-7.3

5.0 5.7 4.8 6.2 7.0

6.3 2.2

*Not Seasonally Adjusted; **January through August average Source: BLS; Loren Scott’s Louisiana Economic Outlook; Louisiana Workforce Commission; Moody’s Analytics; Economic Modeling Systems Incorporated; BRAC analysis

Last year, BRAC forecasted job growth at 2.3% in 2014 Nonfarm new net jobs and employment* (thousands of people)

Forecasted Job Growth

Historical

Low Forecast

2010 2011 2012 2013 2014 2015 364.2 369.3 375.0 379.8** 386.0-392.3 393.0-401.5

-2.0% 1.4% 1.6% 1.3%

Total Employment

Growth Rate

High Forecast

1.6-3.3% 1.8-2.3%

Moody’s 1.6% 1.8%

EMSI 2.0% 1.8%

Dr. Scott 3.3% 2.3%

Forecasts

Most conservative

Least conservative

Source: Bureau of Labor Statistics; BRAC analysis

Regional employment growth continues, meeting forecast expectations Nonfarm employment, not seasonally adjusted

Continued Job Growth

330,000

340,000

350,000

360,000

370,000

380,000

390,000

400,000

410,000

Feb-

10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Dec

-10

Feb-

11

Apr

-11

Jun-

11

Aug

-11

Oct

-11

Dec

-11

Feb-

12

Apr

-12

Jun-

12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Oct

-14

Dec

-14

364.2 369.3 384.9 Total

annual

The regional economy is achieving its forecast expectation for 2014, trending at 2.7% employment growth YOY

375.0 393.1

September 2014 employment of 398.8k was the highest ever in the region

Source: Bureau of Labor Statistics; BRAC analysis

Regional employment growth has outperformed Louisiana and the nation Nonfarm employment, not seasonally adjusted (percent change)

Job Growth Performance

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Baton Rouge Area LA US U.S.

*Peer cities include: Austin, Birmingham, Jackson, Little Rock, Memphis, Mobile, Nashville, and Raleigh Source: Bureau of Labor Statistics; BRAC analysis

The Capital Region unemployment remains lower than the state and peer metro average, but has been trending upwards in recent months

Unemployment rate (percent)

Regional Unemployment

2013 2012

3%

4%

5%

6%

7%

8%

9%

Baton Rouge Area Peer cities* U.S.

6.3%

6.1%

6.2%

Aug

.

Aug

.

Oct

.

Dec

.

Feb.

Apr

.

Jun.

Aug

.

Oct

.

Dec

.

Feb.

Apr

.

Jun.

2014

Source: Louisiana Workforce Commission

Unemployment claims are down 7% compared to 2013, continuing a downward trend since 2010

Average unemployment insurance initial claims and weeks claimed 2010-2014

Unemployment Claims

250

350

450

550

650

750

850

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Average Initial Claims 2010-2014

2010 2011 2012 2013 2014

2500

4500

6500

8500

10500

12500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Average Weeks Claimed 2010-2014

2010 2011 2012 2013 2014

Source: Bureau of Labor Statistics; BRAC analysis; *Data September 2013 to September 2014

82% of the local economy experienced growth in 2014, led by the construction and business services sectors

Percent of total 2014* job distribution and growth

Local Economy

68%

12%

8% 7%

Job Growth

13%

13%

12% 9%

18%

5%

19% 7% 7%

Manufacturing

Construction

Government

Professional & Business Services

Education & Health Services

Professional & Business Services

Government Education & Health Services

Construction

Job Distribution Percent

Leisure & Hospitality

1% - Financial Activities 2% - Other Services

Financial Activities

Other Services

3% - Leisure & Hospitality 3% - Manufacturing

“8% = Trade, Transportation, Utilities, and Information – sectors that experienced no growth (18% of economy)

Source: E MSI, BRAC analysis

Over the last five years, there has been significant growth from education and health services, leisure and hospitality, and manufacturing

Bubble diameter is proportional to number of employees in 2013

Employment Growth Sectors: •  Education & Health Services •  Leisure & Hospitality •  Manufacturing

Financial'Ac)vi)es'

Manufacturing'

Local'Gov’t'&'Public'Ed'

Leisure'&'Hospitality'

Construc)on'

Retail'

State'Gov’t'&'Higher'Ed'

Prof.'&'Bus.'Services'

Educa)on'&'Health'Services'

Growth Sectors B

aton

Rou

ge M

SA E

mpl

oym

ent G

row

th 2

009-

2013

CA

GR

(%)

2013 Baton Rouge MSA Location Quotient -3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0.0 1.0 2.0 3.0

Source: E MSI, BRAC analysis

Health care contributed significantly to growth, with industrial-related sectors also growing at high rates

Bubble diameter is proportional to number of employees in 2013

Growth Sectors B

aton

Rou

ge M

SA E

mpl

oym

ent G

row

th 2

009-

2013

CA

GR

(%)

2013 Baton Rouge MSA Location Quotient

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

Construc)on'of'Buildings'

Finance and Insurance

Management'of'Companies'

Employment Growth Sectors: •  Arts, Entertainment, & Recreation •  Fabricated Metal Product

Manufacturing •  Specialty Trade Contractors •  Construction of Buildings

Accom. & Food Services

Arts, Ent., & Rec.

