1. Corporate Travel Strategic Sourcing Kathy Briski, C.P.M., GTP September 9, 2014

2. Page: 1 Global Procurement Processes Define Supplier Evaluation Criteria Collect Data Conduct Performance Evaluation Develop Improvement Strategy Supplier Relationship Management Process Generate Requisition Approve/ Submit Requisition Process/ Submit Order Receive Goods & Services Approve Invoice Process Invoice & Generate Payment Strategic Sourcing Process Access Opportunity & Establish Team Profile Category Internally & Externally Develop Sourcing Strategy Create Selection Factors & Evaluate Suppliers Conduct Competitive Exercise w/ Approved Suppliers Negotiate & Develop Sourcing Recommend- action Implement Agreements Continuous Improvement Supplier Scorecard Savings Management Spend Analysis Knowledge Management Contract Management Catalog Management Core Supporting Capabilities Day-to-Day Purchasing Process

3. Page: 2 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommend- action Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Validate Internal Requirements & Profile Category Conduct Industry Analysis Internal Category Profile TCO Model Cost Reduction Ideas Industry Profile Build TCO Model Develop Sourcing Objectives Sourcing Strategy Plan: Competitive Supplier Selection or Existing Supplier Development Conduct Supplier Analysis Create Supplier Selection Criteria Supplier Selection Decision Matrix RFIs (optional) “Short List” of Suppliers Complete Traditional RFP Process RFPs / RFQs eAuctions Collaborative Discussions Conduct eAuction(s) Collaborate w/ Incumbent Supplier(s) - AND/OR - Prepare Fact- Based Negotiation Packages Negotiate Agreements Fact-Based Negotiation Packages Supplier Negotiations Presentation Sourcing Recommendation Finalized Agreements Benefits Realization Continual Supplier Improvement Implement Agreements and Monitor KPIs Evaluate Performance and Develop Suppliers Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers Fast Track for Quick Savings Develop Sourcing Strategies & Tactics ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team Assess Opportunity Obtain Sponsorship & ID Team Create Project Plan Project Plan Analyze Current Spend Document Requirements

4. Page: 3 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommend- action Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team Assess Opportunity Obtain Sponsorship & ID Team Create Project Plan Project Plan Analyze Current Spend Document Requirements

5. 4 High Level Travel Project Plan Travel Workplan Review Mobilization & Kick-Off Category Profile Internally & Externally Develop Strategy Screen Suppliers & Selection Factors Conduct Competitive Exercise Negotiate & Develop Sourcing Recommendation Implement Agreement AprilMayJuneJulyAugustSeptember SAMPLE

6. Page: 5 Travel Category Opportunity SAMPLE Category Opportunity Baseline – Travel Key Travel Contracts and Expiration DatesPreliminary Opportunities to Drive Accelerated Benefit Hertz Car Rental Agreement – Expiration Date: July 31, 2010 Northwest Airlines Agreement – Expiration Date: November 30, 2010 American Express Travel Agency Agreement – Expiration Date: September 30, 2009 – Currently Extended until September 30, 2010, with an additional 1 year extension (2011). Mandated Travel & Entertainment Policy Drive Demand Management (Compliance Behavior): On-Line Booking Tool Advance Ticket Purchase Non-Refundable Tickets Preferred Hotel usage Preferred Car Rental usage Hotel Competitive Bid Negotiate American Airlines contract Car Rental Competitive Bid Confirmation of Sourceable Spend Sourcing Group CategorySub-Category Addressable Spend % Addressable Sourceable Spend Est. Mid Saving % Est. Mid Savings $ TravelAirline$6,000,000100%$5,500,0003%$165,000 TravelCar Rental$1,000,000100%$925,0005%$46,250 TravelHotel$4,500,000100%$4,400,0005%$220,000 TravelAgency - Agency Fees$170,000100%$00%$0 Travel Demand Management (Compliance)N/A $700,000 SAMPLE

7. Page: 6 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Validate Internal Requirements & Profile Category Conduct Industry Analysis Internal Category Profile TCO Model Cost Reduction Ideas Industry Profile Build TCO Model Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team

8. Copyright © 2007 Accenture All Rights Reserved. 7 Total Cost of Ownership Travel Hotel Cost Agency Cost Total Cost of Ownership – Elements Air Ticket Cost Emergency Travel Services Change Requests Support Management Fees Online Booking Agent Assisted Booking Client Negotiated Airfare Transaction Fee Price for airfare, room rates and rental rates make up a portion of the TCO for Travel with cost drivers laying hidden in process. Rental Car Cost Airfare Cost Nightly Room Rate Misc. Charges Internet Parking Fitness Center Misc. Charges Fuel Daily Rate Mileage Charge Vehicle Fees GPS Concession Fee Recovery Self fill Fuel and Service Charges Fuel Purchase Options Price Procurement Process Labor Costs Time to register new online users on Cliqbook Time to train new online users Air Ticket Cost Taxes Room Rate Taxes Daily Rate Taxes Travel Policy Policy Enforcement Advance Booking Preferred Suppliers Meals Phone Fuel Surcharges Security Fees Insurance Airport Fees City Surcharge Upgrade Fees Energy Surcharge SAMPLE Ancillary Fees Baggage Fees Change Fees In Flight Internet Status Level

