions that are restricted by the donor are reported as an increase in unrestricted net assets if the restriction expires in the reporting period in which the support is recognized. Other donor restricted contributions are reported as an increase in temporarily restricted net assets, depending on the nature of the restriction. When a restriction expires, temporarily restricted net assets are reclassified to unrestricted net assets. Conditional promises to give are not recognized until they become unconditional; that is, when the conditions on which they depend are substantially met. In-kind Contributions Donated goods and services are recorded at their fair market value at the date of receipt by the Organization. Contributions of donated services that create or enhance non-financial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at fair value in the period received. Contributions of those services not meeting those specified criteria are not recorded in the consolidated financial statements. In-kind contributions recognized in the statement of activities for the year ended June 30, 2012 consisted primarily of foreign office locations, advertising and publications used for promoting business and sports development in the State.

11

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 1 - Summary of Significant Accounting Policies (continued)
Advertising Costs Advertising Costs are expensed when incurred and totaled $796,995 for the year ended June 30, 2012. Excess of Assets Acquired Over Liabilities Assumed The excess of assets acquired over liabilities assumed from the Florida Black Business Investment Board, Inc., Florida Sports Foundation, Inc. and Florida Sports Charitable Foundation Inc. is presented as a $2,478,340 change on the Organizations statement of activities. The portion related to the excess of assets acquired over liabilities assumed for the Florida Black Business Investment Board Inc. was $316,665 and the portion related to the excess of assets acquired over liabilities assumed for the Florida Sports Foundation, Inc. and Florida Sports Charitable Foundation, Inc. collectively was $2,161,675. Income Tax Status The Organization has been recognized by the Internal Revenue Service (IRS) as exempt from federal income tax on related income under Internal Revenue Code (IRC) Section 501(a), consisting of organizations described in Section 501(c)(3). The Organization is also exempt from state income taxes on related income pursuant to Chapter 220.13 of the Florida Statutes. Therefore, a provision for income taxes has not been included in the accompanying consolidated financial statements. The Organizations policy is to record a liability for any tax position taken that is beneficial to the Organization, including any related interest and penalties, when it is more likely than not the position taken by management will be overturned by a taxing authority upon examination. Management believes there are no such positions as of June 30, 2012 and, accordingly, no liability has been accrued. The Organization is no longer subject to tax examinations for years prior to 2009.

12

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 2 - Cash and Cash Equivalents Limited as to Use
The Organizations cash and cash equivalents limited as to use consist of the following as of June 30, 2012:

Enterprise Florida Escrow Programs administered by Enterprise Florida FL Defense Support Task Force State Small Business Credit Support Initiative Rural Strategic Marketing Small Business Technology Growth Fund Florida International Business Expansion Initiative Military Base Protection Minority Business Development Technology related programs Pass through grants administered by Enterprise Florida Funds restricted for grant programs Total Enterprise Florida Florida Opportunity Fund, Inc. Florida Sports Foundation, Inc.

31,138,200 2,645,732 1,832,014 1,350,776 922,783 656,044 322,304 272,657 82,724 3,982,637 43,205,871 40,556,291 2,824,179

86,586,341

Note 3 - Due From State of Florida


Amounts due from State of Florida consist of $12,933,064 at June 30, 2012 under various contracts administered by the DEO, including $8,342,499 receivable under the State Small Business Credit Initiative.

Note 4 - Accounts and Loans Receivable


Accounts and loans receivable consists of private investment contributions, trade show events and unsecured loans to three borrowers with 5% interest payable upon loan maturity, in fiscal 2016. The Organization also has loans receivable under its State Small Business Credit Initiative Program and Clean Energy Investment Program. Management has determined that an allowance for doubtful amounts is not necessary.

13

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 5 - Leaseholds, Furniture and Equipment
Leaseholds, furniture and equipment consist of the following as of June 30, 2012:
Leasehold improvements Office furniture Office equipment Computers and software Less accumulated depreciation $ $ 354,055 407,920 224,738 612,556 1,599,269 (1,117,309) 481,960

Note 6 - Investments in Venture Capital Partnerships and Direct Investments


Investments in venture capital partnerships and direct investments are provided through three programs administered through FOF, including a Fund of Funds program and two direct investment programs. The Fund of Funds program represents the investments in venture capital partnerships, initially funded by $29,500,000 of State appropriations subject to Florida Statute 288.9624 (the Statute). The Statute provides that FOF may invest this initial funding only in seed and early stage venture capital/angel funds that have experienced managers or management teams with demonstrated experience, expertise, and a successful history in the investment of venture capital funds, focusing on opportunities in Florida. FOF may not invest initial Fund of Funds capital in individual businesses. While not precluded from investing in venture capital funds that have investments outside of Florida, FOF must require a venture capital fund to show a record of successful investment in Florida, to be based in Florida, or to have an office in Florida staffed with a full-time, professional venture investment executive in order to be eligible for investment. Any venture capital fund must agree to match dollar-for-dollar the amount contributed by FOF and invest those monies into Florida businesses. Should FOF be dissolved at some point, remaining assets funded by State appropriations shall revert to the DEO. Subsequent to initial capital funding, FOF has also been empowered by the Statute to make direct investments, including loans, in individual businesses and infrastructure projects. To the extent such capital is received, direct investments must be made in Florida infrastructure projects or businesses that are Florida-based or have significant business activities in Florida and operate in technology sectors that are strategic to Florida, including, but not limited to, enterprises in life sciences, information technology, advanced manufacturing processes, aviation and aerospace, and homeland security and defense, as well as other strategic technologies. Investments in Venture Capital Partnerships FOF investments in venture capital partnerships consist of six partnerships that invest in energyrelated and life sciences limited partnerships, presented in the accompanying financial statements at estimated fair value based on net asset value per share. Each of the investments made under the Organizations Fund-of-Funds Program are limited life limited partnerships (or other limited liability vehicles) that provide minimal redemption opportunities. Liquidity is achieved from the partnership through distributions in the form of cash and stock.

14

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 6 - Investments in Venture Capital Partnerships and Direct Investments (continued)
The term of each Fund-of-Funds investment is stated in its limited partnership agreement, as amended, and ranges from approximately 10 to 12 years, including any provisions for extensions. As of June 30, 2012, the Fund-of-Funds investments range in age from approximately 2 months to 39 months and the estimated remaining life of such investments range from approximately 8 years to 12 years. Each Fund-of-Funds investment term and estimated remaining life has been calculated based on its limited partnership agreement, including any term extensions effective as of June 30, 2012. A Fund-of-Funds investment may liquidate before its stated termination date or may require additional term extensions to complete its liquidation in an orderly manner. Fund-of-Funds investment term extensions are implemented in accordance with the respective limited partnership agreement for each investment. As permitted, fair value for each Fund-of-Funds investment is determined by FOF based on its proportionate share of the underlying fair value of the net assets of the limited funds, derived from FOFs ownership percentage and audited financial statements provided by each investee. Direct Investments The Clean Energy Investment Program FOF has an agreement (the Clean Energy Agreement) with the Florida Energy and Climate Commission (the Commission), or successor, to administer the Clean Energy Investment Program. The Clean Energy Investment Program was created in 2011 and is available to qualifying Florida businesses with direct investments in three primary areas of focus: 1) facility and equipment improvement with energy-efficient and renewable energy products, 2) acquisition or demonstration of renewable energy products and 3) process improvement of existing production, manufacturing, assembly or distribution of operations to increase energy efficiency or reduce consumption. The direct investments may consist of debt and other instruments, so long as the proposed activities are consistent with the three areas of focus described above. The Clean Energy Investment Program is directly funded by State of Florida appropriations in the amount of $36,089,000 from a grant awarded by the United States Department of Energy through the American Recovery and Reinvestment Act. As of June 30, 2012, FOF has cumulative capital contributions of $34,943,665 for this program, of which $34,825,152 has been received. Program funding under the Clean Energy Agreement is required to be segregated from existing monies provided by the State or other existing or future contributors, and initial funding is required to be deposited in an interest bearing account. Ninety percent of the proceeds from the Commission ($32,480,100) is required to be invested in accordance with provisions of the preceding paragraph. The remaining ten percent ($3,608,900) is for use in paying administrative costs and expenses. Administrative costs and expenses included an annual fund manager fee equivalent to 3% of the program funding for fiscal 2011 and 2012 and allowable grantee expenses, including legal, accounting, insurance, and other necessary expenses, up to 4% of program funding. To the extent investment program results provide sufficient capital, FOF is contingently liable for additional fund manager fees of up to 3% of program funding annually, calculated cumulatively, plus a fund manager success fee of 30% of the amount that gross proceeds exceed contributed capital, upon the disposition of, or distribution from, each program asset. Interest earned and return on investments may be retained by FOF for additional commitments, fund manager fees, and allowable grantee expenses of the Clean Energy Investment Program.

15

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 6 - Investments in Venture Capital Partnerships and Direct Investments (continued)
The Clean Energy Agreement is set to terminate on March 31, 2025; however, the Commission has the option to renew on the same terms and conditions for an additional five year term. Upon termination of the Clean Energy Agreement, program capital shall be returned to the Commission. Florida Venture Capital Program During fiscal 2011, Enterprise Florida entered into an agreement (the DEO Agreement) with the DEO for the State Small Business Credit Initiative (SSBCI). The Florida Venture Capital Program was one of several programs created utilizing SSBCI funding. The Florida Venture Capital Program is available to qualifying Florida businesses by providing direct investments to increase the amount of capital available to small businesses. The direct investments may consist of debt and other instruments, so long as the proposed activities are consistent with the purpose of the funding. The expiration date of the DEO Agreement is March 31, 2017, upon which all direct investment funding is to be completed. There are no contractual stipulations with respect to return of the funding, should the Florida Venture Capital Program be dissolved at some point. The Florida Venture Capital Program has been designated to transact and account for the portion of SSBCI funding, not to exceed $41,907,900, for the DEO Agreement. Funding for the program originates with the federal government through Title III of the Small Business Jobs Act of 2010 and is passed through DEO and Enterprise Florida to FOF as direct investments are entered into by FOF. Program funding under the DEO Agreement is required to be segregated from existing monies provided by the State or other existing or future contributors, and initial funding is required to be deposited in an interest bearing account. Quarterly reimbursements of administrative costs up to $88,750 will be made by DEO upon proper submission of quarterly reports by the Organization from October 1, 2011 to September 30, 2016, for a total administration fee to not exceed $1,775,000 over the life of the program. Administrative costs and expenses include legal, accounting, insurance, other necessary expenses and a fund manager fee of up to .075% of program funding, of which $56,250 is payable quarterly and reimbursed through quarterly receipts from DEO through Enterprise Florida. To the extent investment program results provide sufficient capital, FOF is contingently obligated for additional fund manager fees of up to $258,058 per quarter, calculated cumulatively, plus a fund manager success fee of 30% of the amount that gross proceeds exceed contributed capital. Such fees would be payable upon the disposition of, or distribution from, each program asset. Interest earned on the interest bearing account and return on investments may be retained by the Organization for additional commitments, fund manager fees, and allowable expenses of the Florida Venture Capital Program. Fair Value Hierarchy The fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, provides three levels of inputs used to measure fair value. Because of the inherent uncertainty of valuations, estimated fair values may differ significantly from the values that would have been used had a ready market for these investments existed.

