J. Thomas Sadowski President & CEO May 12, 2011 BRAC in Greater Baltimore Today and Going Forward Chesapeake Science & Security Corridor

BRAC in 2011 … Today and Going Forward Real Estate Community: Address “Impatience” and Demand Commercial Residential Infrastructure Needs: Apply Creative Solutions Traditional Government Approach vs. “P3” Talent Quotient: Retention and Recruitment Dispelling “brain drain” and addressing “brain gain” Growing need: University support Workforce development and training R&D Commercialization

RE Community “Impatience” Commercial Real Estate Market Slow contractor leasing pace due to DoD cuts uncertainty and mission stabilization at new C4ISR Campus Lease rates/SF greater than Downtown CBD Residential Real Estate Market Economic uncertainty, tight lending and relaxed relo schedule delaying home purchases Lack of “quality” rental properties...frustrating soon-to be-retirees and younger professionals

Infrastructure Infrastructure Needs Requiring Creative Solutions Traditional government resources are limited and diminishing CIP Process too long and politically charged State and local government embracing creative “P3” and “TIF” related solutions: 1.Expedite improvements, leveraging private equity 2.Ignite stalled or new development projects via enhanced credit, stability of income stream for repayment of capital costs

The total equity capital committed to infrastructure in 2008 exceeded $180 billion Dedicated funds available for infrastructure tripled from 2006 to 2008 The total equity capital available to invest in US infrastructure has grown substantially … estimated to be more than $200 billion in 2010 Private Infrastructure Fund Growth $ billion Approximately $60 bn Approximately $180 bn Private Capital Available for Infrastructure Investments Partnership “P3” Opportunities Data Source: Morgan Stanley

Talent Retention and Recruitment Greater Baltimore Job Market: Dispelling “brain drain” and addressing “brain gain” High employee retention rate = reported at 2/3 …vs. 1/3 or less Regional Workforce is top IT market in US Growing demand and job creation potential is staggering … …demand however may outpace supply without augmented recruitment, development, training, etc.

U.S. Tech Market Comparison San Francisco to San Diego 502 Miles Washington, D.C. to Boston 442 Miles California vs. Northeast

San Fran-San Jose (Silicon Valley) IT Workers: 193,140 Concentration: 2.08 Washington-Baltimore (Silicon Bay) IT Workers: 269,770 Concentration: 2.39 Large IT Employment and High Concentration “Every prominent firm is here. The list is very complete.” Jim Micek Lockheed Martin Top U.S. IT Markets

#2 in Total IT Employment#1 in IT Concentration Data Source: Economic Alliance of Greater Baltimore using Bureau of Labor Statistics U.S. IT Employment

Regional Jobs & Workforce Job Postings Per Capita LowHigh Low High Information Technology Scientific Research Engineering Management Consulting Health Care Construction Retail Administrative Services Information Job Mismatch? Availability vs. Demand Demand for Workers Availability of Workers

University Support Four-Year Programming & Strategic R&D Partnership(s) Essential Workforce development and training for 20,000 highly skilled personnel engaged in highly-technical, diverse mission More than $20 billion in R&D offers attractive partnership opportunities across many disciplines and tech platforms ** Articulation of need, opportunity and business case vital to engage the right academic partners (public/private), support/enhance mission and achieve tech transfer ** Commercialization… the biggest opportunity ahead = MD #1 st in R&D, BUT is only #37 th in commercialization

8,500 Computer Science & Engineering degrees awarded …1,500 bio and life science degrees awarded annually in Baltimore-Washington metro …plus, Penn State, Virginia Tech and Univ. of Delaware, etc. Unique and challenging work attracts talent…as does high quality of life and reasonable cost of living Ability to retaining and attract talent is critical to short and long-term economic growth > 55% of BRAC impacted employees are retirement eligible University Effect …on Talent

Appealing to Young Professionals, Families and Entrepreneurs … Key to Long-Term Success National Rankings