Progress Rail Services Corporation

Board Summary Progress Rail Services Corporation Date: November 16, 2017 1600 Progress Drive, Albertville, AL 85950 Main Location: Carson City Joshua Johnson, Director of Operational Excellence Manufacturing

Business Type: New County: Clark County Development Authority Representative: Michael Walsh, LVGEA APPLICATION HIGHLIGHTS - Progress Rail Services Corporation has leased a 130,000 square foot manufacturing facility in Henderson, NV. The company expects the facility to be operational in the fall of 2017. - While some employees will relocate from the company's other facilities, it is anticipated the majority of the Henderson facility staff will be local hires. - The company is the world's largest builder of diesel-electric locomotives for all commercial railroad applications. PROFILE Progress Rail Services Corporation, a wholly owned subsidiary of Caterpillar since 2006, is a supplier of railroad and transit system products and services headquartered in Albertville, Alabama. The company offers advanced Electro-Motive Diesel (EMD) locomotives and engines, railcars, trackwork, fasteners, signaling, rail welding and Kershaw Maintenance-of-Way equipment, along with dedicated locomotive and freight car repair. The company also offers advanced rail technologies, including data acquisition and asset protection equipment. The company's Henderson facility will remanufacture traction motors for the rail industry. Progress Rail Services Corporation operates a network of nearly 200 locations across the United States, Canada, Mexico, Brazil, Germany, Italy, Australia, China, Germany, India, South Africa, the United Arab Emirates, and the United Kingdom. Source: Progress Rail Services Corporation SIGNIFICANCE OF ABATEMENTS IN THE COMPANY'S DECISION TO RELOCATE/EXPAND Progress Rail Services Corporation selected Henderson out of numerous potential cities. The company reviewed each city's economic climate, proximity to its main customers, utility rates, labor and property costs, highway accessibility, and incentives packages as points of comparison. The company notes Nevada's reputation for offering incentives to businesses that create jobs and stimulate economic growth. The company is interested in exploring the incentives offered as part of its effort to invest in the facility and to ensure job growth, stability, and fair wages for its employees. Source: Progress Rail Services Corporation SIGNIFICANCE OF ABATEMENTS IN Statutory Application Sufficient % Over / Under Job Creation 50 50 Yes 0% Average Wage $21.95 $21.97 Yes 0% Equipment Capex (SU & MBT) $1,000,000 $1,475,300 Yes 48% Equipment Capex (PP) $5,000,000 $1,475,300 No -70% INCENTIVES Requested Terms Estimated $ Amount Sales Tax Abmt. 2% for 2 years $92,206 Modified Business Tax Abmt. 50% for 4 years $84,315 Total $176,521

JOB CREATION Contracted 24-Month Projection 5-Year Projection 50 50 110

OTHER CAPITAL INVESTMENT Land Building Purchase BTS / Building Improvements $0 $0 $1,500,000 ECONOMIC IMPACT ESTIMATES (10-Year Cumulative) Total Construction Total Jobs Supported 160 15 Total Payroll Supported $64,867,690 $686,481 Total Output Estimate $200,531,460 $2,365,947 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 $902,181 $2,295,386 $3,197,567 Sales $60,938 $1,180,566 $1,241,504 Lodging $0 $48,831 $48,831 State Taxes Property $49,344 $133,652 $182,996 Sales $49,006 $402,180 $451,186 Modified Business $515,029 $244,713 $759,742 Lodging $0 $16,480 $16,480 Total $1,576,498 $4,321,808 $5,898,306 EMPLOYEE BENEFITS - Percentage of health insurance covered by company: 91%. - Health care package cost per employee - $6,046 annually with options for dependents. - Overtime, PTO/Sick/Vacation, Merit Increases, Tuition Assistance/ Retirement Plan / Profit Sharing / 401(k), Bonus. NOTES - Percentage of revenue generated by the new jobs contained in this application from outside Nevada: 100%. - The company is also considering Reno, NV; Carson City, NV; Salt Lake City, UT; Flagstaff, AZ; Cedar City, UT; and Farmington, NM, as potential locations.

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Company is an / a: (check one) Incentive Application New location in Nevada Company Name: Progress Rail Services Corporation Expansion of a Nevada company Date of Application: August 16, 2017

Section 1 - Type of Incentives Please check all that the company is applying for on this application: SalesS & Use Tax Abatement Sales & Use Tax Deferral ModifiedM Business Tax Abatement Recycling Real Property Tax Abatement PersonalP Property Tax Abatement Other: Utility Tax Abatement

Section 2 - Corporate Information COMPANY NAME (Legal name under which business will be transacted in Nevada) FEDERAL TAX ID # Progress Rail Services Corporation 59-2740308 CORPORATE ADDRESS CITY / TOWN STATE / PROVINCE ZIP 1600 Progress Drive Albertville Alabama 35950 MAILING ADDRESS TO RECEIVE DOCUMENTS (If different from above) CITY / TOWN STATE / PROVINCE ZIP

TELEPHONE NUMBER WEBSITE 800 476 8769 www.progressrail.com COMPANY CONTACT NAME COMPANY CONTACT TITLE Joshua Johnson Director of Operational Excellence E-MAIL ADDRESS PREFERRED PHONE NUMBER [email protected] 708 205-9521 Has your company ever applied and been approved for incentives available by the Governor's Office of Economic Development? YesY No If Yes, list the program awarded, date of approval, and status of the accounts (attach separate sheet if necessary):

