ANNUAL REPORT - Arizona Commerce Authority

ANNUAL REPORT ? FY 2018

CONTENTS

Arizona Commerce Authority Mission. . . . . . . . . . . . . . . . . 03 From the President & CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . 04 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05-06 Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07 Business Attraction & Expansion Results . . . . . . . . . . . . . 08 Strategic Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 09-10

Next-Gen Tech Trends ? UAS AZSkyTech ? FinTech Sandbox

Opportunity Zones Arizona Zanjeros Rural Economic Development. . . . . . . . . . . . . . . . . . . . . . . . 1 1 Innovation & Entrepreneurship. . . . . . . . . . . . . . . . . . . . . . . 12 Arizona Innovation Challenge Venture Ready Invest Southwest Business Development . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-14 RevAZ ExporTech AZSTEP Small Business Services Arizona Film & Digital Media

Workforce Development. . . . . . . . . . . . . . . . . . . . . . . . . . 15-17 Arizona Job Preparedness Summits Arizona Career Readiness Credential Navigator Program Arizona SciTech

Arizona-Mexico Relationship . . . . . . . . . . . . . . . . . . . . . . . . 18 Arizona State Trade & Investment Office Mexico City SkyBridge Arizona Arizona-Sonora Business Expo Arizona-Mexico Commission Economic Development Committee

Marketing Arizona. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29-20 FY 18 Marketing Plan Summary Relaunched ACA Website Paid Media Owned Media Earned Media Trade Shows & Sales Missions

Financial Program Reports. . . . . . . . . . . . . . . . . . . . . . . 21-50 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 52

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ANNUAL REPORT ? FY 2018

MISSION

The mission of the Arizona Commerce Authority is to grow and strengthen Arizona's economy and facilitate the creation of quality jobs for its citizens by supporting and attracting businesses in targeted, high-value base sectors throughout the state.

BUSINESS & FINANCIAL SERVICES

ADVANCED MANUFACTURING

AEROSPACE & DEFENSE

BIOSCIENCE & HEALTH CARE

FILM & DIGITAL MEDIA

TECHNOLOGY & INNOVATION

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ANNUAL REPORT ? FY 2018

FROM THE PRESIDENT & CEO

I'm proud to report that the ACA had another year of record-breaking results in FY 2018!

During the first year under our new five-year strategic plan, we once again exceeded our goals and proved that bold new ideas are worth embracing. The ACA worked on 87 projects with companies that committed to creating 21,102 projected new jobs that have an average wage of $54,194 and investing $2.49 billion into our communities.

As you'll read in the pages that follow, there were many initiatives that earned Arizona "first in the nation" status and global recognition including: the establishment of SkyBridge Arizona, the first inland air cargo port that houses both U.S. and Mexican customs; the launch of the Fintech Sandbox legislation signed by Governor Ducey, making Arizona the first state to establish a program for testing innovative new financial products and services; and the creation of the AZSkyTech program, bringing together nearly 60 industry partners to advance the testing of Unmanned Aircraft Systems (UAS) in Arizona.

Under Governor Ducey's direction, the ACA also led the nomination process to designate Opportunity Zones in Arizona, as part of a new federal program announced by the U.S. Department of the Treasury. Arizona was among the first states to have our Opportunity Zones approved, allowing property owners and investors to begin conceptualizing projects that will provide an economic boost to our communities that need it the most.

In addition, during FY 2018 the ACA continued to help build momentum in Arizona's entrepreneurial ecosystem, enhance rural economic development, support small and medium sized businesses, increase international trade and investment, develop the workforce of the future and market Arizona's advantages to audiences around the world.

True to our pioneering spirit, we're always looking to the future ? encouraging new ideas and innovative approaches when it comes to moving our state forward and creating new opportunities for our citizens.

It is important to recognize that we could not continue to achieve success year after year without the leadership and guidance of our board of directors, chaired by Governor Doug Ducey, and the entire ACA team. Together, we're honored to work hard on behalf of the state that we are so proud to call home.

I hope you enjoy our Fiscal Year 2018 annual report.

My best,

Sandra Watson President & CEO Arizona Commerce Authority

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ANNUAL REPORT ? FY 2018

BOARD OF DIRECTORS

The ACA is guided by a Board of Directors, led by Governor Doug Ducey as Chairman. The Board represents an incredible collection of subject matter expertise combined with business and policy experience,

all leveraged to advance the ACA's mission to strengthen the state's overall economy.

EXECUTIVE COMMITTEE MEMBERS

Governor Doug Ducey Chairman

Brian Mueller

Co-Chairman President and CEO Grand Canyon University

Gary Abrams

CEO and President Abrams Airborne

Manufacturing

Richard Adkerson

President and CEO Freeport McMoRan

Copper & Gold

Sandra Watson

President and CEO Arizona Commerce Authority

Michael Bidwill

President Arizona Cardinals

Mark Bonsall

General Manager and CEO Salt River Project

Drew Brown

Founder and Chairman of the Board DMB Associates, Inc.

Dr. Rita Cheng

2018 Ex-Officio Member President

Northern Arizona University

Dr. Michael Crow

2018 Ex-Officio Member President

Arizona State University

Dr. Wyatt Decker, M.D.

Mayo Clinic Vice President and CEO Mayo Clinic in Arizona

David Goldstein

President Diamond Ventures, Inc.