16

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 6 - Investments in Venture Capital Partnerships and Direct Investments (continued)
FOF classifies its investments into a hierarchical disclosure framework as follows: Level I - Securities traded in an active market with available quoted prices for identical assets as of the reporting date. Level II - Securities not traded on an active market but for which observable market inputs are readily available or Level I securities where there is a contractual restriction as of the reporting date. Level III - Securities not traded in an active market and for which no significant observable market inputs are available as of the reporting date. The cost basis of FOF investments in venture capital partnerships and direct investments was $8,426,415 and $11,625,000, respectively, as of June 30, 2012. The following table summarizes the fair value as of these investments as of June 30, 2012, based on the level of input utilized to measure fair value:

Fair Value Level I Level II Level III Total investments $ 21,311,198 21,311,198

Percent of Net Assets 23% 23%

The following table presents a reconciliation of the beginning and ending balances of the fair value measurements using significant unobservable inputs (Level III):

Venture Capital Partnerships Opening Balance at 7/1/11 Total gains or losses (realized and unrealized) included in changes in net assets Purchases Sales Transfers in and / or out of Level III Ending Balance at 6/30/12 The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to assets still held at the reporting date $ $ 6,127,605 897,850 2,895,631 (484,638) 9,436,448

Direct Investments $ 1,249,750 10,625,000 $ 11,874,750

630,573

17

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 7 Investment in Limited Partnership
Cypress Management is the general partner of Cypress Equity Fund, Ltd. (the "Limited Partnership"). Condensed financial information for the limited partnership is as follows:
Schedule of Financial Position Information December 31, 2011 Assets Liabilities Partners' capital Cypress Management's capital account balance $ $ $ 1,152,679 91,570 1,061,109 6,214

Cypress Management's capital account balance is included in other assets in the consolidated statement of financial position and includes activity occurring between the date of the Limited Partnership's financial statements and Cypress Managements year ended June 30, 2012.
Schedule of Operations Information Year Ended December 31, 2011 Revenues Expenses Net increase in partners capital Cypress Management's change in earnings $ $ $ 232,429 83,190 149,239 1,500

Cypress Management's change in earnings is included in other expenses in the consolidated statement of activities and includes activity occurring between the date of the Limited Partnership's financial statements and Cypress Managements year ended June 30, 2012. The Limited Partnership agreement, as amended, terminated on December 31, 2009. However, Cypress Management intends to extend its life, on a year by year basis, for up to an additional three years beyond December 31, 2009 in order to liquidate its investment portfolio in an orderly manner.

18

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 8 Escrow Payable
The State has awarded a total of $64,771,034 to twenty-four companies under the States incentive programs through June 30, 2012. These awards were intended to fund business projects to further job creation. DEO, along with the consent of these companies, appointed Enterprise Florida as the escrow agent to hold these funds for disbursement to the companies in accordance with the States incentive programs. Through June 30, 2012, Enterprise Florida paid $17,307,500 to nine companies that certified to DEO they had met their contract requirements under the program. Enterprise Florida has returned $16,325,334 to DEO for three companies that were not able to complete their program requirements. Enterprise Florida recorded the remaining $31,138,200 as an escrow payable at June 30, 2012.

Note 9 Temporarily Restricted Net Assets


The Organization classifies Enterprise Florida net assets as temporarily restricted based on agreements with the State, wherein funding may not be utilized for the general purpose of Enterprise Florida, and classifies net assets of FOF and the Foundation as temporarily restricted since their use is specifically limited for the purposes of those consolidating entities. Temporarily restricted net assets consist of the following as of June 30, 2012:

Enterprise Florida: State Small Business Credit Initiative Florida Defense Support Task Force Rural Strategic Marketing Small Business Technology Growth Fund Florida International Business Expansion Initiative Military Base Protection Minority Business Development Technology related programs Florida Opportunity Fund, Inc. Florida Sports Foundation, Inc. $

$10,600,090 3,892,843 1,350,776 1,075,783 656,044 323,021 254,753 82,724 18,236,034 63,636,543 2,341,276 84,213,853

19

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 10 State Operating Assistance Revenue
Performance contracts and pass-through grants with the State of Florida for the year ended June 30, 2012 are as follows:

Operating funds provided to Enterprise Florida, Inc. Pass-through grants administered by Enterprise Florida, Inc.: Visit Florida Defense Infrastructure Defense Reinvestment Military Base Protection Florida Trade and Exhibition Center (CAMACOL) SE Japan Association/Florida Korea Economic Coop. Comm. Regional Rural Development Rural Infrastructure Total Pass-through grants Web Portal unrestricted revenue Less: Pass-through grants not presented as activities Total unrestricted state operating assistance Other programs administered by Enterprise Florida, Inc.: Military Base Protection Program Minority Business Development Florida Defense Support Task Force Florida Sports Foundation, Inc. Total temporarily restricted revenue Total State operating assistance revenue

$ 11,100,000 34,899,209 2,540,681 725,319 38,866 350,000 200,000 355,450 313,686 39,423,211 300 (35,449,209) 15,074,302

65,099 200,000 5,000,000 5,265,099 2,163,901 7,429,000 $ 22,503,302

Pass-through grants amounting to $35,449,209 have been excluded from recognition in the consolidated statement of activities because they represent agency transactions which have been line item appropriated in the State budget. Other pass-through grants amounting to $3,974,002 are reflected as both revenues and expenses in the consolidated statement of activities as they meet the criteria for recognition as activities. The contract with the State of Florida requires Enterprise Florida to return all investment income earned on state pass-throughs and grant funds to the State of Florida. As these funds must be returned to the State, Enterprise Florida does not record the revenue associated with these earnings. Instead, a liability to the State is recorded as interest is earned.

20

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 11 - Retirement Plans
Enterprise Florida sponsors a 401(K) defined contribution retirement plan (the Plan) covering all its employees that are age 21 or older. It is subject to the provisions of the Employee Retirement Security Act of 1974 (ERISA). Participants may contribute up to 100% of compensation, as defined in the Plan, but may not exceed the maximum amount allowable by the Internal Revenue Code (IRC), which is currently $16,500. Enterprise Floridas contributions to the Plan beyond the 3% safe harbor are discretionary. Currently Enterprise Florida matches 25% of the first 4% of wages the employee contributes and makes an additional contribution equal to 10% of employee wages (3% of which is designated as safe harbor and is not discretionary). Investments of contribution are self-directed by participants within investments provided for by the Plan. Participants are immediately vested in their contributions and earnings thereon. Vesting in Enterprise Floridas contributions is based on years of service. A participant vests at 33.33% annually until fully vested upon completion of three years of credited service. Any participant employed at the date of total and permanent disability, death or the attainment of normal retirement age, as defined, is deemed to be 100% vested. Contributions made toward the safe harbor are immediately vested. Enterprise Florida contributed a total of $581,105 to the Plan and all expenses related to the Plan were paid from forfeitures during the year ended June 30, 2012. The Foundation has a defined contribution money purchase pension plan covering all of the full-time employees it had prior to the merger with Enterprise Florida. On the date of merger, all Foundation employees became employees of Enterprise Florida and members of the Enterprise Florida Plan. No further contributions have been made to the Foundations defined contribution money purchase pension plan since the date of merger. Investments are self-directed by participants and accounts vest over a six year period.

Note 12 - Related Party Transactions


The Organization has considerable activity with the State, as presented on the consolidated financial statements and throughout notes to the consolidated financial statements. Management fees charged by Enterprise Florida to Cypress Equity Fund, Ltd. and Florida Development Finance Corporation were $15,000 and $30,000, respectively, during the year ended June 30, 2012. Enterprise Florida recorded $1,425,000 of contributions from entities that had employees on the Board of Directors during the year ended June 30, 2012.

Note 13 - Commitments and Contingencies


Operating Lease Commitments The Organization is obligated under noncancelable operating leases for office facilities and equipment expiring from 2012 through 2017. These leases generally provide for fixed annual rentals; however, the three leases for office space provide for annual increases of approximately 3%. One of these leases, expiring in 2013, contains a renewal option under which the Organization may extend the lease term for 5 years. 21

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 13 - Commitments and Contingencies (continued)
At June 30, 2012 future minimum lease payments under noncancelable operating leases are as follows:

Year Ending June 30, 2013 2014 2015 2016 2017

725,876 228,660 168,279 141,490 35,129

$ 1,299,434
The Organizations rental expense totaled $1,154,865 for the year ended June 30, 2012. Capital Investment Commitments FOF has committed $27,000,000 to eight limited partnerships in Fund-of-Funds investments, of which $18,096,869 remains subject to additional capital calls as of June 30, 2012. In addition to direct investments made and presented on the Statement of Financial Position at June 30, 2012, FOF had formal contracts with eligible investees totaling up to $6,870,000 of additional amounts to be invested under the Clean Energy Investment Program, subject to certain conditions and at the discretion of FOF. Remaining available funding for the Clean Energy Investment Program had been approved by FOFs board of directors and the State for direct investments, pending finalization of terms with investees, at June 30, 2012. Grants and Contracts Contingency Grants and contracts require the fulfillment of certain conditions set forth in the agreements, including certain match requirements with which the Organization did not fully comply during the year ended June 30, 2012. Failure to fulfill or comply with the conditions could result in the return of funds to the grantor. Although it is a possibility, management considers the contingency remote. Investment Manager Fee Contingency FOF is contingently obligated for additional investment manager fees, including administrative fees and success fees, related to the Clean Energy Investment Program and the Florida Venture Capital Program, subject to investment performance as further discussed in Note 6.

22

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements Year Ended June 30, 2012 Note 14 Functional Expenses
The Organizations activities include numerous functions, summarized as follows:

Program Services: International Trade and Development Strategic Partnerships Business Development Marketing, Information, and Communications Minority Business Development Supporting Services - General and Administrative Cypress Management Program Services Florida Sports Foundation Program Services Florida Opportunity Fund Program Services Total Expenses

$ 6,040,871 5,508,325 2,529,415 1,992,130 274,312 4,432,967 71,274 2,464,220 1,550,707 $ 24,864,221

Note 15 Concentrations
For the year ended June 30, 2012, the Organization received approximately 70% and 18% of its revenue from the Florida Department of Economic Opportunity and Florida Energy and Climate Commission, respectively.

Note 16 Subsequent Events


Subsequent events have been evaluated through September 17, 2012, which is the date the financial statements were available to be issued. Subsequent to year-end the Clean Energy Investment Program paid $4,499,991 and the Florida Venture Capital Program paid $6,830,006 to fund additional direct investments.

