6601 Bermuda Road, Las Vegas, NV 89119

Transcription

1 Board Summary Scientific Games Corporation 6601 Bermuda Road, Las Vegas, NV Date: March 15, 2018 Main Location: Carson City Todd Clark, Vice President, Global Facility Services Headquarters Business Type: Expansion County: Clark County Development Authority Representative: Perry Ursem - LVGEA APPLICATION HIGHLIGHTS - Scientific Games Corporation is looking to add to its Nevada based Global Headquarters. As part of this project, the company will significantly expand its existing footprint in the state. - This project will focus on creating a world class headquarters for the company. - The project has potential to result in significant growth of IT jobs at the new facility. PROFILE Scientific Games Corporation is a leading developer of technology-based products and services and associated content for worldwide gaming and lottery markets. The company s portfolio includes instant and draw-based lottery games, electronic gaming machines and game content, server-based lottery and gaming systems, sports betting technology, loyalty and rewards programs, and social, mobile and interactive content and services. Beginning with the breakthrough technology that launched the world s very first secure instant lottery game in 1974, the company has continued to advance the games, technology, programs, marketing research and security that have been a driving force behind the success of more than 300 customers on six continents over the last 40 years. Scientific Games Corporation has approximately 8400 employees worldwide and serves customers from advanced-technology manufacturing and operational facilities in North America, South America, Europe and Asia. Source: Scientific Games Corporation SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND The abatement programs will offset the significant investment the company will make in renovating its new campus. Should this project proceed and the world class campus be established in Las Vegas, the long term economic impact will be substantial. Additionally, the renovated campus will create a more collaborative work environment which will allow the company to continue to attract workforce talent; both locally and from out of state. Source: Scientific Games Corporation REQUIREMENTS Statutory Application Sufficient % Over / Under Job Creation % Average Wage $21.95 $30.55 Company meets 39% Equipment Capex (SU & MBT) $3,383,731 $2,000,000 abatement eligibility -41% Equipment Capex (PP) $3,383,731 $2,000,000 requirements -41% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. 2% for 2 years $125,000 Modified Business Tax Abmt. 50% for 4 years $375,756 Personal Property Tax Abmt. 50% for 10 years $29,421 Total $530,177 JOB CREATION Contracted 24-Month Projection 5-Year Projection OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $5,000,000 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported Total Payroll Supported $350,811,580 $2,288,269 Total Output Estimate $1,537,223,650 $7,886,491 Estimate includes jobs, payroll & output by the company assisted as well as the secondary impacts to other local businesses. NEW TAX REVENUE ESTIMATES (10-Year Cumulative) Direct Indirect Total Local Taxes Property $517,436 $11,900,361 $12,417,797 Sales $203,125 $6,384,635 $6,587,760 Lodging $0 $593,997 $593,997 State Taxes Property $28,301 $565,696 $593,997 Sales $105,000 $2,175,032 $2,280,032 Modified Business $1,898,372 $2,420,664 $4,319,036 Lodging $0 $200,474 $200,474 Total $2,752,234 $24,240,859 $26,993,093 EMPLOYEE BENEFITS - Percentage of health insurance covered by company: 80%. - Health care package cost per employee - $6,509 annually with options for dependents. - Overtime, PTO/Sick/Vacation, Merit Increases, Tuition Assistance, Retirement Plan/ Profit Sharing 401(k). NOTES - Percentage of revenue generated by the new jobs in this contained in this application from outside Nevada: 65%.

2 LAS VEGAS GLOBAL ECONOMIC ALLIANCE February 6,2018 Mr. Paul Anderson Executive Director Nevada Governor's Office of Economic Development 555 E. Washington Avenue, Suite 5400 Las Vegas, Nevada Dear Mr. Anderson, Scientific Games, LLC (herin "Scientific Games") is applying to the State of Nevada for the Sales and Use Tax Abatement, Modified Business Tax Abatement, and Personal Property Tax Abatement. We request their application be placed on the agenda for the March 2018 GOED Board Meeting. Scientific Games is exploring their options to expand operations in Southern Nevada from a current staff of 1200 by hiring 195 new employees over the next 24 months with an average hourly wage exceeding $ Scientific Games will make a total capital investment of $7 million dollars, of which $2 million will be in capital equipment. Our team has reviewed Scientific Games' application and found it to comply with Nevada's statutory requirements for tax abatements. This application has the full support and endorsement of the Las Vegas Global Economic Alliance. We appreciate your consideration in this matter. Sincerely, Perry Ursem Vice President, Business Retention and Expansion Enclosure VIA AUSTI PARKWAY, SUITE 330 LAS VEGAS. NEVADA 89119

