1. Headquarters U.S. Air Force Fly – Fight – Win Mr. Dennis Guadarrama AFRPA/SAU Division Chief 15 February 2011 The Power of EUL: Air Force Enhanced Use Lease Program Overview

2. Fly – Fight – Win Overview Purpose/Future Vision Key Program Progress Approach Client Advocacy Targeted Marketing Action Plan Overview Timeline to Goal Key Takeaways: What this Means to You 1

3. Fly – Fight – Win The Power of EUL 2 Vision: Use the Power of EUL to deliver $5B in return to the Air Force Developed a Plan A comprehensive business-focused approach to portfolio development AF Leadership support Leadership ‘champions’ support opportunity development and advocate program’s value Project Execution Builds on current successes by identifying high-value opportunities and diversifying portfolio Long-term strategy Focused on building partnerships fostering best returns and mutual benefit

4. Fly – Fight – Win Approach Identify and Prioritize Opportunities Identify Hot Markets Map Hot Markets to States Map to Bases and MAJCOMs Evaluate Client Advocacy Prioritize Opportunities  Identified hot markets using four criteria:  Renewable portfolio standards  Superior physical resources  Good price of electricity  Job growth  Identified hot market states  Commercial Real Estate still on road to recovery  Primary focus on Renewable Energy  Identified the number of bases by state  Examined supply and demand at each base  Estimated value of potential projects  Prioritized opportunities at each of the bases by revenue  Assessed AF client advocacy across MAJCOMs and bases  Identified existing advocates at bases and MAJCOM  Assessed where current projects could lead to future interest  Coordinate strategies with FOAs and A7Cs  Prioritized opportunities across MAJCOMs and bases  Prioritized list will be used to develop phased approach  Need concurrence on prioritization criteria: market,state-driven, or client 12345 Opportunity Identification/ValuationOpportunity Prioritization = Complete = In-Progress 3 Incentives? Resources? Potential opportunities? Land available? High revenue potential? Existing project champions? Concurrence on priorities?

5. Fly – Fight – Win Client Advocacy Strategy 4 2. Deploy campaign 3. Project marketing 4. Lifecycle PA support 5. Build on success 1. Establish branding, messaging Overarching Campaign (Program)Project Specific AdvocacyLong-term  Internal: ̶ Goal: Increase awareness and build advocacy for EUL ̶ Demonstrate SAF/IE support ̶ Problem statements: What problem does EUL solve? ̶ Include Developer engagement ̶ Partnership w/FOAs ̶ MAJCOM/ base outreach ̶ Media engagement ̶ Events (ADC, REWNA) ̶ Work closely with external stakeholders  Developer Engagement: ̶ Industry Forums ̶ Social media/web ̶ Trade media ̶ Direct email  PA collaboration w/ installation, MAJCOM, developer  Media engagement to promote opportunities  Developer Industry Days  Ensure external market understands the project  Hill/Edwards: Regional or ‘super’ Industry Days to promote full slate of projects  PA guidance developed in collaboration w/ stakeholders  Key messaging  Media opportunities  Celebrate success Lease signing Ground breaking Economic Impact Relationships  Stakeholder testimonials as evidence of EUL success  Marketing team visits to MAJCOMS/ installations  Continued event participation  Education and training  Goal: Introduce EUL to the next generation of real property officers and asset managers We must communicate the $5B Plan to all stakeholders – Internal and External

6. Fly – Fight – Win Mount a rigorous business development effort to ensure deal success 4 Infuse Industry best practices in to program using Think Tanks and Industry forums 3 There has been a lack of proper due diligence Need for upfront analysis Reduce risk of deal failure Early, up-front due diligence efforts applied to MAJCOM studies to identify opportunities Developed screening tools to identify/analyze hot markets Implemented project management principles (performance metrics, charters, risk management) Need to be more in-line with commercial business practices Continuous dialogue and trust Held highly successful EUL Industry Day in Boston Aug 09 Hosted three Think Tank sessions focused on portfolio driven analysis of real estate and energy markets Collaborated with industry to build the Business Development and solidified the approach for $5B plan 5 Streamline existing process and educate stakeholders Build partnership with other FOAs to expand success 1 2 Process is too long Unclear roles and responsibilities Adaptability to project needs is critical Demonstrated streamlined process through execution of Edwards AFB EUL Held focus groups to define roles and responsibilities; educated over 100 developers and AF personnel over the last 18 months (EUL 101 training, Industry Forum) EUL/PPA governance is needed Partnering with FOAs is critical for success Established Renewable Energy Project Development Subpanel Charter with AFCESA and AFCEE, developed process to evaluate renewable energy projects for execution Working with AFCEE to leverage Natural Infrastructure Key Program Initiatives Program InitiativeIndustry FeedbackAction Taken