23

SUPPLEMENTARY INFORMATION AND OTHER INDEPENDENT AUDITORS REPORTS

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Consolidating Statement of Financial Position June 30, 2012

Enterprise Florida Eliminations

Cypress Equity Fund

Florida Sports Foundation

Florida Opportunity Fund

Total

Assets:

Cash and cash equivalents Operating Limited as to use Due from State of Florida Due from Enterpise Florida Inc. Accounts and loans receivable Loan receivable under the State Small Business Credit Initiative Due from Cypress Equity Fund, Ltd. Prepaid and other assets Leaseholds, furniture and equipment, net Clean Energy Investment Program loans receivable Investments in venture capital partnerships Direct investments Investment in limited partnership $ 4,346,812 43,205,871 12,554,999 548,482 586,427 705,171 462,842 62,410,604 $ 133,627 $ 3,175,938 $ 63,779,550 $ $ 88,619 11,790 14,922 12,082 6,214 $ 2,824,179 259,552 60,446 12,643 19,118 $ 40,556,291 118,513 139,007 124,541 1,530,000 9,436,448 11,874,750 $ $

(139,007) (49,611) (188,618)

4,435,431 86,586,341 12,933,064 571,107 586,427 14,922 854,437 481,960 1,530,000 9,436,448 11,874,750 6,214 $ 129,311,101

Total Assets

Liabilities and Net Assets

Liabilities: Accounts and grants payable Accrued liabilities Escrow payable Deferred revenue Total Liabilities $ 819,907 1,077,130 31,138,200 4,304,201 37,339,438 $

9,250 9,250

834,662 834,662

143,007 143,007

(188,618) (188,618)

1,618,208 1,077,130 31,138,200 4,304,201 38,137,739

Net Assets: Unrestricted Temporarily restricted Total Net Assets $

6,835,132 18,236,034 25,071,166 62,410,604 $

124,377 124,377 133,627 $

2,341,276 2,341,276 3,175,938 $

63,636,543 63,636,543 63,779,550 $

(188,618) $

6,959,509 84,213,853 91,173,362 129,311,101

Total Liabilities and Net Assets

24

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Consolidating Statement of Activities Year Ended June 30, 2012

Unrestricted All Entities Eliminations Eliminations Total Unrestricted Enterprise Florida Total Temporarily Restricted

Temporarily Restricted Florida Florida Sports Opportunity Foundation Fund

Total

Revenues: State operating assistance State Small Business Credit Initiative Capital grant to Florida Opportunity Fund, Inc. Federal grant assistance Private investment contributions In-kind contributions Management and administration fees Trade show revenue Net realized gain on investments Net unrealized gain on investments Other income Net assets released from restrictions Total Revenues $ 15,074,302 1,425,000 206,237 793,010 838,327 265,638 7,646,664 26,249,178 $ (588,188) (639,007) (1,227,195) $ 15,074,302 1,425,000 206,237 204,822 838,327 265,638 7,007,657 25,021,983 $ 5,265,099 11,252,499 634,407 28,449 (3,073,549) 14,106,905 $ 2,163,901 330,000 272,699 345,409 (2,932,408) 179,601 $ 639,007 8,779,873 267,277 630,573 200,456 (1,640,707) 8,876,479 $ (639,007) 639,007 $

7,429,000 11,252,499 8,779,873 634,407 330,000 272,699 267,277 630,573 574,314 (7,007,657) 23,162,985

22,503,302 11,252,499 8,779,873 634,407 1,425,000 536,237 204,822 1,111,026 267,277 630,573 839,952 48,184,968

Expenses: Payroll and related costs General and administrative Grants to sub-recipients Professional fees Depreciation Miscellaneous Total Expenses 7,961,518 8,656,033 3,974,302 5,218,517 278,542 2,504 26,091,416 157,762 157,762 14,106,905 179,601 (468,188) (500,000) (259,007) (1,227,195) 7,493,330 8,156,033 3,974,302 4,959,510 278,542 2,504 24,864,221 -

8,876,479

7,493,330 8,156,033 3,974,302 4,959,510 278,542 2,504 24,864,221 23,162,985 23,320,747

Change in Net Assets Before Acquisitions

Excess of assets acquired over liabilities assumed in acquired entities 157,762 157,762 14,423,570 316,665

2,161,675 2,341,276

8,876,479

2,478,340 25,641,325

2,478,340 25,799,087

Change in Net Assets

Net Assets, Beginning of Year $ 6,959,509 $ $ 6,959,509

6,801,747

6,801,747

3,812,464 $ 18,236,034 $

2,341,276

54,760,064 $ 63,636,543 $

58,572,528 $ 84,213,853 $

65,374,275 91,173,362

Net Assets, End of Year

25

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Schedule of Activities by Consolidated Entity Year Ended June 30, 2012

Enterprise Florida Eliminations Total

Cypress Equity Fund

Florida Sports Foundation

Florida Opportunity Fund

Revenues: State operating assistance State Small Business Credit Initiative Capital grant to Florida Opportunity Fund, Inc. Federal grant assistance Private investment contributions In-kind contributions Management and administration fees Trade show revenue Net realized gain on investments Net unrealized gain on investments Other income Total Revenues $ 108,822 1,641 110,463 20,339,401 11,252,499 634,407 1,425,000 206,237 684,188 838,327 292,446 35,672,505 $ $ 2,163,901 330,000 272,699 345,409 3,112,009 $ 639,007 8,779,873 267,277 630,573 200,456 10,517,186 $ (639,007) (588,188) (1,227,195) $

22,503,302 11,252,499 8,779,873 634,407 1,425,000 536,237 204,822 1,111,026 267,277 630,573 839,952 48,184,968

Expenses: Payroll and related costs General and administrative Grants to sub-recipients Professional fees Depreciation Miscellaneous Total Expenses 7,690,167 5,821,061 3,974,302 3,660,124 271,373 21,417,027 14,255,478 9,189 179,601 32,357 68,917 101,274 271,351 2,639,989 11,395 7,169 2,504 2,932,408

162,626 1,478,081 1,640,707 8,876,479

(468,188) (500,000) (259,007) (1,227,195) -

7,493,330 8,156,033 3,974,302 4,959,510 278,542 2,504 24,864,221 23,320,747

Change in Net Assets Before Acquisitions

Excess of assets acquired over liabilities assumed in acquired entities 316,665 14,572,143 9,189

2,161,675 2,341,276

8,876,479

2,478,340 25,799,087

Change in Net Assets

Net Assets, Beginning of Year $ 25,071,166

10,499,023 $

115,188 124,377

$ 2,341,276

54,760,064 $ 63,636,543 $

65,374,275 91,173,362

Net Assets, End of Year

26

Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

To the Board of Directors, Enterprise Florida, Inc.: We have audited the accompanying consolidated financial statements of Enterprise Florida, Inc. (the "Organization"), as of and for the year ended June 30, 2012, and have issued our report thereon dated September 17, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control over Financial Reporting


Management of the Organization is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Organizations internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organizations internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Organizations internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

27

Compliance and Other Matters


As part of obtaining reasonable assurance about whether the Organizations consolidated financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Board of Directors, management, and applicable federal and state agencies and is not intended to be and should not be used by anyone other than these specified parties.

Orlando, Florida September 17, 2012

28

Independent Auditors Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Federal Awards Program and State Financial Assistance Project and on Internal Control over Compliance in Accordance with OMB Circular A-133 and Chapter 10.650, Rules of the Florida Auditor General
To the Board of Directors, Enterprise Florida, Inc.:

Compliance
We have audited the accompanying consolidated financial statements of Enterprise Florida, Inc. (the "Organization"), compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement and the requirements described in the State of Florida Department of Financial Services State Projects Compliance Supplement that could have a direct and material effect on each of the Organizations major federal awards programs and state financial assistance projects for the year ended June 30, 2012. The Organization's major federal awards programs and state financial assistance projects are identified in the summary of auditors' results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal awards programs and state financial assistance projects is the responsibility of the Organization's management. Our responsibility is to express an opinion on the Organization's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and Chapter 10.650, Rules of the Florida Auditor General. Those standards, OMB Circular A-133 and Chapter 10.650 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal awards program and state financial assistance project occurred. An audit includes examining, on a test basis, evidence about the Organization's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Organization's compliance with those requirements. According to Florida Statutes Section 288.904(2), the Organization is required to raise no less than 100% of the State of Floridas operating investment provided in CSFA 31.003/40.003 Enterprise Florida, Inc. As described in item 2012-01 in the accompanying Schedule of Findings and Questioned Costs, the Organization failed to meet the matching requirements of Florida Statute 288.904(2). Compliance with such requirements is necessary, in our opinion, for the Organization to comply with the requirements applicable to that program.

29

In our opinion, except for the effects of such noncompliance with the requirements of CSFA 31.003/40.003 Enterprise Florida, Inc., regarding matching requirements in Florida Statute 288.904(2) described in the preceding paragraph, the Organization complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal awards programs and state financial assistance projects for the year ended June 30, 2012.

Internal Control over Compliance


Management of the Organization is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to federal awards programs and state financial assistance projects. In planning and performing our audit, we considered the Organization's internal control over compliance with the requirements that could have a direct and material effect on a major federal awards program and state financial assistance project in order to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133 and Chapter 10.650, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Organizations internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program or state program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal awards program or state financial assistance project will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. The Organizations response to the aforementioned finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. We did not audit the Organizations response and, accordingly, we express no opinion on the response. This report is intended solely for the information and use of the Board of Directors, management, and applicable federal and state agencies and is not intended to be and should not be used by anyone other than these specified parties.