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4 Incentive Application Company Name: Scientific Games Corporation Date of Application: February 6, 2018 Company is an / a: (check one) New location in Nevada Expansion of a Nevada company Section 1 - Type of Incentives Please check all that the company is applying for on this application: Sales & Use Tax Abatement Modified Business Tax Abatement Personal Property Tax Abatement Section 2 - Corporate Information CORPORATE ADDRESS 6601 Bermuda Road Sales & Use Tax Deferral Other: COMPANY NAME (Legal name under which business will be transacted in Nevada) Scientific Games Corporation MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) Recycling Real Property Tax Abatement CITY / TOWN Las Vegas FEDERAL TAX ID # STATE / PROVINCE ZIP NV CITY / TOWN STATE / PROVINCE ZIP TELEPHONE NUMBER COMPANY CONTACT NAME Todd Clark ADDRESS todd.clark@scientificgames.com Section 3 - Program Requirements Please check two of the boxes below; the company must meet at least two of the three program requirements: A capital investment of $1,000,000 in eligible equipment in urban areas or $250,000 in eligible equipment in rural areas are required. This criteria is businesses. In cases of expanding businesses, the capital investment must equal at least 20% of the value of the tangible property owned by the business. New businesses locating in urban areas require fifty (50) or more permanent, full-time employees on its payroll by the eighth calendar quarter following quarter in which the abatement becomes effective. In rural areas, the requirement is ten (10) or more. For an expansion, the business must increase employees on its payroll by 10% more than its existing employees prior to expansion, or by 25 (urban) or 6 (rural) employees, whichever is greater. In urban areas, the average hourly wage that will be paid by the business to its new employees is at least 100% of the average statewide hourly wage. in rural areas, the average hourly wage will equal or exceed the lesser of the county-wide average hourly wage or statewide average hourly wage. Section 4 - Nevada Facility Type of Facility: Headquarters Technology Back Office Operations Research & Development / Intellectual Property PERCENT OF COMPANY'S NEVADA LOCATION MARKET OUTSIDE OF NEVADA 65% NAICS CODE / SIC , , DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Corporate Functions, Development, Manufacturing WEBSITE COMPANY CONTACT TITLE Vice President, Global Facility Services PREFERRED PHONE NUMBER Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary): Sales and Use Tax Abatement, Modified Business Tax Abatment, TEN, Catalyst Fund Note: Criteria is different depending on whether the business is in a county whose population is 100,000 or more or a city whose population is 60,000 or more (i.e., urban area), or if the business is in a county whose population is less than 100,000 or a city whose population is less than 60,000 (i.e., rural area). PROPOSED / ACTUAL NEVADA FACILITY ADDRESS 6601 Bermuda Road Jun-2019 Service Provider Distribution / Fulfillment Manufacturing Other: EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) INDUSTRY TYPE Software Games, Software & Technical Consulting, Gaming Yes CITY / TOWN COUNTY ZIP Las Vegas Clark County WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? N/A No 1

