Corporate Travel Automation & the Opportunity for Commercial Card Solutions November 7, 2012

NVBTA Travel Automation & Cards Introductions NVBTA_12Nov7

NVBTA Travel Automation & Cards Introductions NVBTA_12Nov7

NVBTA Travel Automation & Cards Corporate Travel Automation Organizations are automating travel management to streamline processes. Lower performance Average Best travel policy preferred supplier agreements travel agency corporate card reporting solution expense solution online booking Automation also improves visibility, traveler compliance to policy, and ability to negotiate discounts. Source: “Globalization of Corporate Travel Programs,” AirPlus survey of ACTE buyers (2011). “European Expense Management Study,” Amex & A.T. Kearney (2008). NVBTA_12Nov7

NVBTA Travel Automation & Cards TMCs & Travel Card Usage Almost everyone with >$1 mil in travel has a TMC. Walking card usage rises with spend. Annual Travel Spend: Source: Corporate Travel Policy: Benchmarking and Insight, prepared by TRW Travel & Expense Management LLC, July 2010. n = 689 U.S. and Canadian organizations. NVBTA_12Nov7

NVBTA Travel Automation & Cards Individual vs. Corporate Liability Meanwhile, liability structures are drifting further towards corporate. Legend: Card Issuer Cardholder Client Approves Cardholder Sets Credit Line Bill Goes To Payment Made By Guaranteed by Walking Travel Card Individual liability Issuer must check credit Issuer offsets rebate Corp liability / individual pay Client invoiced if cardholder goes 120 days past due Corp liability / corp pay when expense report approved Other Cards CTA / travel agency lodged Purchasing ePayable / virtual Source: First Annapolis Consulting market observations; 2011 RPMG Corporate Travel Card Benchmark Survey Results. NVBTA_12Nov7

NVBTA Travel Automation & Cards Travel Card Benchmarking Market averages can be used to benchmark your travel card program. (note: bars indexed to 100% in each category) # of cards Annual Spend 5,623 $55 mil 755 $10 mil 178 $2.8 mil Note: figures are rounded. Source: 2011 RPMG Corporate Travel Card Benchmark Survey Results. NVBTA_12Nov7

NVBTA Travel Automation & Cards B2B Spend by Form of Payment A summer 2012 1st Annapolis survey shows travel cards and CTAs lead for travel spend. Q3/4/5: What is your best guess of the approximate $value breakdown by payment method for ... B2B spend riding on commercial card network rails: defined herein as spend not related to direct operations - office supplies, computers, telephones, etc defined herein as spend related to direct operations - raw materials, delivery, etc, but explicitly excluding payroll Notes: For Travel Spend, meeting cards were less than 2% and prepaid was less than 1%. Both payment methods were combined into commercial cards (plastics issued). For Direct Spend, SEPA accounted for 1% and was combined with ACH. Virtual / Ghost Cards includes travel agency lodged / central accounts as well as ePayables solutions that ride the p-card rails. Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America. NVBTA_12Nov7

NVBTA Travel Automation & Cards Travel Spend by Form of Payment Segmentation shows some remaining bastions of personal card and check usage for travel. Q3: What is your best guess of the approximate $value breakdown by payment method for Travel manufacturing wholesale retail gov / education non-profit utilities Notes: Minor adjustments were made to Comm’l (Plastic) spend percentages to eliminate rounding errors. For Travel Spend, meeting cards were less than 2% and prepaid was less than 1%. Both payment methods were combined into commercial cards (plastics issued). Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America. NVBTA_12Nov7

NVBTA Travel Automation & Cards Drivers for Card Usage & Growth This survey also revealed key drivers for selection and use of commercial cards. Q: What are the reasons for credit / payment card use in your organization? Q: What would be the key factors in increasing usage of credit cards? Q: What weighting / importance do you assign to the following factors in selecting card issuers? Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America. NVBTA_12Nov7

