Enterprise Florida Board Meeting Agenda · Enterprise Florida Board Meeting Minutes | September 13, 2012 DRAFT Minutes Enterprise Florida Board Meeting September 13, 2012 A regular

Enterprise Florida Board Meeting | November 9, 2012 Updated: 11/5/2012

Enterprise Florida Board Meeting Agenda Rosen Shingle Creek Hotel • 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-Chair’s Report .......................................................... Hal Melton, Vice Chair

September Board Minutes Consent Agenda Annual Financials & Audit Report………………………………………………………...Marshall Criser

8:40 a.m. Chairman’s 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. President’s Update ............................. Gray Swoope, Secretary of Commerce/President & CEO 9:25 a.m. Board Q&A with the President .............................................................................. Board Members 9:35 a.m. Florida’s 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 Minutes | September 13, 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 Dwayne Ingram Alan Becker Belinda Keiser Jay Beyrouti Beth Kirkland Jesse Biter Chris Kise Pam Bondi Fred Leonhardt Park Brady Bob McAdam Ron Campbell Hal Melton Stan Connally Joseph Meterchick Andrew Corty Deborah Millin Brett Couch Gilberto NevesMarshall Criser Susan Pareigis Hayden Dempsey Ernesto Perez Vinny Dolan Winfred Phillips Bill Dymond Henry Rodriguez Blake Gable Denise Saiki Danny Gaekwad Gene Schaefer Kevin Gillen Governor Rick Scott Gordon Gillette Kelly Smallridge Bill Heavener Hal Valeche Kevin Hyman Mark Wilson

Present Via Telephone: Others Present: Debra Duvall David Balloff (Gary Spulak’s alternate) Howard Halle Brook McKnighton (Adam Putnam’s designee)Marshall Heard Jeff Parrish (Dominic Calabro’s alternate) Cindy Kane (Harris Corporation) Mary Snow (Tony Villamil’s alternate) Andy Rosen Michael Sole (Eric Silagy’s alternate) Rick Wilson Gray Swoope

Agenda: I. Welcome & Roll Call II. Action Items & Vice-Chairman’s 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. Chairman’s Report IV. Project Overview from Tampa Bay Region V. President’s Report

VI. 2012 Competitiveness Study VII. Stakeholders Council Update

VIII. New Business IX. Closing Remarks & Adjournment

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 Chairman’s 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.



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. Chairman’s 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 company’s 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 Florida’s 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 that’s your message.”

A question and answer period followed Haslam’s presentation.

President’s 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.



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.



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 Florida’s 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 Florida’s business brand (reluctance of executives to put an operation in a location where everybody comes to play)



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; Florida’s 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 Governor’s 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 it’s 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.



Companies/ Local/ State Consultants Regional EDOs Benchmark Findings

Cost of Doing Business Negative Neutral Neutral Recommendations: modernize taxes

Real Estate and Infrastructure Negative Negative Negative Recommendations: portfolio of sites and buildings

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 Neutral Recommendations: increase funding, promote business brand

ED Administration Neutral 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.



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 don’t 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 Meetings | November 9, 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 The St. Joe Company: Park Brady, CEO

o Walt Disney Parks & Resorts, Anthony Connelly, SVP & CFO U.S.

o TD Bank: Kevin Gillen, Regional President Florida

o JPMorgan Chase & Co. : Mark Bensabat, CEO, Middle Market Banking

o 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 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 EFI’s 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 EFI’s 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 EFI’s 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. EFI’s 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 EFI’s 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 EFI’s 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 [email protected]

Financial Report


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Financial Report


Enterprise Florida, Inc. Financial Statements For the Quarter Ending September 30, 2012

Statement of Financial Position, Unaudited

Attachment A-1 September 30, 2012 & 2011 – Comparative

Attachment A-2 September 30, 2012 & 2011 – Detail Statement of Activities for the Three Months Ending, Unaudited

Attachment B-1 September 30, 2012 & 2011 – Comparative

Attachment B-2 September 30, 2012 & 2011 – Detail Administered Activity by Program as of September 30, 2012

Financial Report


$ %2012 2011 Change Change

Assets1 Cash and Cash Equivalents - unrestricted 11,153$ 12,106$ (953)$ -7.87% (A)

2 Cash and Cash Equivalents - restricted 16,092 3,648 12,444 341.12% (B)

3 Cash and Cash Equivalents - escrow 18,223 35,673 (17,450) -48.92% (C)

4 Accounts Receivable 6,420 3,605 2,815 78.09% (D)

5 Other Assets 663 1,163 (500) -42.99% (E)

6 Total Assets 52,551$ 56,195$ (3,644)$ -6.48%

Liabilities and Net Assets7 Accounts Payable and Other Liabilities 1,499$ 2,083$ (584)$ -28.04% (F)

8 Deferred Revenue 4,432 5,342 (910) -17.03% (G)

9 Escrow Payable 18,214 35,663 (17,449) -48.93% (C)

10 Total Liabilities 24,145 43,088 (18,943) -43.96%

Net Assets11 Temporarily Restricted 18,485 3,801 14,684 386.32% (B)

12 Unrestricted 9,921 9,306 615 6.61% (H)

13 Total Net Assets 28,406 13,107 15,299 116.72%

14 Total Liabilities and Net Assets 52,551$ 56,195$ (3,644)$ -6.48%

(A)

(B)

(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)

(E)

(F)

(G)

(H)

(I)(J)(K)(L)(M)

(N)

(O)

(P)

(Q)

(R)

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.

The increase in unrestricted net assets correlates to the inclusion of the Sports and Minority Business divisions.

Professional Fees are in line with the budget. The increase over prior year relates to the merger of the Sports and Minority Business divisions.

International offices are relatively on track with prior year-to-date numbers and the budget for the year.

Unrestricted funds for operations and administered programs.

Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis.

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.

Accounts receivable includes the first quarter appropriation, trade accounts receivable, and program related income related to the SSBCI program.

September 30

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

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.

The travel budget was increased for FY 2012/13 to meet the needs of the organization.

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.

Accounts payable decreased related to operations and FL Sports grants awarded.

Enterprise Florida, Inc.Statement of Financial Position, Unaudited

Attachment A-1($ in Thousands)

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.

Other assets decreased for depreciation expense recorded at 6/30/12.

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 .