5 Section 5 - Complete Forms (see additional tabs at the bottom of this sheet for each form listed below) Check the applicable box when form has been completed. 5 (A) Equipment List 5 (B) Employment Schedule 5 (C) Evaluation of Health Plan, with supporting documents to show the employer paid portion of plan meets the minimum of 65%. Section 6 - Real Estate & Construction (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up - Plans Over the Next Ten Years Expansions - Plans Over the Next 10 Years Part 1. Are you currently/planning on leasing space in Nevada? If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost of space: Do you plan on making building tenant improvements? If No, skip to Part 2. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently/planning on buying an owner occupied facility in Nevada? If No, skip to Part 3. If Yes *, continue below: Purchase date, if buying (month, year): How much space (sq. ft.)? Do you plan on making building improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 3. Are you currently/planning on building a build-to-suit facility in Nevada? If Yes *, continue below: When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Part 1. Are you currently leasing space in Nevada? No If No, skip to Part 2. If Yes, continue below: What year(s)? How much space (sq. ft.)? Annual lease cost at current space: Due to expansion, will you lease additional space? If No, skip to Part 3. If Yes, continue below: Expanding at the current facility or a new facility? What year(s)? How much expanded space (sq. ft.)? Annual lease cost of expanded space: Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? Part 2. Are you currently operating at an owner occupied building in Nevada? Yes If No, skip to Part 3. If Yes, continue below: How much space (sq. ft.)? 150,000 Current assessed value of real property? $4,438, Due to expansion, will you be making building improvements? Yes If No, skip to Part 3. If Yes *, continue below: When to make improvements (month, year)? TBD Part 3. Do you plan on building or buying a new facility in Nevada? No If Yes *, continue below: Purchase date, if buying (month, year): When to break ground, if building (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? * Please complete Section 7 - Capital Investment for New Operations / Startup. * Please complete Section 7 - Capital Investment for Expansions below. BRIEF DESCRIPTION OF CONSTRUCTION PROJECT AND ITS PROJECTED IMPACT ON THE LOCAL ECONOMY (Attach a separate sheet if necessary): This project will significantly renovate buildings to create a world class headquarters for the company. The company will consolidate all corporate staff into this new campus. The campus will promote greater workplace efficiencies and promote company growth. It may also lead to significant growth of IT jobs at the new facility. We are investigating how much more space will be required to house the growth. 2

6 Section 7 - Capital Investment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How much capital investment is planned? (Breakout below): How much capital investment is planned? (Breakout below): Building Purchase (if buying): $0 Building Purchase (if buying): $0 Building Costs (if building / making improvements): $0 Building Costs (if building / making improvements): $5,000,000 Land: $0 Land: $0 Equipment Cost: $0 Equipment Cost: $2,000,000 Total: $0 Total: $7,000,000 Is the equipment purchase for replacement of existing equipment? Yes Current assessed value of personal property in NV: $16,918,656 (Must attach the most recent assessment from the County Assessor's Office.) Section 8 - Employment (Fill in either New Operations/Startup or Expansion, not both.) New Operations / Start Up Expansions How many full-time equivalent (FTE*) employees will be created by the How many full-time equivalent (FTE*) employees will be created by the end of the first eighth quarter of new operations?: end of the first eighth quarter of expanded operations?: 195 Average hourly wage of these new employees: Average hourly wage of these new employees: $30.55 How many FTE employees prior to expansion?: Average hourly wage of these existing employees: Total number of employees after expansion: 1,200 $ ,395 * FTE represents a permanent employee who works an average of 30 hours per week or more, is eligible for health care coverage, and whose position is a "primary job" as set forth in NAC OTHER COMPENSATION (Check all that apply): N/A Overtime Merit increases Tuition assistance Bonus PTO / Sick / Vacation COLA adjustments Retirement Plan / Profit Sharing / 401(k) Other: BRIEF DESCRIPTION OF ADDITIONAL COMPENSATION PROGRAMS AND ELIGIBILITY REQUIREMENTS (Attach a separate sheet if necessary): Section 9 - Employee Health Insurance Benefit Program Is health insurance for employees and an option for dependents offered?: Yes (copy of benefit plan must be attached) Package includes (check all that apply): Medical Vision Dental Other: Qualified after (check one): Upon employment Three months after hire date Six months after hire date Other: No Health Insurance Costs: Percentage of health insurance coverage by (min 65%): Cost of health insurance for company (annual amount per employee): $6, Company: 80% Health Plan annual out-of-pocket maximum (individual): $ 3, Employee: 20% [SIGNATURE PAGE FOLLOWS] 3

7 Section 10 - Certification I, the undersigned, hereby grant to the Governor's Office of Economic Development access to all pertinent and relevant records and documents of the aforementioned company. I understand this requirement is necessary to qualify and to monitor for compliance of all statutory and regulatory provisions pertaining to this application. Being owner, member, partner, officer or employee with signatory authorization for the company, I do hereby declare that the facts herein stated are true and that all licensing and permitting requirements will be met prior to the commencement of operations. In addition, I and /or the company s legal counsel have reviewed the terms of the GOED Tax Abatement and Incentives Agreement, the company recognizes this agreement is generally not subject to change, and any material revisions have been discussed with GOED in advance of board approval. Todd Clark Name of person authorized for signature Signature Vice President February 6, 2018 Title Date Nevada Governor's Office of Economic Development 555 E. Washington Ave., Ste 5400 Las Vegas, Nevada (Fax)