9. Page: 8 Industry Profile - Objective & Key Questions Objective Provide a detailed understanding of the current corporate travel industry as well as the forces shaping future travel services. The results of this profile will shape Comerica’s travel Sourcing Strategy. Key Questions How big is the industry? Who are the major players? How competitive is the market? What are the key cost drivers? Is the industry in a state of growth or decline? What are the current pricing trends? SAMPLE

10. Page: 9 Travel Scope NAICS 481 – Transportation by Air 4811 – Scheduled Air Transportation 481111 – Scheduled Passenger Air Transportation NAICS 721 – Accommodation 7211 – Traveler Accommodation 721110 – Hotels and Motels 721110.1 Guestroom Rental NAICS 5321 – Automotive Equipment Rental 53211 – Passenger Car Rental and Leasing 532111 – Passenger Car Rental (for business travel) NAICS 561 – Administrative and Support Services 5615 – Travel Arrangement and Reservation Services 561510 – Travel Agencies (including Meetings & Events) In Scope Scheduled passenger air transportation, hotel, passenger car rentals and meeting/event planning services are in scope for travel sourcing. Because of the existing relationship with current travel agency and the subsequent process standardization, it does not make sense to fully source the travel agency component of travel at this time. However, there may be components of the contract to reevaluate. Meeting/Event Planning Services are categorized under the same NAICS code as Travel Agencies. Key Points The travel industry encompasses a variety of different categories each grouped with an NAICS (North American Industry Classification System) code. Source: http://www.bls.gov SAMPLE

11. In 2000, 10 airlines accounted for slightly more than 90% of available seat-mile capacity in the United States. By early 2012, those 10 airlines, through mergers, were reduced to 5 airlines controlling about 85% of the domestic passenger market. Moreover, American and US Airways is currently merging —which would further reduce the number of airlines controlling the vast majority of passenger ridership to only four. BOEING PROPRIETARY Source: Office of Inspector General, AVIATION INDUSTRY PERFORMANCE, A Review of the Aviation Industry, 2008–2011, Number: CC-2012-029, Date Issued: September 24, 2012 RITA, Bureau of Transportation Statistics AIRLINE INDUSTRY – US Airline Mergers

12. Page: 11 Airline Industry: Overview 2013 Airline Industry revenue reached $711 Billion. For 2014, Airline Industry revenue forecasts to reach $746 Billion. Over the five years to 2018, industry revenue is expected to increase at an annualized rate of 3.6% to $848.2 billion US Airline Industry revenue is expected to continue flying upward over the five years to 2019, increasing at an annualized rate of 1.5% to $153.6 billion. Major operators such as American Airlines, Delta and United Continental will reap synergies from their recent mergers, leading to higher profit margins. However, profit margins will still depend on volatile fuel prices and the airlines’ ability to successfully hedge against any adverse movements. New fuel- efficient aircraft will aid this cause and increase operator competitiveness in the global market. U.S. scheduled passenger airlines reported a net profit of $12.7 billion in 2013, up from a profit of $98 million in 2012 Business travel represents 35% of airline’s revenue Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic one-stop round-trip ticket In 2012, U.S. airlines carried 16% more passengers and cargo than in 2000, while using two billion fewer gallons of fuel From 2000-2013, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.51% Key Points Source: Airlines for America: airlines.org, Airline Financials.com, IATA, Wikipedia, CWT 2014 Travel Price Forecast 2013 Global Airline Industry Revenue reached $711 Billion. North America is the industry's revenue leader, generating about 44% of industry revenue. SAMPLE

13. The PPI (measures average change in prices over time) for passenger air transportation. For 2012 the average amounted to 285.0 which represents a gain of 9.5% from 2011, but for 2014 the average is trending slightly upward. Airline Industry: PPI (Producer Price Index) – Scheduled Passenger Air Transportation NAICS 481111 All indexes are subject to revision four months after original publication. Source: http://www.bls.gov/ppi/

