spirit of houston past 372,207 vehicles oct ’14

Spirit of Houston Past

'04 7/04 '05 7/05 '06 7/06 '07 7/07 '08 7/08 '09 7/09 '10 7/10 '11 7/11 '12 7/12 '13 7/13 '14 7/14 '152.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.0

Total Nonfarm Payroll, Houston Metro Area, '04 - '15

Source: Texas Workforce Commission

Empl

oym

ent

(mill

ions

) 463,800 jobs created since the bottom of the recession

'09 '10 '11 '12 '13

375.4 402.4447.9

489.2 517.4Metro Houston GDP – $ Billions

Source: U.S. Bureau of Economic Analysis

'04 7/04 '05 7/05 '06 7/06 '07 7/07 '08 7/08 '09 7/09 '10 7/10 '11 7/11 '12 7/12 '13 7/13 '14 7/14 '1550

60

70

80

90

100Home Sales, 12-Month Moving Total

Source: Houston Association of Realtors

Hom

es (0

00s)

90,836 homesOct ’14

'04 7/04 '05 7/05 '06 7/06 '07 7/07 '08 7/08 '09 7/09 '10 7/10 '11 7/11 '12 7/12 '13 7/13 '14 7/14 '15200

240

280

320

360

400

Vehicle Sales, 12-Month Moving Total

Source: Houston Association of Realtors

Vehi

cles

(000

s)

372,207 vehiclesOct ’14

'09 '10 '11 '12 '13

65.8

80.6

104.5110.3 114.9Houston Exports - $ Billions

Source: U.S. International Trade Administration

'09 '10 '11 '12 '13 '14 -YTD

$61.95

$79.48$94.88 $94.05 $97.98 $93.82

Average Price of Crude - $/Barrel

Source: U.S. Energy Information Administration

'09 '10 '11 '12 '13 '14*

5,860 5,392 5,380

10,936

19,24921,870

Texas Oil Wells Completed

Source: Texas Railroad Commission

'09 '10 '11 '12 '13 '14*

944 978 1,079

1,457

1,9262,198

Texas Avg. Daily Production(Barrels/Day, 000s)

Source: Texas Railroad Commission *estimate

Spirit of Houston Present

Jun Jun 24, 2014 Jul 17, 2014 Aug 08, 2014 Sep '14 Sep 24, 2014 Oct 16, 2014 Nov 07, 2014 Dec 02, 201460

70

80

90

100

110Spot Price, West Texas Intermediate

Source: U.S. Energy Information Administration

$ Pe

r Ba

rrel

Impact of Crude Price Drop on Cash FlowsTexas Production (Daily Avg.) 2.0 million barrels

WTI Price Drop Since June $46.10

Lost Potential Revenue

Daily $92.2 million

Monthly $2.8 billion

Annual $32.4 billion

WTI = West Texas Intermediate, the U.S. benchmark for light sweet crudeSource: Partnership calculations based on data from the Texas Railroad Commission and U.S. Energy Information Administration

Impact of Crude Price Drop on Cash FlowsTexas Production (Daily Avg.) 2.0 million barrels

WTI Price Drop Since June $46.10

Potential Revenue

Daily $92.2 million

Monthly $2.8 billion

Annual $32.4 billion

WTI = West Texas Intermediate, the U.S. benchmark for light sweet crudeSource: Partnership calculations based on data from the Texas Railroad Commission and U.S. Energy Information Administration

Spirit of Houston Yet To Be

Economic Drivers in ’15• U.S. Economy• Construction• International• Population

Professional Services

Hotels, Bars, Restaurants

Adm

inisstrative Support

Construction

Local Education

Retail

Wholesale

Transportation, Warehousin...

Other Services

Other G

overnment

Educational Services

Finance & Insurance

Real Estate

Arts, Entertainm

ent, Recr...

9.3 9.38.4 8.2 7.7

6.6

3.5 3.02.2 1.9

1.2 1.1 0.8 0.7

-3.3

-9.2

Manufactu

ring

En-ergy

2015 - Partnership Employment Forecast

• Cuts to exploration budgets• 20% - 50%

• Drop in the rig count• 500 or more

• Wells drilled• 9,000 fewer

• Industry layoffs• Oil field services• Equipment manufacturing• Exploration and production

• ’15 Forecast Summary– 62,900 jobs– 2.2 percent increase– 3.0+ million by Dec

“Are these the shadows of things that will be or the shadows of things that may be?”

'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '161.5

1.8

2.0

2.3

2.5

2.8

3.0

0

20

40

60

80

100

120

140

160

Oil Prices and Employment Growth

Employment Oil Prices

Source: U.S. Energy Information Administration and Texas Workforce Commission data

Jobs(millions)

WTI($/bbl)