Presented by Patrick Jankowski, Vice President, Research Houston Economic Overview

Houston Area Profile 9 Counties 125+ Cities and towns Most Populous Harris County City of Houston Houston Area Profile

The Big Picture

2011 Gross Domestic Product Rank20 Most Populous Metros$ Billions 11Miami, FL Seattle, WA Minneapolis, MN Detroit, MI Phoenix, AZ San Diego, CA Baltimore, MD St. Louis, MO Tampa, FL Riverside, CA111.5 Fifth Largest U.S. Metro Economy 2011 Gross Domestic Product Rank20 Most Populous Metros$ Billions 1New York, NY1, Los Angeles, CA Chicago, IL Washington, DC Houston, TX Dallas-Fort Worth, TX Philadelphia, PA San Francisco, CA Boston, MA Atlanta, GA283.3 Source: U.S. Bureau of Economic Analysis

Change in Real GDP ’10 – ’11 Rank20 Most Populous Metros% 11 Los Angeles, CA Tampa, FL Chicago, IL St. Louis, MO Washington, DC Baltimore, MD Philadelphia, PA New York, NY Miami, FL Riverside, CA0.4 Fastest Growing Major Metro Economy Change in Real GDP ’10 – ’11 Rank20 Most Populous Metros % 1 Houston, TX3.7 2 Detroit, MI3.5 3 Dallas-Fort Worth, TX3.1 4 Seattle, WA2.9 5 San Francisco, CA2.6 6 Boston, MA2.4 7 San Diego, CA2.3 8 Atlanta, GA2.2 9 Minneapolis, MN Phoenix, AZ1.8 Source: U.S. Bureau of Economic Analysis

Houston has a long history of economic growth.

Most Populous U.S. Metro Areas RankMetro AreaPopulation 1New York19,831,858 2Los Angeles13,052,921 3Chicago9,522,434 4Dallas-Fort Worth6,700,991 5Houston6,177,035 6Philadelphia6,018,800 7Washington5,860,342 8Miami5,762,717 9Atlanta5,457,831 10Boston4,640,802 Most Populous U.S. Metro Areas RankMetro AreaPopulation 11San Francisco4,455,560 12Riverside4,350,096 13Phoenix4,329,534 14Detroit4,292,060 15Seattle3,552,157 16Minneapolis3,422,264 17San Diego3,177,063 18Tampa2,842,878 19St. Louis2,795,794 20Baltimore2,753,149 Fifth Most Populous Metro Source: U.S. Census Bureau

RankMetro AreasChange Since 7/1/11 1Houston125,1852.1% 2Dallas-Ft Worth131,8792.0% 3Phoenix77,4561.8% 4Seattle54,3381.6% 5Washington89,1291.5% 6Atlanta83,1531.5% 7Miami74,8091.3% 8San Francisco58,6421.3% 9San Diego38,8801.2% 10Riverside48,2551.1% Fastest Growing Major Metro RankMetro AreasChange Since 7/1/11 11Minneapolis33,2151.0% 12Los Angeles107,7810.8% 13Boston37,4580.8% 14Baltimore19,4710.7% 15Tampa16,4400.6% 16New York101,9280.5% 17Philadelphia21,3260.4% 18Chicago26,7150.3% 19Detroit4,0940.1% 20St. Louis2,4190.1% Source: U.S. Census Bureau

Growth is the norm for Houston.

Employment Picture

Employment

325,400 = jobs created since recession bottom

Source: U.S. Bureau of Labor Statistics Seasonally adjusted 100% Percent of jobs recovered through June ’13 Houston vs. Top 10 Metros Houston vs. the Top Metros

Source: U.S. Bureau of Labor Statistics Seasonally adjusted 100% Percent of jobs recovered through June ’13 Houston vs. Top 10 Metros Houston vs. the Top Metros

Source: U.S. Bureau of Labor Statistics Seasonally adjusted Percent of jobs recovered through June ’13 Houston vs. Second Tier Metros Houston vs. the Top Metros 100%

Job Growth

Annual Job Growth (000s) Source: U.S. Bureau of Labor Statistics

Source: Texas Workforce Commission Annual Employment Change

Unemployment 6.7% = Houston’s current unemployment rate

What’s driving Houston’s growth

Energy

 28.8% of U.S. jobs in oil and gas extraction  11.7% of U.S. jobs in oil field services  16.5% of U.S. jobs in O&G and construction machinery manufacturing World Energy Headquarters

And energy jobs pay very well. Average weekly wage  Oil and Gas Extraction = $4,301  Support Activities for Mining = $2,353  Ag., Construction, and Mining Machinery = $2,267  All Industries = $1,255

Energy entering a new phase Increased domestic oil and gas production. Cheap, abundant gas to spur manufacturing re-shoring. 33 local chemical plant expansions underway.