Financial Report


Operations Administered Corporate Restricted TotalAssets

15 Cash and Cash Equivalents - unrestricted 4,632$ 4,364$ 2,157$ -$ 11,153$ 16 Cash and Cash Equivalents - restricted - - - 16,092 16,092 17 Cash and Cash Equivalents - escrow 18,223 - - - 18,223 18 Accounts Receivable 4,027 - - 2,393 6,420 19 Other Assets 663 - - - 663 20 Total Assets 27,545$ 4,364$ 2,157$ 18,485$ 52,551$

Liabilities and Net Assets21 Accounts Payable and Other Liabilities 1,497$ 2$ -$ -$ 1,499$ 22 Deferred Revenue 70 4,362 - - 4,432 23 Escrow Payable 18,214 - - - 18,214 24 Total Liabilities 19,781 4,364 - - 24,145

Net Assets25 Temporarily Restricted - - - 18,485 18,485 26 Unrestricted 7,764 - 2,157 - 9,921 27 Total Net Assets 7,764 - 2,157 18,485 28,406

28 Total Liabilities and Net Assets 27,545$ 4,364$ 2,157$ 18,485$ 52,551$

Operations Administered Corporate Restricted TotalAssets

29 Cash and Cash Equivalents - unrestricted 4,184$ 5,324$ 2,598$ -$ 12,106$ 30 Cash and Cash Equivalents - restricted - - - 3,648 3,648 31 Cash and Cash Equivalents - escrow 35,673 - - - 35,673 32 Accounts Receivable 3,605 - - - 3,605 33 Other Assets 1,010 - - 153 1,163 34 Total Assets 44,472$ 5,324$ 2,598$ 3,801$ 56,195$

Liabilities and Net Assets35 Accounts Payable and Other Liabilities 2,083$ -$ -$ -$ 2,083$ 36 Deferred Revenue 18 5,324 - - 5,342 37 Escrow Payable 35,663 - - - 35,663 38 Total Liabilities 37,764 5,324 - - 43,088

Net Assets39 Temporarily Restricted - - - 3,801 3,801 40 Unrestricted 6,708 - 2,598 - 9,306 41 Total Net Assets 6,708 - 2,598 3,801 13,107

42 Total Liabilities and Net Assets 44,472$ 5,324$ 2,598$ 3,801$ 56,195$

September 30, 2011

September 30, 2012

Enterprise Florida, Inc.Statement of Financial Position, Unaudited

Attachment A-2($ in Thousands)

Financial Report


Actual Budget Difference Actual Budget Difference

Revenues:43 State Appropriations 3,950$ 3,962$ (12)$ (D) 2,960$ 3,400$ (440)$ 44 Private Cash Contributions 210 486 (276) (I) - 300 (300) 45 Other Revenues 570 463 107 (J) 318 421 (103) 46 Total Revenues 4,729 4,910 (181) 3,278 4,121 (843)

Expenses:47 Payroll and Related Costs 1,901$ 1,920$ (19)$ (K) 1,652$ 2,076$ (424)$ 48 Operating, General and Administrative 882 1,439 (557) (L) 570 777 (207) 49 Trade Shows 703 561 142 (M) 414 321 93 50 International Offices 341 339 3 (N) 327 346 (19) 51 Professional Fees 180 227 (47) (O) 238 246 (8) 52 Advertising & Marketing 11 266 (255) (P) 19 266 (247) 53 Travel 83 130 (47) (Q) 46 89 (43) 54 Total Expenses 4,102 4,882 (782) 3,266 4,121 (855)

55 Change in net assets - operations 627 28 599 12 - 12 56 Change in net assets - temp restricted 252 - 252 (R) (34) - (34) 57 Net assets, beginning of period 27,527 - 27,527 13,129 13,129 - 58 Net assets, end of period 28,406$ 28$ 28,379$ 13,107$ 13,129$ (22)$

59 Revenue - Pass Throughs & Grants 945 - 945 165 - 165 60 Expenses - Grants to Other Organizations 945 - 945 165 - 165

61 Revenue - Temporarily Restricted 8,350 - 8,350 (R) - - - 62 Expenses -Temporary Restricted 8,098 - 8,098 (R) 34 - 34

(A)

(B)

(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 fourth quarter appropriation, trade accounts receivable, and program related income related to the SSBCI program.

(E) Other assets increased for new fixed assets purchased in FY 2011/12, as well as the new loan programs administered under the Capital programs.

(F)

(G)

(H)(I)

(J)(K)

(L)(M)

(N)

(O)

(P)

(Q)

(R)

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.

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.

($ in Thousands)

Statement of Activities

Increase in payroll and benefits is from the addition of the new program staff and the merger of the Sports and Minority Business divisions.

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 .

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.

The travel budget was increased for FY 2012/13 to meet the needs of the organization.

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.

Professional Fees are in line with the budget. The increase over prior year relates to the merger of the Sports and Minority Business divisions.

International offices are relatively on track with prior year-to-date numbers and the budget for the year.

Revenue related to events is higher than the budget and the prior year. These fees directly offset event expenses.

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.

Unrestricted funds for operations and administered programs.

Corporate contributions are budgeted on a straight-line basis with actual collections recorded on a cash basis.

Enterprise Florida, Inc.

For the Three Months Ending, Unaudited

September 30, 2012 September 30, 2011

Attachment B-1

Financial Report


Operations Administered Corporate Restricted Total

Revenues:63 State Appropriations 3,950$ -$ -$ -$ 3,950$ 64 Private Cash Contributions - - 210 - 210 65 Other Revenues 570 - - - 570 66 Total Revenues 4,520 - 210 - 4,729

Expenses:67 Payroll and Related Costs 1,901$ -$ -$ -$ 1,901$ 68 Operating, General and Administrative 819 - 63 - 882 69 Trade Shows 703 - - - 703 70 International Offices 341 - - - 341 71 Professional Fees 180 - - - 180 72 Advertising & Marketing 11 - - - 11 73 Travel 83 - - - 83 74 Total Expenses 4,039 - 63 - 4,102

75 Change in net assets - operations 481 - 147 - 627 76 Change in net assets - temp restricted - - - 252 252 77 Net assets, beginning of period 7,283 - 2,010 18,233 27,526 78 Net assets, end of period 7,764$ -$ 2,157$ 18,485$ 28,406$

79 Revenue - Pass Throughs & Grants - 945 - - 945 80 Expenses - Grants to Other Organizations - 945 - - 945

81 Revenue - Temporarily Restricted - - - 8,350 8,350 82 Expenses -Temporary Restricted - - - 8,098 8,098

Operations Administered Corporate Restricted Total

Revenues:83 State Appropriations 2,960$ -$ -$ -$ 2,960$ 84 Private Cash Contributions - - - - - 85 Other Revenues 317 - 1 - 318 86 Total Revenues 3,277 - 1 - 3,278

Expenses:87 Payroll and Related Costs 1,652$ -$ -$ -$ 1,652$ 88 Operating, General and Administrative 326 - 244 - 570 89 Trade Shows 414 - - - 414 90 International Offices 327 - - - 327 91 Professional Fees 238 - - - 238 92 Advertising & Marketing 19 - - - 19 93 Travel 46 - - - 46 94 Total Expenses 3,022 - 244 - 3,266