Orlando, Florida September 17, 2012

30

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Schedule of Expenditures of Federal Awards and State Financial Assistance Year Ended June 30, 2012

Agency and Purpose

Grant Period

CFDA Number Expenditures

CSFA* Number

Grant/Contract Number

Pass-Through to Subrecipients

Federal Agency Name: Small Business Administration State Trade and Export Promotion Pilot Grant Program 10/1/11-9/30/12 59.061 SBAHQ-11-IT-0029 $ 634,407 $ -

U.S. Department of Energy Passed through the State of Florida, Executive Office of Governor, Florida Energy and Climate Commission ARRA-State Energy Program Total expenditures of federal awards 7/1/11-6/30/12 $ 81.041 DE-EE0000241/ARS003 34,943,665 35,578,072 $

State Agency Name: Direct projects: State of Florida, Department of Economic Opportunity Florida Black Business Investment Board 7/1/11-6/30/12 7/1/11-6/30/12 7/1/01-6/30/02 31.003/40.003 31.003/40.003 SB-12-001 n/a 31.001/40.001 SB-12-001 $

200,000 11,100,000 300 11,100,300 200,000 1,278,667 437,387 147,627 17,000 460,000 2,540,681 13,640,981

200,000 1,278,667 437,387 147,627 17,000 460,000 2,540,681 2,540,681

Enterprise Florida, Inc. operating support Web Portal

Defense Infrastructure Grants Defense Infrastructure Grants Defense Infrastructure Grants Defense Infrastructure Grants Defense Infrastructure Grants Defense Infrastructure Grants

7/1/11-6/30/12 7/1/10-6/30/11 7/1/09-6/30/10 7/1/08-6/30/09 7/1/07-6/30/08 7/1/06-6/30/07

31.003/40.003 31.003/40.003 31.003/40.003 31.003/40.003 31.003/40.003 31.003/40.003

SB-12-005 OT-11-005 OT-09-005 OT-09-005 OT-08-009 OT-07-009

Total CSFA 31.003/40.003 7/1/11-6/30/12 7/1/10-6/30/11 7/1/10-6/30/11 7/1/10-6/30/11 7/1/11-6/30/12 7/1/10-6/30/11 7/1/09-6/30/10 31.005/40.005 31.008/40.007 31.027/40.012 31.030/40.013 31.044/40.014 31.044/40.014 31.044/40.014 SB-12-001 OT-11-005 OT-11-005 OT-11-005 SB-12-005 OT-11-005 OT-09-005

Florida Sports Foundation

2,163,901 355,450 350,000 313,686 104,808 573,096 47,415 725,319

355,450 350,000 313,686 104,808 573,096 47,415 725,319

Rural Community Development

Local Economic Development Initiatives

Rural Infrastructure Fund

Defense Reinvestment Grants Defense Reinvestment Grants Defense Reinvestment Grants

Florida Defense Support Task Force Florida Defense Support Task Force

7/1/11-6/30/12 7/1/11-6/30/12

31.044/40.014 31.044/40.014

SB-12-001 SB-12-005

91,157 1,016,000 1,107,157 31.044/40.014 31.044/40.014 31.044/40.014 SB-12-005 OT-11-005 OT-07-001 65,099 38,866 235,848 339,813 2,172,289

38,866 38,866 764,185

Military Base Protection Military Base Protection Military Base Protection

7/1/11-6/30/12 7/1/10-6/30/11 7/1/06-6/30/07

Total CSFA 31.044/40.014 7/1/11-6/30/12 7/1/07-6/30/08 31.046/40.016 31.046/40.016 SB-12-005 OT-08-009

Advocating International Relationships Advocating International Relationships

200,000 48,439 248,439 $ 19,444,746 $

200,000 200,000 4,524,002

Total expenditures of state financial assistance

* The Catalog for State Financial Assistance numbers changed from the Executive Office of the Governor to the Department of Economic Opportunity during the year.

See notes to schedule of expenditures of federal awards and state financial assistance.

31

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance Year Ended June 30, 2012
Note 1 - Presentation This Schedule of Expenditures of Federal Awards and State Financial Assistance is presented on the accrual basis of accounting and includes federal and state expenditures of Enterprise Florida, Inc. and consolidating entities. The information in this Schedule is presented in accordance of OMB Circular A-133 and Chapter 10.650, Rules of the Florida Auditor General , and, therefore, certain amounts in this Schedule may differ from amounts presented in, or used in preparation of the consolidated financial statements. Primarily the amounts differ due to the State Energy Program including cumulative grant proceeds since inception. Note 2 - Match Requirement Enterprise Florida, Inc. receives funding for operations from the DEO which is subject to Florida Statute Section 288.904(2) match requirements. The match requirements are designed to require Enterprise Florida, Inc. to secure statutory basis match of at least 100 percent of the State's operating investment in Enterprise Florida, Inc. which was $14,200,000 for year ended June 30, 2012. Total qualifying match of $12,394,801 was $1,805,199 less than this requirement. GAAP Basis (1) Total matching private funds Direct cash (3) Cash donations from assisted organizations (4) Jointly raised cash (5) Fees charged for products or services (6) Copayments, stock, warrants, royalties or other private resources (7) Quick-Response Training Program in-kind contributions (8) $ $ $ $ $ $ $ 5,278,716 1,425,000 1,368,296 2,485,420 Statutory Basis (2) $ $ $ $ $ $ $ 12,394,801 1,387,500 1,529,174 2,986,314 2,101,438 4,390,375

1. GAAP basis amounts are reported in accordance with accounting principles generally accepted in the United States of America, which is the same basis of accounting as the accompanying consolidated financial statements. For purposes of the above calculation, amounts relate only to Enterprise Florida, Inc. 2. Florida Statutory basis amounts are reported as defined in Section 288.904(2), Florida Statutes. Inkind contributions under this basis of accounting include amounts that do not meet the GAAP basis requirements for revenue recognition. 3. Defined in Section 288.904(2)(b)(1) as cash given directly to Enterprise Florida, Inc., for its operations, including contributions from at-large members of the board of directors.

32

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance Year Ended June 30, 2012
Note 2 - Private-Sector Support (continued) 4. Defined in Section 288.904(2)(b)(2) as cash donations from organizations assisted by the divisions. 5. Defined in Section 288.904(2)(b)(3) as cash jointly raised by Enterprise Florida, Inc., and a private local economic development organization, a group of such organizations, or a statewide private business organization that supports collaborative projects. 5. Defined in Section 288.904(2)(b)(4) as cash generated by fees charged for products or services of Enterprise Florida, Inc., and its divisions by sponsorship of events, missions, programs, and 7. Defined in Section 288.904(2)(b)(5) as copayments, stock, warrants, royalties, or other private resources dedicated to Enterprise Florida, Inc., or its divisions. 8. Defined in Section 288.047(9) as eligible in-kind contributions received under the Quick-Response Training Program, administered by Workforce Florida, Inc., which may be counted toward the matching requirements of Section 288.904(2). Contributions presented consist of projected wages in contracts entered into during fiscal 2012 that are estimated to be paid to trainees while in the QuickResponse Training Program. This method of reporting in-kind contributions under the QuickResponse Training Program is consistent with that specified in a Memorandum of Understanding among Enterprise Florida, Workforce Florida, Inc. and DEO, executed April 2008.

33

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended June 30, 2012

Part I - Summary of Auditors' Results Financial Statement Section Type of auditors' report issued: Internal control over financial reporting: Material weakness(es) identified? yes x no Unqualified

Significant deficiency(ies) identified? Noncompliance material to financial statements noted?

yes

none reported

yes

no

Federal Awards and State Projects Section Internal control over major programs: Material weakness(es) identified? yes x no

Significant deficiency(ies) identified? Type of auditors' report on compliance for major federal programs and state projects: Any audit findings disclosed that are required to be reported in accordance with Circular A-133 Any audit findings disclosed that are required to be reported in accordance with Chapter 10.650

yes

none reported

Qualified

yes

no

yes

no

34

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended June 30, 2012

Part I - Summary of Auditors' Results (continued) Federal Awards and State Projects Section (continued) Identification of major federal programs and state projects: Federal Programs: Name of Program or Cluster Small Business Administration State Trade and Export Promotion Pilot Sport Program U.S. Department of Energy ARRA - State Energy Program CFDA Number 59.061

84.041

State Projects: Name of Project Florida Department of Economic Opportunity Enterprise Florida, Inc. Military Base Protection Dollar threshold used to determine Type A programs: Federal State Auditee qualified as low-risk auditee for federal purposes? Part II - Financial Statement Findings This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations of provisions of contracts and grant agreements, and abuse related to the financial statements that are required to be reported in accordance with Government Auditing Standards. There were no financial statement findings required to be reported in accordance with Government Auditing Standards. Part III - Federal Award Findings and Questioned Costs This section identifies the significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs, as well as any material abuse findings, related to the audit of major federal programs, as required to be reported by Section 510(a) of OMB Circular A-133. There were no findings required to be reported by OMB Circular A-133 $ $ x yes 300,000 583,342 no CSFA Number

31.003/40.003 31.044/40.014

35

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Schedule of Findings and Questioned Costs Federal Awards Programs and State Financial Assistance Projects Year Ended June 30, 2012
Part IV - State Project Findings and Questioned Costs This section identifies the significant deficiencies, material weaknesses, and material instances of noncompliance, including questioned costs, as well as any material abuse findings, related to the audit of major state projects, as required to be reported by Chapter 10.650, Rules of the Florida Auditor General . There are no items related to state financial assistance required to be reported in a management letter. Florida Department of Economic Opportunity - CSFA #31.003/40.003 - Enterprise Florida, Inc. Statement of Condition 2012-01: Florida Statute Section 288.904(2) (the Statute) specifies matching requirements with respect to the funding of Enterprise Florida, Inc.s operating activities by the State legislature. The Statute requires a 100% match of the states $14,200,000 operating investment for fiscal year end June 30, 2012, which includes: 1) Cash given directly to Enterprise Florida, Inc., for its operations, including contributions from at-large members of the board of directors; 2) Cash donations from organizations assisted by the divisions; 3) Cash jointly raised by Enterprise Florida, Inc., and a private local economic development organization, a group of such organizations, or a statewide private business organization that supports collaborative projects; 4) Cash generated by fees charged for products or services of Enterprise Florida, Inc., and its divisions by sponsorship of events, missions, programs, and publications; and 5) Copayments, stock, warrants, royalties, or other private resources dedicated to Enterprise Florida, Inc., or its divisions. Florida Statute Sections 288.047(9) further specify eligible in-kind contributions received under the Quick Response Training Program may be counted toward the matching requirements of Section 288.904(2). The Quick Response Training Program is administered by Workforce Florida, Inc. (Workforce Florida), an entity that is independent of Enterprise Florida, Inc. These contributions consist of wages paid to trainees. Total match through June 30, 2012 is $12,394,801, resulting in a match deficiency of $1,805,199. Criteria: The Statute requires a 100% match of the states $14,200,000 operating investment for fiscal year end June 30, 2012. Effect of Condition: Enterprise Florida, Inc. did not meet its matching requirements under Florida Statutes. The Florida Department of Economic Opportunity ("DEO") has not imposed penalties or sanctions on Enterprise Florida, Inc. Cause of Condition: Under current Florida Statutes, in order to meet its matching requirements, Enterprise Florida, Inc. has to use Quick Response Training Program data provided by Workforce Florida, which is an organization outside of its control. The Quick Response Training Program data has increased from the prior year but is still significantly lower than in previous years due to slower economic activity and project expansion. In addition, the current Florida Statute section 288.904(2)(b) does not include other in-kind contributions in the match calculation, as in prior years. Recommendation: We recommend that Enterprise Florida, Inc., with the assistance of Workforce Florida, continue to closely monitor the Quick Response Training Program data during the year and continue to communicate potential issues with meeting the matching requirements provided in Section 288.904(2) to DEO on a timely basis.

36

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Summary Schedule of Prior Audit Findings and Corrective Action Plan Federal Awards Programs and State Financial Assistance Projects Year Ended June 30, 2012 Status of Prior Audit Findings:
The fiscal year 2012 audit finding 2012-01 is a repeat of the fiscal year 2011 audit finding 2011-01 and fiscal year 2010 audit finding 2010-01.

