US Location Trends

1. Labor Analytics Group US Location Trends May 21, 2009

2. What overall location trends are you currently seeing on your region?  Why? • What are the top 3-5 emerging markets in your region?  • What are the primary reasons company's seek to locate operations in these and other markets in your region?  • What common perceptions do foreign businesses have about your region and are they accurate? • As a location consultant, what location criteria tends to be the most difficult to acquire/address in your region? • Which companies do you compete most with for location/real estate consulting projects in your region?

3. What is a “High Density” Operation? • “High Density” operations are back-office environments that are heavily labor laden. • “High Density” refers to these operations high occupancy ratios; typically occupying one employee for every 100 – 200 sqft. • Examples of high density operations are varied and can include call centers, processing centers, shared services centers and many other “back-office” functions. • This operation type is particularly well-suited for identifying location trends, because they can be located anywhere there are people.

4. 2009 US Location Trends – 3 Dominant Themes The rapid change in the domestic and global economic condition has created three dominant themes effecting corporate location strategy: • Cost Take-Out • Corporate America is reacting to the current economic downturn by redoubling its efforts to identify significant cost reduction opportunities • Portfolio Flexibility • The rapid economic change has spurred corporations to consider new methods of building long-term flexibility into their portfolios • Revived focus on US Markets • High unemployment and revived political concerns havecorporations re-focusing on US markets.

5. US Location Trends – Cost Take-Out • Labor continues to be the primary criteria in determining HD locations. • HD operations continue to migrate to smaller, lower cost and less competitive markets. • 40% of all call center openings occurred in Tier 3 markets in 2008; up from 33% in 2007 • We may see a reversal in the short run due to rising unemployment • HD operations housing “knowledge workers” increase as corporations reengineer their processes to consolidate front-office operations into back-office environments (UBS, Fidelity, State Street, Merrill Lynch) • HD growth has been on steady decline in US since 4Q06 – • new openings dropped by 40% from 2006-2007; by 20% in 2008 • in 4Q08 closures grew by 61% over the same quarter in 2007

6. US Location Trends – Portfolio Flexibility Corporate planning during the down turn is putting a premium on portfolio FLEXIBILITY • Work at home/virtual workplace • Outsourcing • Alternative workplace strategies – hoteling, etc. We must PLAN for HERE We are HERE

7. US Location Trends – Re-Focused on US • Corporate users pull back on some off-shoring initiatives due to: • Political back-lash • unpopular to offshore jobs when US unemployment is nearing 9% • Obama tax code modifications • Eroding cost/performance benefit • although still lower cost than the US, many traditional offshore markets are seeing rapid increases in wage rates and competition • Alternative operating models • Home agent models offer greater flexibility at lower cost, domestically • International BPO’s seeking US locations due to: • US client demand • Diversification of operating portfolio

8. Kansas City, KS-MO LABOR AVAILABILITY • Population: 1,454,816 • Labor Force: 782,146 • Unemployment Rate (March ‘09): 8.2% • Population Growth (‘08-’13): 3.4% • Johnson County Community College 18,913 • University of Missouri @ KC 14,430 • Kansas City Community College 5,801 • Metropolitan Community College 5,539 • Metropolitan CC @ Penn Valley 4,450 • Farmer’s Insurance 1,500 • CitiCards 1,200 • Prescription Solutions 850 • ADT Security 800 • T-Mobile 800 • 04/24/09 – Accent Marketing closes call center, lays-off 163 agents • 01/08/09 – Sprint-Nextel announces more job cuts for ’09. Cut 4,000 in 2008. • 11/07/08 – Capital One closes home loan operation, lays-off 330. COLLEGES & UNIVERSITIES MAJOR HIGH DENSITY OPERATIONS STRENGTHS • Deep and broad base of varied skill sets • Large finance and insurance sector • Relatively low labor costs for its market size • Well educated labor force • Good travel access due to central location w/in US • Over saturated call center/BPO market • Historically low unemployment levels • Not cost-effective for basic skill requirements (call center, data processing, etc.) RECENT MARKET ACTIVITY WEAKNESSES

9. Springfield, MO LABOR AVAILABILITY • Population: 345,125 • Labor Force: 186,306 • Unemployment Rate (March ‘09): 8.4% • Population Growth (‘08-’13): 4.1% • Missouri State University 19,348 • Ozarks Technical Community College 10,249 • Drury University 4,978 • Evangel University 1,657 • Central Bible College 697 • Chase Card Services 1,600 • T-Mobile 800 • American National P&C 785 • Teletech 532 • AT&T 450 • 12/17/08 – Wyndham Hotels closes reservation center, lays off 400. • 10/06/08 – Westgate Resorts closes its call center, lays off 100. • 07/23/08 – FORT Properties buys Chase Card Services operations center. COLLEGES & UNIVERSITIES MAJOR HIGH DENSITY OPERATIONS STRENGTHS • Excellent balance of skills/education to cost • Recent and significant lay-off activity presents strong employment opportunity for incoming businesses • Strong college base drives lower cost employment • Anecdotal evidence suggest strong quality & work ethic • Prior to recent lay-offs, market was showing signs of tight labor market – could return as economy improves • Limited real estate options • Limited economic incentive opportunities RECENT MARKET ACTIVITY WEAKNESSES

10. Radcliff, KY LABOR AVAILABILITY • Population: 177,475 • Labor Force: 85,023 • Unemployment Rate (March ‘09): 10.9% • Population Growth (‘08-’13): 5.4% • Elizabeth Community & Tech College 5,423 • Fort Knox Army Base 23,489 • Cardinal Health 537 • Nielsen Media Research 524 • Fort Knox National Company 188 • NA COLLEGES & UNIVERSITIES MILITARY INSTALLATIONS MAJOR HIGH DENSITY OPERATIONS STRENGTHS • Strong opportunity to be an Employer-Of-Choice • Very low prevailing wage and cost of living levels • Very little employment competition • Large military base offers strong spousal employment opportunities • Small market size puts a ceiling on employment level • Limited base of higher skilled employees • Rural market is less accessible • Limited/non-existent real estate options may force built-to-suit RECENT MARKET ACTIVITY WEAKNESSES

11. CB RICHARD ELLIS LABOR ANALYTICS GROUP For more information, please contact: Mark Seeley Senior Managing Director 602.735.5230 Mark.Seeley@cbre.com Kristin Beatty Director 602.735.5247 Kristin.Beatty@cbre.com Contact Information