95 Change in net assets - operations 255 - (243) - 12 96 Change in net assets - temp restricted - - - (34) (34) 97 Net assets, beginning of period 6,453 - 2,841 3,835 13,129 98 Net assets, end of period 6,708$ -$ 2,598$ 3,801$ 13,107$

99 Revenue - Pass Throughs & Grants - 165 - - 165 100 Expenses - Grants to Other Organizations - 165 - - 165

101 Revenue - Temporarily Restricted - - - - - 102 Expenses -Temporary Restricted - - - 34 34

September 30, 2011

September 30, 2012

Enterprise Florida, Inc.Statement of Activities

For the Three Months Ending, UnauditedAttachment B-2

($ in Thousands)

Financial Report


Funds FundsReceived Funds In

Contract From Paid To HouseAwarded State Recipients 9/30/12

Base Protection:102 Awarded in 11/12 18,950 18,950 - 18,950 103 Awarded in 10/11 117,400 117,400 92,557 24,843

Defense Infrastructure:104 Awarded in 12/13 400,000 - - - 105 Awarded in 11/12 1,181,245 445,311 200,000 245,311 106 Awarded in 10/11 5,000,000 3,367,797 2,163,155 1,204,642 107 Awarded in 09/10 1,367,325 1,385,457 921,321 464,136 108 Awarded in 08/09 10,600,000 10,600,000 10,400,000 200,000 109 Awarded in 07/08 2,782,000 2,113,344 1,375,589 737,755 110 Awarded in 06/07 5,314,500 3,635,718 3,533,729 101,989 111 Awarded in 05/06 3,498,165 3,203,404 3,199,713 3,691 112 Awarded in 04/05 3,550,000 3,020,000 2,567,380 452,620

Defense Reinvestment:113 Awarded in 11/12 850,000 850,000 181,773 668,227 114 Awarded in 10/11 850,000 850,000 774,809 75,191

Rural Development:115 Awarded in 10/11 587,500 587,500 534,022 53,478

Rural Infrastructure:116 Awarded in 10/11 1,100,000 958,062 846,974 111,088

Interest (payable to the State of Florida)117 Earned - - - 2,424

118 Ending Balance 37,217,085 31,152,943 26,791,022 4,364,345

Detail of Administered Activities by ProgramEnterprise Florida, Inc.

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 1 – 2 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Financial Position 3 Consolidated Statement of Activities 4 Consolidated Statement of Cash Flows 5 Notes to Consolidated Financial Statements 6 – 23 SUPPLEMENTARY INFORMATION AND OTHER INDEPENDENT AUDITORS’ REPORTS Consolidating Statement of Financial Position 24 Consolidating Statement of Activities 25

Schedule of Activities by Consolidated Entity 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 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 29 – 30 Schedule of Expenditures of Federal Awards and State Financial Assistance 31 Notes to Schedule of Expenditures of Federal Awards and State Financial Assistance 32 – 33 Schedule of Findings and Questioned Costs 34 – 36 Summary Schedule of Prior Audit Findings and Corrective Action Plan 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 Organization’s 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.

2

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 A-133, 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 ENTITIESConsolidated Statement of Financial Position

June 30, 2012

Cash and cash equivalents:Operating 4,435,431$ Limited as to use 86,586,341

Due from State of Florida 12,933,064 Accounts and loans receivable 571,107 Loan receivable under the State Small Business Credit Initiative 586,427 Due from Cypress Equity Fund, Ltd. 14,922 Prepaid and other assets 854,437 Leaseholds, furniture and equipment, net 481,960 Florida Opportunity Fund Clean Energy Program loans receivable 1,530,000 Florida Opportunity Fund investments in venture capital partnerships 9,436,448 Florida Opportunity Fund direct investments 11,874,750 Investment in limited partnership 6,214

Total Assets 129,311,101$

Liabilities:Accounts and grants payable 1,618,208$ Accrued liabilities 1,077,130 Escrow payable 31,138,200 Deferred revenue 4,304,201

Total Liabilities 38,137,739

Net Assets:Unrestricted 6,959,509 Temporarily restricted 84,213,853

Total Net Assets 91,173,362

Total Liabilities and Net Assets 129,311,101$

Liabilities and Net Assets

Assets

See notes to consolidated financial statements. 3

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIESConsolidated Statement of Activities

Year Ended June 30, 2012

Temporarily Unrestricted Restricted Total

Revenues:State operating assistance 15,074,302$ 7,429,000$ 22,503,302$ State Small Business Credit Initiative - 11,252,499 11,252,499 Capital grant to Florida Opportunity Fund, Inc. - 8,779,873 8,779,873 Private investment contributions 1,425,000 - 1,425,000 Trade show revenue 838,327 272,699 1,111,026 Federal grant assistance - 634,407 634,407 In-kind contributions 206,237 330,000 536,237 Management and administration fees 204,822 - 204,822 Net realized gain on investments - 267,277 267,277 Net unrealized gain on investments - 630,573 630,573 Other income 265,638 574,314 839,952 Net assets released from restrictions 7,007,657 (7,007,657) -

Total Revenues 25,021,983 23,162,985 48,184,968

Expenses:General and administrative 8,156,033 - 8,156,033 Payroll and related costs 7,493,330 - 7,493,330 Professional fees 4,959,510 - 4,959,510 Grants to sub-recipients 3,974,302 - 3,974,302 Depreciation 278,542 - 278,542 Miscellaneous 2,504 - 2,504

Total Expenses 24,864,221 - 24,864,221

Change in Net Assets Before Acquisitions 157,762 23,162,985 23,320,747

Excess of assets acquired over liabilities assumed in acquired entities - 2,478,340 2,478,340

Change in Net Assets 157,762 25,641,325 25,799,087

Net Assets, Beginning of Year 6,801,747 58,572,528 65,374,275

Net Assets, End of Year 6,959,509$ 84,213,853$ 91,173,362$


ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIESConsolidated Statement of Cash Flows


Cash Flows From Operating Activities:Increase in net assets 25,799,087$ Adjustments to reconcile increase in net assets to net cash provided by operating activities:

Depreciation 277,093 Loss on disposal of assets 2,504 Funding of venture capital partnerships investments (2,895,631) Net unrealized gain from investments (630,573) Proceeds from investment distributions 484,638 Net realized gain from investments (267,277) Equity in earnings of affiliate (1,499) Changes in:

Due from State of Florida 836,372 Accounts and loans receivable (905,335) Due from Cypress Equity Fund, Ltd. (20,621) Prepaid and other assets (388,815) Investment in limited partnership 10,764 Accounts and grants payable (1,407,532) Accrued liabilities (16,909) Escrow payable 274,866 Deferred revenue 565,203