Corrective Action Plan:


The corrective action plan for the fiscal 2012 Finding No. 2012-01 is as follows: Enterprise Florida continues to follow the comprehensive approach to monitoring and reporting the matching requirements to DEO defined in fiscal year 2008/2009. The match reporting includes the match as a percentage of the total requirements which allows the DEO contract manager to see where Enterprise Florida is against target each quarter. For fiscal year 2011/12, after the third quarter Quick Response Training Program data was received, Enterprise Florida staff contacted Workforce Florida staff to discuss any potential large projects that might impact the data. Enterprise Florida staff then communicated the potential match issue verbally and in writing to the DEO contract manager, to the Audit, Finance and Compensation, and Executive Committees of the Board of Directors. Management agrees with the recommendation and will continue to follow these comprehensive reporting procedures in the future as necessary as well as having the legislative team continue working with the legislature to add the in-kind category back into statute for fiscal year 2012/13.

37

GOVERNOR RICK SCOTT


Record of Economic Growth
www.flgov.com rick.scott@eog.myflorida.com (850) 488-7146

Florida Unemployment Rate Has Largest Drop of Any State in the Nation
Unemployment Rates (%) for states with 1.5 percentage point decline or more (Seasonally Adjusted) December 2010 Compared to August 2012 Ranked by Change

Florida Ohio Missouri Utah Nevada Michigan Arizona Massachusetts California Kentucky Idaho 0.0 0.5 1.0

2.3 percentage point drop 2.0 2.0 1.8 1.8 1.8 1.7 1.6 1.6 1.5 1.5
1.5 2.0 2.5

Percentage Point Drop In Unemployment Rate


Source: U.S. Bureau of Labor Statistics

Enterprise Florida Board

Jeff Atwater *** Florida Department of Financial Services The Capitol, Plaza 11 Tallahassee, FL 32399 (850) 413-2850

Alan Becker * Becker & Poliakoff, P.A. 3111 Stirling Rd. Ft. Lauderdale, FL 33312 (954) 987-7550

Mark Bensabat * JPMorgan Chase & Co. 450 S. Orange Ave. Ste 1000 Orlando, FL 32801 (407) 236-5436

Jay Beyrouti *** Monicarla, L.T.D. 4707 140th Ave N. Ste 208 Clearwater, FL 33762 (727) 656-8048

Jesse Biter *** Biter Enterprises, LLC. 1233 N. Gulfstream Ave. PH. 1 Sarasota, FL 34236 (941) 870-3679

Pam Bondi *** Florida Office of the Attorney General The Capitol, PL-01 Tallahassee, FL 32399 (850) 245-0140

Park Brady * The St. Joe Company 133 South WaterSound Pkwy Watersound, FL 32413 (850) 231-7402

Dominic Calabro ** Florida Tax Watch 106 N. Bronough St. Tallahassee, FL 32301 (850) 222-5052

Ron Campbell *** The Seminole Companies 455 N. Indian Rocks Rd. Ste B Belleair Bluffs, FL 33770 (813) 352-9002

Stan Connally * Gulf Power Company One Energy Place Pensacola, FL 32520 (850) 444-6057

Anthony Connelly * Walt Disney Parks & Resorts, U.S. 1375 E. BuenaVista Dr. Ste440 Lake Buena Vista, FL 32830 (407) 828-5075

Andy Corty * Florida Trend 490 First Ave. S. Ste 800 St. Petersburg, FL 33701 (727) 893-8204

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

Enterprise Florida Board

Brett Couch * Regions Bank 100 N. Tampa St. Ste 3100 Tampa, FL 33602 (813) 226-1212

Marshall Criser * AT&T 150 W. Flagler St. Ste 1901 Miami, FL 33130 (305) 347-5300

Hayden Dempsey *** Greenberg Traurig 101 E. College Ave. Tallahassee, FL 32301 (850) 222-6891

Nancy Detert ** Florida Senate 417 Commercial Ct. Ste D Venice, FL 34292 (941) 480-3547

Ken Detzner *** Florida Department of State 500 S Bronough St., Ste 316 Tallahassee, FL 32399 (850) 245-6524

Vinny Dolan * Progress Energy, Inc. 299 1st Ave N. St. Petersburg, FL 33701 (727) 820-5001

Chris Dorworth ** Florida House of Representatives 1055 AAA Dr. Ste 205 Lake Mary, FL 32746 (407) 333-1815

Debra Duvall *** Water Pointe Realty Group 3727 S.E. Ocean Blvd. Ste100 Stuart, FL 34996 (772) 283-3330

Sheldon Fox * Harris Corporation 1025 West NASA Boulevard Melbourne, FL 32919 (800) 442-7747 Bill Dymond *** Lowndes, Drosdick, Doster, Kantor & Reed 215 N. Eola Dr. Orlando, FL 32801 (407) 418-6423 Blake Gable * Barron Collier Companies 2600 Golden Gate Pkwy Naples, FL 34105 (239) 403-6857 Danny Gaekwad *** NDS USA 2100 S.E. 73rd Loop Ocala, FL 34480 (352) 840-9593

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

Enterprise Florida Board

Kevin Gillen * TD Bank 5900 N. Andrews Ave. Ft. Lauderdale, FL 33309 (954) 233-2082

Gordon Gillette * TECO Energy 702 North Franklin St. Tampa, FL 33602 (813) 228-4492

Howard Halle * Wells Fargo Bank, N.A. 1 Independent Dr. Ste 2500 Jacksonville, FL 32202 (904) 351-7271

Marshall Heard * Florida Aviation Aerospace Alliance 620 Apache Trail Merritt Island, FL 32953 (321) 454-6023

Bill Heavener * Full Sail University 3300 University Blvd. Ste 218 Winter Park, FL 32792 (407) 571-3900

Clayton Hollis * Publix Super Markets, Inc. 3300 Publix Corporate Pkwy Lakeland, FL 33811 (863) 284-5586

Kevin Hyman * Bright House Networks, LLC 301 E. Pine St. Ste 600 Orlando, FL 32801 (407) 210-3151

Dwayne Ingram *** Workforce Florida, Inc. 17820 Willow Lake Dr. Odessa, FL 33556 (312) 873-1150

Russ Jollivette * Florida Blue 4800 Deerwood Campus Pkwy Jacksonville, FL 32245 (904) 905-3478

Belinda Keiser *** Keiser University 1900 W Commercial Blvd. Ste 180 Fort Lauderdale, FL 33309 (954) 776-4476

Beth Kirkland ** Florida Economic Development Council PO Box 1639 Tallahassee, FL 32302 (850) 521-3114

Chris Kise *** Foley & Lardner, LLP 106 E. College Ave. Ste 900 Tallahassee, FL 32301 (850) 513-3367

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

Enterprise Florida Board

Tom Kuntz * SunTrust Bank 200 S. Orange Ave. Orlando, FL 32801 (407) 237-4458

Fred Leonhardt *** GrayRobinson, P.A. 301 E. Pine St. Ste 1400 Orlando, FL 32801 (407) 244-5655

Bob McAdam * Darden Restaurants, Inc. 1000 Darden Center Dr. Orlando, FL 32837 (407) 245-5366

Hal Melton * FLF, LLC 230 S. New York Ave. Ste 101 Winter Park, FL 32789 (407) 265-1188

Joe Meterchick * PNC Bank 5422 Bay Center Dr. Ste 100 Tampa, FL 33609 (813) 637-7100

Deborah Millin * Hewlett Packard 6923 Pine Valley St. Bradenton, FL 34202 (941) 343-7009

Gilberto Neves * Odebrecht Construction, Inc. 201 Alhambra Circle Ste 1400 Miami, FL 33134 (305) 704-5859

Susan Pareigis ** Florida Council of 100 102 West Whiting Street, Suite 200 Tampa, FL 33602 (813) 229-1775

Ernesto Perez * Dade Medical College 3401 NW 7th St. Miami, FL 33125 (305) 644-1171

Win Phillips * University of Florida 204 Tigert Hall Gainesville, FL 32611 (352) 392-9122

Adam Putnam *** Florida Department of Ag & Consumer Services 407 S. Calhoun Street Tallahassee, FL 32399 (850) 410-6701

Henry Rodriguez *** Woodmere Holdings, LLC 1515 Ringling Blvd. Ste 890 Sarasota, FL 34236 (941) 312-5996

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

Enterprise Florida Board

Andy Rosen * Kaplan Higher Education Corporation 6301 Kaplan University Ave. Ft. Lauderdale, FL 33309 (954) 515-3888

Denise Saiki * Lockheed Martin Global Training & Logistics 100 Global Innovation Circle Orlando, FL 32828 (407) 306-1446

Gene Schaefer * Bank of America, N.A. 701 Brickell Ave. Miami, FL 33131 (305) 347-2990

Rick Scott *** State of Florida Governor 400 South Monroe St. Tallahassee, FL 32399 (850) 488-5603

Eric Silagy * Florida Power & Light Co. 700 Universe Blvd. Juno Beach, FL 33408 (561) 304-5206

Kelly Smallridge * Business Development Board of Palm Beach County 310 Evernia St. West Palm Beach, FL 33401 (561) 835-1008

Gary Spulak * Embraer Aircraft Holding, Inc. 276 SW 34th St. Ft. Lauderdale, FL 33315 (954) 359-3721

Pam Stewart *** Florida Department of Education 325 W. Gaines St. Ste 1514 Tallahassee, FL 32399 (850) 245-0505

Hal Valeche *** York Street Capital Advisors 128 Vira Dr. Palm Beach Gardens, FL 33418 (561) 799-0305

Tony Villamil * Washington Economics Group 2655 Lejeune Rd. Ste 608 Coral Gables, FL 33134 (305) 461-3811

Rick Wilson * Bacardi U.S.A., Inc. 2701 LeJeune Rd. Coral Gables, FL 33134 (786) 264-8114

Mark Wilson ** Florida Chamber Of Commerce 136 S. Bronough St. Tallahassee, FL 32301 (850) 521-1200

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

Enterprise Florida Board

Millar Wilson * Mercantil Commercebank 220 Alhambra Circle Coral Gables, FL 33134 (305) 460-4038

MISSION
EFIs mission is to diversify Floridas economy and create better-paying jobs for its citizens by supporting, attracting and helping to create globally competitive businesses in innovative, high-growth industries.