14. Page: 13 Airline Industry: Cost Drivers Source: www.rajcoaviation.com 2013 Cost Drivers Key Points The top three cost drivers for ninety five percent of the world’s airlines, are: fuel, personnel and the cost of aircraft, which together account for an average of 64.3% of an airline’s total cost structure. Dependence on oil production, labor agreements and a duopoly in aircraft manufacturing prevent airlines from having any substantive impact on these cost drivers. With revenues fixed by competitive ticket pricing and the majority of their costs out of their control, airlines are challenged to maintain earnings and gain competitive advantage by controlling less than 35% of their cost structure. Top 3 Drivers Account For 64.3% of Total Airline Costs. SAMPLE

15. Page: 14 Airline Industry: Jet Fuel Costs Historically jet fuel expenses have ranged between 10% and 15% of U.S passenger airline operating costs, but in 2008 the cost of fuel was between 30% – 40% of total operating expenses for most carriers The Air Transport Association estimates that for every dollar increase in the price of jet fuel (a derivative product of crude oil), US airlines incur an additional $445.0 million in fuel expenses From 2000 – 2010, US airlines carried 15% more traffic while using 2.1 Billion fewer gallons of fuel. For 2013 jet fuel prices averaging $124.60 per barrel. Current 2014 price is $120.60 per barrel or 8.4% from last year this time. Impact on 2013 fuel bill: $-4 Billion (global airline industry) From 1978-2012, U.S. airlines improved fuel efficiency approximately 120% Increasing Jet Fuel Costs Key Points Sources: Airlines for America: www.airlines.org, www.bts.gov, www.iata.orgwww.airlines.orgwww.bts.gov Fuel is one of the largest cost contributor to airlines’ operating costs. SAMPLE

16. Page: 15 Airline Industry: Air Travel Price Index Sources: Bureau of Transportation Statistics, AMEX 2013 Forecast, CWT 2014 Travel Price Forecast, Airlines for America: www.airlines.org Air Travel Price Index for Tampa, FL Key Points 1 The air travel price index measures the percents change over time in prices paid by travelers. The cost of airfare flying out of Tampa, FL has been lower than the U.S. average. Airfares will be nearly flat in Canada and the United States next year, driven by a highly consolidated and fiercely competitive landscape, stable projected oil prices, and potential reduction in demand from the U.S. government, driven by its sequestration efforts. Airlines found several ways to grow revenue without raising fares – a la carte pricing: from charging for select coach seat assignments, boarding after elite status members, baggage fees and fuel surcharges and possibly using restrooms! In 2011, US airlines posted the lowest annual rate of mishandled baggage ever recorded. 2013 ancillary revenue reached over $42 billion this year, up from $36.1 billion in 2013. Ancillaries will account for 6% of total airline revenue in 2013, up from 5.4% last year. The cost of air travel have been very volatile over the past several years. The cost of airfare flying out of Tampa, FL has been lower than the U.S. average. SAMPLE

17. Page: 16 Airline Industry: Baggage Fees SAMPLE Source: www.bts.gov

18. Page: 17 Airline Industry: Cancellation/Change Fees SAMPLE Source: www.bts.gov

19. Page: 18 Airline Industry: Price of Air Travel versus Other Goods & Services Sources: Airlines for America: www.airlines.org Price of Air Travel Versus Other Goods and Services Shown in their original values, facilitating comparisons with other goods & services versus the price of air travel and with movements in the U.S. Consumer Price Index (CPI). CPI is defined as a measure that examines the weighted average of prices of a basket of consumer goods and services. SAMPLE

20. Page: 19 Airline Industry: Market Segment & Competitive Landscape Source: www.ibisworld.com Key Points Level Concentration in this industry is Medium The Domestic Airlines industry has a moderate level of concentration. The top four industry players are estimated to hold a combined market share of more than 66.4% in 2014. Level & Trend Competition in this industry is High and the trend is Increasing The Domestic Airlines industry is highly competitive. Airlines compete for customers on price, frequency and capacity, route offerings, loyalty programs, promotions, rewards and service quality. Barriers to Entry in this industry are High and Steady Costs to purchase aircraft and specialist machinery, hangar and other airfield space, as well as costs to attract skilled labor and to comply with stringent safety requirements are high and a significant barrier to industry entry. Level & Trend Globalization in this industry is Low and the trend is Increasing The Domestic Airlines industry has a low level of globalization, with access to domestic routes strictly controlled for US-based airlines; foreign ownership is discouraged. Foreign operators may provide services to the domestic market, but are generally restricted to limited routes and destinations. SAMPLE