Specialty Trade Contractors

Heavy & Civil Engin. Construction

Fabricated Metal Product Manu.

Chemical Manu.

Petroleum & Coal Products Manu.

Health Care & Social Assistance

Ed. Services

Admin., Support, Waste Mgmt & Remediation Services

Prof., Sci. & Tech. Services

*Baton Rouge area includes Ascension, East Baton Rouge, and Livingston Parishes Source: MLS; GBRAR; Brookings Institution

The Baton Rouge Area’s real estate market showed growth in sales and home prices over the past year

Baton Rouge Area* home sales (units sold)

Real Estate Market

0

100

200

300

400

500

600

700

800

900

1000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2013 2014

•  Home sales are up roughly 1.9% for 2014 compared to 2013

•  2014 average home sales prices in the Baton Rouge Area increased 3.7% from the 2013 average

Source: City of Baton Rouge and Parish of East Baton Rouge Inspection Division

Residential and commercial permitting are both up since 2013 New East Baton Rouge residential and commerical units permitted

Permitting

0'

100'

200'

300'

400'

500'

600'

700'

Q1' Q2' Q3' Q4'

Commercial'2013' Commercial'2014'

Residen)al'2013' Residen)al'2014' •  Residential permitting was up 11% in 2014 (Q3) compared to 2013 (Q3)

•  Commercial permitting is down 14% in 2014 (Q3) compared to 2013 (Q3)

Current Office Marketing

Total Square

Feet

• Total Office Space Square Feet (Class A & Class B) = 6,225,466 • Total Available Office Space Square Feet = 729,067 • Total Amount of Available Office Space (5,000 Square Feet of Contiguous Space or

less) = 330,000 • Actual Amount of Functional Contiguous Square Feet Available = 450,000 -550,000 • Total “Theoretical” Vacancy Rate: ~12%

Functional Square Feet

• 36 Buildings with 10,000 Sq. Ft. or More of Vacant Contiguous Space (5 Class A, 12 Class B, 19 Class C) 7 Buildings with 40,000 Vacant Contiguous Space (1 Class A, 3 Class B, 3 Class C)

• Functional Space versus Vacant Space • Obsolete and/or Inadequate “Class B/C” skews Vacancy Rate • Actual Vacancy Rate for Functional Class A and Class B Space: ~7%

Office Market

Projection

• Velocity of national deals indicates few will wait for BTS options • Limited availability of large blocks of space contnue will deter new tenants • Total Vacancy Rate projected to decrease to ~7% in 2015 (~430,000 SF) • Functional Vacancy Rate projected to decrease to ~3% in 2015 (~200,000 SF)

Region includes Ascension, East Baton Rouge, East Feliciana, Iberville, Livingston, Pointe Coupee, St. Helena, West Baton Rouge and West Feliciana parishes *Sales were estimated from sales and use tax collections and rates of each taxing jurisdiction within each parish Source: Local tax offices; BRAC analysis

Regional spending has been slowly but steadily increasing since 2011 Regional spending January 2011 to September 2014 (millions)

Regional Spending

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800 2014 sales tax collections are 7.2% higher than 2013

Source: youreconomy.org

Baton Rouge Area’s business growth rate ranks 26th in the U.S. for the past five years, with small business growth being the driver

The total number of business establishments has increased by 6,226, or an average annual rate of 2.5%, from 2009-2013.

Business Growth Rate

Establishments 2009 2013 Change

Total 62,492 68,718 6,226

Self Employed 21,704 14,309 -7,395

Stage 1 (2-9) 33,700 46,112 12,412

Stage 2 (10-99) 6,411 7,526 1,115

Stage 3 (100-499) 587 674 87

Stage 4 (500+) 90 97 7

O8.5%'

9.2%'

4.3%'3.7%'

1.9%'

SELF' STAGE'1' STAGE'2' STAGE'3' STAGE'4'

27.4%'

60.8%'

10.6%'

1.0%' 0.1%'

SELF' STAGE'1' STAGE'2' STAGE'3' STAGE'4'

Growth Within Stages

Composition by Stages

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total Establishments

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000 New'Startups'

Source: youreconomy.org

The Baton Rouge Area has experienced considerable business growth since the mid 1990s, but business creation has been stagnant in the last three years

