Mr. Terry L. Batenhorst Area Director, West San Antonio 2015

Budget Uncertainty Original plan $322M Reduction in FY 2016 $1B in FY 2017 Alternate Plan $183 M Reduction in FY2016 Cuts in days, hours, etc.

National Defense Authorization Act Newest plan, overhaul the commissary system? Sec of Defense come up with a plan by 1 March to make commissaries and exchanges Budget-Neutral by 1 Oct 2018 Exploit synergies to optimize operations. Privatizing operations in whole or in part. Engagement of major Commercial Grocery retailers for discount savings on Groceries. Closing stores in close proximity to other facilities or where commercial alternatives are available.

National Defense Authorization Act Benchmarks 1. High level of Customer Service 2. Provide high quality products 3. Sustainment of savings. Pilot program test for 5-10 years. * Must meet the Benchmarks and be Budget-Neutral.

Other Issues Employee conversion to NAF Private label Variable pricing Headquarters cuts (25%) Delayering the organization

Performance We’re PROUD. We’re COMMITTED. We’re MORE.

DeCA Sales Comparison FY 2015 Area Sales % Change $ Difference WEST AREA $1,395,669,070 - 2.45% - $35,117,678 PACIFIC AREA $1,036,181,174 - 1.66% - $17,536,470 EAST AREA $1,426,549,287 - 1.58% - $22,950,982 CENTRAL AREA $1,186,963,906 - 0.88% - $10,515,376 EUROPE AREA $397,716,043 - 6.28% - $26,660,664 DeCA OVERALL $5,443,079,481 - 2.03% - $112,781,170 Area FY13 Sales FY12 Sales Difference % Change WEST AREA $1,395,734,384 $1,444,161,043 - $ 48,426,658 - 3.35% PACIFIC AREA $ 768,328,393 $ 777,347,848 - $ 9,019,455 - 1.16% EAST AREA $1,273,509,542 $1,306,405,414 - $ 32,895,872 - 2.52% CENTRAL AREA $1,037,606,206 $1,065,554,267 - $ 27,948,060 - 2.62% EUROPE AREA $ 375,489,504 $ 407,822,264 - $ 32,332,760 - 7.93% Sum: $4,850,668,030 $5,001,290,836 - $150,622,806 - 3.01%

Sales per Transaction FY 2015 vs. FY 2014 vs. FY 2013 Area Sales per Trans FY 2015 Sales per Trans FY 2014 Sales per Trans FY 2013 WEST $60.53 $61.12 $61.34 PACIFIC $57.96 $58.29 $58.38 EAST $70.28 $71.12 $70.69 CENTRAL $67.51 $67.76 $67.68 EUROPE $40.68 $41.95 $40.83

West Area Sales by Zone FY 2015 Zone Sales % Change $ Difference CENTRAL TEXAS $212,060,769 - 3.05% - $6,675,277 OKLAHOMA-NM $263,675,670 - 3.88% - $10,640,395 FRONT RANGE $295,150,576 - 2.47% - $7,475,018 NORTHERN CA $149,982,748 - 2.36% - $3,617,722 SOUTHERN CA $271,441,680 - 1.92% - $5,311,779 CENTRAL CA $121,384,842 - 1.20% - $1,469,653 CAN-MEX $231,955,533 - 1.51% - $3,545,557 TOTAL $1,545,651,818 - 2.44% - $38,735,401

West Area Sales – Zone 6 FY 2015 Store Name FY 15 Sales % Change $ Difference CORPUS CHRISTI $8,681,662 1.91% $162,432 DYESS $10,320,768 - 1.02% - $106,572 FORT HOOD I $37,098,104 - 0.42% - $156,817 FORT HOOD II $20,956,636 - 4.21% - $920,603 FORT SAM HOUSTON $40,548,937 - 2.56% - $1,066,899 GOODFELLOW $9,630,382 0.21% $20,379 KINGSVILLE $652,388 - 3.09% - $20,815 LACKLAND $36,930,735 - 10.96% - $4,547,515 LAUGHLIN $3,623,229 9.41% $311,728 RANDOLPH $43,617,929 - 0.80% - $350,595 Store Name FY13 Sales FY12 Sales % Change $ Difference CORPUS CHRISTI $ 7,345,598 $ 7,743,043 - 5.13% - $ 397,445 DYESS $ 9,224,065 $ 9,925,529 - 7.07% - $ 701,464 FORT HOOD I $34,581,785 $36,779,422 - 5.98% - $2,197,636 FORT HOOD II $20,442,435 $21,030,020 - 2.79% - $ 587,585 FORT SAM $36,476,326 $38,608,091 - 5.52% - $2,131,765 GOODFELLOW $ 8,424,736 $ 8,300,905 1.49% $ 123,831 KINGSVILLE $ 624,358 $ 619,004 0.86% $ 5,354 LACKLAND $38,557,321 $39,855,491 - 3.26% - $1,298,170 LAUGHLIN $ 2,957,120 $ 3,176,393 - 6.90% - $ 219,274 RANDOLPH $38,985,465 $41,153,974 - 5.27% - $2,168,509

Combined Monthly Sales Comparison DeCA Wide Combined Monthly Sales Comparison 11

Combined sales from the 5 stores Lackland, Randolph, Fort Sam, Fort Hood 1 & 2 Combined sales from the 5 stores

The Texas Challenge

Goal for FY 2016 3% Sales Increase We’re PROUD. We’re COMMITTED. We’re MORE.