Net Cash Provided by Operating Activities 21,716,335

Cash Flows From Investing Activities:Purchases of equipment (88,289) Funding of loans receivable (2,695,000) Funding of direct investments (9,625,000) Repayment of loan receivable 1,165,000 Distributions from Cypress Equity Fund, Ltd. 7,926

Net Cash Used in Investing Activities (11,235,363)

Net Increase in Cash and Cash Equivalents 10,480,972

Cash and Cash Equivalents, Beginning of Year 80,540,800

Cash and Cash Equivalents, End of Year 91,021,772$

Classified in Consolidated Statement of Financial Position:Cash and cash equivalents - operating 4,435,431$ Cash and cash equivalents - limited as to use 86,586,341

Cash and Cash Equivalents, End of Year 91,021,772$

Supplemental Schedule of Noncash Investing Activities:Conversion of loan to equity 1,000,000$


ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIES Notes to Consolidated Financial Statements


6

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 Florida’s 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-for-profit 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”)



7

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 FOF’s 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. FOF’s 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 Florida’s Board of Directors also serve as Directors of Space Florida. The 2011 legislation also affected Enterprise Florida’s 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.



8

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 Florida’s 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 pro-business 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.



9

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 5-7 yearsOffice furniture 5-7 yearsOffice equipment 5 yearsComputers and software 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.



10

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 Corporation’s 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.



11

Note 1 - Summary of Significant Accounting Policies (continued) State Operating Assistance Revenue State operating assistance revenue represents State appropriations for the Organization’s 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 pass-through 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.



12

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 Organization’s 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 Organization’s 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.



13

Note 2 - Cash and Cash Equivalents Limited as to Use The Organization’s cash and cash equivalents limited as to use consist of the following as of June 30, 2012:

Enterprise Florida Escrow 31,138,200$ Programs administered by Enterprise Florida

FL Defense Support Task Force 2,645,732 State Small Business Credit Support Initiative 1,832,014 Rural Strategic Marketing 1,350,776 Small Business Technology Growth Fund 922,783 Florida International Business Expansion Initiative 656,044 Military Base Protection 322,304 Minority Business Development 272,657 Technology related programs 82,724

Pass through grants administered by Enterprise FloridaFunds restricted for grant programs 3,982,637

Total Enterprise Florida 43,205,871

Florida Opportunity Fund, Inc. 40,556,291 Florida Sports Foundation, Inc. 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.



14

Note 5 - Leaseholds, Furniture and Equipment Leaseholds, furniture and equipment consist of the following as of June 30, 2012: Leasehold improvements 354,055$ Office furniture 407,920 Office equipment 224,738 Computers and software 612,556

1,599,269 Less accumulated depreciation (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 energy-related 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 Organization’s 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.



15

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 FOF’s 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.



16

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.



17

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 ValuePercent of Net Assets

Level I -$ - Level II - - Level III 21,311,198 23%Total investments 21,311,198$ 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

PartnershipsDirect

Investments

Opening Balance at 7/1/11 6,127,605$ 1,249,750$

Total gains or losses (realized and unrealized) included in changes in net assets 897,850 -

Purchases 2,895,631 10,625,000

Sales (484,638) -

Transfers in and / or out of Level III - -

Ending Balance at 6/30/12 9,436,448$ 11,874,750$

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 630,573$ -$



18

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:

Assets 1,152,679$ Liabilities 91,570

Partners' capital 1,061,109$

Cypress Management's capital account balance 6,214$

Schedule of Financial Position InformationDecember 31, 2011

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 Management’s year ended June 30, 2012.

Revenues 232,429$ Expenses 83,190

Net increase in partners capital 149,239$

Cypress Management's change in earnings 1,500$

Schedule of Operations InformationYear Ended December 31, 2011

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 Management’s 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.



19

Note 8 – Escrow Payable

The State has awarded a total of $64,771,034 to twenty-four companies under the State’s 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 State’s 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 $10,600,090 Florida Defense Support Task Force 3,892,843 Rural Strategic Marketing 1,350,776 Small Business Technology Growth Fund 1,075,783 Florida International Business Expansion Initiative 656,044 Military Base Protection 323,021 Minority Business Development 254,753 Technology related programs 82,724

18,236,034Florida Opportunity Fund, Inc. 63,636,543 Florida Sports Foundation, Inc. 2,341,276

84,213,853$



20

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. 11,100,000$

Pass-through grants administered by Enterprise Florida, Inc.:Visit Florida 34,899,209 Defense Infrastructure 2,540,681 Defense Reinvestment 725,319 Military Base Protection 38,866 Florida Trade and Exhibition Center (CAMACOL) 350,000 SE Japan Association/Florida Korea Economic Coop. Comm. 200,000 Regional Rural Development 355,450 Rural Infrastructure 313,686

Total Pass-through grants 39,423,211

Web Portal unrestricted revenue 300

Less: Pass-through grants not presented as activities (35,449,209)

Total unrestricted state operating assistance 15,074,302

Other programs administered by Enterprise Florida, Inc.:Military Base Protection Program 65,099 Minority Business Development 200,000 Florida Defense Support Task Force 5,000,000

5,265,099

Florida Sports Foundation, Inc. 2,163,901

Total temporarily restricted revenue 7,429,000

Total State operating assistance revenue 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.



21

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 Florida’s 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 Florida’s 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 Foundation’s 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.



22

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 725,876$ 2014 228,660 2015 168,279 2016 141,490 2017 35,129

1,299,434$

The Organization’s 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 investee’s 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 FOF’s 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.



23

Note 14 – Functional Expenses The Organization’s activities include numerous functions, summarized as follows:

Program Services:International Trade and Development 6,040,871$ Strategic Partnerships 5,508,325 Business Development 2,529,415 Marketing, Information, and Communications 1,992,130 Minority Business Development 274,312

Supporting Services - General and Administrative 4,432,967 Cypress Management Program Services 71,274 Florida Sports Foundation Program Services 2,464,220 Florida Opportunity Fund Program Services 1,550,707

Total Expenses 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.

SUPPLEMENTARY INFORMATION AND OTHER INDEPENDENT AUDITORS’ REPORTS

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27

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 Organization’s 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 Organization’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Organization’s 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 entity’s 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.

28

Compliance and Other Matters As part of obtaining reasonable assurance about whether the Organization’s 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.


29

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 Organization’s 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 Florida’s 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.

30

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 Organization’s 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 Organization’s 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 Organization’s 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.