Oil Prices & Employment Growth

 2,800 engineering and architectural firms operate here  20 of the world’s 25 largest with Houston operations  86,380 engineers, architects and technicians Houston is an engineering center.

What’s driving growth... Foreign Trade Houston-Galveston Customs District $ Billions (U.S.) Exports Imports

International Trade - Houston-Galveston Customs District Ports – Houston, Galveston, Texas City, Freeport, Corpus, Victoria Airports – Bush Intercontinental, Sugar Land Regional 41 countries with $1+ billion in trade 17 commodities with $1+ billion in trade – Oil, industrial equipment, computers, chemicals, plastics, rubber, iron and steel products, copper products, motor vehicles, scientific instruments, beverages, grains Foreign Trade

15th Busiest Port in the World First in the U.S. in foreign tonnage Second in U.S. in total tonnage 220 million tons annually 8,000+ deep draft ships called at Houston Service between Houston and more than 1,000 world ports Foreign Trade – Port of Houston

Houston’s Top 25 Export Destinations

CountryTrade ($B)CountryTrade ($B) Mexico $ Argentina $2.579 Brazil $9.144 Nigeria $2.480 Netherlands $7.899 Korea, Republic Of $2.762 Venezuela $3.629 Ecuador $2.325 Chile $4.212 Turkey $3.025 Colombia $4.801 Panama $1.817 United Kingdom $3.514 Russia $1.708 Belgium $3.459 Germany $2.088 Singapore $3.614 Costa Rica $1.699 China $3.835 India $2.163 France $2.459 U.A.E. $1.791 Saudi Arabia $2.099 Japan $1.502 Peru$2.616 Source: WISER Trade Houston’s Top 25 Export Destinations

Projected Economic Growth – Houston’s 25 Largest Trading Partners Country ∆ GDP ’12 – ’13 Direction Country ∆ GDP ’12 – ’13 Direction Mexico 3.7↔ Argentina 4.0↔ Brazil 4.1↑ Nigeria 6.6↓ Netherlands 0.8↑ Korea, Republic Of 4.0↑ Venezuela 3.2↓ Ecuador 3.9↓ Chile 4.5↔ Turkey 3.2↑ Colombia 4.4↔ Panama 8.5↑ United Kingdom 2.0↑ Russia 3.9↔ Belgium 0.8↑ Germany 1.5↑ Singapore 3.9↑ Costa Rica 4.0↔ China 8.8↔ India 7.3↑ France 1.0↑ United Arab Emirates 2.9↑ Saudi Arabia 4.1↓ Japan 1.7↓ Peru 6.0↑ Source: International Monetary Fund Outlook for Houston’s Export Destinations

’13 Outlook for Houston’s Top Export Destinations GDP Direction# Countries ↑13 ↔7 ↓5 Outlook for Houston’s Export Destinations

International business presence What are you doing right now More than 100 international companies have opened, expanded or relocated to Houston in the last few years…

Three Airports – Bush Intercontinental – William P. Hobby Airport – Ellington Airport Passengers – 50.3 million passengers in ’12 Air cargo – 419,000 metric tons in ’12 13 international passenger carriers – 68 destinations in 30 countries 11 domestic carriers – 119 domestic destinations Aviation supports growth

Houston’s Global Reach 38 Source: Houston Airport System

 Texas Medical Center  45.8 million gross sq ft physical space  106,000 employees  54 member institutions, including 17 hospitals  7.2 million patient visits annually  More than 16,000 international patients Houston has the nation’s largest medical center.

Growing population – 125,000 people/year Infant population – 65,000 births/year In-Migration – 60,000 newcomers/year Aging population – 15,000 seniors (65+)/ year Population Growth Source: U.S. Census Bureau

Houston Outlook

Population

Employment

Gross Regional Product

Presented by Patrick Jankowski, Vice President, Research Houston Economic Overview