Dawn Grove

2018 Ex-Officio Member Chairperson

Arizona Workforce Council

Mignonne Hollis

President and CEO Business & Tax Analyst, LLC

Maria Harper-Marinick

2018 Ex-Officio Member Chancellor

Maricopa Community College District

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ANNUAL REPORT ? FY 2018

BOARD OF DIRECTORS

John Kaites

Founding Partner Global Security Innovative

Strategies

James Keeley

Founding Partner Colliers International

Eileen Klein

2018 Ex-Officio Member Arizona State Treasurer

Dr. Taylor Lawrence

President Raytheon Missile Systems

Stephen Macias

President and CEO Pivot Manufacturing

Honorable Speaker J. D. Mesnard

2018 Ex-Officio Member Arizona House of Representatives

William Pilcher

CEO USI Insurance Services, LLC

Donald Slager

President and CEO Republic Services, Inc.

Anthony Smith

President County Board of Supervisors

Association

Victor Smith

President and Owner JV Farms

Honorable Jay Tibshraeny

2018 Ex-Officio Member President

League of Arizona Cities and Towns

Dr. Robert Robbins, M.D.

2018 Ex-Officio Member President

University of Arizona

Honorable President Steve Yarbrough

2018 Ex-Officio Member Arizona Senate

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ANNUAL REPORT ? FY 2018

EXECUTIVE SUMMARY

September 20, 2017: the ACA Board of Directors voted to approve the next five-year business plan for the organization.

PROJECTED JOBS

GOAL PERFORMANCE

16,000

21,102

132%

OF GOAL

PROJECTED CAPITAL

INVESTMENT

GOAL PERFORMANCE

$1.4 BILLION

$2.49 BILLION

178%

OF GOAL

PROJECTED WAGES

GOAL PERFORMANCE

$53,250 $54,194

102%

OF GOAL

2,005

engagements with small, medium and large

businesses

21,102

projected new jobs

$54,194

average salary

$2.49B

projected capital investment

$30.31B

projected economic output

13 corporate headquarters attraction and

expansion projects

69 rural Arizona communities visited

168 Arizona Census tracts across all 15 counties designated as Opportunity Zones

60+ industry partners joined the AZSkyTech program for advancing Unmanned Aircraft

Systems (UAS)

3,500+ attendees and nearly 100 exhibitors participated in the inaugural Arizona-Sonora Business Expo in

March 2018

79 Arizona companies assisted through the ACA's Arizona State

Trade & Investment Office in Mexico City

131 Arizona film & digital media productions assisted

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ANNUAL REPORT ? FY 2018

BU S I N E S S AT TR ACTION & E XPAN S ION RE SU LTS

FISCAL YEAR 2018 CLIENTS AND TOTALS

87 PROJECTS

$2.49B CAPITAL INVESTMENT*

21,102 PROJECTED NEW JOBS*

$54,194 AVERAGE SALARY*

COMPANY ? 1ST QUARTER 84 Lumber

Aquafil Group Arizona Nutritional Supplements

B. Braun of America Ball Corporation Bank of the West Concentrix

Empereon-Constar EuroContempo Cabinetry Fin Exploration Company

Hop Knot Brewery, LLC L & H Industrial Inc - Tempe Lockheed Martin Corporation Manufacturing Technologies Inc.

MFour Mobile Research MPW Manufacturing Services, LLC. NantEnergy (Formerly Fluidic Energy)

Northwest Healthcare Optima Tax Relief, LLC Runbeck Election Services, Inc.

Splash Titan LED, Inc.

TuSimple United Parcel Service, Inc.

Versum Materials Welbrook Skilled Nursing

ZipRecruiter

COMPANY ? 2ND QUARTER Atlas Copco

Botanical Food Company, Inc Brightside Benefit Inc. Burns McDonnell Capco Labs Cenlar - Tempe Chewy, Inc. CMOC International

Comprehensive Health Management, Inc Convergys

Eclipse Automation Kelpac Medical LAI International

Martech Medical Products Mesker Openings Group

Mister Car Wash Morgan Stanley - New York

MST Solutions On Q Financial PayPal - Scottsdale Quicken Loans Solera Health Stanley Convergent Security Solutions Inc.

Top Golf

COMPANY ? 3RD QUARTER Advanced Manufacturing & Power Systems

Allstate Insurance Company Amazon Corporate LLC Bravada Yachts Boeing Company EdgeCore Data Centers Footprint USA GEICO - Tucson

Good Health Manufacturing Hoy Health LLC Ingram Micro King Koil

Nikola Motor Company Orbital ATK - Armament Systems

Orbital ATK, Inc. Pure Care

Quality Plastics Of Prescott TailStorm Health Inc.

COMPANY ? 4TH QUARTER Airobotics

Amazon Corporate LLC AQST Space Systems Arconic (FKA Alcoa Fastening Systems)

Axiscades Cognizant Technology Solutions - Phoenix

Deloitte Tax LLP - Los Angeles Diplomat Pharmacy

Freedom Financial Network Freshly, Inc. - Customer Service Inteplast Group, Ltd. - Phoenix

MD Helicopters, Inc. Nammo Talley Defense System

Northwest Healthcare PillPack

Piper Plastics, Inc. Prenexus Health, LLC

Q.E.P. Co., Inc.

* Three-year projections

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