21. Page: 20 Hotel Industry: Overview 2013 Global Hotel Industry Revenue reached $592 Billion. The US Hotel Industry Revenue reached $144.4 billion in 2013 In 2014 global hotel revenues are estimated to grow 2 % to $604.5 billion. Over the five years to 2018, IBISWorld forecasts industry revenue will increase at an average annual rate of 2.2% to $661.5 billion.. This will result from growth in business and pleasure travel, and rising room rates. Over the five years to 2014, IBISWorld expects industry revenue to grow at an average annual rate of 2.5%. In 2014, industry revenue is expected to jump 2.3%, as consumer confidence and spending spike, raising revenue to $144.4 billion. US revenue is projected to increase at an average annual rate of 3.0% to $167.0 billion over the five years to 2019. Smith Travel Research is projecting increases in all three key performance metrics during 2014: Occupancy is expected to rise 1.3% to 62.7%, Average Daily Rate (ADR) will increase 4.6% to $116.43 and Revenue Per Available Room (RevPAR) is expected to grow 6.0% to $72.97. Key Points Source: www.IBISWorld.com, Smith Travel Researchwww.IBISWorld.com 2013 Global Hotel Industry Revenue reached $592 Billion. The US Hotel Industry Revenue reached $144.4 Billion in 2013. SAMPLE

22. Page: 21 Hotel Industry: Chains / Brands The majority of the global branded properties and revenue are mostly located in North American Major revenue for global chains (such as Marriott, Hilton, etc) is from franchise and management fees. Business travelers, including executives, are shifting from luxury hotels to more moderate mid-priced hotels Hotel taxes, usually a combination of sales and occupancy taxes along with the occasional flat fee, range from 10% to more than 18%. Hotel costs represent the single largest component of non-air expenses, about 43% of the travel dollar Key Points Source: PWC Hospitality Directions, Smith Travel Research, CWT Hotel Solutions, Business Travel News, IBISWorld The majority of the global branded properties and revenue are mostly located in North America, SAMPLE Brands by Service Level

23. Hotel Chain Scales Chain ScaleBrand Name Luxury Upper Upscale Upscale Midscale Economy Ex-Upscale Ex-Midscale Ex-Economy For Domestic Hotel Bookings (2012) :  Total Tracked Spend: $XXM  46% of spend in Upper Upscale. Average Nightly Rate: $XXX  21% of spend in Upscale. Average Nightly Rate: $XXX  Business Travel News: 2014 Corporate Travel Index: $158

24. The PPI for hotel rooms have fluctuated during 2012 due to pressures from both buyers and sellers. The 2014 average is 136.2, indicating rates are continuing to rise. Hotel Industry: PPI – Hotels & Motels, Guestroom Rentals Source: http://www.bls.gov/ppi/ NAICS 721110.1 All indexes are subject to revision four months after original publication.

25. Page: 24 Hotel Industry: Cost Drivers Source: www.IBISWorld.com Operating Cost Drivers Over 80% of costs in the hotel industry is distributed among four categories: (1) administrative overhead, (2) labor, (3) repairs and maintenance, and (4) food and beverage. SAMPLE

26. Top Business Occupancy Hotel Markets Worldwide – 2013 YTD CWT 2014 Travel Price Forecast Page: 25

27. CWT 2014 Forecast: Airline, Hotel, and Car Rental Pricing Page: 26

28. US Hotel Industry – Competitive Landscape Level Concentration in this industry is Medium In 2014, the four largest operators in the industry (Hilton Worldwide, Marriott International, InterContinental Hotels Group and Starwood Hotels and Resorts) account for an estimated 41.0% of industry revenue It is increasing as hotel buyouts and mergers become more frequent and operators join franchise and chain operators. Level & Trend Competition in this industry is High and the trend is Increasing At most price points, hotels look to attract travelers by offering competitive prices with a range and quality of service to maximize client satisfaction, while minimizing room vacancy rates. Room discounting increases during difficult economic periods, with fewer discounts offered in boom times. Barriers to Entry in this industry are Medium and Steady The start-up costs and market share concentration vary between industry segments, particularly for the international standard five-star properties compared with three-star motels. Globalization in this industry is Medium and the trend is Increasing Most operators in this industry are US-owned and earn most of their sales from domestic activity. Page: 27 Key Findings Source : www.ibisworld.com,www.ibisworld.com

29. Page: 28 Car Rental Industry: Overview Global industry spend is $36.4 Billion of which 30% is business travel at airports and 35% off-airport. The industry is segmented by business travelers, leisure travelers, car leasing and car sharing Leisure market has grown larger than corporate business market Industry revenue is forecast to grow at an annualized rate of 3.0% over the five years to 2019 to $42.2 billion High fuel cost is impacting industry as customers, especially leisure travelers, are finding other alternatives (public transportation) Hertz and Avis expanding off-airport locations to compete with Enterprise Car rental industry adjusted to global recession better than other travel industry categories. They can “right” size fleet to meet demand by disposing vehicles quickly and reduce costs. Key Points Source: IBISWORLD, Auto Rental News, Business Travel News Global industry spend is $36.4 billion of which 30% is business travel at airports SAMPLE

30. Rental Car Industry: PPI – Passenger Car Rental NAICS 532111 All indexes are subject to revision four months after original publication. Source: http://www.bls.gov/ppi/ The PPI for passenger car rentals had been decreasing since 2013, but for 2014 prices are starting to finally rise again.

