1. Defense Commissary Agency ALA Conference/Food Show Honolulu, Hawaii 1 Mr. Keith C. Hagenbuch Executive Director, Store Operations August 17-19

2. 241 Commissaries 13 Countries 15,000 + Employees $5.6B Annual sales 90M Annual transactions 30% Average savings vs. grocery stores/supercenters 146+ Years serving the nation Your Commissary … It’s Worth the Trip! DeCA by the Numbers We sell groceries at cost plus 5% surcharge 2

3. FY 2014 Independent Financial Audit  13 th straight Unqualified or “Clean” Audit Opinion  Challenges Audit Opinion 3

4. Cardboard Recycling Efficiencies FY 2015 4

5. 5

6.  Food Banks approved by OSD(P&R)  Unsellable but edible items donated  107 approved Food Banks serve 127 stores in the United States  Over 1.7M pounds donated in FY 2014  FY 2015 donations will divert an estimated 2M pounds from landfills The Right Thing to Do for the Nation Food Bank Donations 6

7.  DeCA’s Number #1 transformational priority  Standardizing & modernizing our supply chain systems and all of our business processes world-wide  Contract award to NCR Government Systems in Jan 2015  Implementation will occur over four separate increments  Increment #1 will be fully deployed by Summer 2016  Category Analyzer  Power HQ  Planogramming  Vendor Portal and Bill Back Manager  Enterprise Scale Manager  More Information – DeCA’s Industry Day, ALA web site, etc. 7 Enterprise Business Solution

8. Recent Grand Openings  Camp Carroll, Republic of Korea (Re-opening)  Fort Rucker, Alabama 8

9. Camp Carroll Grand Re-Opening 9 Re-Opened July 14, 2015

10. Camp Carroll Re-Opening 10

11. Fort Rucker Grand Opening 11 Opened July 15, 2015

12. Future Construction Program 12  Focus on Upgrading Existing Stores  Example: Schofield Barracks  Update décor  Optimize sales area  Replace equipment  Add freeze storage

13. Future New Commissaries 13  2016  Spangdahlem AB, Germany  2017  NAS Jacksonville, Florida  Fort Belvoir, Virginia

14. Spangdahlem AB, GE Opening 2016 Future New Commissaries 14

15. NAS Jacksonville, FL Opening 2017 Future New Commissaries 15

16. Fort Belvoir, VA Opening 2017 Future New Commissaries 16

17. $ Billion! 5.63 FY 2014 Agency Sales 17

18. 18 DeCA % of Sales by Areas FYTD 2015 (thru July 2015)

19. 19 DeCA Sales Comparison FYTD 2015 (thru July 2015) AreaSales ($M)% Change Central $991.96-0.03% East $1,204.73-0.57% Europe $364.64-5.45% Pacific $883.59-1.35% West $1,168.36-1.58% DeCA Overall $4,613.27-1.27%

20. 20 Customer Transactions FYTD 2015 (thru July 2015) Area Transactions (M) % Change Central 14.660.16% East 16.930.45% Europe 8.19-3.39% Pacific 14.90-0.91% West 19.24-0.87% DeCA Overall 73.92-0.66%

21. 21 Hawaii Sales and Transactions As of July 2015 ZoneFYTD SalesJuly Sales Hawaii$208,033,343$20,827,994 Zone FYTD Transactions July Transactions Hawaii 3,163,492 318,423

22. 22 Hawaii Sales Comparison FYTD 2015 (thru July 2015) StoreSales ($M)% Change Kaneohe Bay$32.24-1.70% Pearl Harbor$73.64-1.48% Hickam$42.350.91% Schofield$59.805.13% Total Hawaii$208.030.79%

23. 23 Hawaii Transaction Comparison FYTD 2015 (thru July 2015) Store Transactions (M) % Change Kaneohe Bay 0.515-3.49% Pearl Harbor 1.075-0.82% Hickam 0.690-0.86% Schofield 0.8832.75% Total Hawaii 3.163-0.31%

24.  Operational Training  Guard & Reserve  Centralized Meat Pricing  Produce 10% Push  Push Promotion Package  Customer Service Program SO Initiatives 24

25.  Training classes conducted to date  CAO – 6 classes, 144 students  Accountability - 7 classes, 117 students  Food safety – 12 classes, 230 students  Department Operations – 35 classes, 700 students 25 Operational Training

26.  FY 2015  Events: 35  Sales: $2.9 Million  Savings: $1.3 Million  Patrons served: 21,865 Providing the Benefit On-Site to our Guard & Reserve 26 Guard & Reserve On-Site Sales As of July 2015