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. 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). Section 4 - Nevada Facility Type of Facility: Headquarters Service Provider Technology Distribution / Fulfillment Back Office Operations Manufacturing Research & Development / Intellectual Property Other: PERCENT OF COMPANY'S NEVADA LOCATION MARKET OUTSIDE OF EXPECTED DATE OF NEW / EXPANDED OPERATIONS (MONTH / YEAR) NEVADA 100% October 01 2017 NAICS CODE / SIC INDUSTRY TYPE 336510 - Railroad Rolling Stock Manufacturing Manufacturing DESCRIPTION OF COMPANY'S NEVADA OPERATIONS Manufacture and Remanufacture or traction motors for the rail industry PROPOSED / ACTUAL NEVADA FACILITY ADDRESS CITY / TOWN COUNTY ZIP 820 Wigwam Parkway Henderson Clark County 89014 WHAT OTHER STATES / REGIONS / CITIES ARE BEING CONSIDERED FOR YOUR COMPANY'S RELOCATION / EXPANSION / STARTUP? Reno, Nevada; Carson City, Nevada; Salt Lake City, Utah; Flagstaff, Arizona; Cedar City, Utah;Farmington, New Mexico

1 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

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 Part 1. Are you currently leasing space in Nevada? leasing space in Nevada? Yes If No, skip to Part 2. If Yes, continue below: If No, skip to Part 2. If Yes, continue below: What year(s)? What year(s)? 2017 -2027 How much space (sq. ft.)? How much space (sq. ft.)? 130,000 Annual lease cost at current space: Annual lease cost of space: $931,243.00 Due to expansion, will you lease additional space? Do you plan on making building tenant improvements? Yes If No, skip to Part 3. If Yes, continue below: If No, skip to Part 2. If Yes * , continue below: Expanding at the current facility or a new facility? When to make improvements (month, year)? Aug-2017 What year(s)? How much expanded space (sq. ft.)? Part 2. Are you currently/planning on Annual lease cost of expanded space: buying an owner occupied facility in Nevada? No Do you plan on making building tenant improvements? If No, skip to Part 3. If Yes * , continue below: If No, skip to Part 3. If Yes * , continue below: Purchase date, if buying (month, year): When to make improvements (month, year)? How much space (sq. ft.)? Do you plan on making building improvements? Part 2. Are you currently operating at an If No, skip to Part 3. If Yes * , continue below: owner occupied building in Nevada? When to make improvements (month, year)? If No, skip to Part 3. If Yes, continue below: How much space (sq. ft.)? Part 3. Are you currently/planning on Current assessed value of real property? building a build-to-suit facility in Nevada? No Due to expansion, will you be making building improvements? If Yes * , continue below: If No, skip to Part 3. If Yes * , continue below: When to break ground, if building (month, year)? When to make improvements (month, year)? Estimated completion date, if building (month, year): How much space (sq. ft.)? Part 3. Do you plan on building or buying a new facility in Nevada? 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 add a 130000 sqft manufacturing facility that will employe 45 people near the onset and is expected to ramp up to over 100 people in the future. The business remanufactures rail equipment and will provide significant job growth, and commerce in the area.

2 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): $1,500,000 Building Costs (if building / making improvements): $0 Land: $0 Land: $0 Equipment Cost: $1,475,300 Equipment Cost: $0 Total: $2,975,300 Total: $0

Is the equipment purchase for replacement of existing equipment? No Current assessed value of personal property in NV: $0 (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?: 50 end of the first eighth quarter of expanded operations?: Average hourly wage of these new employees: $21.97 Average hourly wage of these new employees: How many FTE employees prior to expansion?: Average hourly wage of these existing employees: Total number of employees after expansion:

* 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 360.474. OTHER COMPENSATION (Check all that apply): 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) No 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:

Health Insurance Costs: Percentage of health insurance coverage by: Cost of health insurance for company (annual amount per employee): $ 6,046.08 Company: 91% Health Plan annual out-of-pocket maximum (individual): $ 1,500.00 Employee: 9%

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Site Selection Factors Company Name: Progress Rail Services 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: 4 Transportation infrastructure: 3 Labor costs: 5 Transportation costs: 3 Real estate availability: 3 State and local tax structure: 4 Real estate costs: 3 State and local incentives: 5 Utility infrastructure: 4 Business permitting & regulatory structure: 4 Utility costs: 5 Access to higher education resources: 3

OTHER FACTORS & RATINGS: The proximity of the location to our customer base was also a major factor in the decision making process.

Equipment Schedule, Detailed

The Office has determined the detailed equipment schedule as described in this application constitutes confidential proprietary information of Progress Rail Services Corporation, and is not a public record.

Employment Schedule, Detailed

The Office has determined the detailed employment schedule as described in this application constitutes confidential proprietary information of Progress Rail Services Corporation, and is not a public record.

5(C) Evaluation of Health Plans Offered by Companies Company Name: Progress Rail Services Corporation County: Clark County

Total Number of Full-Time Employees: 50

Average Hourly Wage per Employee $21.97 Average Annual Wage per Employee (implied) $45,697.60

Annual Cost of Health Insurance per Employee $6,046.08 Percentage of Cost Covered by: Company 91% Employee 9%

Health Plan Annual Out-of-Pocket Maximum $1,500

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 1% MMQ

Annual Out-of-Pocket Maximum not to exceed $6,600 (2015) $1,500 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 for GOED to independently confirm the same.

Jennifer Baumberger Name of person authorized for signature Signature

Benefits Director 8/23/2017 Title Date