31. Page: 30 Car Rental Industry: Market Share After Hertz’s purchase of Dollar Thrifty, the top three rental car companies will make up 95% of the total on-airport US car rental industry revenues Suppliers offer different brands that focus on specialized markets: Corporate Traveler – On-airport convenience – Hertz, Avis and National Leisure Market – On/Off-airport Budget, Dollar Thrifty, and Enterprise Additional Non-US regional players include: Europcar (Europe and Asia Pacific) Sixt (Germany and EMEA) In high risk countries such as India, China, Thailand, Latin America, etc. the business model is to rent a car with driver. Cost is less than a chauffer / limo as a typical rental vehicle is used Car rental companies have implemented a variety of new ancillary fees to help preserve some of the lost revenue in recent times, such as tacking on fees to extend a reservation, eliminating 60 minute grace period, or increasing the cost of a two-day rental “Virtual rental technology” – enables customers to reserve, rent, access and return cars just about anywhere. ZipCar, WeCar, Connect. It is forecasted that that base rates will increase on average between 0% to 2% for business travel rental cars in the U.S. for 2014. This is big news since US suppliers haven’t been able to increase rates, even slightly. This is due to increasing fleet costs for car rental providers, as their used vehicles sell for less than in recent years as consumers shift toward buying more new and fewer used vehicles. Even so, the highly consolidated market will retain strong competition among suppliers in 2014. Business Travel News 2014 Corporate Travel Index: $47 Key Points Source: www.autorentalnews.com; www.ibisworld.com, Business Travel News, 2014 Corporate Travel Indexwww.autorentalnews.comwww.ibisworld.com The U.S. car rental market is highly consolidated among a small number of major players and is getting smaller. SAMPLE Top 3 Car Rental Companies By Revenue Global Market Share

32. Page: 31 Car Rental Industry: Cost Drivers Source : www.ibisworld.com, Auto Rental Newswww.ibisworld.com Operating Cost Drivers Key Findings The industry have slowly recovered as the demand for air travel, which is the industry’s primary revenue source, started to increase as of 2010. The industry’s solid recovery is expected to continue over the next five years. Demand is expected to increase as domestic travel rates continue to grow, bolstered by the US economy’s recovery. Industry revenue is forecast to grow at an annualized rate of 3.0% over the five years to 2019 to $42.2 billion. Corporate profit is currently at an all-time high, growing an impressive 9.2% per year on average over the five years to 2014 Over the past five years, many industry operators have continued to expand into off-airport markets, providing additional avenues for growth. Car rental operators have learned from the recession and have sought to diversify their revenue streams, so as to mitigate exposure to any one segment of the economy. Car sharing has continued to emerge over the past five years as both traditional car rental companies and new players seek to gain market share in this new segment of the industry. Each of the major car rental companies now has a car sharing division. Over 78% of costs in the car rental industry is distributed among four categories: (1) Purchases, (2) Other, (3) Depreciation, and (4) Wages. SAMPLE

33. US Car Rental Industry – Competitive Landscape This industry is Mature New technologies, such as online reservations, provide advantages like reduced customer acquisition costs. But these advantages flow on to existing companies and do not produce new entrants or new markets. Some companies are expanding into local markets with programs like car sharing. Basis for Competition: High and the trend is increasing All companies in this industry compete primarily on price and customer service. Companies also compete through branding and market segmentation. Strategic alliances with airlines and hotels can produce a competitive edge. External competition stems from other modes of travel including taxis, limousines and public transport. Barriers to Entry in this industry are Medium and Steady Rental fleet investment is a significant monetary outlay. Potential new entrants would have difficulty establishing a brand identity because the current brands are heavily entrenched. Globalization in this industry is Low and the trend is Steady All major car rental companies in the United States are domestically owned; however, US car rental companies operate globally either through direct ownership or through license and franchise agreements. Page: 32 Key Findings Source : www.ibisworld.com,www.ibisworld.com

34. Travel Management Industry: Overview The top 50 travel management companies represent over $185 billion in sales revenue in 2013. Five companies registered more than $20 billion in sales, the same number as in 2013, although three had more than $30 billion, up from one last year There were 16 listees with sales of more than $1 billion, same as the last 2 years Smaller firms continued to grow impressively, with and without acquisitions. Ovation Travel moved from $828 million to $910 million, and Direct Travel soared from $575 million to $767 million as it continued an aggressive acquisition strategy. Over the five years to 2019 IBISWorld expects industry revenue will increase an annualized 10.1% to $265.4 billion. Expedia, and now Priceline maintains top spots over AMEX. Technology dominated the replies when it came to recent developments and projections. A number of companies said they were developing proprietary technology solutions The industry is highly fragmented, with the top four industry players accounting for less than 30.0% of the industry's market share. Travel Agency profit margins are low, reflecting a high level of competition in the industry. 2013 Top 6 Travel Management Co’s By Revenues Key Points Source: www.travelweekly.com Travel Weekly Power List 2014, www.bts.govwww.travelweekly.com Over the next 5 years IBISWorld expects industry revenue will increase an annualized 10.1% to $264.4 billion.