7. Fly – Fight – Win Action Plan Portfolio Evolution 6 Current Project Pipeline Values CategoryProject TypeValue Energy Solar $ 242.0M Coal $ 118.0M Waste-to-Energy $ 82.0M Cogeneration $ 40.0M Real Estate Mixed Use $ 166.1M Industrial $ 48.1M R&D $ 64.0M Hospitality $ 22.0M Medical $ 1.5M Real Estate $301.3M 38% Energy $482.0M 62% A:Current Pipeline ~$.78B Targeted Project Strategy Values Target ApproachExample Focused on hot market, high revenue, and vastly available land bases with high EUL success to date to generate surge of revenue AFMC: Edwards, Hill (Solar, Geothermal) B:Mid-term ~$3.6B Portfolio Expansion Strategy Values Innovation StrategiesDescription Focused Execution Diversity portfolio with right mix of projects Reinvestment and Cost Avoidance Dividends Re-invest EUL proceeds into installation requirements generating cost avoidance and cost savings measures New Assets Natural Infrastructure and resources, equipment with excess capacity, available real property New Execution Models MAJCOM IDIQs, PPA/EUL, Fence to Fence EUL, Performance- driven support (RESS) New Technologies Nuclear, cogeneration, algae Energy 30% Traditional Real Estate 10% Innovation 60% C: Long-term ~$3.7B

8. Fly – Fight – Win Approach Target Strike Zones (Hot Market States) 7 Hot Energy Market Characteristics: Superior physical resources, renewable portfolio standards, and good electricity prices, jobs, and rates. Hot markets Other opportunity locations 88% of the AF EUL program future energy deals are located in Hot Market States States Opportunities # of Projects California19 Utah11 Nevada6 Arizona4 Florida4 Colorado 3 New Mexico2 New Jersey2 Texas2 Idaho2 Alabama1 Virginia1 Delaware1 Georgia1 Ohio1 Illinois 1 Mississippi1 Tennessee1 Alaska 1 Cumulative Total64 Markets aligned to States w/ AF Installations

9. Fly – Fight – Win Glide Path to $5B 8 Comments A: Current program at projected NPV of $783M B: Estimated $3.6B focused on target strike zones (Hill & Edwards AFB) C: Estimated $3.7B attainable from diversifying the portfolio (cost avoidance, reinvestment, fence to fence analysis) Targeting the $5B goal by focusing on 3 primary areas: A: Current Pipeline B: Mid-term C: Long-term Program Glide Path NPV Potential Current Pipeline (Executed & In Pipeline) Grand Total Targeted Project Strategy Portfolio Expansion Strategy $5B Goal Line Stretch Goal $8.08B $3.7B $0.82 A B C $0.78B $5.0B $3.6B $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 NPV ($ in Billions) $8.0

10. Fly – Fight – Win Targeted Marketing Developed Marketing and Communications Team focused on: Building sustainable partnerships with developers and financiers Continue conveying a predictable, understandable, process for transactions Partnering with state and local community stakeholders to: Identify synergies with potential EUL projects and stakeholder expectations Consistently communicate with Economic Development Offices, Local Universities, and City Council meetings Educate and inform regulatory agencies on EUL benefits and processes Sharing initial due diligence with development community Ensure synergies and identify potential local investors and/or grant funding for specific initiatives Exploring new approaches to industry days Regional, AF-wide Renewable Energy Forums 9

11. Fly – Fight – Win Takeaways 10 AFRPA is focused on reaching $5B Goal Developed a plan 1 Communications & Marketing 5 Developed three focus areas Resources/Manpower through AFRPA, MAJCOM, and installations play critical role in execution of the plan Targeted stakeholder engagement and marketing to build synergies Sharing of due diligence to maximize probability of deal success Long-Term Strategy 4 Ensuring projects remain financeable through a flexible, streamlined process Strategizing on how best to spread the wealth across the Air Force Focusing on investment strategies that will help the Air Force support the $5B goal Project Execution 3 Initiated long-term strategy planning with Hill and Edwards AFBs Identified next wave of opportunities (Hill, Edwards, AMC) Developed timeline to reach $5B Set the stage for solicitations and HRO selections over the next 3 years Leadership Support 2 Establish firm support and direction from HQ Air Force through MAJCOMs to bases that EUL projects are a top priority SAF/IE endorsement will increase advocacy and momentum of the program

12. Fly – Fight – Win 11 Contact Delivering Value to the Warfighter, our People, and our Communities Visit us at www.airforceeul.com (external) www.afrpa.hq.af.mil (internal) 1-866-725-7617 Follow the Air Force Real Property Agency on Facebook

13. Fly – Fight – Win Questions? 12