Mr. Philip E. Sakowitz, Jr., Director & CEO

2

• Balanced Score Card• Partnerships• Communications• Initiatives

– “Every Day is Mom’s Day” Program– Single Soldier– 2008 Physical Activity Guidelines for Americans Program– Installation Access– Infrastructure– The Future

Topics Today

3

Internal Business/Process Perspective

Facility Condition Index (FCI)Major Construction Project ExecutionCommercial Services Management) Internal Controls Over Financial ReportingAudited Opinion of Financial Statements

Financial Perspective

Resale Stocks (Sales)Commissary Operations (Costs)Surcharge Obligations

Customer Perspective

Commissary Customer Service SurveyAmerican Customer Satisfaction IndexSustain Customer Savings

Learning and Growth Perspective

Corporate Development – Succession PlanningWorkforce of the FutureAbove Store Level Reengineering

DeCA Balanced Scorecard

4

• Resale Stocks (Sales)

– FY 2008 Sales Actual: $5.81B (+ $276M) (+5.0%)

– FY 2008 Sales Projection: $ 5.81B

• Commissary Operations (Costs)

– FY 2008 Costs Actual: $1.263.2 (99.6% Execution)

– FY 2008 Costs Goal: $1.267.7B

Balanced ScorecardFinancial Perspective

5

• Commercial Services Mgt (formerly Competitive Sourcing)– DeCA is prepared to begin A76 studies when the DeCA A76 study moratorium ends, however we also plan to pursue these other Commercial Services tools like Business Process Reengineering (BPR)

– We will continue to strive for Continuing Process Improvements through initiatives like BPRs and Lean 6 Sigma Black Belt projects.

• Internal Controls Over Financial Reporting– Highest score in DoD for FY 2007 Statement of Assurance for Internal Controls—2nd straight year

• Audited Opinion of Financial Statements– Clean Audit Opinion: 6th straight year (Anticipating 7th this year)

Balanced ScorecardInternal Business/Process Perspective

6

• Commissary Customer Satisfaction Index (CCSS)– Patron Satisfaction

– 4.60 (out of 5.0)

• American Customer Satisfaction Index (ACSI)– National average for commercial grocers: 76– DeCA’s score: 77

• Sustain Customer Savings– Benefit Value– Target: 30%– Actual: 31.9%

Balanced ScorecardCustomer Perspective

7

• DeCA scores increased in all 17 dimensions (e.g. Leadership, Training/Career Development, Innovation,

Customer Orientation, Work Environment)

• Highest Score ever in “Customer Orientation” set a new Department of Defense benchmark Customer Orientation" benchmark is a significant milestone and

truly gratifying given the business we are in supporting service members and their families with our daily, worldwide operations

Employee Satisfaction

8

• Corporate Development – Succession Planning

21st Century Leadership

Leadership Development

Workforce of the Future

Military Family Members

Wounded Warrior Program

NSPS

Balanced ScorecardLearning and Growth Perspective

9

Partnerships

10

• Military Resale Industry • American Logistics Association• DoD / Military Services

− TRICARE− Military OneSource− DoDDS− Mental Health Self Assessment Program (MHSAP)− 2008 Physical Activities Guidelines for Americans − Obesity Program

• Military Associations• Non-Profit Organizations

Partnerships

11

• Joint Communications

− Customer linked to AAFES/NEXCOM/MCX via www.commissaries.com

− Mailers, weekly ads, radio, catalogs

• Joint Construction Projects

• Joint Business Processes

– Exploring and leveraging promotional affinities

• Senior Leadership Advisor Summit at HQ DeCA

Partnerships: Military Exchanges

From Competition to CooperationFrom Competition to Cooperation

12

Communications

13

Communications

Mr. Sak

owitz

CSM

Garcia

14

Media

Communications

15

Communications

16

EnergyRecognized

Leader

In the

Grocery

Industry!

PrintMedia

17

Energy

PrintMedia

Recognized

Leader

In the

Grocery

Industry!

18

Social Media

19

Social Media …

It’s Changing Everything. Are You Ready?

20

“Social Mediais People Having

Conversations Online”

Social Media

21

Over 4 MillionArticles

Your Text here

200 MillionBlogs

Over 100 Million Videos

1.5 MillionResidents

Social Media

22

TitleTitleSocialMedia

83% Have watched video clips

83% Have watched video clips

55% Have uploaded photos

55% Have uploaded photos

57% Have joined a social network57% Have joined a social network

73% Of active usershave read a blog

73% Of active usershave read a blog

45% Have started their own blog

45% Have started their own blog

Social Media

23

34%34% 36%36% 32%32%

Trust bloggers’ opinions

on products & services

Trust bloggers’ opinions

on products & services

Think more positively

aboutcompanies that have

blogs

Think more positively

aboutcompanies that have

blogs

Post opinions

about products

& brands on their blog

Post opinions

about products

& brands on their blog

PEOPLE ARE TALKING ABOUT YOUR BRAND. RIGHT NOW.