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31

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIESNotes to Schedule of Expenditures of Federal Awards and State Financial Assistance


GAAP Basis Statutory Basis(1) (2)

Total matching private funds 5,278,716$ 12,394,801$

Direct cash (3) 1,425,000$ 1,387,500$

Cash donations from assisted organizations (4) 1,368,296$ 1,529,174$

Jointly raised cash (5) -$ -$

Fees charged for products or services (6) 2,485,420$ 2,986,314$

Copayments, stock, warrants, royalties or other private resources (7) -$ 2,101,438$

Quick-Response Training Program in-kind contributions (8) -$ 4,390,375$

3. Defined in Section 288.904(2)(b)(1) as cash given directly to Enterprise Florida, Inc., for itsoperations, including contributions from at-large members of the board of directors.

Note 1 - Presentation

This Schedule of Expenditures of Federal Awards and State Financial Assistance is presented on theaccrual 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 OMBCircular A-133 and Chapter 10.650, Rules of the Florida Auditor General , and, therefore, certainamounts in this Schedule may differ from amounts presented in, or used in preparation of theconsolidated financial statements. Primarily the amounts differ due to the State Energy Programincluding cumulative grant proceeds since inception.

Note 2 - Match Requirement

1. GAAP basis amounts are reported in accordance with accounting principles generally accepted inthe United States of America, which is the same basis of accounting as the accompanyingconsolidated financial statements. For purposes of the above calculation, amounts relate only toEnterprise Florida, Inc.

2. Florida Statutory basis amounts are reported as defined in Section 288.904(2), Florida Statutes. In-kind contributions under this basis of accounting include amounts that do not meet the GAAP basisrequirements for revenue recognition.

Enterprise Florida, Inc. receives funding for operations from the DEO which is subject to FloridaStatute Section 288.904(2) match requirements. The match requirements are designed to requireEnterprise Florida, Inc. to secure statutory basis match of at least 100 percent of the State'soperating 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.

32

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIESNotes to Schedule of Expenditures of Federal Awards and State Financial Assistance


8. Defined in Section 288.047(9) as eligible in-kind contributions received under the Quick-ResponseTraining Program, administered by Workforce Florida, Inc., which may be counted toward thematching requirements of Section 288.904(2). Contributions presented consist of projected wages incontracts entered into during fiscal 2012 that are estimated to be paid to trainees while in the Quick-Response Training Program. This method of reporting in-kind contributions under the Quick-Response Training Program is consistent with that specified in a Memorandum of Understandingamong Enterprise Florida, Workforce Florida, Inc. and DEO, executed April 2008.

Note 2 - Private-Sector Support (continued)

4. Defined in Section 288.904(2)(b)(2) as cash donations from organizations assisted by thedivisions.

5. Defined in Section 288.904(2)(b)(3) as cash jointly raised by Enterprise Florida, Inc., and a privatelocal economic development organization, a group of such organizations, or a statewide privatebusiness organization that supports collaborative projects.

5. Defined in Section 288.904(2)(b)(4) as cash generated by fees charged for products or services ofEnterprise 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 privateresources dedicated to Enterprise Florida, Inc., or its divisions.

33

ENTERPRISE FLORIDA, INC. AND CONSOLIDATED ENTITIESSchedule of Findings and Questioned Costs –

Federal Awards Programs and State Financial Assistance ProjectsYear Ended June 30, 2012

Financial Statement Section

Type of auditors' report issued:

Internal control over financial reporting:

Material weakness(es) identified? yes x no

Significant deficiency(ies) identified? yes x none reported

Noncompliance material to financial statements noted? yes x no

Federal Awards and State Projects Section

Internal control over major programs:

Material weakness(es) identified? yes x no

Significant deficiency(ies) identified? yes x none reported

Type of auditors' report on compliance formajor federal programs and state projects:

Any audit findings disclosed that are required to be reported in accordance with Circular A-133 yes x no

Any audit findings disclosed that are required to be reported in accordance with Chapter 10.650 x yes no

Part I - Summary of Auditors' Results

Qualified

Unqualified

34



Federal Awards and State Projects Section (continued)

Identification of major federal programs and state projects:

Federal Programs:

Small Business Administration State Trade and Export Promotion Pilot Sport Program

U.S. Department of Energy ARRA - State Energy Program

State Projects:

Florida Department of Economic Opportunity Enterprise Florida, Inc. Military Base Protection

Dollar threshold used to determine Type A programs:

FederalState

Auditee qualified as low-risk auditee for federal purposes? x yes no

There were no findings required to be reported by OMB Circular A-133

CSFA Number

31.003/40.003

300,000$

Name of Program or Cluster CFDA Number

84.041

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.

This section identifies the significant deficiencies, material weaknesses, fraud, illegal acts, violations ofprovisions of contracts and grant agreements, and abuse related to the financial statements that arerequired 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.

59.061

Part I - Summary of Auditors' Results (continued)

583,342$

Name of Project

31.044/40.014

Part II - Financial Statement Findings

35



Part IV - State Project Findings and Questioned Costs

Criteria: The Statute requires a 100% match of the state’s $14,200,000 operating investment for fiscalyear end June 30, 2012.

This section identifies the significant deficiencies, material weaknesses, and material instances ofnoncompliance, including questioned costs, as well as any material abuse findings, related to the auditof major state projects, as required to be reported by Chapter 10.650, Rules of the Florida AuditorGeneral . There are no items related to state financial assistance required to be reported in amanagement letter.

Recommendation: We recommend that Enterprise Florida, Inc., with the assistance of WorkforceFlorida, continue to closely monitor the Quick Response Training Program data during the year andcontinue to communicate potential issues with meeting the matching requirements provided in Section288.904(2) to DEO on a timely basis.

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 matchingrequirements with respect to the funding of Enterprise Florida, Inc.’s operating activities by the Statelegislature. The Statute requires a 100% match of the state’s $14,200,000 operating investment forfiscal year end June 30, 2012, which includes: 1) Cash given directly to Enterprise Florida, Inc., for itsoperations, including contributions from at-large members of the board of directors; 2) Cash donationsfrom organizations assisted by the divisions; 3) Cash jointly raised by Enterprise Florida, Inc., and aprivate local economic development organization, a group of such organizations, or a statewide privatebusiness organization that supports collaborative projects; 4) Cash generated by fees charged forproducts 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 resourcesdedicated to Enterprise Florida, Inc., or its divisions. Florida Statute Sections 288.047(9) further specifyeligible in-kind contributions received under the Quick Response Training Program may be countedtoward the matching requirements of Section 288.904(2). The Quick Response Training Program isadministered by Workforce Florida, Inc. (“Workforce Florida”), an entity that is independent ofEnterprise Florida, Inc. These contributions consist of wages paid to trainees. Total match throughJune 30, 2012 is $12,394,801, resulting in a match deficiency of $1,805,199.

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 WorkforceFlorida, which is an organization outside of its control. The Quick Response Training Program data hasincreased from the prior year but is still significantly lower than in previous years due to slowereconomic 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.

