#1NEVADA Mining Association 2019 MINING THROUGH UNCERTAINTY APPLIED ANALYSIS#2The Importance of Minerals in Our Lives EVERY AMERICAN BORN THIS YEAR WILL NEED... 3.19M lbs of minerals, metals and fuels in their lifetime 7.70M cu. ft NATURAL GAS 1.36M lbs STONE, SAND & GRAVEL 330,573 lbs 75,327 gal 53,071 lbs COAL PETROLEUM CEMENT NEVADA Mining Association 30,190 lbs SALT 20,127 lbs IRON ORE 14,337 lbs 12,182 lbs PHOSPHATE CLAYS ROCK 980 lbs COPPER 953 lbs LEAD 466 lbs ZINC 1.54 troy oz GOLD 2,066 lbs BAUXITE (ALUMINUM) 62,648 lbs OTHER MINERALS & METALS Source: Minerals Education Coalition, National Mining Association, the U.S. Geological Survey and the U.S. Energy Information Administration MINING THROUGH UNCERTAINTY APPLIED 2 ANALYSIS#3The Importance of Minerals in Our Lives EVERY AMERICAN BORN THIS YEAR WILL NEED... 3.19M lbs of minerals, metals and fuels in their lifetime 7.70M cu. ft NATURAL GAS 1.36M lbs STONE, SAND & GRAVEL 330,573 lbs 75,327 gal COAL PETROLEUM 53,071 lbs CEMENT NEVADA Mining Association 30,190 lbs SALT 20,127 lbs IRON ORE 14,337 lbs 12,182 lbs PHOSPHATE ROCK CLAYS 980 lbs COPPER 953 lbs LEAD 466 lbs ZINC 1.54 troy oz GOLD 2,066 lbs BAUXITE (ALUMINUM) 62,648 lbs OTHER MINERALS & METALS Source: Minerals Education Coalition, National Mining Association, the U.S. Geological Survey and the U.S. Energy Information Administration MINING THROUGH UNCERTAINTY APPLIED 3 ANALYSIS#4How Stable is Mining 20 Production in Nevada? NEVADA MINING THROUGH UNCERTAINTY APPLIED ANALYSIS Mining Association#5Nevada Mining Operations Au GO Do BG |Au L B Barite Li Lithium C C Clay Mg Magnesium Au C D G B Au Do G Gy L Cu Copper Mo Molybdenum G Fe D Diatomite D DGL □ Opals Au Pe Cu || Au PS T Do Dolomite 103 Active Operations in 2018 CG Gy L G Au BCD Au li C Au Mg Pe P G Geothermal Au Gold Gy Gypsum Fe Iron Ore P Perlite Pe Petroleum S Salt Si Silica Ag Silver L Limestone T Turquoise Gy L Si NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Department of Taxation 5 APPLIED ANALYSIS#6Nevada Mining Operations Au GO Do BG |Au L B Barite Li Lithium C C Clay Mg Magnesium Au C D G B Au Do G Gy L Cu Copper Mo Molybdenum G Fe D Diatomite D DGL □ Opals Au Pe Cu || Au PS T Do Dolomite $7.7B Gross Proceeds of Minerals in 2018 CG Gy L G Au C Au Mg Pe BCD Au li P G Geothermal Au Gold Gy Gypsum Fe Iron Ore P Perlite Pe Petroleum S Salt Si Silica Ag Silver L Limestone T Turquoise Gy L Si NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Department of Taxation 6 APPLIED ANALYSIS#7Nevada Mining Operations -4.1% Annual Gross Proceeds Loss from 2017 to 2018 Au GO Do BG |Au L B Barite Li Lithium C C Clay Au C D G B Au Do G Gy L Cu Copper G Fe D Diatomite D DGL Au Pe Cu || Au PS T Do Dolomite CG Gy L G Au C Au Mg Pe BCD Au li P Ag Silver L Limestone T Turquoise Gy L Si G Geothermal Au Gold Gy Gypsum Fe Iron Ore Mg Magnesium Mo Molybdenum □ Opals P Perlite Pe Petroleum S Salt Si Silica NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Department of Taxation 7 APPLIED ANALYSIS#8Information Transportation/Warehousing Education Health Care/Social Assistance Management of Companies Nondurable Goods Admin/Waste Management Finance/Insurance 7.3% 5.6% 5.3% 4.8% 4.5% 4.4% 4.4% 4.2% Nevada GDP Growth by Sector 2008-2018 Compound Annual Growth Rate All Industries Total: +2.5% Government Durable Goods Real Estate/Rental/Leasing Prof/Scientific/Tech Services Accommodation/Food Arts/Entertainment/Recreation 3.4% Retail Trade 3.1% Other 3.1% Wholesale Trade 2.9% 2.7% 2.2% 2.0% 1.9% 1.5% Utilities 1.4% Agriculture Construction -2.3% Mining -2.4% -2.1% NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Bureau of Economic Analysis 8 APPLIED ANALYSIS#9Mineral Production Past 12 Months Increased 10.0% Remained About the Same 40.0% Decreased 40.0% Refused/NA 10.0% NEVADA Mining Association ■Increased ■Remained About the Same ■ Decreased ■Refused/NA MINING THROUGH UNCERTAINTY Source: NVMA 2019 Survey APPLIED ANALYSIS#10Durable Goods 23.9% Nondurable Goods 14.1% Construction 12.8% Management of Companies 9.7% Education 9.6% Admin/Waste Management 9.1% Arts/Entertainment/Recreation 8.3% Transportation/Warehousing 7.7% Nevada GDP Growth by Sector 2017-2018 Compound Annual Growth Rate Prof/Scientific/Tech Services Finance/Insurance Real Estate/Rental/Leasing Other Information 7.5% Wholesale Trade 7.3% Health Care/Social Assistance 7.3% 6.8% 6.4% 5.9% 5.8% Retail Trade 4.9% All Industries Total: +5.6% Utilities 2.6% Government 1.3% Accommodation/Food 0.8% Agriculture Mining -18.1% -7.3% NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Bureau of Economic Analysis 10 APPLIED ANALYSIS#11Mining Gross Domestic Product (In Billions) Nevada $4.1 $3.9 $3.5 $5.1 $6.3 $5.7 $4.4 $3.4 $3.3 $2.7 $3.9 $3.2 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Source: United States Bureau of Economic Analysis NEVADA MINING THROUGH UNCERTAINTY 11 APPLIED ANALYSIS Mining Association#12Mining GDP Share of All Industry Total Nevada 3.3% 3.1% 2.6% 5.0% 4.5% 4.2% 3.4% 2.5% 2.5% 2.2% 1.9% 1.9% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 Source: United States Bureau of Economic Analysis NEVADA MINING THROUGH UNCERTAINTY 12 APPLIED ANALYSIS Mining Association#13Mineral Production Next 12 Months NEVADA Mining Association Increase 40.0% Remain About the Same 30.0% Decrease 20.0% Refused/NA 10.0% Increase ■Remain About the Same ■ Decrease MINING THROUGH UNCERTAINTY ■Refused/NA 13 Source: NVMA 2019 Survey APPLIED ANALYSIS#14Business Revenues or Sales Past 12 Months NEVADA Mining Association Increased 42.9% Remained About the Same Decreased 16.3% Refused/NA 12.2% 28.6% ■Increased Remained About the Same ■ Decreased ■Refused/NA MINING THROUGH UNCERTAINTY 14 Source: NVMA 2019 Survey APPLIED ANALYSIS#15Business Revenues or Sales Next 12 Months NEVADA Mining Association Increase 53.2% Remain About the Same 21.3% Decrease 17.0% Increase ■Remain About the Same ■Decrease ■Refused/NA MINING THROUGH UNCERTAINTY 15 Refused/NA 8.5% Source: NVMA 2019 Survey APPLIED ANALYSIS#16Business Profitability Past 12 Months NEVADA Mining Association Increased 36.7% Remained About the Same 28.6% Decreased 20.4% Refused/NA 14.3% ■Increased ■Remained About the Same ■Decreased ■Refused/NA MINING THROUGH UNCERTAINTY 16 Source: NVMA 2019 Survey APPLIED ANALYSIS#17Are Commodity Prices 20+ Going to Increase? NEVADA Mining Association MINING THROUGH UNCERTAINTY 17 APPLIED ANALYSIS#18Commodity Price Next 12 Months Gold 63.8% Silver 56.5% Copper 48.9% NEVADA Mining Association Increase Stay About the Same ■ Decrease MINING THROUGH UNCERTAINTY 31.9% 4.3% 39.1% 4.3% 40.4% 10.6% 18 Source: NVMA 2019 Survey APPLIED ANALYSIS#19Price Change Over the Past Year OVER THE PAST YEAR (ACTUAL) PROJECTED IN NEXT 12 MONTHS COMMODITY AUGUST 2018 