1. Ready. Resourceful. Responsive! American Logistics Association Navy Exchange Service Command Update Navy Exchange Service Command October 20, 2010

2. Snapshot of the U.S. Navy Today A Typical Navy Day Personnel: Personnel on deployment: 45,766 Reserves currently mobilized: 6,768 Active Component End Strength: 328,330 Reserve Component End Strength: 102,913 DoN Civilian End Strength: 202,178 288 Battle Force Ships  152 underway (53%)  112 On deployment (39%) Attack submarines : 30 underway (56%) 21 On deployment (39%) Aircraft (operational): 3,700+ 2

4. 2010-2011 Commander’s Guidance Strengthen our Navy Connection Seek Efficiencies in Everything We Do Enhance Our Customer ’ s Experience Leverage Technology to Improve Our Bottom Line Take Care of Associates Build for the Future Caring, Committed, Connected

5. 5 Enhance Our Customer’s Experience Customer Segmentation Connecting with our Customers Expanding the Shopping Experience Sense of Community Connecting to Navy

6. Customer Segmentation - NEX Life Stages Ed & Ellen Empty nesters Dave & Doris Double Dippers Fred & Fran Full Nesters Sam & Sarah Senior Shoppers Al & Alyssa Arrivers Timothy & Tiffany Teens

7. NAVY EXCHANGE SERVICE COMMAND 11.7% 21.4% 32.2% 20.9% 11.5% System Total San Diego 4.5% 16.9% 28.3% 28.6% 16.7% Naval Station San Diego

8. New Watch Shop Prototype New San Diego Main Store

9. New Jewelry Department Prototype New San Diego Main Store

10. New Cosmetics with Large Decompression Zone New San Diego Main Store

11. New Fixtures / Fragrance Wall New San Diego Main Store

12. Mens Denim Focal Wall New San Diego Main Store

13. Navy Community Connection New San Diego Main Store

14. New TV Wall New San Diego Main Store

15. Apple Concept Shop New San Diego Main Store

16. New Mass Beauty Zone New San Diego Home Store

17. New Domestics and Housewares Departments with Martha Stewart Shops New San Diego Home Store

18. Focused on everyday essentials and value New San Diego Home Store

19. Growing categories important to our Navy families New San Diego Home Store

20. Going Green in our Garden Centers New San Diego Home Store

21. NAVY EXCHANGE SERVICE COMMAND System Total Great Lakes 11.7% 21.4% 32.2% 20.9% 11.5% 60.6% 17.7% 18.7% 1.2% 0.2% Great Lakes Service School

22. Renovated Great Lakes Student Store Updated Uniform Shop

23. Expanded Navy Pride Department Renovated Great Lakes Student Store

24. Young Men's Departments with latest trends in fashion Renovated Great Lakes Student Store

25. Young Ladies Departments with latest trends in fashion Renovated Great Lakes Student Store

26. New Electronics Department Tailored to the Student “Arriver” Population Renovated Great Lakes Student Store

27. Sight & Sound Central Display Renovated Great Lakes Student Store

28. Large Gaming Zone Renovated Great Lakes Student Store

29. Expanded GNC Renovated Great Lakes Student Store

30. Providing Healthy Choices Renovated Great Lakes Student Store

31. Large consumables section to support a young population Renovated Great Lakes Student Store

32. 32 Connecting with Our Customers YouTube Video Twitter Digital Flyer Facebook E-Mail

33. 33 NEX Special Orders Expanding the Shopping Experience - Cross Channel Retail NEX Call Center Brick & Mortar Vendor Kiosks

34. MyNavyExchange.com 34 Navy Pride Electronics Sunglasses & Watches Home Décor Kitchen & Dining Baby Tactical Gear Motorcycle Gear Men’s Beauty & Fragrances Bed & Bath Home Electronics Women’s Shoes

35. 35 New Retail Initiatives Multichannel expansion offering NEX assortments worldwide Macy’s Partnership … provides exclusive brands Masstige – Innovation Hot items – iPad, Kindle, Game Exchange

36. New Services Initiatives Zip Express – Home Electronic Installation Things Remembered We Car Redbox Video Rental Kiosks Expansion of Services E-Commerce Offerings

37. 37 Instilling a Sense of Community - Programs for Navy Families A-OK Program Celebrity Appearances Customer Appreciation Days Homecoming Events Health and Safety Awareness Programs Vehicle Maintenance Classes for Deployed Spouses Joint Events with MWR It’s About More Than Just the ROI

38. Wounded Warrior Programs Billabong Surf Camp

39. Wounded Warrior Programs NASCAR Race

40. Customer Appreciation Days NEX Guam

41. Marketing Efforts Family Fun Fitness Festival Childhood Obesity awareness 2011 Joint Sweepstakes Joint Advertising Resale Leadership Forum Working with our Resale Partners

42. 42 Connecting to Navy Cross Promotion Alcohol Deglamorization Financial Health Motorcycle Safety Predatory Lending Military One Source Wounded Warrior Support Going Green Disaster Response School Lunch Program WiFi Sailor of the Year

43. 43 Navy Connection Navy Professional Reading Program Naval Academy Cross-Promotional Support Testimonials Combined Federal Campaign Navy-Marine Corps Relief Society

44. Partnering with Navy Chief of Information (CHINFO)

45. 45 We Couldn’t Do It Without You Thank You for All Your Support!