1. Florida Retail Federation Annual Meeting Retailing: Sustaining Your Sails! La Playa Resort, Naples, Florida November 18, 2008 By: Tony Villamil The Washington Economics Group, Inc. Estimation and Forecasting of Retail Sales in Florida: An Update

2. External Macroeconomic Drivers of Economic Activity and Income in Florida: A Framework FLORIDA ECONOMIC AND INCOME GROWTH DRIVEN BY: EXTERNAL DRIVERS 2009 Florida OutlookTendency Business ClimateSteady US Econ/Fin MarketsRecession Global EconomyRecession

3. US Economic Drivers of Florida Indicator20052006200720082009 F Risk F 1. Economic Growth 1 (  % Real GDP) 3.12.92.01.0  2. Inflation 2 (  % Core CPI/U) 2.22.62.42.61.5-- 3. Fed Funds Rate (Avg) 3 3.24.95.02.31.0-- 4. Unemployment Rate 4 (%)5.14.6 6.87.5  Source: Bureau of Economic Analysis, Bureau of Labor Statistics, Federal Reserve and Forecast (F) by The Washington Economics Group, Inc. Notes: 1 Data for 2008 is based on IIIQ-08 vs. IIIQ-07. 2 Data based on the first half of 2008. 3 Annual Average, 2008 is based up to Oct YTD. 4 Data for 2008 is based on Sep 2008.

4. Global Economic Drivers of Florida Region/Country (  GDP, %) 200520062007 20082009 F Developed Economies Euro Area Japan U.K. 1.6 1.9 2.1 2.8 2.4 2.8 2.6 2.0 3.0 1.3 0.7 1.0 0.2 0.5 -0.1 Emerging Countries China India 10.4 9.1 12.0 10.0 12.0 9.3 9.7 8.0 7.0 7.4 Latin American Region Brazil Mexico 3.0 3.2 3.7 4.8 5.4 3.2 4.8 2.5 4.0 2.5 Source: IMF, Oct 2008 and United Nations ECLAC.

5. Sensitivity of Florida Retail Sales Population and per-capita income growth accounts for a significant 87 percent of the expected change in overall retail sales Consumer expectation and month of the year account for a 12 percent change in retail sales The remaining 1 percent change in retail sales can be attributed to random factors, not accounted by the model

6. Forecast for Retail Sales in 2009, Adjusted for Inflation and Broken Down by Principal Product and Services Sectors Sector Total Retail Sales ($ Million) Change from 2008 (Inflation Adjusted %) Non-Durables$100,5221.50% Durables29,3733.0% Tourism/Recreation68,5961.32% Business Related70,8224.95% Automobiles and Accessories65,63310.0% Building Related23,7926.0% Total$358,9182.0% Source: Forecast Model, The Washington Economics Group, Inc.

7. Statistical Analysis Indicators of Retail Sales

8. Florida Consumer Confidence Index: A Slight Recovery in 2009 Source: University of Florida BEBR and Forecast (F) by The Washington Economics Group, Inc. Data is based on Dec observations of each year. 2008 is based on Oct data.

9. $ Crude Oil/Barrel Source: Energy Information Administration (EIA) and Forecast (F) by The Washington Economics Group, Inc. Data is based on Dec observations of each year. 2008 is based on Nov data.

10. Florida Single-Family Median Home Prices Source: Florida Association of Realtors and Forecast (F) by The Washington Economics Group, Inc. Data is based on Dec observations of each year. 2008 is based on Sep YTD data.

11. Florida Unemployment Rate Source: Florida Agency for Workforce Innovation and Forecast (F) by The Washington Economics Group, Inc. Data is based on Dec observations of each year. 2008 is based on Sep data.

13. Florida Taxable Sales: A Modest Increase for 2009 Source: Florida Economic and Demographic Research Database and Forecast (F) by The Washington Economics Group, Inc. Data is based on Aug observations of each year.

14. Florida Growth and Total Retail Sales Source: University of Central Florida (UCF), Oct 2008 Forecast.

15. Florida Non-Agricultural Employment Source: Florida Agency for Workforce Innovation. Data is based on December observation of each year. 2008 growth is based on Sep vs. Sep 2007.

16. Florida Retail Trade Employment Source: Florida Agency for Workforce Innovation. Data is based on December observation of each year. 2008 growth is based on Sep vs. Sep 2007.

17. Concluding Observations A modest recovery in Retail Sales expected in 2009, from the low levels experienced in 2008 It is unlikely that total Retail Sales will reach 2004 levels next year, but a recovery is likely to gather momentum in the last quarter of 2009 Monetary and fiscal policies are highly stimulative of an economic recovery late in 2009 Financial federal package now geared to support consumer credit

18. The Washington Economics Group, Inc. 2655 LeJeune Road, Suite 608 Coral Gables, Florida 33134 Phone: 305-461-3811 www.weg.com info@weg.com The Washington Economics Group, Inc. 2655 LeJeune Road, Suite 608 Coral Gables, Florida 33134 Phone: 305-461-3811 www.weg.com info@weg.com