AUGUST 2019 INCREASE DECREASE Gold (per Troy Oz.) $1,180 $1,515 63.8% 4.3% Silver (per Troy Oz.) $14.61 $16.93 56.5% 4.3% Copper (per Pound) $2.72 $2.59 48.9% 10.6% NEVADA Mining Association MINING THROUGH UNCERTAINTY 19 Source: NVMA 2019 Survey APPLIED ANALYSIS#20Price of Gold USD per Troy Ounce $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 Peak to Present: -$380 (-20.0%) $400 $200 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 NEVADA Mining Association MINING THROUGH UNCERTAINTY '18 '19 $1,515 Source: London Bullion Market Association 20 APPLIED ANALYSIS#21Price of Gold USD per Troy Ounce $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 NEVADA Mining Association MINING THROUGH UNCERTAINTY 64% 32% 4% '19 Source: London Bullion Market Association; NVMA 2019 Survey APPLIED 21 ANALYSIS#22Price of Silver USD per Troy Ounce $60 $50 $40 $30 $20 Peak to Present: -$31.78 (-65.2%) $10 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 NEVADA Mining Association MINING THROUGH UNCERTAINTY '18 '19 $16.93 Source: London Bullion Market Association 22 APPLIED ANALYSIS#23Price of Silver USD per Troy Ounce $60 $50 $40 $30 $20 $10 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 NEVADA Mining Association MINING THROUGH UNCERTAINTY '19 57% 39% 4% Source: London Bullion Market Association; NVMA 2019 Survey 23 APPLIED ANALYSIS#24Price of Copper USD per Pound $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 '12 '13 '14 NEVADA Mining Association Peak to Present: -$1.34 (-34.0%) '15 '16 '17 '18 MINING THROUGH UNCERTAINTY $2.59 '19 Source: London Metal Exchange 24 APPLIED ANALYSIS#25Price of Copper Next 12 Months $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 '12 '13 '14 '15 '16 '17 '18 NEVADA Mining Association MINING THROUGH UNCERTAINTY '19 49% 40% 11% Source: London Metal Exchange; NVMA 2019 Survey 25 APPLIED ANALYSIS#26What is the Outlook for the Mining Industry in Nevada? NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 26 ANALYSIS#27Nevada's Economy NEVADA Mining Association 2019 Annual Survey Refused/No Answer Wrong Direction 12.2% 12.2% Right Direction 75.5% "Right Direction" Prior Year Comparison 92.9% 75.5% 2018 2019 MINING THROUGH UNCERTAINTY 27 Source: NVMA 2019 Survey APPLIED ANALYSIS#28Business Environment in Nevada Past 12 Months NEVADA Mining Association 8.2% 40.8% 36.7% 10.2% 4.1% Much Better Somewhat Better About the Same Somewhat Worse Refused/No Answer MINING THROUGH UNCERTAINTY 28 Source: NVMA 2019 Survey APPLIED ANALYSIS#29State Business Tax Climate Nevada has the 9th Best Business Tax Climate in the U.S. NEVADA Mining Association Best Tax Climate Worst Tax Climate Source: Tax Foundation MINING THROUGH UNCERTAINTY 29 APPLIED ANALYSIS#30Business Environment in Nevada Next 12 Months NEVADA Mining Association 4.1% 36.7% 46.9% 8.2% 4.1% Much Better Somewhat Better About the Same Somewhat Worse Refused/No Answer MINING THROUGH UNCERTAINTY 30 Source: NVMA 2019 Survey APPLIED ANALYSIS#31Elements of Nevada Mining that Most Encourage Investment Security Certainty Concerning the Administration, Interpretation and Enforcement of Existing Regulations NEVADA Mining Association Political Stability Availability of Labor/Skills Quality of Infrastructure MINING THROUGH UNCERTAINTY 42.3% 41.2% 40.4% 54.9% 53.7% Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 31 APPLIED ANALYSIS#32What is the Outlook for Mining Employment in Nevada? NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 32 ANALYSIS#33Nevada Employees Next 12 Months NEVADA Mining Association Increase 57.1% Stay About the Same 30.6% Decrease 6.1% ■Increase ■Stay About the Same ■Decrease Refused/NA MINING THROUGH UNCERTAINTY 33 Refused/NA 6.1% Source: NVMA 2019 Survey APPLIED ANALYSIS#34Nevada Employment Annual Employment Year-over-Year Growth 1,600,000 8% 1,400,000 6% 4% 1,200,000 2% 1,000,000 0% 800,000 -2% 600,000 -4% 400,000 -6% 200,000 -8% 0 -10% '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '01 '03 '05 '07 '09 '11 '13 '15 YTD '17 '19 YTD NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Bureau of Labor Statistics 34 APPLIED ANALYSIS#35Mining Association NEVADA Employment Growth by State United States 4.0% 3.5% 3.3% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Utah Nevada Washington Idaho Florida South Dakota Arizona Texas New Mexico Oregon Wyoming Mississippi Rhode Island Colorado Alaska Tennessee Alabama California 1.5% Montana North Carolina Georgia New Hampshire New Jersey South Carolina Arkansas Kentucky US New York Kansas Indiana West Virginia Illinois Massachusetts Maine Missouri Iowa Oklahoma Ohio Delaware Hawaii Virginia Pennsylvania Connecticut North Dakota Michigan Nebraska Wisconsin Minnesota Maryland Vermont Louisiana MINING THROUGH UNCERTAINTY Source: United States Bureau of Labor Statistics 35 ANALYSIS APPLIED#36Employment Growth by Sector Nevada Prior Year vs. Present Professional & Business Services Construction Manufacturing Leisure & Hospitality Trade, Transportation & Utilities Education & Health Services Financial Activities Government Other Services Mining & Logging Information -125 25 25 792 1,458 NEVADA Mining Association 5,450 5,300 5,092 2,683 MINING THROUGH UNCERTAINTY 6,583 9,733 Net Growth: +49,217 12,225 Source: United States Bureau of Labor Statistics 36 APPLIED ANALYSIS#37Employment Growth by Sector Nevada Prior Year vs. Present Manufacturing Construction Professional & Business Services Financial Activities Education & Health Services Trade, Transportation & Utilities Other Services Leisure & Hospitality Government Mining & Logging Information -0.8% 2.1% 1.9% 1.6% 0.9% 0.2% NEVADA Mining Association 6.6% 4.0% 3.7% MINING THROUGH UNCERTAINTY Net Growth Rate: +3.6% 11.3% 12.6% Source: United States Bureau of Labor Statistics 37 APPLIED ANALYSIS#38Mining Employees Next 12 Months NEVADA Mining Association Increase 30.6% Stay About the Same 38.8% Decrease 26.5% ■Increase ■Stay About the Same ■Decrease ■Refused/NA MINING THROUGH UNCERTAINTY 38 Refused/NA 4.1% Source: NVMA 2019 Survey APPLIED ANALYSIS#39Nevada Mining Employment Annual Employment Year-over-Year Growth 18,000 20% 16,000 15% 14,000 10% 12,000 5% 10,000 8,000 0% 6,000 -5% 4,000 I -10% 2,000 0 -15% '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 YTD YTD NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Bureau of Labor Statistics 39 APPLIED ANALYSIS#40Mining Company Employment Growth Next 12 Months NEVADA Mining Association Increase 46.9% Stay About the Same 38.8% Refused/NA 10.2% Decrease 4.1% ■Increase Stay About the Same ■Decrease Refused/NA MINING THROUGH UNCERTAINTY 40 Source: NVMA 2019 Survey APPLIED ANALYSIS#41How Much Does the Mining Industry Pay in Taxes to Nevada? NEVADA MINING THROUGH UNCERTAINTY APPLIED 41 ANALYSIS