Social Media

24

IT’S NOT A FAD…

It’s A Fundamental ShiftIn The Way We Communicate

Social Media

25

Strategic Initiatives

26

• EVERYDAY is Mom’s Day at Your Commissary… Mom’s Day is not just in May anymore The Commissary cares January 5 kicks off in-store campaign Take advantage of promoting your products for Mom’s, January – May In-store displays, samples, and special discount coupons The Commissary is also your gift destination for Mom; not just your typical grocery store

• EVERYDAY is Mom’s Day at Your Commissary… Mom’s Day is not just in May anymore The Commissary cares January 5 kicks off in-store campaign Take advantage of promoting your products for Mom’s, January – May In-store displays, samples, and special discount coupons The Commissary is also your gift destination for Mom; not just your typical grocery store

Every Day is Mom’s Day Program

MOMS – TREAT YOURSELF TO THE BEST!MOMS – TREAT YOURSELF TO THE BEST!

27

Single Soldiers

28

The first comprehensive guidelines on physical activity ever to be issued by the Federal government

Provides science-based guidance to help Americans

aged 6 and older improve their health through appropriate physical activity

The Guidelines will be widely promoted through

various communications strategies, such as materials for the public, Web sites, and partnerships with organizations that promote physical activity

2008 Physical Activity Guidelines for Americans

29

• DeCA is partnering with TRICARE, HHS, AAFES and Military OneSource

– Create awareness of childhood obesity to military families through Public Awareness Media Campaigns

– Childhood obesity has become a major medical issue in the United States and it affects the children of our uniformed service members as well

• DeCA has a URL linked to www.commissaries.com with topics:– Dietitian articles promoting The Surgeon General’s

“Take the Pledge”, Campaign to increase physical activity and healthy eating habits– Widget promoting TRICARE “Get Fit” Campaign– USDA Food Guide Pyramid, “My Pyramid” for kids on front page

• Pentagon Channel– Making healthy choices while shopping in the Commissary

Childhood Overweightand Obesity

30

• USNORTHCOM is working to establish baseline standards for a Joint Installation Access Control System– Related they plan to issue policy in a Directive Type Memorandum

(DTM) format, which they have in the final stages of coordination. This DTM is expected to specify three physical access cards

1. The first is the Command Access Card (CAC); 2. The second is an alternate card to the CAC; 3. The third is a standard installation visitor pass system.

• USD (I) is the DoD policy proponent for both Personnel Security (background investigations) and Physical Security (access control)

• American Logistics Association

Installation Access Control

31

Initial Estimate

FY Installation Scope ($000) Remarks

10 Ramstein Upgrade $31,975 10 Ft Carson MILCON Equipment $6,956 Construction MILCON Funded10 Gunter Build to lease $1,530 Build to Lease being investigated10 Portsmouth NNSY Replace $20,029

Total $60,490

11 New London Replace $20,478 Possible Joint with NEXCOM11 Ft Lewis MILCON Equipment $8,490 Construction MILCON Funded11 White Sands MILCON Equipment $3,499 Construction MILCON Funded11 Mitchell Field Replace $9,538 11 Annapolis Replace $16,934 Joint with NEXCOM

Total $58,939

12 Ft Myer Upgrade $24,417 12 Newport Replace $18,568 12 Moffett Field Replace $23,131

Total $67,116

Proposed POMFY 2010 – FY2015

Surcharge Major Construction Program

32

Initial Estimate

FY Installation Scope ($000)

13 Ft Belvoir Replace $43,981 13 Kadena Upgrade $24,193

Total $67,174

14 Ft Eustis Upgrade $21,541 14 Patuxent River Upgrade $15,173 14 Vilseck Upgrade $15,247

Total $51,961

15 Ft Polk Replace $22,439 15 Ft Rucker Replace $18,457

Total $40,896

Proposed POMFY 2010 – FY2015

Surcharge Major Construction Program

33

Together, Together, We Will Meet Every We Will Meet Every

Challenge! Challenge! DoD Budget

Scrutiny

Change in Administration

The Economy

Competition Relevanc

e

The Relentless Pursuit

of Excellence

The Relentless Pursuit

of Excellence

The Future

34

Are the Highest in Customer Commitment

Asked other HH members

what they wanted

Asked other HH members

what they wanted

Made &brought

a shoppinglist

Made &brought

a shoppinglist

Checkedtheir

pantry &refrigerator

Checkedtheir

pantry &refrigerator

Brought manufacturer

coupons& used them

Brought manufacturer

coupons& used them

Military CustomersDisciplined Shoppers

35The DeCA Seal

36

“The Commissary It’s Worth The Trip”

37

Questions?