3 rd Quarter 2009 Maritime, Logistics, Warehousing and Distribution

General Overview Source: HREDA research

• 2 nd largest Metropolitan Area between Washington D.C. and Atlanta, GA

• Centrally located along U.S. East Coast

• Civilian labor force of over 800,000

• Over 96,000 students from 8 universities and 4 community colleges

• 75% of the U.S. population is within 750 miles or 1,200 kilometers of Hampton Roads

• Unobstructed ice free harbor with 50 ft deep channels located 18 miles from the open ocean

• Weekly First-in service from Asia providing 22-day transit between vessels last of port of call in Asia and Virginia

Population Source: U.S. Census Bureau Total Population: 1.6 million James City County 62,414 Williamsburg 12,481 Gloucester County 38,656 York County 61,027 Newport News 179,614 Poquoson 11,829 Hampton 145,494 Southampton County 18,480 Isle of Wight County 35,472 Suffolk 82,302 Chesapeake 220,111 Virginia Beach 433,746 Portsmouth 100,577 Norfolk 234,220 Franklin 8,877

Shipbuilding & Ship Repair Above: A 700-ton island is being placed on the flight deck of the George H.W. Bushthe nations newest and most advanced nuclear-powered aircraft carrierat Northrop Grumman Shipyard

• Additional Shipbuilders & Ship Repair Companies

• Associated Naval Architects, Inc.

• Berkeley Machine Works & Foundry Company, Inc.

• Colonnas Shipyard, Inc.

• Earl Industries, LLC

• Lyon Shipyard, Inc.

• Marine Hydraulics International, Inc.

• Metro Machine Corporation

• Norfolk Naval Shipyard

Sources: Port of Hampton Roads Annual 2007; Harvard Business School, Cluster Mapping Project, Institute for Strategy and Competitiveness, 2002; Northrop Grumman Website According to a study by the Harvard Business School, the Virginia Beach-Norfolk-Newport News MSA ranked #1 in shipbuilding and ship repair in the United States and is home to over 22% of the nations shipbuilding employees Pictured Below: Norfolk Shipbuilding and Dry-dock Major Shipbuilders Northrop Grumman Newport News 550-acre facility 155,000 sq. ft. foundry, one of the largest in the U.S. Possesses the largest dry-dock in the Western Hemisphere; measuring 2,173 ft. long and 250 ft. wide BAE Systems Norfolk Ship Repair One of the largest ship repair facilities on the East Coast Features one of the worlds largest and most modern floating steel dry-docks Davis Boat Works 250 ton Marine Travelift, one of the few in commercial operation in the world

Located just 18 miles from the open ocean, the Port of Virginia in Hampton Roads is home to the best natural deepwater harbor on the East Coast with its unobstructed, ice free harbor and 50 feet deep channels The Port of Virginia handled over 2.0 million TEUs in 2008, a 2% decrease from calendar year 2007. Source: The Virginia Port Authority; 2007 Hampton Roads Maritime and International Trade Guide, Craney Island Marine Terminal Economic Impact Study, Moffat & Nichol, 2004 The Port of Virginia

• Additional Terminals:

• • APM Terminals Virginia

• • Elizabeth River Terminal

• • Lamberts Point Docks

• • Kinder Morgan Terminals

Currently, there is 26.5 million sq. ft. of distribution space in Hampton Roads. With the expansion projects underway or proposed by the Port, an additional 20 to 60 million sq. ft. will be needed to handle cargo by 2030.

The Port of Virginia is served by 20 steamship lines offering weekly service to Europe and Asia Sources: The Virginia Maritimer, May/June 2006, July/August 2006; Port of Hampton Roads Annual 2007; Company Websites An estimated 70% of the Virginia Port Authoritys business is now secured with 10-year contracts, including shipping lines such as The Grand Alliance, CKY, China Shipping, Turkon, MSC, ACL and most recently CMA CGM and Emirates Shipping Line Shipping Lines Sampling of Hampton Roads shipping companies: * CMA CGM, ZIM Integrated Shipping Services and MAERSK Line Limited are headquartered in Hampton Roads

Sources: Virginia Port Authority; MSAonline.com; Maersk Shipping; 2006 Hampton Roads Maritime and International Trade Guide APM Terminals has opened Phase I of its $450 million, 575-acre facility in Portsmouth. This is the USAs first privately developed container terminal and is one of the largest and most advanced container facilities on the North American East Coast. Norfolk International Terminals (NIT)

• Phase I

• 3205 ft. berth

• 55 ft. water depth

• 1 million TEU capacity

• 8 cranes

• 30 RMGs

• 6 on-dock rail tracks

• Completed: September 2007

• Final Build-Out

• 4,000 ft. berth

• 2.16 million TEU capacity

• 10 cranes

• 60 RMGs

• 12 on-dock rail tracks

• Anticipated completion: 2017

• Phase II, Stage 2 of the Backlands Renovation is currently underway (25 acres)

• North Yard Expansion and North Wharf Extension includes:

• • Extending the north wharf 800 ft.