Mining Association#42RANK TAXPAYER NAME TOTAL (IN MILLIONS) 1 MGM Resorts International 2 NV Energy (1,4) $4,499 $2,425 3 Caesars Entertainment Corporation $2,223 Ten Highest Assessed Taxpayers 2018-2019 4 Wynn Resorts Limited $1,113 5 Las Vegas Sands Corporation $1,037 6 Station Casinos Incorporated $857 7 NEWMONT MINING $662 8 Station Casinos Incorporated $522 9 BARRICK MINING $504 10 Ruby Pipeline LLC $439 TOTAL $14,281 NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Department of Taxation 42 APPLIED ANALYSIS#43Roll Assessed Value by Class 2017-2018 Other 96.9% NEVADA Mining Association MINING THROUGH UNCERTAINTY Mining-Related 3.1% Source: Nevada Department of Taxation 43 APPLIED ANALYSIS#44Net Proceeds of Minerals Taxes Paid By Nevada Mining Industry, Including Royalty Recipients (In Millions) $91.8 $97.6 $75.7 $62.6 $163.0 $255.6 $216.7 $171.0 $155.1 $136.6 $125.9 $103.2 $101.6 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 NEVADA Mining Association MINING THROUGH UNCERTAINTY '18 Source: Nevada Department of Taxation 44 APPLIED ANALYSIS#45Share of Net Proceeds Tax Generated by Specific Minerals 2018 NEVADA Mining Association $126 M Total Net Proceeds Tax Generated Gold/Silver 91.9% MINING THROUGH UNCERTAINTY Copper 2.7% Geothermal 1.3% Gypsum 0.05% Oil 0.3% Other 3.8% Source: Nevada Department of Taxation (Operators and Royalties Combined) 45 APPLIED ANALYSIS#46Share of Net Proceeds Tax Generated by Specific Minerals 2018 $116 M Net Proceeds Tax Generated by Gold/Silver NEVADA Mining Association Gold/Silver 91.9% MINING THROUGH UNCERTAINTY Other 8.1% Source: Nevada Department of Taxation (Operators and Royalties Combined) 46 APPLIED ANALYSIS#47$892.9 Net Proceeds Tax Generated by County 2018 | In Millions Lander Eureka Humboldt White Pine NEVADA Mining Association $367.9 $343.5 $232.7 $218.6 $157.2 $44.9 $35.1 $29.7 $10.2 $8.2 $1.7 $0.8 $0.0 $0.0 $0.0 $0.0 Elko Nye Esmeralda Pershing Churchill Clark Mineral MINING THROUGH UNCERTAINTY Lyon Storey Washoe Douglas Lincoln Carson City Source: Nevada Department of Taxation 47 APPLIED ANALYSIS#48Net Proceeds Tax Generated by County 2018 | In Millions $892.9 $367.9 $343.5 $232.7 Lander Eureka Humboldt White Pine NEVADA Mining Association 78.3% Of Total Net Proceeds Tax Generated by Top 4 Counties MINING THROUGH UNCERTAINTY Source: Nevada Department of Taxation 48 APPLIED ANALYSIS#49Total Estimated Major Taxes Paid by Nevada Mining $223.6 $203.7 $388.1 $314.0 $431.4 $349.5 $312.2 $292.3 $278.9 $245.8 $235.5 $255.6 $216.7 $163.0 $171.0 $136.6 $155.1 $125.9 $91.8 $97.6 $103.2 $101.6 '08 '09 '10 '11 '12 '13 '14 ■Net Proceeds ■Sales/Use Tax Property Tax NEVADA Mining Association '15 '16 '17 '18 ■Modified Business Tax Source: Nevada Department of Taxation, NvMA Member Survey, Natural Resource Industry Institute (2008 - 2010), Industry Surveys Note: Historical figures may be adjusted to reflect the latest available information. MINING THROUGH UNCERTAINTY 49 APPLIED ANALYSIS#50What Do Education Funding Formula Changes Mean for Mining? NEVADA MINING THROUGH UNCERTAINTY APPLIED 50 ANALYSIS Mining Association#51Education Funding Under the Nevada Plan NEVADA Mining Association THE FUNDING OF K-12 PUBLIC SCHOOLS IN NEVADA The "Nevada Plan" and Distributive School Account (DSA) NEVADA PLAN Distributive School Account State Funding (Obligation) NEVADA PLAN State Guaranteed Basic Support 1. Distributive School Account Funding: [1] State General Fund [2] Out-of-State LSST (2.25%) [3] Annual Slot Machine Tax (portion) [4] Federal Mineral Lease Revenue [5] Interest from Permanent School Fund 2 3 NEVADA PLAN Local Funding Non-Nevada Plan Local "Outside" Funding 2. Nevada Plan Local Funding: [1] Local School Support Tax (2.25%) [2] Ad Valorem Property/Mining Tax (1/3 PSOPT) PSOPT Public Schools Operating Property Tax 3. Non-Nevada Plan "Outside" Funding: [1] Ad Valorem Property/Mining Tax (2/3 PSOPT) [2] Governmental Services Tax (formerly MVPT) [3] Franchise Taxes [4] Unrestricted Federal Revenue-Impact Aid [5] Interest, Tuition, and Other Local Revenue [6] Opening General Fund Balance Locally Generated Revenues Capital Projects Debt Service Mostly Federal Funds Special Revenue Funds State Revenues Capital Projects/Debt Service: [1] General Obligation Bonds [2] Pay-as-You-Go" Financing Programs [3] Ad Valorem Tax Assessments [4] Governmental Services Tax Special Revenue Funds: [1] ESEA No Child Left Behind (NCLB) Act* [2] Nutrition Programs [3] Special Education Programs [4] Career & Technical Education [5] State School Improvement *Titles I, II, IV, V and VI Class Size Reduction Program Funds Class Size Reduction Program Funds: [1] State General Funds Adult High School Diploma Program Adult High School Diploma Program [1] State General Funds APPLIED ANALYSIS#52Education Funding Under the Nevada Plan NEVADA Mining Association Distributive School Account (DSA) Equity Allocation Model [1] Enrollment Module [2] Legislative Support Module [1] School [3] Revenue Module District Enrollment Module [4] Expenditure Module [1] 2 Legislative School District Basic Support Level Module [1] [6] Other Operating Expense Module [4] [7] Basic Support Level Ratio Module [5] Licensed Staff Allotment and Expense Module [1] [1] [9] Transportation Equalization [4] Module [10] Preliminary Basic Support Level Module [8] Wealth Adjustment Module [1] [3] [2] [1] [1] [2] [13] Budget and Growth Rate [12] Budget [3] Phasing Adjustment Module Input Modules [3] Module [4] [3] [7] [15] [14] 問 Biennium Year 2 [10] Basic Support [11] [14] Level Module Basic Support Level Module [Biennium Year 1) [11] Special Education Module [1] $0.25 Property Taxes Minus > (per $100 Assessed Value) Local School Support Taxes-LSST (2.25%) Nevada Plan State Funding Responsibility Numbers in Brackets ("[]") Refer to DSA Model Modules: [1] thru [4] Data Modules [5] thru [15] Processing Modules APPLIED ANALYSIS#53How Much is Nevada Spending on K12 Education? ? ■ Is it the $1.6 billion reported as total Distributive School Account resources in the executive budget? ■ Is it the $2.2 billion reported in the Nevada Comprehensive Annual Financial Report, State Spending Analysis? ■ Is it the $2.3 billion reported as the legislatively approved total Department of Education budget in the Fiscal Appropriations Report? ■ Is it the $2.9 billion reported as total regular support in the Distributive School Account? ■ Is it the $3.2 billion reported as total required state support in Distributed School Account? ■ Is it the $3.9 billion reported as total operating expenditures in the state's Nevada Plan summary? NEVADA Mining Association APPLIED ANALYSIS#54How Much is Nevada Spending on K12 Education? ? $5.0B There are more than 80 state, local and federal revenue