27.  Standardized Meat Processing  Deployed video-based training CONUS-wide  Centralized Pricing  Tested in 8 stores in Zone 28  Expanded to 168 stores CONUS-wide  What’s Next 27 Centralized Meat Pricing

28.  Director’s Guidance  Mandate Promotional Compliance  Deployment Schedule  Results 28 Produce 10% Push

29. 29 Push Promotion  Store Operations  In-House Programming and Systems Control  360° Stakeholder Communication is Critical  Huge Program with Huge Results  The Future

30. Customer Service Program  Background  Today  Future  30

31. DeCA Pacific Area

32. Hawaii Local Vendor Food Show.  The first local vendor food show was held in 1998 to invite local manufacturers and vendors to partner with DeCA and foster mutual business relationships.  Each year DeCA has selected new products from companies participating in the food show. Since the first show in1998, DeCA has selected over 2,400 products.  Each year companies that have never done business with commissaries participate in the food show. Since 1998, DeCA has written contracts with 111 companies. 32

33. About Commissaries.  In Hawaii, DeCA operates four commissaries on Oahu to serve the Hawaii military community of 166,000 active-duty, reserve, National Guard members, retirees and their family members.  By shopping regularly in the commissary, patrons save an average of 30 percent or more on their purchases compared to commercial prices.  The savings in Hawaii is even greater; compared to local commercial prices, patrons save an average of 50.14 percent. 33

34.  Annual Sales - $249M in FY 2014  Customer Transactions - 3.82M in FY 2014  Payroll - $24.6M (FY 2015 target)  DeCA and Contract Employees - 667  Baggers and Vendor Stockers - 658  Facility and HVAC Maintenance - $2.1M Hawaii Snapshot 34

35. Hawaii Snapshot  Hawaiian Local Produce  Contract Awarded to Coast Produce in Oct 2006  Coast’s Partner is Honolulu-Based Armstrong Produce  Armstrong Uses 5 Local Wholesalers/Distributors to Supply Locally Grown and Mainland Procured Produce Items from 98 different vendors  Locally Procured Produce (October 2013-August 2015: Line Items Pounds Sales Volume % of all Produce Sales 304 5.48M $6.39M 19% 35

36. Hawaii Food Show YearLocal Products AddedNew Company/Contracts 20142597 20131407 201216911 20111415 20102117 20091589 200825117 20071698 20061407 20051244 20041144 20031053 20021105 20011106 20001055 19991004 1998852 Total 2,491111 36

37. Hawaii’s Million-Dollar Vendors Received more than $1M from DeCA in FY 2014. 37  Six companies doing business with commissaries exclusively in Hawaii:  Diamond Head Seafood Wholesale  Loves Bakery  Hawaii Foodservice Alliance LLC  Paradise Beverages Inc.  50th State Poultry  Golden Touch Trading Inc.  Two companies began selling to commissaries in Hawaii and now sell outside of the state:  Hawaiian Isles Kona Coffee Co.  Hawaiian Host Candies of LA, Inc.

38. The Commissary – Shopping Destination of Choice. 38  Outstanding Customer Service  Pricing  Stock Availability  Cleanliness of Stores We are proud. We are committed. We are more.

39. Keith C. Hagenbuch Executive Director, Store Operations  E-mail address: keith.hagenbuch@deca.mil  Commercial phone: (804) 734-8000 ext 48513  DSN 687-8513 James J. Hudson, Jr. Principal Deputy, Director Store Operations  E-mail address: jay.hudson@deca.mil  Commercial phone: (804) 734-8000 ext 48513  DSN 687-8513 DeCA Store Operations Senior Leadership 39

40. David C. Carey, Jr. Pacific Area Director  E-mail address: david.carey@deca.mil  Commercial phone: (916) 569-4978  DSN 839-4978 Martin J. Jackson Pacific Area Deputy Director  E-mail address: martin.jackson@deca.mil  Commercial phone: (916) 569-4841  DSN 839-4697 DeCA Store Operations Senior Leadership – Pacific Area 40

41. Pacific Area Zone Managers 41 Victoria M. Best-Rush Alaska and Washington Zone Manager  E-mail address: victoria.best-rush@deca.mil  Commercial phone: (253) 982-6697  DSN 382-6697 Bruce E. Graf Hawaii Zone Manager  E-mail address: bruce.graf@deca.mil  Commercial phone: (808) 448-4669  DSN 448-4669

42. Ken Chastain Japan (Okinawa) Zone Manager  E-mail address: ken.chastain@deca.mil  Commercial phone: 011-81-98-961-1786  DSN 634-1786 Wayne S. Walk Korea & Guam Zone Manager  E-mail address: wayne.walk@deca.mil  Commercial phone: 011-82-2-7916-7136  DSN 736-7136 Pacific Area Zone Managers 42

44. Questions