ALA Commissary Roundtable Richmond, Virginia May 1, 2014 Mr. Joseph H. Jeu DeCA Director

Agenda The video highlights that we are in the midst of changing and challenging times Presentation topics include: –DoD budget overview –Transformational focus items –Supporting initiatives –Final thoughts 2

DoD Budget Proposal Overview Streamlines legislative provisions to enable DeCA to become partially self-sustaining –Phased budgetary reduction by $1B over three years $200M in FY15, $600M in FY16, and $1B in FY17 –Become partially self-sustaining by ending current “sell at cost” model and instead sell items at mark-up –DeCA will continue to receive approximately $400M annually –Patron savings reduced from 30% 3

Taking Care of Military Families Ongoing business transformation proceeds 4 −Enterprise Business Solution –CLICK2GO −Category Management −Rewards Card −Alternate Store Formats −Shopper Insights

Enterprise Business Solution Most important transformation –Comprehensive worldwide & across the supply chain business process engineering –Standardize and improve processes –Adopt “retail business suite” as used in commercial grocery –Modernize DeCA’s supply chain in 4 increments 5 Essential for continued support of military families

Taking Care of Military Families Working together, we have a tremendous opportunity to better support our nation’s military families through focus on: –Fresh & healthy alternatives –Case lot sales –Guard & Reserve sales –Manufacturer & distributor fill rates –Improved vendor stocking support –Timely introduction of new items 6

Final Thoughts & The Way Ahead Tough times for DoD as it balances resources to readiness DeCA continuing with transformation and modernization of the commissary business We appreciate your continued support of our nation's military families 7 Thank you for all you do for our valued patrons!

8