resources that have been dedicated to education programs; they are expected to generate approximately $5.0B in FY2020 and $5.1B in FY2021 NEVADA Mining Association APPLIED ANALYSIS#55How Much is Nevada Spending on K12 Education? ? The differences are significant, limiting transparency and creating confusion $6,052 Basic Per Pupil Support (Gov Rec FY2020) $10,197 Total Education Resources Per Pupil (FY2020) NEVADA Mining Association APPLIED ANALYSIS#56Nevada is home to one of the nation's largest school districts (i.e., the Clark County School District) and some of its smallest school districts NEVADA Mining Association Student Enrollment Nevada School Districts Washoe 64,500 Humboldt 3,480 Elko 9,840 Pershing 690 Storey 440 Lander 1,000 Churchill 3,250 Eureka 270 White Pine Carson 2,230 City 7,760 Mineral 550 Nye 5,240 Esmeralda Douglas 5,840 70 Lincoln 980 Lyon 8,680 Clark 324,000 APPLIED ANALYSIS#57SB 543 Guiding Principles Transparency How much is being spent on education, where the funding is coming from and where is it spent Student-Centered Recognize the differences in cost per student, allocate funding accordingly Geographic Diversity Recognize the differences in each school district, allocate funding accordingly Hold Harmless Focus on allocation of incremental revenue, minimizing reallocation at student expense Classroom-focused Support classroom instruction and programming that directly improves student achievement NEVADA Mining Association APPLIED ANALYSIS#58NEVADA Mining Association 1 The Core Elements of SB543 2 3 4 сл Creation of the Nevada Education Fund Creation of the Education Stabilization Account Replace the Nevada Plan with the Pupil-Centered Funding Plan Creation of the Commission on School Funding Enhanced Reporting and Accountability at All Levels APPLIED ANALYSIS#59State of Nevada Education Fund STEP 1 Identify all non-federal resources available to fund education programs (see, Element 1) Pupil-Centered Funding Model State Admin. and Oversight Programs Base Funding (Inflation + Enrollment Growth) Weighted Funding (Allocation of All Other Funds) STEP 2 Allocate resources necessary to fund state administration, oversight and non-district programs (i.e., funds not allocated to districts) STEP 3 Ensure that base funding is made whole such that allocations made to all students are not diminished to increase allocations to selected students STEP 4 Additional funds are directed to weighted categories in proportion to the gap between their current funding and targets under full adequacy NEVADA Mining Association Excess Allocation (Distribution of Funds After Parity) STEP 5 At the point where there is parity in funding relative to full adequacy, funds are proportionally allocated APPLIED ANALYSIS#60A APA CONSULTING AUGENBLICK, PALAICH AND ASSOCIATES Nevada School Finance Study By Augenblick, Palaich and Associates Education Commission of the States Picus Odden and Associates Final, October 22, 2018 Picus Odden EDUCATION COMMISSION & Associates OF THE STATES NEVADA Mining Association NDE/APA K12 Base Funding Allocation Recommendation "Successful Schools" Base Equity Allocation Adjustments Small School District Adjustment Necessarily Small Schools Adjustment Comparable Wage Index APPLIED ANALYSIS#611 Weighted Funding Classifications Special Education Students 2 English Language Learners 3 At-Risk Students (those living at or near the poverty level) 4 Gifted and Talented Students Base Funding Funds Allocated to Every Student in the State + Existing Categorical Funding All Funds Currently Allocated to Programs Targeting Weighted Students Remain with Weighted Students + Incremental Funding All Funds After Base Funding is Increased by Inflation are Allocated to Weighted Student Programs Until Those Programs are Fully Funded NEVADA Mining Association APPLIED ANALYSIS#62District-Level Impacts and Hold Harmless/True-Up Approach Hold Harmless. All school districts will be frozen at FY2020 funding levels, ensuring that any school district that would receive less funding under the student- centered funding model does not receive any less money that it did in the current school year. True-Up. Incremental K12 education funds will be allocated to school districts that are currently receiving less funding than they would under the student-centered funding model before any other allocations are made, allowing them to be made whole as additional K12 education funding is made available. NEVADA Mining Association APPLIED ANALYSIS#63Impacts for Mining ■ Nevada's Constitutional Conflict Mining Tax Dollars are the First Education Dollars Distributed Under the New Formula, Must be Returned to the County of Origin If Mining Tax Dollars are Greater than the Total Amount of Funds that Would Otherwise be Allocated Under the Formula, Those Funds are "Authorized for Expenditure as a Continuing Appropriation for the Purpose of Mitigating the Adverse Effects of the Cyclical Nature of the Industry of Extracting and Processing Minerals on the Ability of the County School District to Offer its Pupils a Reasonably Equal Educational Opportunity." NEVADA Mining Association - 10- Legislature that the remaining money in the State Education Fund be used to provide a multiplier for each category of pupils which is as close as practicable to the multiplier for the preceding fiscal year; (b) The recommendations of the Commission for the multiplier for each category of pupils be considered and the multiplier for one category of pupils may be changed by an amount that is not proportional to the change in the multiplier for one or more other categories of pupils if the Legislature determines that a disproportionate need to serve the pupils in the affected category exists; and (c) If the multipliers for all categories of pupils in a fiscal year are increased from the multipliers in the immediately preceding fiscal year, a proportional increase is considered for the statewide base per pupil funding amount. 6. For any money identified in subsection 4 of NRS 362.170 which is deposited to the credit of the State Education Fund: (a) The amount of such money for the county from which the money was collected that does not exceed the total amount of money appropriated pursuant to subsection 2 to the county school district is deemed to be the first money appropriated pursuant to subsection 2 for that county school district. (b) The amount of such money for the county from which the money was collected which exceeds the total amount of money appropriated pursuant to subsection 2 to the county school district must be transferred to the county school district and is hereby authorized for expenditure as a continuing appropriation for the purpose of mitigating the adverse effects of the cyclical nature of the industry of extracting and processing minerals on the ability of the county school district to offer its pupils a reasonably equal educational opportunity. 