DeCA Wide Sales History Year Sales Trend 2011 $5,873,720,210 2012 $6.008,239,880 Record Year 2013 $5,797,657,15 2014 $5,555,860,651 2015 $5,443,079,481

FY 2016 Sales Goals ($M)

Director’s Focus Areas Outstanding Customer Service Pricing (to include promotions) Stock Availability/Improved In-Stock Positions Cleanliness of Stores

February – July Comparison 39.7% 15.8% 16.5% 15.1% 12.7% May not add to 100% due to rounding Source: DeCA Retail Sales

Market Penetration February – July 2015 Scott AFB Pearl Harbor 62% 56% 77% 31% 83% 76% 60% <5 73% <5 <5 5-9.9 66% 41% <10 <10 10-14.9 57% <15 <15 15-19.9 46% <20 <20 Source: DeCA Retail Sales

Demographic Index Age Group Scott AFB Pearl Harbor Under 22 50 96 22-24 43 126 25-30 139 31-34 65 135 35-44 103 118 45-54 151 87 55-60 134 73 61-64 72 65-69 113 71 70-74 93 75+ 74 78 HH Size Scott AFB Pearl Harbor 1 72 95 2 108 88 3 104 112 4 105 111 5+ 98 115

Scott AFB – Category Index by Age February – July 2015 Net Sales Index by Age CATEGORY DESCRIPTION Under 22 22-24 25-30 31-34 35-44 45-54 55-60 61-64 65-69 70-74 75+ Grand Total BREAKFAST BARS 69 65 77 106 160 204 199 186 142 112 85 COUGH COLD SINUS FLU ALLERGY VARIOUS 68 56 82 95 148 190 155 146 126 98 72 129 DOG FOOD DRY 76 83 84 99 143 163 135 125 79 49 119 DOG SNACKS 87 63 89 139 162 134 116 94 111 ISOTONIC 55 52 75 138 124 103 92 45 SODAS ALL FLAVORS 74 62 182 159 127 COFFEE CANNED REGULAR 66 58 78 137 170 131 114 115 FOOD K TO O 1 71 80 91 169 151 121 123 COFFEE TEA COCOA K CUPS 64 96 156 153 136 120 CEREAL FAMILY AND TOPPERS 60 50 133 165 140 113 VITAMIN OR SUPPLEMENT BROADLINE 59 132 174 166 101 MEXICAN 168 147 97 117 MILK FLUID 130 173 118 109 YOGURT LIGHT REDUCED FAT CHILLED CHEESE SHREDDED CHLLL CRACKERS CAN CHEESE SPREAD 54 70 90 PIZZA 57 107 BAKERY ITEMS 51 CEREAL ADULT 122 67 TISSUE BATH 53 Source: DeCA Retail Sales

Pearl Harbor – Category Index by Age February – July 2015 CATEGORY DESCRIPTION Under 22 22-24 25-30 31-34 35-44 45-54 55-60 61-64 65-69 70-74 75+ Grand Total RICE PLAIN DRY 171 196 241 237 213 167 144 134 121 145 192 181 JUICE BLENDS 117 153 157 151 119 73 59 60 58 61 92 TUNA 146 182 184 179 105 136 114 79 81 139 COFFEE TEA COCOA K CUPS 88 130 133 120 90 57 42 32 29 24 62 CEREAL ADULT 160 183 170 137 84 55 54 47 93 CEREAL FAMILY AND TOPPERS 113 142 164 149 118 72 50 48 CEREAL CHILDREN 107 154 165 158 131 80 74 115 BABY FORMULAS BABY NEED 108 100 111 106 NATURAL ORGANIC 188 194 202 218 123 71 110 178 SODAS ALL FLAVORS 87 128 56 43 37 34 38 68 WATER 177 169 156 95 85 83 94 125 COOKIES 135 150 124 70 51 49 39 CRACKERS CAN CHEESE SPREAD 129 66 53 NUTS CAN OR PK 180 190 148 82 CHIPS TORTILLA 189 141 89 64 65 CHIPS POTATO 103 159 86 69 101 DETERGENTS LAUNDRY LIQUID 98 162 155 78 52 DOG FOOD DRY 63 36 41 35 44 TOWELS PAPER OR CLOTH OR WIPE 176 TISSUE BATH 143 Source: DeCA Retail Sales

Facilities Projects We’re PROUD. We’re COMMITTED. We’re MORE.

Facilities Projects – R22 Replacement FY 2015/16 Store Projected Start / Completion Date Miramar October 2015 Edwards TBD El Centro Fort Huachuca Fort Worth Mountain Home Offutt Vandenberg

Projected Start / Completion Date Facilities Projects FY 2015/16/17 Store Type Projected Start / Completion Date Lackland AFB Renovations/Refrig replace November 2015 China Lake Pre-Design FY 2016 Los Angeles Port Hueneme Planning Altus FY 2017 F. E. Warren Fort Irwin