61 Enterprise Florida Board Members


Updated 10/29/2012

36 At-Large Members*

6 Ex-Officio**

19 Appointed/Statute ***

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l lcox@eflorida.com

2012 2013 ENTERPRISE FLORIDA EVENTS


Date
November 8 9, 2012 November 11-18, 2012 November 13-15, 2012 November 14-17, 2012 December 1-9, 2012 December 2-6, 2012 December 4-6, 2012 December 10, 2012 January, 2013 (TBA) January 22-25, 2013 January 27-29, 2013 January 30-31, 2013 January 2013 (TBA) January 2013 (TBA) February 25 27, 2012 February 26 March 3, 2013 April 11-14, 2013 May 2013 (TBA) March 5-9, 2013 May 8-9, 2013 May 10-12, 2013

Event Name
Enterprise Florida Board & Stakeholders Meeting Business Development Mission to Kenya Marine Equipment Trade Show METS 2012 MEDICA 2012 Florida International Senior Games & State Championships Governors Team Florida Mission Aeromart Toulouse 2012 Governors Innovators in Business Awards Florida Tourism Day ARAB HEALTH Trade Show 2013 IEDC leadership forum Enterprise Florida Board & Stakeholders Meeting AACCLAs Outlook on the Americas Conference Opportunities in the Sunshine State CCQF Site Selectors Guild Australian International Air Show China (Shanghai) International Boat Show 2013 34th Hemispheric Congress of Latin Chambers of Commerce CeBIT 2013 Enterprise Florida Board Meeting Sunshine State Games Bradenton Area Festival

Event Location
Orlando, FL Nairobi, Kenya Amsterdam, The Netherlands Dsseldorf, Germany Polk County Bogota, Columbia Toulouse, France Tallahassee, FL Tallahassee, FL Dubai, United Arab Emirates Orlando, FL Tallahassee, FL Miami, FL Quebec City, Quebec New Orleans Avalon/Victoria, Australia Shanghai, China Miami, Florida Hannover, Germany Orlando, FL Manatee County

Industry Sector(s)
Economic Development Best Prospects Marine Industry Life Sciences Sports Development Best Prospects Aviation, Aerospace, & Defense Business Awards Florida Tourism Industry Life Sciences Site Consultants Economic Development Best Prospects Best Prospects Site Consultants Aviation, Aerospace, & Defense Marine Industry Best Prospects ICT Economic Development Sports Development

Type of Event
Board Meeting Investment & Trade Trade & Investment Investment & Trade Sports Investment & Trade Investment & Trade Awards Tourism Investment & Trade Business Development Board Meeting Investment & Trade Investment Development Business Development Investment & Trade Trade & Investment Trade Development Investment & Trade Board Meeting Sports

Event Contact
Liefke Cox 407-956-5688 Bryant Salter 305-808-3660 Larry Bernaski 904-359-9350 Michael Schiffhauer 407-956-5688 Stephen Rodriguez 850-410-5287 Ivan Barrios 305-808-3390 Ken Cooksey 850-298-6632 Liefke Cox 407.956.5688 John Webb 850-922-4493 Michael Schiffhauer 407-956-5634 Kim Wilmes 407-956-5628 Liefke Cox 407-956-5688 Ivan Barrios 305-808-3390 Frdrick Bernard 514-448-0544 Kim Wilmes 407-956-5628 Ken Cooksey 850-298-6632 Larry Bernaski 904-359-9350 Ivan Barrios 305-808-3390 Andrea Moore 850-469-8989 Liefke Cox 407-956-5688 Stephen Rodriguez 850-410-5287

ENTERPRISE FLORIDA

WWW.EFLORIDA.COM/EVENTS

Updated 11/2012

2012 2013 ENTERPRISE FLORIDA EVENTS


Date
May 21-24, 2013 June 7-9, 2013 June 17-19, 2013 June 21-23, 2013 August 7-8, 2013 October 21-23, 2013 October 30-31, 2013 November 20-23, 2013

Event Name
HOSPITALAR 2013 Sunshine State Games Alachua County Festival Paris Air Show 2013 Sunshine State Games Polk County Festival Enterprise Florida Board & Stakeholders Meeting CoreNet Enterprise Florida Board & Stakeholders Meeting MEDICA

Event Location
Sao Paulo, Brazil Alachua County Le Bourget Paris, France Polk County Northwest Region Las Vegas, NV Miami, FL Germany

Industry Sector(s)
Life Sciences Sports Development Aviation, Aerospace, & Defense Sports Development Economic Development Site Consultants Economic Development Life Sciences

Type of Event
Investment & Trade Sports Investment & Trade Sports Board Meeting Business Development Board Meeting Investment & Trade

Event Contact
Michael Schiffhauer 407-956-5634 Stephen Rodriguez 850-410-5287 Ken Cooksey 850-298-6632 Stephen Rodriguez 850-410-5287 Liefke Cox 407-956-5688 Kim Wilmes 407-956-5628 Liefke Cox 407-956-5688 Michael Schiffhauer 407-956-5688

ENTERPRISE FLORIDA

WWW.EFLORIDA.COM/EVENTS

Updated 11/2012

Floridas 2013 Economic Development


Legislative Agenda
TheFloridaInfrastructureFund(FIF)isaninnovativewaytofundinfrastructureprojectsandincreaseprivatecapital investmentinFlorida.TheFIFwouldbea$700millionFloridafocusedinfrastructureinvestmentprogramfortheFlorida OpportunityFund(FOF.)TheFOFwouldraise$700millionofinvestmentcapitalfromprivatecapitalsourcestofundthe program,togoalongwith$700millioninfuturecontingenttaxcreditsusedonlyasaguaranteetotheprincipal investmenttoprograminvestors.CreationoftheFIFcouldpotentiallyresultinover$6billioninfundingfor infrastructureprojectsandover60,000newjobs.EFIsupportsthecreationoftheFloridaInfrastructureFund. Currentlybusinessesarecappedat$7mforthetotalamountofQTIorQDSCawardpaymentstheycanreceive.This legislationwouldremovethepercompanycapfortheseprogramsandencouragecompaniestocontinuetoinvestin Floridaandcreateadditionaljobs.EFIsupportstheremovaloftheQTIandQDSCAwardCaps Speedisoneofthemostcriticaldecidingfactorsforbusinesses.Whenmakingarelocationorexpansiondecisionthe fasterthestatecanawardanincentiveapprovalthemorelikelyabusinessisgoingtochooseFlorida.Allcurrentawards fortheInnovationIncentiveFundmustbeapprovedbytheLegislativeBudgetCommission(LBC).Mirroringthe InnovationIncentiveFundapprovalprocessaftertheQuickActionClosing(QAC)Fundwillallowforamuchquicker responsetocompetitiveprojects.EFIsupportschangingtheInnovationIncentiveFundapprovalprocesstomatchthe QuickActionClosingFundprocess. FloridasmanufacturersareatadisadvantageversusotherSoutheasternstateswhenpurchasingmachineryand equipment.Currentlymanufacturersmusthavea5%increaseinproductivityinordertoqualifyforasalestax exemption.Reducingtheproductivityrequirementsimplifiestheprocessandallowsthemanufacturertofocuson equipmentpurchaseswithoutworryingaboutqualifyingforasalestaxexemption,andthus,makingFloridas manufacturingsectormorecompetitivewithotherstates. EFIsupportsreducingthe5%increaseinproductivityrequirementtoqualifyforsalestaxexemptionson manufacturingmachineryandequipment. TheEconomicDevelopmentToolkitcontainsincentiveprogramsthestateusestoretainandgrowexistingFlorida companiesandcompetitivelycompetefornewbusiness.Reinforcingtheindividualandcollectiveimportanceofthe programsinthetoolkitiscriticaltomaintainingahighleveloflegislativesupport.EFIsupportsGovernorScotts recommendationsforcompetitivelyfundingtheEconomicDevelopmentToolkitviatheSEEDFund,whichwillallow greaterflexibilityinspendingtosupportprogramsrelatedtojobcreation. GovernorsScottandhisstaffareanintegralpartofFloridaseconomicdevelopmentrecruitmentprocessaswellasthe activelyinvolvedineconomicdevelopmentprojects.ItisextremelyimportantthattheGovernorandotherstate agenciesinvolvedineconomicdevelopmentarecoveredunderFloridasconfidentialitylaws.EFIsupportsclarifying statutestoensuretheGovernorandstateagenciesarecoveredunderFloridasconfidentialitylaws.

FloridaInfrastructureFund RemovaloftheQTIandQDSC percompanyawardcaps UpdateoftheInnovation IncentiveFundApproval Process

ManufacturingMachinery andEquipmentTax Exemption

EconomicDevelopment Toolkit/SEEDFundFunding ClarificationofFloridas EconomicDevelopment ConfidentialityLaws

CreateaRecurringFunding SourceforSpringTraining FacilitiesImprovements

UpdatetoProfessionalSports TeamLicenseTagStatutes

SpaceFloridaFinancingFund Institutionalizationof SpaceportsintoFDOTs budgetplanning QuickResponseTraining Grants VisitFlorida RuralEconomicDevelopment Programs

WithfiveteamswhohaveleasesexpiringwithFloridascommunitiesinthenearfuture,itisimperativethatFloridahave inplaceamechanismtohelpensuretheseteamsstayinFlorida.Bycreatingafundingsourceforfuturenew constructionfacilityupgradesFloridawillpositionitselftoretaintheseteamsandpotentiallyrecruitadditionalteams. Increaseawardamountsto$5mbycontinuingwithfundingfromsalestaxcollectionsfrom14currentstadiums (generating$3m)andaddarecurring$2mfromtheSEEDfund. EFIsupportsthecreationofadedicatedfundingsourceforspringtrainingfacilities. Currentlyprofessionalsportsteamlicensetagmoneyisdirectedthroughtrustfundsthatarechargingan8%fee,unlike mostlicensetagprograms.BydissolvingcurrentTFsandmovingtagfundsdirectlytoEnterpriseFloridafordistribution intheFloridaSportsGrantprogramthereisanautomaticincreaseinthefundsavailablefortheprogram.Inaddition currentFloridaSportslicenseplaterevenuesarecappedat$2.5mandmanytagsareclosetoreachingthatcap.Ifthe capwasincreasedto$3.5mprofessionalsportsteamwillbeabletoincreasemarketingeffortstoincreaserevenue. EFIsupportsupdatingprofessionalsportsteamlicensetagstatutes. In2010SpaceFloridawasappropriated$10mspecificallytoutilizefinancingtoolshowevernofundshavebeen appropriatedsincethattime.AsSpaceFloridasmaintoolforrecruitingbusinesstoFlorida,EFIandSpaceFloridaare requestinganadditional$10minappropriationsforthefund. EFIsupportsfundingtheSpaceFloridaFinancingFundat$10m. Spaceportsareamodeoftransportationandshouldbefundedlikeseaports,roadsandrailinFDOTsbudget.By creatingastructureforfundingspaceportsbysettingannualminimums,rulesandguidanceFloridawillensureconsistent treatmentofitsspaceports. EFIsupportstheinstitutionalizationofspaceportsintoFDOTsbudgetplanning. Trainingofworkerscontinuestobeacriticalpartoftheeconomicdevelopmentprocessandfullfundingisneeded. EFIsupportsWorkforceFloridasbudgetrequestforQRTfunding. FloridastourismindustryremainsanimportantaspectofFloridaseconomy. EFIsupportsVisitFloridasfundingrequestfor20132014. **EnterpriseFloridaiscurrentlyconductingaruraleconomicdevelopmentstrategicplanstudy.Legislative recommendationswillbeforthcomingoncetheplaniscompleted.EFIwillsupportlegislativerecommendationsas suggested.** Currentlawprohibitsmostbusinessesfromutilizingthisprograminenterprisezonebecauseofthethresholdthat dictatesthatonlybusinesspropertyhavingasalesprocessofover$5,000perunitshallqualifyfortheexemption.By loweringthesalespriceto$500forunittherewouldbeasignificantincreaseinthenumberofbusinessthatwouldbe abletotakeadvantageoftheexemptioninEnterpriseZones.EFIiscurrentlyawaitingfeedbackfromtheGovernors officeonthefiscalimpactofthislegislation. GovernorScottsJOBSAgenda PolicyinitiativesthatincreaseFloridascompetitivenessinbusinessdevelopment