35. Page: 34 Global TMC Industry: Overview Leisure travel is the largest market for the industry. This market is made up of travelers taking both domestic and international trips. The total number of international tourism departures is expected to have exceeded 1 billion in 2014. The top three countries for departures are Germany, the United States and China. Many travelers going overseas still use travel agency services for part or all of their trip components, such as accommodations and airline bookings. However, in mature markets such as the United States travelers are increasingly likely to use online services to book their domestic trip, or make arrangements directly with hotels and airlines. Key Points Source: IBISWORLD, Global industry spend is $36.4 billion of which 30% is business travel at airports SAMPLE

36. The PPI for travel agencies has gone down 13% since its high in 2001 (due to 9/11 and the commencement of the on-line booking tool), but has risen since and has exceeded its 2007 high and continues to climb. TMC Industry: PPI – Travel Agencies NAICS 561510 All indexes are subject to revision four months after original publication. Source: http://www.bls.gov/ppi/

37. Page: 36 Global Travel Agency: Cost Drivers Source : www.ibisworld.comwww.ibisworld.com Operating Cost Drivers Over 60% of costs in the travel agency industry is distributed among four categories: (1) Wages, (2) Purchases, (3) Rent & Utilities, and (4) Marketing. SAMPLE

38. CWT Additional 2014 Perspective Page: 37 Business Travel News – 2014 Corporate Travel Index: Food $88 per day

39. Page: 38 Advito Consulting 2014 Forecast Airlines for America, www.airlines.orgwww.airlines.org AirlineFinancials.com AMEX Business Travel 2013 Forecast and Trends ATWOnline, www.atwonline.comwww.atwonline.com Auto Rental News Bureau of Labor Statistics, www.bls.govwww.bls.gov Bureau of Transportation Statistics, www.bts.govwww.bts.gov Business Travel News CWT Hotel Solutions CWT 2014 Travel Price Forecast Egencia 2013 Forecast Forbes, www.forbes.comwww.forbes.com Hoovers Online, www.hoovers.comwww.hoovers.com IATA (International Air Transport Association) & World Air Transport Statistics (WATS 2006) www.ibisworld.com Global Business Travel Association, www.gbta.orgwww.gbta.org OneSource Inc., www.onesource.comwww.onesource.com Power List 2014, www.travelweekly.comwww.travelweekly.com Pwc Hospitality Directions Rajcoaviation.com Smith Travel Research Data The Transnational.travel Travel Daily News, www.traveldailynews.comwww.traveldailynews.com Travel Procurement Travel Weekly, www.travelweekly.comwww.travelweekly.com Wikipedia Wikiinvest Appendix: Data Sources SAMPLE

40. Page: 39 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Develop Sourcing Objectives Sourcing Strategy Plan: Competitive Supplier Selection or Existing Supplier Development Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers Develop Sourcing Strategies & Tactics ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team

41. Page: 40 Sourcing Strategies & Tactics Several sourcing strategies can be pursued, either separately or together. — Possible Sourcing Strategies — Best Price Analysis Volume Leveraging Strategic Relationship Process Improvement Demand Management Commodity Sourcing Strategy STRATEGIC RELATIONSHIP  Establish integrated or close relationships with suppliers where both buyer and supplier work together to share information, collaborate, and further each partner’s goals STRATEGIC RELATIONSHIP  Establish integrated or close relationships with suppliers where both buyer and supplier work together to share information, collaborate, and further each partner’s goals PROCESS IMPROVEMENT  Identify opportunities to standardize and streamline business processes that will result in improved quality, reduced cycle times, and lower total cost of ownership PROCESS IMPROVEMENT  Identify opportunities to standardize and streamline business processes that will result in improved quality, reduced cycle times, and lower total cost of ownership BEST PRICE ANALYSIS  Evaluate and model all costs and use negotiation tactics that increase transparency and maximize competition BEST PRICE ANALYSIS  Evaluate and model all costs and use negotiation tactics that increase transparency and maximize competition DEMAND MANAGEMENT  Address factors such as standards, requirements, and policies to reduce costs related to internal demand DEMAND MANAGEMENT  Address factors such as standards, requirements, and policies to reduce costs related to internal demand VOLUME CONCENTRATION  Aggregate like goods and/or services across organizational units in order to increase negotiation leverage and negotiate better pricing, and terms and conditions VOLUME CONCENTRATION  Aggregate like goods and/or services across organizational units in order to increase negotiation leverage and negotiate better pricing, and terms and conditions