8 Site Selection Factors Company Name: Scientific Games Corporation County: Clark County Section 1 - Site Selection Ratings Directions: Please rate the select factors by importance to the company's business (1 = very low; 5 = very high). Attach this form to the Incentives Application. Availability of qualified workforce: 3 Transportation infrastructure: 3 Labor costs: 3 Transportation costs: 2 Real estate availability: 1 State and local tax structure: 5 Real estate costs: 1 State and local incentives: 5 Utility infrastructure: 3 Business permitting & regulatory structure: 3 Utility costs: 3 Access to higher education resources: 4 Please summarize the importance of the abatement program to your decision (please include at least a paragraph summary): The abatement programs will offset the significant investment that the company needs to make in renovating the new campus. The tax abatements provided from the State programs are a fraction of the economic impact of the renovation costs, thus providing a good return on investment to Nevada. In addition, the long term economic impact of this project will be substantial. Should this project proceed and the world class campus is established in Las Vegas, it will allow the company to be more efficient in the work processes while attracting more talent. 5

9 5(A) Capital Equipment List Company Name: Scientific Games Corporation County: Clark County Section 1 - Capital Equipment List Directions: Please provide an estimated list of the equipment [columns (a) through (c)] which the company intends to purchase over the two-year allowable period. For example, if the effective date of new / expanded operations begins April 1, 2015, the two-year period would be until March 31, Add an additional page if needed. For guidelines on classifying equipment, visit: tax.nv.gov/localgovt/policypub/archivefiles/personal_property_manuals. Attach this form to the Incentives Application. (a) Equipment Name/Description Furniture Information Technology - Computers, Networks Systems, etc. Security Equipment Signage ( b) (c) (d) # of Units Price per Unit Total Cost $1,100, $600, $250, $50, TOTAL EQUIPMENT COST Is any of this equipment* to be acquired under an operating lease? *Certain lease hold equipment does not qualify for tax abatements Yes $2,000, No 6

10 5(B) Employment Schedule Company Name: Scientific Games County: Clark County Section 1 - Full-Time Equivalent (FTE) Employees Directions: Please provide an estimated list of full time employees [columns (a) through (d)] that will be hired and employed by the company by the end of the first eighth quarter of new / expanded operations. For example, if the effective date of new / expanded operations is April 1, 2015, the date would fall in Q2, The end of the first eighth quarter would be the last day of Q2, 2017 (i.e., June 30, 2017). Attach this form to the Incentives Application. A qualified employee must be employed at the site of a qualified project, scheduled to work an average minimum of 30 per week, if offered coverage under a plan of health insurance provided by his or her employer, is eligible for health care coverage, and whose position of a primary job as set forth in NAC (a) New Hire Position Title/Description Engineering Game Design Corporate Functions Support (b) ( c ) (d) (e) (f) Number of Positions Average Hourly Wage Average Weekly Hours Annual Wage per Position Total Annual Wages 65 $ $69, $4,549, $ $62, $4,056, $ $58, $3,785, TOTAL 195 $30.55 $12,391, Section 2 - Employment Projections Directions: Please estimate full-time job growth in Section 2, complete [columns (b) through (c)]. These estimates are used for state economic impact and net tax revenue analysis that this agency is required to report. The company will not be required to reach these estimated levels of employment. (a) Year 3-Year 4-Year 5-Year (b) Number of FTE(s) Projected (c) Average Hourly Wage (d) Payroll 300 $30.55 $19,063, $30.55 $19,063, $30.55 $19,063,

11 5(C) Evaluation of Health Plans Offered by Companies Company Name: Scientific Games County: Clark County Total Number of Full-Time Employees: 195 Average Hourly Wage per Employee $30.55 Average Annual Wage per Employee (implied) $63, Annual Cost of Health Insurance per Employee $6, Percentage of Cost Covered by: Company 80% Employee 20% Health Plan Annual Out-of-Pocket Maximum $3,000 Generalized Criteria for Essential Health Benefits (EHB) [following requirements outlined in the Affordable Care Act and US Code, including 42 USC Section 18022] Covered employee's premium not to exceed 9.5% of annual wage 2.6% MMQ Annual Out-of-Pocket Maximum not to exceed $7,150 (2017) $3,000 MMQ Minimum essential health benefits covered (Company offers PPO): (A) Ambulatory patient services (B) Emergency services (C) Hospitalization (D) Maternity and newborn care (E) Mental health/substance use disorder/behavioral health treatment (F) Prescription drugs (G) Rehabilitative and habilitative services and devices (H) Laboratory services (I) Preventive and wellness services and chronic disease management (J) Pediatric services, including oral and vision care No Annual Limits on Essential Health Benefits I, the undersigned, hereby declare to the Governor's Office of Economic Development that the facts herein stated are true, and that I have attached sufficient plan information highlighting where our plan reflects meeting the 65% minimum threshold for the employe paid portion of the plan for GOED to independently confirm the same. Todd Clark Name of person authorized for signature Signature Title Vice President Date 2/6/2018