• • Adding a 2 nd ship berth

• • Renovating and improving 30 acres of container yard

• • Purchasing container handling equipment

• • Constructing a new truck interchange

The project will increase the capacity of NIT North by 34 percent APM Terminals Virginia Current Port Expansion Projects APM Terminals facility welcomes 3 rd party business

Craney Island Expansion The Port of Virginias 4 th Terminal - Upon completion, the fourth terminal will have the capacity of approximately 2.5 million TEUs and an on-terminal intermodal rail loading facility

• Phase I: Proposed completion 2019

• • 300 acres

• • 2 berths

• • 6 cranes

• Phase II: Slated for completion in 2033

• • 600 acre facility

• • 8 berths

• • 15 Suez-class container cranes

Source: Virginia Port Authority The current 50 ft. dredging project of the shipping channels is nearing completion and portions of the 55 ft. dredging project (including the 60 ft. Atlantic Ocean channel) have been authorized. Future Expansion of the Port Road and Rail Connection to Route 164 CIDMMA Proposed Third Crossing

Half Moone Cruise and Celebration Center Completed in March 2007 with 80,000 sq. ft. of passenger and event space, the terminal is the first in the U.S. to fully comply with current Homeland Security standards. Carnival Cruise Lines and Royal Caribbean make the new Half Moone Cruise and Celebration Center a home port Sources: Virginia Business Magazine; Half Moone Cruise and Celebration Center Website; ShipsandCruises.com Passenger Cruise Industry Half Moone Cruise Terminal

• Maritime and Transportation Center

• Recently announced the launch of the Maritime and Transportation Center in conjunction with 30 partners that cross business, government, industry, military and education

• Over the next year the Maritime and Transportation Center will:

• • Identify the most pressing workforce development needs in maritime and transportation industries

• • Identify current education and training programs to aid maritime and transportation workforce needs

• • Develop identified educational programs

• Apprentice School

• Proprietary shipbuilding school for individuals interested in a

• career with Northrop Grumman

• Curriculum is divided into two sections:

• • World Class Shipbuilder

• • Trade Related Education

• Qualified apprentices may elect to pursue studies in advanced programs in design, production planning, and advanced shipyard operations

• Over 800 apprentices enrolled

Old Dominion University Sources: Old Dominion University, Northrop Grumman, TCC Educational Resources The Maritime Institute Provides specialization for students in the maritime field, which includes shipping, ports and logistics management

• Graduate Level

• Concentration in maritime and port management is integrated into the schools MBA and MPA programs

• • Students learn the roles of terminals and ports, the business of shipping, commercial processes, port planning and design processes and logistics

• Electives are also available through the Master of Arts in Economics curriculum

• Undergraduate Level

• Maritime and Supply Chain Management Undergraduate Major

• • ODU is the 2 nd university in the country to offer at the undergraduate level

• • Specialized coursework including international shipping, supply chain and logistics, shipping management and port management along with similar elective options

Sources: Port of Hampton Roads Annual 2006; Company Websites Logistics, Distribution And Warehousing Major Warehouse Providers

Given the combination of strategic location, superior transportation options and plentiful real estate, Hampton Roads has become a preferred location for major distributors. Sources: Company Websites, HREDA Research, The Virginian Pilot, Co-Star Real Estate The above table is just a sampling of corporations with distribution centers in Hampton Roads and is by no means a complete list Major Corporate Distribution Centers Logistics, Distribution And Warehousing Distributors (250+ Employees) Employment Facility Size (sq. ft.) Lillian Vernon 200 300,000 QVC (Suffolk) 1,000 1,000,000 Ferguson Enterprises 800 140,000 (HQ) AAFES Dan Daniels 800 1,295,000 SYSCO Food Services 490 300,000 Cost Plus 225 1,000,000 Dollar Tree 650 114,000 Target Corp. 300 1,788,000 US Food Service 300 202,000 Chesapeake-Noland Company 1,300 95,000 Wal-Mart 600 2,054,000