42. Page: 41 Sourcing Strategy: Airlines Current State Travel policies located in Accounts Payable Expenditure Manual – No enforcement All departments using one travel agency, however suspect that some Southwest bookings are going directly to Southwest.com Travel compliance is not be monitored Recently moved corporate headquarters from Detroit, MI to Dallas, TX Top 3 airline spend: Northwest, American and Southwest Current contract with Northwest only (no discount in Tier 3 and high market share commitment) 70% of air spend in Tier 3 Some international air spend – about 15% Sourcing Recommendation Create separate travel policy with management enforcement Enter into negotiations with Northwest (current contracted supplier) and American Airlines. In addition, pursue possible corporate deal with Southwest Airlines. Stimulate competition between Northwest and American Airlines in multi-hub city pairs Stimulate competition between Northwest and American Airlines for international air spend Negotiate with Southwest and determine if market share can support a formal corporate agreement Market dynamics suggest a 2 year contract Results Separate travel policy resulting in improved compliance Discount in Tier 3 level pricing Capture all Southwest spend SAMPLE

43. Page: 42 Savings Opportunity Proposed StrategyExpected Outcome Volume Concentration  Consolidate all Division car rental spend.  Leveraging buying power across all Divisions to maximize savings. Primary and Secondary Considerations  Pricing exercise to include using one primary vendor only or having one primary and one secondary vendor for car rentals.  Award business to one primary only, or one primary and one secondary vendor, whichever is more advantageous. Service Consolidations  Increase total spend to include cargo van/truck rental business to leverage buying power with Enterprise and Budget.  Enterprise to acknowledge additional spend with cargo van/truck business which could help achieve additional savings. Show Budget total spend across their business units to obtain best pricing. Additional Concessions  Ask for additional concessions, including higher rebate, lower city surcharges, lower refueling charges, lower one-way and weekly rentals, and lower GPS rental fee.  Better rebate terms, possible lower city surcharges, and flat rate refueling charge which amounts to additional savings. Demand Management – Global Policy  Develop a global travel policy for all Division’s to follow.  Consistency across all Division’s leads to demand management savings. Demand Management – Enforcement Mechanism  Empower Global Travel Department to enforce global travel policy with key Division team members.  Demand management savings in all areas, airline, hotel and car rental. Demand Management – Class of Service Standardization  Standardize car rental class of service to “intermediate” size car only.  Average daily car rental rate to decrease, providing incremental cost savings to the program. Category Strategy Deliverable Perform pricing exercise to include primary and primary/secondary considerations, include van/truck rental spend and negotiate additional concessions such as better rebate terms, lower city surcharges and flat rate refueling charge. SAMPLE

44. Page: 43 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Conduct Supplier Analysis Create Supplier Selection Criteria Supplier Selection Decision Matrix RFIs (optional) “Short List” of Suppliers Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team

45. Page: 44 Car Rental Scorecard SAMPLE

46. Page: 45 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Complete Traditional RFP Process RFPs / RFQs eAuctions Collaborative Discussions Conduct eAuction(s) Collaborate w/ Incumbent Supplier(s) - AND/OR - Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team

47. Page: 46 Supplier Engagement Options There are many ways to initially exchange information. While RFPs are often appropriate, they are one of many means of engaging suppliers. Pre-Negotiation Information Exchange Direct Negotiations with an Incumbent Supplier Direct Negotiations with a Target Supplier Brainstorm with a Group of Trusted Suppliers On-Line Auctions RFPs / RFQs Should choose the method(s) that best meets both the Strategic Sourcing objective and the team resource capacity

48. Page: 47 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Prepare Fact- Based Negotiation Packages Negotiate Agreements Fact-Based Negotiation Packages Supplier Negotiations Presentation Sourcing Recommendation Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team