7. The weighted funding appropriated pursuant to paragraph (e) of subsection 2: (a) May not be used to settle or arbitrate disputes between a recognized organization representing employees of a school district or the governing body of a charter school and the school district or governing body or to settle any negotiations; and (b) May not be used to adjust the district-wide schedules of salaries and benefits of the employees of a school district. Sec. 5. 1. To account for variation between the counties of this State in the cost of living and the cost of labor, the Department shall establish by regulation cost adjustment factors MINING THROUGH UNCERTAINTY 63 APPLIED ANALYSIS#64NEVADA Mining Association ? AW ? Where Do We Go From Here? Implementation and Execution ◉ July 1, 2019 Effective Date July 1, 2021 Effective Date ■ Communication and Messaging ■ Public Sector ■ Private Sector ■ Commission on Education Funding Funding Adequacy 20 APPLIED ANALYSIS#65What are the Impacts 20 of Mining in Nevada? APPLIED NEVADA MINING THROUGH UNCERTAINTY 65 ANALYSIS Mining Association#66Employment Impacts for Nevada Mining Industry Operations 2018 11,200 NEVADA Mining Association 8,081 10,112 Direct Indirect Induced 29,393 Total Jobs Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 66 APPLIED ANALYSIS#67Employment Impacts for Nevada Mining Industry Operations 2018 34,495 32,904 32,234 30,462 30,162 29,754 29,350 29,393 2011 2012 2013 2014 2015 2016 2017 2018 NEVADA Mining Association 29,393 Total Jobs Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 67 APPLIED ANALYSIS#68Wage/Salary Impacts for Nevada Mining Industry Operations 2018 $1.3 B NEVADA Mining Association Direct $0.7 B $0.5 B Indirect Induced $2.4 B Total Labor Income Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 68 APPLIED ANALYSIS#69Wage/Salary Impacts for Nevada Mining Industry Operations 2018 $2.76 B $2.58 B 2011 NEVADA Mining Association $2.64 B $2.49 B $2.43 B $2.41 B $2.40 B $2.36 B 2012 2013 2014 2015 2016 2017 2018 $2.4 B Total Labor Income Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 69 APPLIED ANALYSIS#70Value-Added Impacts for Nevada Mining Industry Operations 2018 $4.2 B NEVADA Mining Association Direct $1.2 B $0.9 B Indirect Induced $6.3 B Total GDP Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 70 APPLIED ANALYSIS#71Value-Added Impacts for Nevada Mining Industry Operations 2018 $6.8 B 2011 NEVADA Mining Association $7.3 B $6.9 B $6.6 B $6.3 B $6.0 B $5.9 B $6.1 B 2012 2013 2014 2015 2016 2017 2018 $6.3 B Total GDP Supported by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 71 APPLIED ANALYSIS#72Economic Output for Nevada Mining Industry Operations 2018 NEVADA Mining Association $7.9 B Direct $2.0 B $1.5 B Indirect Induced $11.4 B Total Economic Output Generated by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY 72 APPLIED ANALYSIS#73Economic Output for Nevada Mining Industry Operations 2018 $13.0 B 2011 NEVADA Mining Association $14.0 B $13.0 B $12.1 B $11.1 B $10.9 B $11.3 B $11.4 B 2012 2013 2014 2015 2016 2017 2018 $11.4 B Total Economic Output Generated by Nevada. Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis MINING THROUGH UNCERTAINTY APPLIED 73 ANALYSIS#74What is the Outlook for the Mining Industry Nationally? NEVADA MINING THROUGH UNCERTAINTY APPLIED 74 ANALYSIS Mining Association#75National Economy 2019 Annual Survey Refused/No "Right Direction" Prior Year Comparison 79.6% NEVADA Mining Association Answer 10.2% Wrong Direction 10.2% Right Direction 79.6% 75.0% 2018 2019 MINING THROUGH UNCERTAINTY 75 Source: NVMA 2019 Survey APPLIED ANALYSIS#76Investment Attractiveness Index United States Median: 74.0 83.9 84.3 86.1 79.9 69.3 70.4 70.7 72.5 74.0 74.5 56.6 52.9 Washington California Colorado Minnesota NEVADA Mining Association Michigan Montana MINING THROUGH UNCERTAINTY New Mexico Wyoming Idaho Arizona Utah Alaska Nevada Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 76 APPLIED ANALYSIS 93.0#77Investment Attractiveness Index Growth United States Michigan -6.6% -2.9% -0.4% Colorado California Minnesota NEVADA Mining Association 27.6% Arizona Washington Alaska MINING THROUGH UNCERTAINTY Utah Nevada 13.9% 11.4% 10.0% 8.8% 7.8% 6.1% 6.6% 3.5% 2.2% Montana New Mexico Source: Fraser Institute Survey of Mining Companies (2017 vs. 2018) and Applied Analysis 77 APPLIED ANALYSIS Idaho Wyoming#78Policy Perception Index United States 69.6 Median: 90.3 99.3 90.2 90.3 91.7 93.8 93.9 94.7 96.3 85.2 85.5 81.2 77.8 California Washington Montana Colorado NEVADA Mining Association Alaska Michigan MINING THROUGH UNCERTAINTY Minnesota Arizona Wyoming New Mexico Idaho Utah Nevada Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 78 APPLIED ANALYSIS#791.1% Michigan Wyoming NEVADA Mining Association Policy Perception Index Growth United States 17.6% 16.8% 13.6% 13.7% 11.0% 11.2% 11.6% 12.1% 9.7% 7.2% 7.5% Arizona Nevada Utah Alaska Washington Idaho MINING THROUGH UNCERTAINTY New Mexico Colorado Source: Fraser Institute Survey of Mining Companies (2017 vs. 2018) and Applied Analysis 79 APPLIED ANALYSIS California Minnesota Montana 23.0%#80Washington NEVADA Mining Association Best Practices Mineral Potential Index United States Median: 61.5 88.8 86.5 78.8 76.3 70.0 66.7 60.7 61.5 57.1 57.7 58.7 47.9 36.4 California Minnesota Michigan Colorado New Mexico MINING THROUGH UNCERTAINTY Wyoming Montana Idaho Utah Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 80 APPLIED ANALYSIS Arizona Alaska Nevada#81Best Practices Mineral Potential Index Growth United States -15.0% Colorado Michigan -12.9% -13.5% -10.2% California Minnesota Washington NEVADA Mining Association 58.2% Arizona Montana MINING THROUGH UNCERTAINTY Alaska Utah 15.6% 8.2% 9.3% 3.8% 5.3% 0.6% 1.3% -0.8% Nevada New Mexico Source: Fraser Institute Survey of Mining Companies (2017 vs. 2018) and Applied Analysis 81 APPLIED ANALYSIS Idaho Wyoming#82What is the Outlook for the Mining Industry Internationally? APPLIED NEVADA MINING THROUGH UNCERTAINTY 82 ANALYSIS Mining Association#83Investment Attractiveness Index 2018 2017 2018 Index Location Rank Rank Score Score 1 NEVADA (US) 3 93.3 2 Western Australia 5 91.5 3 Saskatchewan (CA) 2 90.0 4 Quebec (CA) 6 88.4 5 Alaska (US) 10 86.1 Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis MINING THROUGH UNCERTAINTY 83 APPLIED ANALYSIS NEVADA Mining Association#84Policy Perception Index 2018 2017 2018 Index Location Rank Rank Score Score 1 Saskatchewan (CA) 3 100.0 2 NEVADA (US) 5 99.3 3 Finland 2 99.2 4 Rep. of Ireland 1 97.7 LO Western Australia 17 96.7 Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis MINING THROUGH UNCERTAINTY 84 APPLIED ANALYSIS NEVADA Mining Association#85Best Practices Mineral Potential Index 2018 2017 2018 Index Location Rank Rank Score Score 1 NEVADA (US) 8 88.8 2 Western Australia 4 88.0 3 Alaska (US) 5 86.5 4 NW Territories (CA) 19 86.0 5 Nunavut (CA) 10 84.6 Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis NEVADA MINING THROUGH UNCERTAINTY 85 APPLIED ANALYSIS Mining Association#86Regional Median Investment Attractiveness 81.2 74.0 75.5 68.3 66.3 59.8 56.6 54.1 Argentina Africa Latin America and Caribbean Oceania Europe United States Australia NEVADA Mining Association MINING THROUGH UNCERTAINTY Canada Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 86 APPLIED ANALYSIS#87Regional Median Investment Attractiveness Growth 9.3% 7.1% 5.5% 3.8% 1.5% 0.5% -7.6% Argentina Africa Europe Oceania United States Australia NEVADA Mining Association Canada 16.5% Latin America and Caribbean Source: Fraser Institute Survey of Mining Companies (2017 vs. 2018) and Applied Analysis MINING THROUGH UNCERTAINTY 87 APPLIED ANALYSIS#88Regional Median Policy Perception Index 64.3 60.8 61.1 56.5 89.9 90.3 84.1 85.4 Argentina Oceania Africa Latin America and Caribbean Australia Europe NEVADA Mining Association MINING THROUGH UNCERTAINTY Canada United States Source: Fraser Institute Survey of Mining Companies (2018) and Applied Analysis 88 APPLIED ANALYSIS#89Regional Median Policy Perception Index Growth 15.5% 11.2% 8.5% 9.3% 7.5% 2.4% -7.9% Argentina Europe Africa Canada United States Australia NEVADA Mining Association Latin America and Caribbean 28.6% Oceania Source: Fraser Institute Survey of Mining Companies (2017 vs. 2018) and Applied Analysis MINING THROUGH UNCERTAINTY 89 APPLIED ANALYSIS#90Trade Wars: What Do They Mean for Us? NEVADA MINING THROUGH UNCERTAINTY APPLIED 90 ANALYSIS Mining Association#91China's Dominance of the Rare Earth Market Rare Earth Extraction in 2018 Seventy percent of rare earths are mined in the People's Republic of China, and processes a greater percentage of the rare earths annually Eighty percent of U.S. imports of usable rare earths also come from China NEVADA Mining Association Others 30% People's Republic of China 70% ■ Earlier this year, the Chinese government suggested it would lower the amount of rare earths supplied to the U.S. as retaliation for increased tariffs on Chinese goods MINING THROUGH UNCERTAINTY Source: South China Morning Post 91 APPLIED ANALYSIS#92Revitalizing the Rare Earth Market in the U.S. NEVADA Mining Association Rare Earth Extraction in 2018 Others 30% People's Republic of China 70% ■ The Mountain Pass mine, located an hour away from Las Vegas, is a potential part of the answer to a reduced supply of rare earth minerals ■ From the 1960s to the 1980s, the United States was a leader in extracting these minerals, and Mountain Pass was a big part of that Despite not being mined since 2015, Mountain Pass is still the largest source of rare earths in the country ■ MP Materials, based in Las Vegas, is seeking to reestablish rare earth mining and help reduce dependency on imported rare earths MINING THROUGH UNCERTAINTY Source: South China Morning Post; Financial World; News 3 Las Vegas 92 APPLIED ANALYSIS#93NEVADA Mining Association APPLIED MINING THROUGH UNCERTAINTY 93 ANALYSIS#94NEVADA Mining Association APPLIED MINING THROUGH UNCERTAINTY 94 ANALYSIS#95What About Electric Vehicles and Batteries? NEVADA MINING THROUGH UNCERTAINTY APPLIED 95 ANALYSIS Mining Association#96Electric Vehicle Sales Rise Dramatically China United States Global EV Sales 1,182,000 663,000 409,000 Europe 306,000 358,000 200,000 97,000 Others 52,000 53,000 Japan 56,000 ■2018 ■2017 64% increase in EV sales 2017 to 2018 79% in the U.S. 78% in China 34% in Europe ■ More than 1.27 million EVs are on the road in the U.S. as of June 30, 2019 ■ In Q2 2019, approximately 85,000 EVs were sold in the U.S. ■ Q2 2019 sales increased 23% over Q2 2018 sales NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Edison Electric Institute and EV-Volumes.com 96 APPLIED ANALYSIS#97Electrifying Global Transportation Global long-term passenger vehicle sales by drivetrain EV share of global vehicle fleet by segment Million vehicles 100 80 60 40 20 0 2015 2020 2025 2030 2035 2040 Source: BloombergNEF NEVADA Mining Association Share of fleet 90% 80% 70% ICE 60% 50% PHEV 40% BEV 30% 20% 10% 0% 2019 2025 2030 2035 2040 Buses Light commercial Passenger Medium commercial Heavy commercial Source: BloombergNEF. Note: Commercial vehicle adoption figures include the main markets of China, Europe, and the U.S. MINING THROUGH UNCERTAINTY 97 APPLIED ANALYSIS#98Copper and Electric Vehicles Pounds of Copper Required Battery Electric Bus Hybrid Electric Bus 196 Battery Electric Vehicles (EVs) 183 Plug-in Hybrid EVS 132 Hybrid EVs 85 814 ■ Demand for copper in vehicles expected to increase by 1,700 kilotons by 2027 56% of all light commercial vehicles and 31% of all medium commercial vehicles will be electric by 2040 NEVADA Mining Association Conventional Cars 49 MINING THROUGH UNCERTAINTY Source: Edison Electric Institute and the Institute for Electric Innovation 98 APPLIED ANALYSIS#99Exponential Energy Storage Growth Lithium, Cobalt, Nickel and other minerals needed Global cumulative energy storage installations GW NEVADA Mining Association 1,200 1,000 800 600 400 200 0 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Source: BloombergNEF Other South Korea Japan United Kingdom Australia France Southeast Asia Latin America Germany India United States ■China MINING THROUGH UNCERTAINTY APPLIED 99 ANALYSIS#100TEGLR TESLR NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 100 ANALYSIS#101Purchasing Managers Index 70 60 50 40 30 20 10 0 '01 '03 '05 '07 '09 '11 '13 '15 '17 NEVADA Mining Association MINING THROUGH UNCERTAINTY '19 Source: Institute for Supply Management 101 APPLIED ANALYSIS#102How Might the State Budget Be Impacted by a Recession? NEVADA MINING THROUGH UNCERTAINTY 102 APPLIED ANALYSIS Mining Association#103Nevada General Fund Revenue Trends In Billions $1.7 $1.8 $1.8 $2.4 $4.2 $4.0 $3.7 $3.3 $3.1 $3.1 $3.2 $3.1 $3.0 $3.1 $3.1 $3.1 $2.7 $2.7 FY FY FY FY FY FY '01 '02 '03 '04 '05 '06 '07 FY FY FY '08 '09 ■Sales Tax ■Gaming Taxes FY FY '10 '11 '12 ■Mod. Business Tax FY FY FY FY FY FY FY '13 '14 '15 '16 '17 '18 ■ Other NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Economic Forum 103 APPLIED ANALYSIS#104Public School Enrollment Nevada 467,527 NEVADA Mining Association '16 498,616 '17 '18 '19 31,089 Increase in enrollment in Nevada public schools between the 2015-2016 and the 2018-2019 school years MINING THROUGH UNCERTAINTY Source: Nevada Department of Education 104 APPLIED ANALYSIS#105Medicaid