Effect of Condition: Enterprise Florida, Inc. did not meet its matching requirements under FloridaStatutes. The Florida Department of Economic Opportunity ("DEO") has not imposed penalties orsanctions on Enterprise Florida, Inc.

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

37

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.

Florida Unemployment Rate Has Largest Drop of Any State in the NationUnemployment Rates (%) for states with 1.5 percentage point decline or more (Seasonally Adjusted)

December 2010 Compared to August 2012 Ranked by Change

Source: U.S. Bureau of Labor Statistics

www.flgov.com [email protected] (850) 488-7146

Record of Economic Growth GOVERNOR RICK SCOTTGOVERNOR RICK SCOTT

0.0 0.5 1.0 1.5 2.0 2.5

Idaho

Kentucky

California

Massachusetts

Arizona

Michigan

Nevada

Utah

Missouri

Ohio

Florida

Percentage Point Drop In Unemployment Rate

2.3

2.0

2.0

1.8

1.8

1.8

1.7

1.6

1.6

1.5

1.5

percentagepoint drop

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


(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.


(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

For Additional Information: Liefke Cox l Director of Investor Relations l 407.956.5688 l [email protected]

61 Enterprise Florida Board Members 36 At-Large Members* | 6 Ex-Officio** | 19 Appointed/Statute ***

10/29/2012Updated

|


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.


(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


(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

Bill Dymond ***

Lowndes, Drosdick, Doster,

Kantor & Reed

215 N. Eola Dr.

Orlando, FL 32801

(407) 418-6423

Sheldon Fox *

Harris Corporation

1025 West NASA Boulevard

Melbourne, FL 32919

(800) 442-7747

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



10/29/2012Updated

|


Kevin Gillen *

TD Bank

5900 N. Andrews Ave.


(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


(850) 521-3114

Chris Kise ***

Foley & Lardner, LLP

106 E. College Ave. Ste 900


(850) 513-3367



10/29/2012Updated

|


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


(850) 410-6701

Henry Rodriguez ***

Woodmere Holdings, LLC

1515 Ringling Blvd. Ste 890

Sarasota, FL 34236

(941) 312-5996



10/29/2012Updated

|


Andy Rosen *

Kaplan Higher Education

Corporation

6301 Kaplan University Ave.


(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.


(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.


(954) 359-3721

Pam Stewart ***

Florida Department of

Education

325 W. Gaines St. Ste 1514


(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.


(786) 264-8114

Mark Wilson **

Florida Chamber Of

Commerce

136 S. Bronough St.


(850) 521-1200



10/29/2012Updated

|


Millar Wilson *

Mercantil Commercebank

220 Alhambra Circle


(305) 460-4038

MISSION

EFI’s mission is to diversify Florida’s economy and

create better-paying jobs for its citizens by supporting,

attracting and helping to create globally competitive

businesses in innovative, high-growth industries.



10/29/2012Updated

|

2012 – 2013 ENTERPRISE FLORIDA EVENTS

ENTERPRISE FLORIDA WWW.EFLORIDA.COM/EVENTS Updated 11/2012

Date Event Name Event Location Industry Sector(s) Type of Event Event Contact

November 8 – 9, 2012 Enterprise Florida Board &

Stakeholders Meeting Orlando, FL Economic Development Board Meeting

Liefke Cox 407-956-5688

November 11-18, 2012 Business Development Mission to Kenya Nairobi, Kenya Best Prospects Investment & Trade Bryant Salter 305-808-3660

November 13-15, 2012 Marine Equipment Trade Show

METS 2012 Amsterdam, The Netherlands Marine Industry Trade & Investment

Larry Bernaski 904-359-9350

November 14-17, 2012 MEDICA 2012 Düsseldorf, Germany Life Sciences Investment & Trade Michael Schiffhauer

407-956-5688

December 1-9, 2012 Florida International Senior Games

& State Championships Polk County Sports Development Sports

Stephen Rodriguez 850-410-5287

December 2-6, 2012 Governor’s Team Florida Mission Bogota, Columbia Best Prospects Investment & Trade Ivan Barrios

305-808-3390

December 4-6, 2012 Aeromart Toulouse 2012 Toulouse, France Aviation, Aerospace, &

Defense Investment & Trade

Ken Cooksey 850-298-6632

December 10, 2012 Governors Innovators in Business Awards Tallahassee, FL Business Awards Awards Liefke Cox

407.956.5688

January, 2013 (TBA) Florida Tourism Day Tallahassee, FL Florida Tourism Industry Tourism John Webb

850-922-4493

January 22-25, 2013 ARAB HEALTH Trade Show 2013 Dubai, United Arab Emirates Life Sciences Investment & Trade Michael Schiffhauer

407-956-5634

January 27-29, 2013 IEDC leadership forum Orlando, FL Site Consultants Business Development Kim Wilmes

407-956-5628

January 30-31, 2013 Enterprise Florida Board &

Stakeholders Meeting Tallahassee, FL Economic Development Board Meeting

Liefke Cox 407-956-5688

January 2013 (TBA) AACCLA’s “Outlook on the Americas”

Conference Miami, FL Best Prospects Investment & Trade

Ivan Barrios 305-808-3390

January 2013 (TBA) Opportunities in the Sunshine State – CCQF Quebec City, Quebec Best Prospects Investment Development Frédérick Bernard

514-448-0544

February 25 – 27, 2012 Site Selectors Guild New Orleans Site Consultants Business Development Kim Wilmes

407-956-5628

February 26 – March 3, 2013

Australian International Air Show Avalon/Victoria, Australia Aviation, Aerospace, &



April 11-14, 2013 China (Shanghai) International Boat Show

2013 Shanghai, China Marine Industry Trade & Investment

Larry Bernaski 904-359-9350

May 2013 (TBA) 34th Hemispheric Congress of Latin

Chambers of Commerce Miami, Florida Best Prospects Trade Development

Ivan Barrios 305-808-3390

March 5-9, 2013 CeBIT 2013 Hannover, Germany ICT Investment & Trade Andrea Moore 850-469-8989

May 8-9, 2013 Enterprise Florida

Board Meeting Orlando, FL Economic Development Board Meeting

Liefke Cox 407-956-5688

May 10-12, 2013 Sunshine State Games – Bradenton

Area Festival Manatee County Sports Development Sports


2012 – 2013 ENTERPRISE FLORIDA EVENTS

ENTERPRISE FLORIDA WWW.EFLORIDA.COM/EVENTS Updated 11/2012

Date Event Name Event Location Industry Sector(s) Type of Event Event Contact

May 21-24, 2013 HOSPITALAR 2013 Sao Paulo, Brazil Life Sciences Investment & Trade Michael Schiffhauer