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13 INDUSTRY-LEADING LOTTERY, GAMING & INTERACTIVE GAMING COMPANY February Scientific Games Corporation. All Right Reserved.

14 To empower our customers by creating the world s best gaming and lottery experiences. Our Mission 2018 Scientific Games Corporation. All Right Reserved.

15 Land-Based Casinos Licensed Online Casino Operators Global lotteries Instant Games & Systems OUR CUSTOMERS U.S. and International Social Casino 2018 Scientific Games Corporation. All Right Reserved. Online Real-Money Sports Betting Licensed Betting Operators (bingo, arcade) VLT Operators

16 JOINING FORCES: A LEADER IN GAMING & LOTTERY + A LEADER IN DIGITAL LTM 9/30/17: SGMS ~ $3.0 Billion Revenue LTM 9/30/17: NYX* ~ 200 Million Revenue INTERACTIVE LTM 9/30/17 $1.8bn Revenue LTM 9/30/17 $794mm Revenue LTM 9/30/17 $406mm Revenue LTM 9/30/17 * $187mm Revenue ~1,600 CUSTOMERS ~9,500 EMPLOYEES OPERATIONS ON 6 CONTINENTS 2018 Scientific Games Corporation. All Right Reserved. * NYX financial information translated at CAD$1.00 / US$ NYX results are not included in SGMS consolidated results for the periods presented above. The NYX financial information above has been derived from NYX s audited consolidated financial statements for the year ended December 31, 2016 and its unaudited consolidated financial statements for the nine months ended September 30, 2017 and September 30, 2016, in each case, as such statements have been filed with the System for Electronic Document Analysis and Retrieval. In addition, the NYX financial information above has been prepared in accordance with International Financial Reporting Standards, which may differ from how such information would be prepared under Generally Accepted Accounting Principles in the U.S. NYX financial information is presented for illustrative purposes only and is not necessarily indicative of what the operating results actually would have been achieved if the NYX acquisition had taken place during the period presented, nor are they indicative of future operating results.

17 ONE SCIENTIFIC GAMES - NEW SOCIAL & DIGITAL DIVISIONS GAMING LOTTERY Proven product brands include Bally, Barcrest, Shuffle Master and WMS Gaming Operations Machine Sales Systems Tables Products Trusted provider to 150+ lotteries globally, including 24 of the Top 25* lotteries in the world Instant Games Systems Leading social slots provider and 3rd largest publisher of social casino apps Social Gaming SOCIAL Leading supplier of digital gaming content and technology Digital Real Money Gaming Content and Platforms Sportsbook SG Universe igaming/ilottery Platforms DIGITAL 2018 Scientific Games Corporation. All Right Reserved. *La Fleur's Almanac

18 INDUSTRY S BROADEST PORTFOLIO Gaming Operations Gaming Machine Sales Gaming Systems Utility Products Proprietary Table Games Electronic Table Games Social Gaming 2018 Scientific Games Corporation. All Right Reserved. Real Money Online Gaming igaming Lottery Games Lottery Systems Sports Betting ilottery One Stop Shop

19 POWER OF CROSS CHANNEL 2018 Scientific Games Corporation. All Right Reserved.

20 MARKET LEADERSHIP Games Social Gaming MARKET LEADER Instant Games Electronic Table Systems 2018 Scientific Games Corporation. All Right Reserved. Systems Tables 4,022 Innovation Focused Employees 94 Innovation Awards past 5 years 2,130+ Patents #1 Customer Loyalty 8 11

21 2018 Scientific Games Corporation. All Right Reserved.

22 COMPANY LEADERSHIP// 2018 Scientific Games Corporation. All Right Reserved.

23 HISTORY OF INNOVATION 2018 Scientific Games Corporation. All Right Reserved.