BusinessPropertyUsedinan EnterpriseZone AdditionalItemsEFISupport

EnterpriseFloridaLegislativeAffairsTeam
MichaelPreston:8507667827SharonSpratt:8506619062

MEMOR ANDUM
TO: FROM: SUBJECT: DATE: CC: EFI BOARD OF DIRECTORS & PARTNERS GRAY SWOOPE, SECRETARY OF COMMERCE, PRESIDENT & CEO OF ENTERPRISE FLORIDA FLORIDA TARGET INDUSTRY COMPETITIVENESS STUDY SEPTEMBER 28, 2012 EFI STAFF

At our September Enterprise Florida Board Meeting, we heard a presentation from McCallum Sweeney on their initial findings regarding the Statewide Economic Development Competitiveness Study. The study, is critical milestone as we continue to look for ways to improve our business climate and Florida's ability to compete. It is important to note that Enterprise Florida, through our stakeholder council, requested this study. It was a proactive step toward getting a clear and objective look at where we are in our economic development efforts compared to our competitors and where we need to focus our energy to achieve our job creation goals. The study reviewed Floridas current policies, practices, and resources over several years; talked to corporate decision makers and site consultants; and conducted benchmarking analyses with regional and local economic developers. The study offers suggestions on how to better advance local, regional and statewide economic development efforts while also making recommendations to help align our policies with our goals. Key findings include: Site selectors are noticing the impressive improvements to our incentive approval process. However, the study pointed out that the states Closing Fund is underfunded and points out the states distinct disadvantage in this area. We have the opportunity to improve the flexibility and effectiveness of our existing programs. The study also underscored that Florida has a large talented workforce noting the multilingual nature of the population. Given our strengths in that area we need to better market our current talent assets. The study calls for us to continue to modernize our tax structure and streamline our permitting processes. Finally, the study also points out the need for the development and promotion of a strong Florida business brand and the need to align marketing activities to target industries. I am proud to say that we are already making great progress on these with the support of our economic development partners.

Florida Target Industry Competitiveness Study Memo Page 2

The research and findings of the study provide us great insight as to how our state compares to our competitors. A number of the recommendations confirmed what we already knew, providing validation that projects such as developing a sites and buildings database are important. The study also provides an objective perspective on issues where Florida falls behind our competitors, such as the level of funding for workforce training programs and a lack of dedicated funding for economic development at the local level. I would like to thank our utility partners for funding this important effort Florida Power & Light Company, Progress Energy, Gulf Power, Power South, TECO, and Seminole Electric. However, Florida has made impressive strides over the last two years under the leadership of Governor Scott and the Florida Legislature. I am confident that through implementation of these recommendations as well as the proactive efforts at both the state and local levels we will make our state the best place in the nation to do business. Thank you for your continued support and commitment to economic development.

CompetitivenessStudyRecommendations
State(S)or MethodtoAchieve (L)Legislative Local(L)Issue
(P)Policy (B)Budget (O)Operational

StatusofImplementation

CostofDoingBusiness
ModernizeTaxes StreamlinePermittingProcess
S S/L L L/P/O IssuesforconsiderationbytheLegislature EFIwillrecommendstepsforcommunitiestoexpedite andimprovetheirpermittingprocessestobemore businessfriendly Theeconomicdevelopmentliaisonsprogramisinplace andbeingutilizedthroughoutmultipleStateagenciesand departments,includingEFI

EstablishLiaisonswithOtherStateAgencies

RealEstateandInfrastructure
ImprovePortfolioofSitesandBuildings
S O/B Astatewidesitesandbuildingsdatabaseisunderway andwillbecompletedinSpring2013;databasewillallow Floridatobettershowcaseexistingassets AstudyofFlorida'sruralcommunitesisunderway,which willbefollowedbyaruralmarketingplanandprogram EFIiscurrentlyworkingwithutilitiesoncertain marketingactivities FloridautilitiesareinvariousstagesofpursuingED riders

EnhanceRuralEconomicDevelopment Toolbox LeveragePartnershipswithUtilities IncreaseUseofEconomicDevelopment Riders

S S

O P/L

TalentandTraining
ImproveQuickResponseTraining(QRT) ImproveExistingIndustryRelationships
S S/L B O QRTbudgetincreaserequestforFY2014/15 BothEFIandWFIhaveexistingindustryinitiatives underway Communitypractitionersshouldalsoenhanceexisting industryprograms WFIcurrentlyevaluatingmeanstoestablishasingle workforcebrandforthestate EnhanceEFIprojectmanagementinvolvementwithWFI Workisunderwayandbestpracticeshavebeen indentified TheformationofDEOandshiftofincentiveprocessing hasledtoamorestreamlinedprocess Continualcommunicationisimprovingtheprocess

MarketCurrentTalentAssets ImproveProjectManagementTactics AlignTrainingwithTargets

S/L S/L S/L

O/B O O/B/P/L

Incentives
StreamlineIncentiveAuthorizationProcess
S O/P/L

EnhanceEconomicDevelopmentToolbox ImproveFlexibilityandEffectivenessof ExistingPrograms IncreaseUpfrontIncentives

S S S

L L/B B

IssuesforconsiderationbytheLegislature IssuesforconsiderationbytheLegislature ThecreationoftheSEEDFundisasteptoward increasingtheflexibilityofthetoolkitandallowingthe Statetorespondquicklytomajorprojects IssueforconsiderationbytheLegislature

CreateLocalOptionSalesTaxtoBenefit EconomicDevelopment

S/L

Page1of2

10/12/2012

PreparedbyEnterpriseFlorida,Inc.

State(S)or MethodtoAchieve (L)Legislative Local(L)Issue


(P)Policy (B)Budget (O)Operational

StatusofImplementation

EconomicDevelopmentStrategy/Branding
IncreaseFundingforMarketing
S B Additionalfundingisbeingrequestedintheupcoming legislativebudgetforeconomicdevelopmentmarketing EFIanditsstakeholderandutilitypartnersareworking togethertocreateaTEAMFloridapartnershipthatwill helpfundbusinessmarketingandbrandingeffortsforthe state

PromoteFlorida'sBusinessBrand

O/B

Floridabusinessbrandisunderdevelopmentwitha January2013rolloutdate,andacampaigntofollow Marketingfortargetsectorsiscurrentlyinplaceandcan beviewedontheEFIwebsite Withadditionalfunding,thesemarketingeffortscanbe enhanced Trainingopportunitieswillbeincreasedasbudgetallows andareallocationofexistingresourceswillenablemore industryspecificdevelopmentopportunities MoreformalpartnershipsandeventswithEFI'sally networkareunderdevelopment,includingaTEAMFlorida partnershiptohelpfundbusinessmarketingandbranding forthestate Additionalresourcesareanticipatedinthefuture,in additiontoareallocationofexistingresourcestoensure talentsaremaximized Bestpracticeswillbeestablishedtoensurethehighest levelofpositiveclientinteraction

AlignMarketingtoTargetIndustries

O/B

EconomicDevelopmentAdministration
DevelopStaff
S O/B

StrengthenAllyNetwork

O/B

ExpandProjectManagementTeam

ImproveProfessionalismofStaff

Page2of2

10/12/2012

PreparedbyEnterpriseFlorida,Inc.

Target Industry Competitiveness Study

September 13, 2012 St. Pete Beach, FL Mark Sweeney, McCallum Sweeney Consulting

Agenda
Introduction to MSC and Avalanche Project Overview and Process Target Industry Analysis Competitiveness Issues

Thank you to the following companies for funding this study for Florida and its communities:

Introduction to McCallum Sweeney Consulting and Avalanche Consulting

MSC Clients

Boy Scouts of America

SGL Automotive Carbon Fibers LLC joint venture

Kasle Steel

American Titanium Works

Avalanche Experience

20+ U.S. States 80+ Regions Europe Mexico South America

Project Overview and Process

Project Overview

This is an opportunity to enhance Floridas competitiveness for its target industries and beyond.
STEP2: TalktoCorporate DecisionMakers andSite Consultants

STEP1: ReviewCurrent Policies, Practices,and Resources

STEP3: TalktoRegional andLocal Economic Developers

STEP4: Conduct InHouse Benchmarking Analysis

STEP5: DevelopFinal Report

Step 1: Reviewed Current Policies, Practices, and Resources (Incentives)


Quick Action Closing Fund (QACF) Qualified Target Industry Tax Refund (QTI) High Impact Performance Incentive Grant (HIPI) Qualified Defense and Space Contractor Tax Refund (QDSC) Capital Investment Tax Credit (CITC) Quick Response Training Program (QRT) Incumbent Worker Training Program (IWT) Economic Development Transportation Fund Rural Incentives Urban Incentives Brownfield Incentives Enterprise Zones Jobs for the Unemployed Tax Credit Program (JUTC) Local Government Distressed Area Matching Grant Program (LDMG) Manufacturing and Spaceport Investment Incentive Program (MSII) Property, Sales, & Use Tax Exemptions Expedited Permitting Local Incentives Local Ad Valorem Tax Exemption Programs Local Impact Fee Deferrals Corporate Income Tax Exemption Innovation Incentive Fund Research & Development Tax Credit Research Commercialization Matching Grants Florida State Economic Development Trust Fund (SEED) Renewable Energy Production Tax Credit

Step 1: Reviewed Current Policies, Practices, and Resources (State and Regional Studies)
2010-2015 Strategic Plan for Workforce Development Florida Chamber Foundation The Elements of Reform Florida Economic Action Plan 2001-2011 Announcements EFI Strategic Plan JEDC Downtown Action Plan Real Estate Brochures and Maps 2003-2006 JAXPORT Marine Statistics 2005-2010 Air Cargo Traffic Reports 2010 JEA Electric Tariffs 2005-2010 Worksource Strategic Plan Workforce Florida Inc. Strategic Plan Spotlight on the Audience AFTA Creative Industries Report Cultural Council Economic Impact Report Spark Downtown Initiative Plan Urban Focus Executive Summary 2011 Book of Lists 2003-2009 Tourism Economic Impact Reports CDMP Economic Element 2006 South Florida CEDS - 2007 2008 Annual Visitor Profile and Economic Impact Study 2010-2015 Strategic Plan for Workforce Development Broward County Targeted Industry Study Executive Summary City of Miami Target Industry Study Chapters 5 & 6 Greater Miami and the Beaches 2010 Visitor Industry Overview Enterprise Florida Incentive Descriptions Knight Foundation Soul of the Community Study List of Completed Projects 2000 to Present Mayors Economic Summit II Report January 2002 Miami River Marine Industry Economic Assessment and Profile Miami-Dade Aviation Department Facts At-a-Glance Miami-Dade County: Economic and Demographic Profile October, 2010 One Community One Goal Update One Community One Goal: A Targeted Industry Study for Miami-Dade County One Community One Goal: Original OCOG Reports 1997-1999 Qualified Targeted Industries List Target Industry Update Final January 2010 WorldCitys Whos Here Global Economic Impact Study
10

Step 1: Reviewed Current Policies, Practices, and Resources (Other)


Taxes Regulatory Climate Economic Development Practices

11

Step 2: Talked to Corporate Decision Makers and Site Consultants


Conducted interviews with companies and/or consultants in each of Floridas target industries
Received 42 projects from Enterprise Florida and 68 projects from others (utilities, regional groups, locals, etc.)