49. Page: 48 Negotiations Approach – Discussion Points Based on a review of Company’s current program, contract terms, and stakeholder requirements, the following improvement areas have been identified to maximize the annual incentive rebate. Negotiation PointDescriptionSupplier Pricing, Incentive Rebate Structure Size down the gap between rebate tiers to reduce the risk associated with dropping to a lower tier. Closing the gap between tiers will inset Company to drive more spend to Amex. Ensure incentive BPS earned at each tier are best in class for domestic and non- domestic spend. ABC Pricing, Signing BonusReduce/eliminate minimum signing bonus *NACV thresholds (claw back clause) to avoid refunding any portion of the $1M signing bonus paid to Company in 2008. Take a position which suggest Company is doing Amex a favor by offering them other potential business. ABC should fight to keep this business considering transition cost will be minimal for them, thus their margin will not be adversely be effected. ABC Pricing, Performance Bonus Establish a realistic performance target based on the post spin *NACV, the current (pre spin) performance target is too aggressive. Maximize the annual performance bonus. ABC Pricing, DeductionsMinimize consulting assessment expenses (hourly rate) and Membership Reward (MR) fees which are deducted directly from the incentive rebate. Negotiate an annual credit which can be applied to consulting and MR expenses. ABC Pricing, High ROC Transactions Reduce the 50 BSP reduction on P-card transactions > $10K (Hi-ROC volume). Negotiate a buffer which can be applied to the Hi-ROC volume, i.e. request that the BSP penalty apply only to Hi-ROC volume which exceeds a specified amount. ABC *NACV – Net Annual Charge Volume (i.e. annual spend with Amex) SAMPLE

50. Page: 49 Negotiations Approach – Projected Targets Below are the projected results should Company be successful in driving ABC to the negotiation points proposed. Total Savings is projected to be approximately $300-$600K. SAMPLE Expected Benefits StrategyTypeSavings ($)LAS / BATNAKey Enablers Incentive Rebate Structure – fine tune the incentive BSP tiers to maximize the rebate received post spin-off. Financial$200-$400KFocus on sizing down the gap between rebate tires. Put business out to bid Stakeholder buy-in Executive sponsorship Procurement Support Performance & Signing Bonus – adjust bonus targets to align with the post spin-off spend portfolio. The current targets are far to aggressive. Financial$100-$150KConcede to a reduction in the performance bonus if the target is simultaneously reduced Mandate a reduction in minimum thresholds for signing bonus retention Stakeholder buy-in Executive sponsorship Procurement Support Deductions – reduce the expense subtracted from the *NACV and deductions from the base incentive rebate. Financial$0-$50KFocus on improving the rebate earned on High- ROC volume Dedicate a resource to handle ad-hoc assessment activities Stakeholder buy-in Executive sponsorship Procurement Support Total$300-$600K *NACV – Net Annual Charge Volume (i.e. annual spend with Amex) SAMPLE

51. Page: 50 Strategic Sourcing Process Overview Profile Category Internally & Externally Create Selection Factors & Evaluate Suppliers Negotiate & Develop Sourcing Recommen- dation Implement Agreements Strategic Sourcing Methodology Activities Deliverables or Tools Validate Internal Requirements & Profile Category Conduct Industry Analysis Internal Category Profile TCO Model Cost Reduction Ideas Industry Profile Build TCO Model Develop Sourcing Objectives Sourcing Strategy Plan: Competitive Supplier Selection or Existing Supplier Development Conduct Supplier Analysis Create Supplier Selection Criteria Supplier Selection Decision Matrix RFIs (optional) “Short List” of Suppliers Complete Traditional RFP Process RFPs / RFQs eAuctions Collaborative Discussions Conduct eAuction(s) Collaborate w/ Incumbent Supplier(s) - AND/OR - Prepare Fact- Based Negotiation Packages Negotiate Agreements Fact-Based Negotiation Packages Supplier Negotiations Presentation Sourcing Recommendation Finalized Agreements Benefits Realization Continual Supplier Improvement Implement Agreements and Monitor KPIs Evaluate Performance and Develop Suppliers Develop Sourcing Strategy Conduct Competitive Exercise w/ Approved Suppliers Fast Track for Quick Savings Develop Sourcing Strategies & Tactics ANALYSISSTRATEGY SUPPLIER SELECTION IMPLEMENTATION Assess Opportunity & Establish Team Assess Opportunity Obtain Sponsorship & ID Team Create Project Plan Project Plan Analyze Current Spend Document Requirements

52. Page: 51 Implementation Plan Overview An effective implementation plan consists of several key components necessary to ensure rapid and complete benefits realization from the new supply arrangement(s), and to follow through on agreed to parameters during contract negotiations. Plan ComponentDescription Transition Plan  Shift from old supply agreements to new ones.  May or may not involve switching suppliers. Communication Plan  Inform the user community of the outcome of the strategic sourcing effort.  Specify to users how they are impacted and what actions they are required to take as a result of the strategic sourcing effort.  Highlight all benefits that users may derive from the new supply arrangements. Compliance Plan  Determine how compliance to new supply arrangements will be enforced (if possible).  Closely linked to the “Communication Plan”. Benefits Tracking & Reporting Plan  Measure benefits resulting from new supply arrangements relative to targets  Report to senior management on both status and any necessary actions required to improve benefits realization. Performance Management Plan  Ensure that suppliers are performing along key metrics as required by the contract.  Put in place a regular communication vehicle with suppliers to drive improvements in supplier performance. – Overview of Implementation Plan Components – SAMPLE