407-956-5634

June 7-9, 2013 Sunshine State Games – Alachua

County Festival Alachua County Sports Development Sports


June 17-19, 2013 Paris Air Show 2013 Le Bourget – Paris, France Aviation, Aerospace, &



June 21-23, 2013 Sunshine State Games – Polk

County Festival Polk County Sports Development Sports


August 7-8, 2013 Enterprise Florida Board &

Stakeholders Meeting Northwest Region Economic Development Board Meeting

Liefke Cox 407-956-5688

October 21-23, 2013 CoreNet Las Vegas, NV Site Consultants Business Development Kim Wilmes

407-956-5628

October 30-31, 2013 Enterprise Florida Board &

Stakeholders Meeting Miami, FL Economic Development Board Meeting

Liefke Cox 407-956-5688

November 20-23, 2013 MEDICA Germany Life Sciences Investment & Trade Michael Schiffhauer

407-956-5688

Florida Infrastructure Fund

The Florida Infrastructure Fund (FIF) is an innovative way to fund infrastructure projects and increase private capital investment in Florida. The FIF would be a $700 million Florida‐focused infrastructure investment program for the Florida Opportunity Fund (FOF.) The FOF would raise $700 million of investment capital from private capital sources to fund the program, to go along with $700 million in future contingent tax credits used only as a guarantee to the principal investment to program investors. Creation of the FIF could potentially result in over $6 billion in funding for infrastructure projects and over 60,000 new jobs. EFI supports the creation of the Florida Infrastructure Fund.

Removal of the QTI and QDSC per company award caps

Currently businesses are capped at $7m for the total amount of QTI or QDSC award payments they can receive. This legislation would remove the per company cap for these programs and encourage companies to continue to invest in Florida and create additional jobs. EFI supports the removal of the QTI and QDSC Award Caps

Update of the Innovation Incentive Fund Approval Process

Speed is one of the most critical deciding factors for businesses. When making a relocation or expansion decision the faster the state can award an incentive approval the more likely a business is going to choose Florida. All current awards for the Innovation Incentive Fund must be approved by the Legislative Budget Commission (LBC). Mirroring the Innovation Incentive Fund approval process after the Quick Action Closing (QAC) Fund will allow for a much quicker response to competitive projects. EFI supports changing the Innovation Incentive Fund approval process to match the Quick Action Closing Fund process.

Manufacturing Machinery and Equipment Tax Exemption

Florida’s manufacturers are at a disadvantage versus other Southeastern states when purchasing machinery and equipment. Currently manufacturers must have a 5% increase in productivity in order to qualify for a sales tax exemption. Reducing the productivity requirement simplifies the process and allows the manufacturer to focus on equipment purchases without worrying about qualifying for a sales tax exemption, and thus, making Florida’s manufacturing sector more competitive with other states. EFI supports reducing the 5% increase in productivity requirement to qualify for sales tax exemptions on manufacturing machinery and equipment.

Economic Development Toolkit/SEED Fund Funding

The Economic Development Toolkit contains incentive programs the state uses to retain and grow existing Florida companies and competitively compete for new business. Reinforcing the individual and collective importance of the programs in the toolkit is critical to maintaining a high level of legislative support. EFI supports Governor Scott’s recommendations for competitively funding the Economic Development Toolkit via the SEED Fund, which will allow greater flexibility in spending to support programs related to job creation.

Clarification of Florida’s Economic Development Confidentiality Laws

Governor’s Scott and his staff are an integral part of Florida’s economic development recruitment process as well as the actively involved in economic development projects. It is extremely important that the Governor and other state agencies involved in economic development are covered under Florida’s confidentiality laws. EFI supports clarifying statutes to ensure the Governor and state agencies are covered under Florida’s confidentiality laws.

Florida’s 2013 Economic Development Legislative Agenda

Create a Recurring Funding Source for Spring Training Facilities Improvements

With five teams who have leases expiring with Florida’s communities in the near future, it is imperative that Florida have in place a mechanism to help ensure these teams stay in Florida. By creating a funding source for future new construction facility upgrades Florida will position itself to retain these teams and potentially recruit additional teams. Increase award amounts to $5m by continuing with funding from sales tax collections from 14 current stadiums (generating $3m) and add a recurring $2m from the SEED fund. EFI supports the creation of a dedicated funding source for spring training facilities.

Update to Professional Sports Team License Tag Statutes

Currently professional sports team license tag money is directed through trust funds that are charging an 8% fee, unlike most license tag programs. By dissolving current TFs and moving tag funds directly to Enterprise Florida for distribution in the Florida Sports Grant program there is an automatic increase in the funds available for the program. In addition current Florida Sports license plate revenues are capped at $2.5m and many tags are close to reaching that cap. If the cap was increased to $3.5m professional sports team will be able to increase marketing efforts to increase revenue. EFI supports updating professional sports team license tag statutes.

Space Florida Financing Fund

In 2010 Space Florida was appropriated $10m specifically to utilize financing tools‐ however no funds have been appropriated since that time. As Space Florida’s main tool for recruiting business to Florida, EFI and Space Florida are requesting an additional $10m in appropriations for the fund. EFI supports funding the Space Florida Financing Fund at $10m.

Institutionalization of Spaceports into FDOT’s budget planning

Spaceports are a mode of transportation and should be funded like seaports, roads and rail in FDOT’s budget. By creating a structure for funding spaceports by setting annual minimums, rules and guidance Florida will ensure consistent treatment of its spaceports. EFI supports the institutionalization of spaceports into FDOT’s budget planning.

Quick Response Training Grants

Training of worker’s continues to be a critical part of the economic development process and full funding is needed. EFI supports Workforce Florida’s budget request for QRT funding.

VisitFloridaFlorida’s tourism industry remains an important aspect of Florida’s economy. EFI supports VisitFlorida’s funding request for 2013‐2014.

Rural Economic Development Programs

**Enterprise Florida is currently conducting a rural economic development strategic plan study. Legislative recommendations will be forthcoming once the plan is completed. EFI will support legislative recommendations as suggested.**

Business Property Used in an Enterprise Zone

Current law prohibits most businesses from utilizing this program in enterprise zone because of the threshold that dictates that only business property having a sales process of over $5,000 per unit shall qualify for the exemption. By lowering the sales price to $500 for unit there would be a significant increase in the number of business that would be able to take advantage of the exemption in Enterprise Zones. EFI is currently awaiting feedback from the Governor’s office on the fiscal impact of this legislation.