Surveyed the Site Selection Guild

12

13

Step 3: Talked to Regional and Local Economic Developers


Interviewed top level state officials
Enterprise Florida - Chief Executives: Gray Swoope, Melissa Medley, Griff Salmon Enterprise Florida Business Development: Crystal Sircy, Rob Sitterley, Marty Wilson Florida Economic Development Council (FEDC): Amy Evancho, Ed Schons Department of Economic Opportunity (DEO): Michelle Dennard, Director, Division of Strategic Business Development Workforce Florida: Chris Hart, President / CEO; Andra Cornelius, Vice President of Business and Workforce Development Opportunities

Surveyed regional and local developers

14

15

Step 4: Conducted in-house benchmarking analysis


Benchmarking States
Alabama Georgia North Carolina Michigan Texas

Analysis
Target Industries Taxes Incentives Regulatory Climate Economic Development Practices

16

Target Industry Analysis

17

Aviation / Aerospace
Niche Sectors: Aircraft & Aircraft Parts Manufacturing, Maintenance Repair & Overhaul of Aircrafts, Navigation Instrument Manufacturing, Flight Simulator Training, Space Vehicles and Guided Missile Manufacturing, Satellite Communications, Space Technologies, and Launch Operations

Key Competiveness Issues


Continued growth in the sector with growing regional competition. Opportunities in large and small aircraft, these activities can cross over into advanced materials and related supplier parts production. Aggressive high value incentives at state and local level will be important

Enhancements for Florida


Increase portfolio of ready sites, particularly those with runway access Training is key critical driver for companies and winning states are putting multithousands of dollars per job into training, and also enhancing training capability Incentive enhancements would follow these issue significantly enhanced industrial training resources, and developing a portfolio of ready airport sites
18

Clean Technology
Niche Sectors: Biomass and Biofuels Processing, Energy Equipment Manufacturing, Energy Storage Technologies, Photovoltaics, and Environmental Consulting

Key Competiveness Issues


Broadly defined dynamic sector with cutting edge and often risky technologies; focus on renewable energy generation, energy storage, green activities including mobility, lighting, etc. Opportunities in solar and wind energy generation, energy storage; these activities can cross over into advanced materials and process improvements associated with more traditional products. Florida presents a very large local market to prospects

Enhancements for Florida


Up front costs and finance are important, so FL-focused capital funds as well as elimination of sales tax on machinery and equipment will be important. Recruitment of specialized engineering talent and upper management are important and so call on FL to enhance its business image relative to tourism Electric reliability and costs are often critical as well
19

Financial / Professional Services


Niche Sectors: Banking, Insurance, Securities & Investments, Engineering, Legal, Accounting, and Consulting

Key Competiveness Issues


Large important office sector in which Florida has and continues to have success. Cost savings relative to major finance centers (NY and SF), established presence of workforce (concentrations in Broward and S. Florida as well as Tampa and Wall Street South), and record of success in spite of disaster risk are all strengths of Florida

Enhancements for Florida


Infrastructure costs will be focused on electric reliability and costs, and road infrastructure as it relates to commuting. Job-based incentives will be impactful, supported by training incentives Continued improvement of FLs business brand will help overcome executive reluctance to relocate critical operations (or him/herself) to FL
20

Homeland Security / Defense


Niche Sectors: Optical Instruments, Navigation Aids, Ammunition, Electronics, Military Vehicles, Shipbuilding & Repair, Computer Systems Design, and Simulation & Training

Key Competiveness Issues


Broadly defined dynamic sector with cutting edge and often risky technologies; typically tied to direct or indirect federal government funding Opportunities in aviation (unmanned vehicles) and information technology will be primary sources of projects and be realized in such areas as aviation, shipbuilding, simulations, etc. Floridas federal representatives will play an important role

Enhancements for Florida


Portfolio of sites, large and small, airport access and Class A, urban sites in info tech centers, even large remote sites, may all be sought by different prospects in this sector, so a strong diverse portfolio of ready sites is an advantage. Recruitment of specialized engineering talent and upper management are important and so again calls on FL to enhance its business image relative to tourism Electric reliability and costs are often critical as well Land incentives will be well received by prospects
21

Information Technology
Niche Sectors: Modeling, Simulation & Training, Optics and Photonics, Digital Media, Software, Electronics, and Telecommunications

Key Competiveness Issues


Challenge for Florida is its surprisingly strong presence of IT skills in the workforce, but lack of a concentration of stand alone IT firms. (No Silicon Peninsula positioning.) Image and communication are critical Capital sources find promising opportunities in FL but tend to tie investment with relocation to hubs such as CA and MA

Enhancements for Florida


Aggressive development of local, regional and statewide information technology networks, including physical urban concentrations Better direct communication between universities and their resources and young IT firms Electric reliability and costs are often critical as well, and tie to broader concern re disaster disruption risk, so infrastructure hardening is important Development of capital sources friendly to keeping start up firms in FL.
22

Life Sciences
Niche Sectors: Biotechnology, Pharmaceuticals, Medical Devices, Lab & Surgical Instruments, and Diagnostic Testing

Key Competiveness Issues


Florida appears poised for potential increase in activity in Life Sciences.
Leveraging the impact of the major research instititutions of Scripps and Planck is showing success University of Miami is in the marketplace with its Life Science center

Capital sources find promising opportunities in FL but tend to tie investment with relocation to hubs such as CA and MA Natural disaster risk is front of mind for large life science projects

Enhancements for Florida


Better direct communication between universities and their resources and young Life Science firms Electric reliability and costs are often critical as well, and tie to broader concern re disaster disruption risk, so infrastructure hardening is important Development of capital sources friendly to keeping start up firms in FL.

23

Manufacturing
Niche Sectors: Food and Beverage, Automotive & Marine, Plastics & Rubber, and Machine Tooling

Key Competiveness Issues


Challenge for Florida is its geography parts of Florida are one days drive to the mainland. Florida targets are those operations that will serve Florida, and high value products for whom shipping is a modest relative cost.

Enhancements for Florida


Development of broad statewide portfolio of ready sites Ease of incentive granting for sites and infrastructure Increased funding for, and Governors authority over, Quick Action Closing Fund Upgrade of state industrial training resources and training incentives Communities prepared to offer ready sites with all infrastructure at no cost to the prospect.

24

Corporate Headquarters

Key Competiveness Issues


Primary challenge for Florida is image a great place to come have fun, not recognized as a place to come establish your HQ. (The fun image actually works against the work image.) Strengths include very good air service both domestic and international excellent regarding Latin America, weal regarding Asia) Florida successfully targets those operations seeking a hemispheric presence from which to serve North and South America Lack of F500 HQ concentration, so some concern re headquarters level legal and financial services

Enhancements for Florida


Image and campaign. Promotion of air service assets Promotion of Floridas Quality of Life assets (more than just their visit assets) Relocation cost incentives (prime target for enhanced Closing Fund)
25

Global Logistics
Key Competiveness Issues
Challenge for Florida is its geography parts of Florida are one days drive to the mainland. Florida targets are those operations that will serve Florida
International and perishable goods best fit for FL distirbution

Locations in northern Florida that provide access to Florida and much of southeast US within one days drive time.

Enhancements for Florida


Development of broad statewide portfolio of ready sites, particularly distribution focused in the northern part of the state Ease of incentive granting for sites and infrastructure
Electric (including redundant power) and transportation most critical

Upgrade of state industrial training resources and training incentives Communities prepared to offer ready sites with all infrastructure at no cost to the prospect.

26

Competitiveness Issues

27

Cost of Doing Business

(+) POSITIVE

(=) NEUTRAL

(-) NEGATIVE

Recommendations Modernize Taxes


Implement Single Factor Sales Appointment Formula for Corporate Income Tax Eliminate Sales Tax on Commercial Leases

Streamline Permitting Process Establish / Strengthen Liaisons with Other State Agencies

28

Real Estate and Infrastructure

Recommendations Continue to Develop Portfolio of Sites and Buildings


Up-to-Date Database Certified Sites Program

Enhance Rural Economic Development Toolbox Leverage Partnerships with Utilities Increase Use of Utility Economic Development Riders

29

Talent and Training

Recommendations Improve Quick Response Training (QRT)


Increase Funding for Workforce Training Establish Capability through Program Talent Acquisition

Improve Existing Industry Relationships Market Current Workforce Talent Assets Improve Project Management Tactics Align Training with Targets
Compile Database Collaborate with Education Institutions
30

Incentives

Recommendations Streamline Incentive Authorization Process


Continue Improvement between Enterprise Florida and Department of Economic Opportunity Increase Governors Authority to Offer Incentives

Enhance Economic Development Toolbox


Implement County Tier System Revise Wage Levels for Incentive Eligibility

31

Incentives, continued
Recommendations Improve Flexibility and Effectiveness of Existing Programs
Eliminate Rarely Used Incentives Standardize Local Match Requirements Establish Carry-forwards for Corporate Income Tax Incentives Commit to Full Sales Tax Exemption on Machinery and Equipment

Increase Up-front Incentives Create Option for Local Sales Tax to Benefit Economic Development

32

Economic Development Strategy / Branding

Recommendations Increase Funding Promote Floridas Business Brand Align Marketing to Target Industries

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Economic Development Administration

Recommendations Develop Staff


Professional Development and Industry Expertise

Strengthen Ally Networks


Regional/Local and Utilities

Expand Project Management Team / Prepare for Increased Interest in Florida Improve Professionalism of Staff
Cultural Training and Prospect Visit Management
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MSC Contact Information

Mark M. Sweeney Senior Principal msweeney@mccallumsweeney.com McCallum Sweeney Consulting 550 South Main Street, Suite 550 Greenville, SC 29601 864-672-1600 (main) 864-672-1610 (fax) www.mccallumsweeney.com

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