Hampton Roads is linked to domestic markets by one of the country's most modern interstate and state highway systems. Interstate 64, a major east-west route, encircles the metropolitan area and connects Hampton Roads to I-95a principal north-south route. Additionally, U.S. Routes 58 and 460 connect Hampton Roads to I-95 and I-85. To the East, the Chesapeake Bay Bridge Tunnel saves 90 miles to the New York/New Jersey corridor and gives coastal highway traffic direct access to Hampton Roads. Rates are an estimate based on a full truckload with 52 stackable 4 ft. x 4 ft. pallets with total weight of 10,000 lbs. Sources: Virginia Department of Transportation; Virginia Port Authority, January 2008; Travelnotes.org; FreightQuote.com Trucking Hampton Roads Interstate System

Hampton Roads is served primarily by the rail transportation giants Norfolk Southern and CSX. The Port of Hampton Roads creates a perfect entry location for these railways to distribute throughout the East Coast and the Midwest. Efficient connections with other rail systems and motor carriers provide easy and affordable access to the rest of the U.S.

• CSX Corporation

• Offers a variety of rail, container-shipping, intermodal, trucking, barge and contract logistics management services

• Operates over 22,000 miles of track in 23 states as well as the District of Columbia and two Canadian provinces

• VA recently approved plans to help fund improvements that will expedite rail travel between Portsmouth and Atlanta and the Southeast by:

• • • Providing double-stack freight service over a 560-mile market

• Norfolk Southern Railway

• Headquartered in Hampton Roads

• Operates more than 21,200 miles of track in 22 states primarily in the Southeast and Midwest U.S., as well as Ontario, Canada

• VA recently allocated $22.3 million to help fund improvements to NSs Heartland Corridor which will ultimately expedite distribution to the Midwest by:

• • Raising 28 railroad tunnels between Hampton Roads and Ohio to allow double stacked trains

• • Shaving 233 miles off of NSs main route between Norfolk and Chicago, cutting off 1.5 days of travel

Sources: Virginia Department of Rail and Public Transportation; Norfolk Southern; CSX; The Virginian Pilot; 2008 Hampton Roads Statistical Digest Hours include positioning and handling Major Rail

Sources: Norfolk International Airport, August, 2008; Newport News Williamsburg Airport, 2008; 2006 Hampton Roads Maritime & International Trade Guide Hampton Roads is serviced by the Norfolk International Airport, and the Newport News/Williamsburg International Airport. Both airports are currently undergoing extensive expansion projects.

• Handled over 64 million pounds (29 million kilos) of air cargo during 2008

• Houses two ultra-modern Air Cargo Terminals

• • Current expansion projects will boost the complex from 88,000 sq. ft. to 120,000 sq. ft.

• Provides speedy clearance by the Airport Customs Broker through the use of the Automated Broker Interface (ABI) and the Automated Commercial System of U.S. Customs

• Current or recently completed improvement projects include:

• • New general aviation terminal

• • New air traffic control tower

• • New hangars, extended ramps and runways

• Over 73,440 pounds (33,312 kilos) of air cargo passed through the airport in 2008

Newport News/Williamsburg Intl. Airport (PHF) Air Cargo Norfolk Intl. Airport (ORF)

As a Fortune 500 company with a global market, Norfolk Southern Corporation is proud to call Hampton Roads home. A business friendly region, Hampton Roads is populated by a talented, diverse workforce and it offers an outstanding quality of life. The regions educational institutions are among the finest in the Commonwealth. From a world-class symphony and museum to scores of other artistic and entertainment values, its cultural abundance provides an array of options for our people outside of work. Wick Moorman CEO, Norfolk Southern Corporation "What better place than Hampton Roads stands out as a site for this relocation? Hampton Roads has the largest concentration of skilled and highly competent marine specialists on the East Coast, and is ideally situated for a parts distribution center for America's service needs. Jack Finnegan President, MacGREGOR (USA), MacGREGOR Group Southeast Virginia is seen as a strategic location for NYK Logistics major East Coast presence. Centrally located with excellent port facilities and infrastructure, our expansion here further enables us to provide a full complement of logistics services for our clients. That, combined with a talented workforce and a business-friendly community, made this an easy choice. Lane Turner President, Warehouse Division NYK Logistics Inc Hampton Roads Logistics Business Community We are absolutely thrilled with the people from the community we can call team members. I cant say enough about their work ethic. It has always been easy to recruit talented people here. Mark Irvin General Manager, Suffolk Location Target Import Warehouse

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