Eligible Recipients Eligible Recipients 700,000 Annual Growth 70% 60% 600,000 500,000 50% 40% 400,000 30% 300,000 20% 200,000 10% 100,000 0% 0 -10% '05 '07 '09 '11 '13 '15 '17 '19 '05 '07 '09 '11 '13 '15 '17 '19 LTM LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Department of Welfare and Supportive Services 105 APPLIED ANALYSIS#106Nevada Modified Business Tax In Millions $700 Modified Business Tax rate was scheduled to decrease this year ■ Rate decrease eliminated in 2019 Nevada Legislature ■ Estimated that this extension will generate $98 million of additional revenue over the biennia Pending lawsuit alleges that taxes were raised without the two-thirds majority as required by the Nevada Constitution Source: Nevada Governor's Finance Office; Las Vegas Review-Journal $600 $500 $400 $300 $200 $100 $0 FY FY FY FY FY FY FY FY FY FY '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 NEVADA MINING THROUGH UNCERTAINTY Mining Association 106 APPLIED ANALYSIS#107Nevada Modified Business Tax In Millions $700 $600 $500 $400 $300 $200 $100 $0 FY FY FY FY FY FY FY FY FY FY '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 NEVADA Mining Association Share of General Fund Revenue 14.5% Mod. Business Tax MINING THROUGH UNCERTAINTY Source: Nevada Governor's Finance Office 107 APPLIED ANALYSIS#108Nevada General Fund Revenue Actual vs Forecasted - In Millions $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 FY '01 སྤྲསྟྲ FY FY '02 '03 '04 '05 HO FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY '06 '07 '08 '09 '10 '11 '11 '12 '13 '14 '15 '16 '17 '18 NEVADA Mining Association ■Actual Forecasted MINING THROUGH UNCERTAINTY Source: Nevada Governor's Finance Office; Nevada Economic Forum 108 APPLIED ANALYSIS#109How is Nevada's Economy Different Today than During the Last Recession? NEVADA MINING THROUGH UNCERTAINTY APPLIED 109 Mining Association ANALYSIS#110Foreclosure Inventory Nevada 60,000 50,000 56,028 40,000 30,000 20,000 10,000 0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 NEVADA MINING THROUGH UNCERTAINTY Mining Association '18 '19 Source: Mortgage Bankers' Association 110 APPLIED ANALYSIS#111Foreclosure Inventory Nevada 60,000 50,000 56,028 40,000 30,000 20,000 10,000 3,781 0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Source: Mortgage Bankers' Association NEVADA MINING THROUGH UNCERTAINTY 111 APPLIED ANALYSIS Mining Association#112Negative Equity Nevada Q1 2010 72.7% Negative Equity Q1 2019 4.2% Negative Equity NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: CoreLogic APPLIED 112 ANALYSIS#113Building Permits Nevada Building Permits Total Permits Annual Growth ■Single-Unit Multi-Unit 60% 30,000 40% 25,000 20,000 20% 0% 15,000 -20% 10,000 5,000 -40% 0 -60% '07 '09 '11 '13 '15 '17 '19 '07 '09 '11 '13 '15 '17 '19 LTM LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Census Bureau APPLIED 113 ANALYSIS#114Building Permits Nevada Building Permits ■Single-Unit Multi-Unit 60% 30,000 40% 25,000 20,000 20% 0% Total Permits Annual Growth h.. 15,000 -20% 10,000 -40% 5,000 0 -60% '07 '09 '11 '13 '15 '17 '19 '07 '09 '11 '13 '15 '17 '19 LTM LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: United States Census Bureau APPLIED 114 ANALYSIS#115Median Housing Prices Washoe County New Homes Existing Homes $500,000 $467,191 $400,000 $374,500 $450,000 $350,000 $400,000 $300,000 $350,000 $250,000 $300,000 $250,000 $200,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $0 $0 '07 '09 '11 '13 '15 '17 '19 '07 '09 '11 '13 '15 '17 '19 Source: Sales Traq NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 115 ANALYSIS#116Home Closings Washoe County New Homes Existing Homes 5,000 10,000 4,500 9,000 4,000 8,000 3,500 7,000 3,000 6,000 2,500 5,000 2,000 4,000 1,500 3,000 1,000 2,000 500 1,000 0 0 '05 '07 '09 '11 '13 '15 '17 '19 '05 '07 '09 '11 '13 '15 '17 '19 LTM LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Sales Traq; NNRMLS APPLIED 116 ANALYSIS#117Home Closings Washoe County New Homes Existing Homes 5,000 10,000 4,500 9,000 4,000 8,000 3,500 7,000 3,000 6,000 2,500 5,000 2,000 4,000 1,500 3,000 1,000 2,000 500 1,000 0 0 '05 '07 '09 '11 '11 '13 '15 '17 '19 '05 '07 '09 '11 '13 '15 '17 '19 LTM LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY 117 Source: Sales Traq; NNRMLS APPLIED ANALYSIS#118Median Housing Prices Las Vegas Area New Homes Existing Homes $450,000 $350,000 $395,664 $400,000 $350,000 $300,000 $250,000 $300,000 $272,000 when $250,000 $200,000 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 $50,000 $0 $0 '07 '09 '11 '13 '15 '17 '19 '06 '08 '10 '12 '14 '16 '18 Source: Sales Traq NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 118 ANALYSIS#119Home Closings Las Vegas Area 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 '05 NEVADA Mining Association New Homes Existing Homes 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 '07 '09 '11 '13 '15 '17 '19 '05 '07 '09 '11 '13 '15 '17 '19 LTM LTM Source: Sales Traq MINING THROUGH UNCERTAINTY APPLIED 119 ANALYSIS#120Home Closings Las Vegas Area 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 NEVADA Mining Association New Homes Existing Homes 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 '05 '07 '09 '11 '13 '15 '17 '19 '05 '07 '09 '11 '13 '15 '17 '19 LTM LTM Source: Sales Traq MINING THROUGH UNCERTAINTY APPLIED 120 ANALYSIS#121Peak-to-Trough Employment Movement Nevada Education & Health Services Government Mining & Logging Other Services Information Manufacturing Financial Activities Trade, Transportation & Utilities Professional & Business Services Leisure & Hospitality NEVADA Mining Association Net Job Loss: -159,300 (-12.6%) Construction -84,200 MINING THROUGH UNCERTAINTY 12,800 7,800 600 -2,000 -2,300 -11,800 -12,300 -16.200 -23,800 -27,900 Source: United States Bureau of Labor Statistics 121 APPLIED ANALYSIS#122Trough-to-Present Employment Movement Nevada Professional & Business Services Leisure & Hospitality Trade, Transportation & Utilities Education & Health Services Construction Manufacturing Financial Activities Other Services Information 66,600 60,100 51,900 42,800 40,900 22,900 18,800 10,100 3,100 Net Job Gain: +317,600 (28.6%) Mining & Logging 2,800 Government -2,400 NEVADA Mining Association Source: United States Bureau of Labor Statistics MINING THROUGH UNCERTAINTY 122 APPLIED ANALYSIS#123Las Vegas Strip Trends Billions es es to to es es es es es $0 $1 $2 $4 $3 $6 $5 $8 Gross Gaming Revenue Average Daily Room Rate Hotel Occupancy Rate $145 91% $140 90% $135 89% $130 88% $125 87% $120 86% $115 $110 85% $105 84% '07 '09 '11 '13 '15 '17 '19 LTM '13 '14 '15 '16 '17 '18 '19 LTM '13 '14 '15 '16 '17 '18 '19 LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: Nevada Gaming Control Board; Las Vegas Convention