Additional Items EFI Support Governor Scott’s JOBS Agenda Policy initiatives that increase Florida’s competitiveness in business development

Enterprise Florida Legislative Affairs Team

Michael Preston: 850‐766‐7827 Sharon Spratt: 850‐661‐9062

MEMORANDUM

TO: EFI BOARD OF DIRECTORS & PARTNERS

FROM: GRAY SWOOPE, SECRETARY OF COMMERCE, PRESIDENT & CEO OF ENTERPRISE FLORIDA

SUBJECT: FLORIDA TARGET INDUSTRY COMPETITIVENESS STUDY

DATE: SEPTEMBER 28, 2012

CC: 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 Florida’s 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 state’s Closing Fund is underfunded and points out the state’s 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 multi-lingual 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.

State (S) or Local (L) Issue

Method to Achieve(L) Legislative(P) Policy(B) Budget

(O) Operational

Status of Implementation

Cost of Doing BusinessS L • Issues for consideration by the Legislature

S / L L / P / O • EFI will recommend steps for communities to expedite and improve their permitting processes to be more business friendly

S O • The economic development liaisons program is in place and being utilized throughout multiple State agencies and departments, including EFI

Real Estate and InfrastructureS O / B • A statewide sites and buildings database is underway

and will be completed in Spring 2013; database will allow Florida to better showcase existing assets

S L • A study of Florida's rural communites is underway, which will be followed by a rural marketing plan and program

S O • EFI is currently working with utilities on certain marketing activities

S P / L • Florida utilities are in various stages of pursuing ED riders

Talent and TrainingS B • QRT budget increase request for FY 2014/15

S / L O • Both EFI and WFI have existing industry initiatives underway • Community practitioners should also enhance existing industry programs

S / L O / B • WFI currently evaluating means to establish a single workforce brand for the state

S / L O • Enhance EFI project management involvement with WFI

S / L O / B / P / L • Work is underway and best practices have been indentified

IncentivesS O / P / L • The formation of DEO and shift of incentive processing

has led to a more streamlined process • Continual communication is improving the process

S L • Issues for consideration by the Legislature

S L / B • Issues for consideration by the Legislature

S B • The creation of the SEED Fund is a step toward increasing the flexibility of the toolkit and allowing the State to respond quickly to major projects

S / L L • Issue for consideration by the Legislature

Enhance Rural Economic Development Toolbox

Increase Use of Economic Development Riders

Streamline Incentive Authorization Process

Improve Flexibility and Effectiveness of Existing Programs

Create Local Option Sales Tax to Benefit Economic Development

Leverage Partnerships with Utilities

Improve Quick Response Training (QRT)

Improve Existing Industry Relationships

Market Current Talent Assets

Improve Project Management Tactics

Align Training with Targets

Enhance Economic Development Toolbox

Increase Up‐front Incentives

Competitiveness Study Recommendations

Establish Liaisons with Other State Agencies

Modernize TaxesStreamline Permitting Process

Improve Portfolio of Sites and Buildings

Page 1 of 2 10/12/2012 Prepared by Enterprise Florida, Inc.

State (S) or Local (L) Issue

Method to Achieve(L) Legislative(P) Policy(B) Budget

(O) Operational

Status of Implementation

Economic Development Strategy / BrandingS B • Additional funding is being requested in the upcoming

legislative budget for economic development marketing• EFI and its stakeholder and utility partners are working together to create a TEAM Florida partnership that will help fund business marketing and branding efforts for the state

S O / B • Florida business brand is under development with a January 2013 roll‐out date, and a campaign to follow

S O / B • Marketing for target sectors is currently in place and can be viewed on the EFI website• With additional funding, these marketing efforts can be enhanced

Economic Development AdministrationS O / B • Training opportunities will be increased as budget allows

and a reallocation of existing resources will enable more industry specific development opportunities

S O / B • More formal partnerships and events with EFI's ally network are under development, including a TEAM Florida partnership to help fund business marketing and branding for the state

S B • Additional resources are anticipated in the future, in addition to a re‐allocation of existing resources to ensure talents are maximized

S O • Best practices will be established to ensure the highest level of positive client interaction

Expand Project Management Team

Improve Professionalism of Staff

Increase Funding for Marketing

Promote Florida's Business Brand

Align Marketing to Target Industries

Develop Staff

Strengthen Ally Network

Page 2 of 2 10/12/2012 Prepared by Enterprise Florida, Inc.

Target Industry Competitiveness Study

September 13, 2012St. Pete Beach, FL

Mark Sweeney, McCallum Sweeney Consulting

Agenda

• Introduction to MSC and Avalanche

• Project Overview and Process

• Target Industry Analysis

• Competitiveness Issues

2

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

Introduction to McCallum Sweeney Consulting and

Avalanche Consulting

3

MSC Clients

4

KasleSteel

Boy Scouts of AmericaSGL Automotive CarbonFibers LLC joint venture

American Titanium Works

Avalanche Experience

6

20+ U.S. States80+ RegionsEuropeMexicoSouth America

Project Overview and Process

7

Project Overview

8

This is an opportunity to enhance Florida’s competitiveness for its target industries and beyond.

STEP 1:Review Current

Policies, Practices, and Resources

STEP 2:Talk to Corporate Decision Makers

and Site Consultants

STEP 3:Talk to Regional

and Local Economic Developers

STEP 4:Conduct In‐House

Benchmarking Analysis

STEP 5:Develop Final

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)

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• 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)

10

• 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• Mayor’s 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• WorldCity’s Who’s Here Global Economic Impact Study

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 Florida’s 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

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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

• 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 multi-thousands 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

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

Clean Technology

19

• 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

Niche Sectors: Biomass and Biofuels Processing, Energy Equipment Manufacturing, Energy Storage Technologies, Photovoltaics,

and Environmental Consulting

Financial / Professional Services

20

• 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 FL’s business brand will help overcome executive reluctance to relocate critical operations (or him/herself) to FL

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

Homeland Security / Defense

21

• 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.

• Florida’s 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

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

Design, and Simulation & Training

Information Technology

22

• 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.

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

Life Sciences

23

• 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.

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

Manufacturing

24

• 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 Governor’s 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.

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

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 Florida’s 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 day’s

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 day’s 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

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

(+) POSITIVE (=) NEUTRAL (-) NEGATIVE

Real Estate and Infrastructure

29

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

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 Governor’s Authority to Offer Incentives

• Enhance Economic Development Toolbox– Implement County Tier System

– Revise Wage Levels for Incentive Eligibility

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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 Florida’s Business Brand

• Align Marketing to Target Industries

33

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

34

Mark M. Sweeney

Senior Principal

[email protected]

McCallum Sweeney Consulting

550 South Main Street, Suite 550

Greenville, SC 29601

864-672-1600 (main)

864-672-1610 (fax)

www.mccallumsweeney.com

35

MSC Contact Information

Documents

Enterprise Florida Board Meeting Agenda · Enterprise Florida Board Meeting Minutes | September 13, 2012 DRAFT Minutes Enterprise Florida Board Meeting September 13, 2012 A regular