NVBTA Travel Automation & Cards Drivers for Card Usage & Growth Organizations who put more travel spend on cards / CTAs realize more value-add. for respondents that place 70% or more of travel spend on travel cards or CTAs, one-third would say data & reporting capabilities drives 20-39% of the reasons why they use cards. for 70%+ respondents, one-third would weight improving control & compliance as 40-59% of the rationale for increasing usage Q: What are the reasons for credit / payment card use in your organization? (all responses must sum to 100%) Q: What would be the key factors in increasing usage of credit cards? (all responses must sum to 100%) Source: First Annapolis Consulting B2B payments survey, June / July 2012, n=44 mid-market and large end-user organizations based in North America. NVBTA_12Nov7

NVBTA Travel Automation & Cards Mobile Transaction Authorization Mobile authentication for corporate travel payments is quite limited, but likely to grow. Source: "Mobile Payment - How It Will Transform Corporate Travel and Expense Management," AirPlus, April 2012. Based on global 2012 survey of ACTE buyers. NVBTA_12Nov7

NVBTA Travel Automation & Cards Mobile Applications for Travel Mobile apps are also niche; but fundamental to further enhancing traveler productivity. Source: “Expense Management for a New Decade,” Aberdeen Group survey of respondents from EMEA (23%), N.A. (67%), AsiaPacific (6%), and South/Central America (4%) (March 2011). NVBTA_12Nov7

NVBTA Travel Automation & Cards About First Annapolis First Annapolis is a specialized consulting firm focused exclusively on payments. Client Payment Strategy Background: Founded in 1991; privately held Headquartered in the Baltimore area Professional Staff: 75+ professionals Balanced combination of industry, functional, and consulting experience Service Offerings: Management consulting and M&A advisory services Practice areas aligned with all payment products and services Clients: Card partners (retailers, autos, airlines, hotels, affinity groups, etc.) Banks and specialty finance companies Payment networks Processors and service providers Trade and government organizations Emerging payment providers Card Issuing Debit / Prepaid Commercial Payments Merchant Acceptance Strategy Development / Support (strategic planning, benchmarking, diagnostics, business casing) Partnership Finance (retail, travel, entertainment, oil, auto, affinity, agent) Management Consulting (strategy, market research, business casing, partnerships, implementation) (acquisition / divestiture strategy, buy / sell-side representation, transaction support) M&A Advisory Loyalty Program Support (platform/delivery, integration, implementation) Strategic Sourcing (insource vs. outsource, feature / functionality, vendor selection) NVBTA_12Nov7

NVBTA Travel Automation & Cards First Annapolis Contact First Annapolis Consulting | M&A Advisory Services 900 Elkridge Landing Road, Suite 400 Linthicum, Maryland 21090 USA Lauriergracht 138 1016RT Amsterdam The Netherlands www.firstannapolis.com Frank Martien Partner frank.martien@firstannapolis.com (410) 855-8513 NVBTA_12Nov7

NVBTA Travel Automation & Cards Moderator Script & Questions Now that we’ve caught a glimpse of some current trends in corporate travel automation, let’s ask the experts. Bill, if I could start with you, (1) could you describe some of the ways TMCs are facilitating more automated or sophisticated use of CTAs or walking cards? [allow Bill and other panelists to address question]. Now, Robin (2) what are some best practices you’re seeing with regards to travel spend data consolidation, reporting, and analysis - and - how are organizations creatively using this data to their benefit? [all panelists address question]. Terry, (3) what trends are you seeing relative to TMC and travel card mandates; and what are some best practice examples that come to mind? [all address question]. Bill, as you reflect on the panelists’ input, (4) what advice would you give to a client regarding how to identify and position an internal executive champion to push an organization towards further corporate travel automation? [all address question]. Robin, (5) over the next five years, what tangible benefits will mobile deliver for corporate travel automation / how will the business case be made? [all address question]. And Terry, do you see banks, card networks, TMCs, or all three types of providers, leading the charge in mobile - or - will mobile be driven mostly by players outside of corporate travel? [all address question]. Finally, Bill, what form of corporate travel automation have we NOT discussed that we’ll start reading about within five to 10-years’ time? [all address question]. And, Robin, what’s in store for us regarding future convergence of corporate travel management and payment practices across geographic markets? [all address question]. Terry, should M&A be on the radar; and what sort of business combinations up and down the value chain could impact corporate travel automation and payments? NVBTA_12Nov7