and Visitors Authority 123 APPLIED ANALYSIS#124Las Vegas Strip Trends Gross Gaming Revenue Average Daily Room Rate Hotel Occupancy Rate 6% 6% 4% 5% 2% 0% 4% -2% 3% -4% -6% 2% -8% 1% -10% -12% 0% 2.5% 2.0% 1.5% 1.0% UL.. 0.5% 0.0% -0.5% -1.0% '07 '09 '11 '13 '15 '17 '19 '13 '14 '15 '16 '16 '17 '17 '18 '19 LTM LTM Source: Nevada Gaming Control Board; Las Vegas Convention and Visitors Authority '13 '14 '15 '16 '17 '18 '19 LTM NEVADA Mining Association MINING THROUGH UNCERTAINTY 124 APPLIED ANALYSIS#125Annual GDP Growth and Financial Events 16% '74 Franklin Nat'l BK 14% '87 Stock Market Crash 12% 10% '00 Tech Bubble '90 S&L Crisis 8% 6% 4% 2% 0% '82 LatAm Debt -2% '07 Subprime Crisis рити -4% '71 '74 '77 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13 '16 '19 NEVADA Mining Association Recession Annual GDP Growth Source: United States Bureau of Economic Analysis APPLIED ANALYSIS#126Comparative Analysis of Periods of Expansion and Real GDP Growth Recent expansion has been the second longest period of economic growth in history NEVADA Mining Association Trough Peak Duration (Qtrs.) Real GDP Compound Annual Growth Rate Q1 1991 Q1 2001 41 3.6% Q2 2009 To Date 40 2.3% Q1 1961 Q4 1969 36 4.9% Q4 1982 Q3 1990 32 4.3% Q4 2001 Q4 2007 25 2.9% Q1 1975 Q1 1980 21 4.3% Q4 1949 Q2 1953 15 7.6% Q2 1954 Q3 1957 14 4.0% Q4 1970 Q4 1973 13 5.1% Q2 1958 Q2 1960 9 5.5% Q3 1980 Q3 1981 5 4.3% AVERAGE 22 4.4% MINING THROUGH UNCERTAINTY Source: United States Bureau of Economic Analysis; Applied Analysis 126 APPLIED ANALYSIS#127In-Migration by State California to Nevada 60,000 50,000 40,000 30,000 20,000 10,000 Total In-Migration 40% 30% 20% 10% 0% -10% Annual Change וי T 0 -20% '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 Source: United States Census Bureau NEVADA Mining Association MINING THROUGH UNCERTAINTY 127 APPLIED ANALYSIS#128The Mercury News HOW CALIFORNIANS MOVING TO NEVADA ARE CHANGING THE STATE'S POLITICS "But the net flow from the Golden State has swelled in recent years, as sky-high housing prices in the Bay Area and Southern California sent residents searching for drastically cheaper deals a few hours drive away in the expanding Reno or Las Vegas metropolitan areas...” NEVADA Mining Association MINING THROUGH UNCERTAINTY 128 Date: August 12, 2019 APPLIED ANALYSIS#129THE WALL STREET JOURNAL. AS CALIFORNIA LOSES PEOPLE, A LAS VEGAS SUBURB GROWS "For Karina Nasir, leaving California for this booming Las Vegas suburb was the chance to escape commutes up to three hours. For Bill Clune, it is saving $5,000 a year on his water bill..." NEVADA Mining Association Date: February 26, 2019 MINING THROUGH UNCERTAINTY 129 APPLIED ANALYSIS#130LAS VEGAS REVIEW-JOURNAL NEVADA AMONG TOP STATES FOR INBOUND MOVES, STUDY FINDS "A large share of mostly younger, middle-aged people are looking to move to Nevada from California to escape the high housing costs..." NEVADA Mining Association MINING THROUGH UNCERTAINTY 130 Date: January 2, 2019 APPLIED ANALYSIS#131FRITTS 53762 DEDICATED JH 2496 B U-HAUL Our Low Decks Make Your Mon EXIT 103 Malki Rd. 1 MILE LOWEST DE EZ-LOAD RAM NEVADA Mining Association MINING THROUGH UNCERTAINTY TOYOTA HAINS NOTRE BLZ 175 RAIMS MOTORCOM PRIUS LAP4850 U-HAU 131 APPLIED ANALYSIS#132U-Haul Prices in Northern Nevada $1,187 Price for a Truck and Tow from San Francisco to Reno $241 Price for a Truck and Tow from Reno to San Francisco NEVADA Mining Association MINING THROUGH UNCERTAINTY Source: U-Haul APPLIED 132 ANALYSIS#133U-Haul Prices in Southern Nevada $1,063 Price for a Truck and Tow from Los Angeles to Las Vegas $203 Price for a Truck and Tow from Las Vegas to Los Angeles NEVADA Mining Association MINING THROUGH UNCERTAINTY 133 Source: U-Haul APPLIED ANALYSIS#134Hachman Diversity Index Nevada 90 90 85 80 75 70 65 60 55 50 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING THROUGH UNCERTAINTY '17 '18 '19 More Diverse Source: United States Bureau of Labor Statistics; Applied Analysis 134 APPLIED ANALYSIS#135Hachman Diversity Index Nevada 90 90 85 80 75 70 65 60 55 50 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING THROUGH UNCERTAINTY '17 '18 '19 More Diverse Source: United States Bureau of Labor Statistics; Applied Analysis 135 APPLIED ANALYSIS#136Investments in Nevada $41.2 B Total Planned and Under Construction Investments in Nevada $15.2 B Northern Nevada $26.0 B Southern Nevada NEVADA Mining Association MINING THROUGH UNCERTAINTY 136 Source: Applied Analysis APPLIED ANALYSIS#137ALTERNATE 26-32 GATES ⚫ ADG IV TAXILANES RON/DEICE SPOTS ON SOUTH & NORTH MODERNIZES CONCOURSE B OR REPLACE AIR CARGO RELOCATED NEW 11-GATE CONCOURSE RTAA MINI-STORAGE & WAREHOUSE UNITS BELLY CARGO EXISTING AIR CARGO FACILITIES 0 RON/DEICE ADG IV ADG IV POTENTIAL TERMINAL EXPANSION NEW ARRIVALS ACCESS TO BAG CLAIM ADG IV ADMIN (LEV 3) NEW 10-GATE CONCOURSE ADG IV MODERNIZE CONCOURSE B OR NEW 11-GATE CONCOURSE LEGEND New Terminal Structure Future Terminal Expansion New Admin Structure New CBP Extents of New Apron Extents of Future Apron Reno-Tahoe International Airport Expansion ◉ Planned, $1.6 billion expansion of Reno-Tahoe International Airport The expansion will include a new concourse, new rental car facility and renovations to the existing baggage claim and concourses NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 137 ANALYSIS EXISTING TERMINAL POTENTIAL SSCP EXPANSION ADG IV RON / DEICE#138Park Lane Under Construction, $500 million mixed-use development ◉ Phase one will add in a large apartment complex, phase two will add retail/hotel space, and phase three will add more residential space NEVADA Mining Association MINING THROUGH UNCERTAINTY APPLIED 138 ANALYSIS#139Resorts World Las Vegas $4.2 billion casino resort to be owned and operated by the Genting Group Under Construction and expected to complete in 2021 NEVADA Mining Association MINING THROUGH UNCERTAINTY 139 APPLIED ANALYSIS#140allegiant stadium P Allegiant Stadium $1.9 billion, 65,000-seat stadium located near the Las Vegas Strip to be home of the Las Vegas Raiders Under Construction and expected to complete in 2020 NEVADA Mining Association MINING THROUGH UNCERTAINTY 140 APPLIED ANALYSIS#141Consumer Confidence Index United States 200 180 160 170.9 140 120 100 80 60 m прим гри миру 112.2 40 20 0 '80 '83 '86 '89 '92 '95 '98 '01 '04 '07 '10 '13 '16 '19 Recession -Present Situation NEVADA Mining Association -Future Expectations MINING THROUGH UNCERTAINTY 141 Source: The Conference Board APPLIED ANALYSIS#142Consumer Sentiment Index 120 100 80 60 40 20 0 '01 '03 '05 '07 '09 '11 '13 '15 '17 NEVADA Mining Association MINING THROUGH UNCERTAINTY '19 Source: University of Michigan 142 APPLIED ANALYSIS#143NEVADA Mining Association 2019 MINING THROUGH UNCERTAINTY APPLIED ANALYSIS