Total establishments and new startup creation by year

Business Creation

Source: Bureau of Labor Statistics (BLS), EMSI

The Baton Rouge Area has experienced extremely strong gross regional product (GRP) growth since 2009, driven by a flood of investment into the region

Baton Rouge Area and national GRP/GDP per capita

Gross Regional Product

$30,000.00

$35,000.00

$40,000.00

$45,000.00

$50,000.00

$55,000.00

$60,000.00

$65,000.00

2009 2010 2011 2012 2013

Baton Rouge Area National Average

•  Baton Rouge Area GRP has increased by 24% since 2009

•  This increase amounts to just over $11.9 billion

0

1000

2000

3000

4000

5000

6000

7000

8000

2009 2010 2011 2012 2013

Baton Rouge Area National Average Source: Department of Commerce, International Trade Administration; EMSI

Baton Rouge Area exports per capita have increased 81% since 2009, compared to a national average of 45%

Exports per capita

Exports

•  Baton Rouge Area exports have increased by 81% since 2009

•  This increase amounts to nearly $3 billion

Economy Outlook Business owners are growing more optimistic about the regional economy

Adjectives assessing the overall condition of the Capital Region economy Size of the word is proportional to frequency of response in a survey of business leaders

*Percentages may not sum to 100 due to rounding

Percentage of respondents in a survey of regional business leaders*

2015 Forecasts

1% 0% 3% 5%

30% 27% 20%

11% 2%

2015 ECONOMIC GROWTH FORECAST

No Change

Moderate Decline

Rapid Decline

Moderate Growth

Rapid Growth

83%

88%

The outlook for growth is 3 percentage points lower versus 86% growth outlook in 2014

Don’t Know

4% 0% 3% 5%

74%

9%

Up 25%+

Down 5-10%

Down <5%

Same Up <5%

Up 5-10%

Up 10-25%

Down 10-25%

Down 25%+

90%

60% The outlook for growth is 6 percentage point higher versus 54% growth outlook in 2014

EMPLOYMENT GROWTH FORECAST

*Percentages may not sum to 100 due to rounding

Percentage of respondents in a survey of regional business leaders*

2015 Forecasts

0% 5% 6% 3% 10%

23% 28% 17%

8%

Up 25%+

Down 5-10%

Down <5%

Same Up <5%

Up 5-10%

Up 10-25%

Down 10-25%

Down 25%+

86%

76% The outlook for growth is 1 percentage points lower versus 77% growth outlook in 2013

BUSINESS REVENUE FORECAST

Up 25%+

Down 5-10%

Down <5%

Same Up <5%

Up 5-10%

Up 10-25%

Down 10-25%

Down 25%+

88%

53% The outlook for growth is 4 percentage points higher versus 49% growth outlook in 2013

CAPITAL EXPENDITURE FORECAST

2% 2% 5% 3%

36% 23%

15% 11% 4%

*Respondents were not allowed to choose multiple answers

Workforce, transportation/traffic, and education remain as the top obstacles for businesses in the Capital Region

Percentage of respondents in a survey of regional business leaders*

Survey Responses

19%

13%

8%

7%

6%

6%

5%

3%

2%

Zoning

Regulatory restrictions

Crime rate

Material costs

Access to capital

Tax rates

Infrastructure development delays

Lack of good public school options/cost of private school tuition

Transportation/traffic issues

Workforce issues

Top obstacles 2015 response

28%

*Respondents were allowed to choose multiple answers

Top concerns of area business leaders on availability of qualified workforce

Percentage of respondents in a survey of regional business leaders*

Survey Responses

Candidates lacking “soft skills”

Candidates with unrealistic salary expectations

Finding experienced managers in field

Challenges with recruiting out of state talent to the region

Finding candidates who can pass drug tests or stay drug free

Available workforce obstacles

Finding engineers in your field

High turnover

Finding skilled crafts labor (e.g. welders, pipefitters)

Candidates lacking requisite education or experience

2015 response

23%

19%

11%

11%

5%

6%

6%

3%

2%

27%

37%

28%

13%

15%

7%

7%

13%

6%

2014 response

*Respondents were allowed to choose multiple answers

Transportation infrastructure is the top statewide trend of concern Percentage of respondents in a survey of regional business leaders*

Survey Responses

35%

18%

18%

17%

17%

14%

13%

10%

9%

Transportation infrastructure

State legal climate and tort reform

Insurance

State economic development

K-12 education reform and performance

Tax incentives

Changes to state tax structure/code

State regulatory environment

Statewide trends 2015 response

37%

12%

20%

16%

19%

15%

16%

14%

19%

2014 response

Declining state government budget

*Respondents were allowed to choose multiple answers

For the third consecutive year health care reform/regulations is the top national and international concern

Percentage of respondents in a survey of regional business leaders*

Survey Responses

32%

25%

16%

15%

13%

13%

9%

8%

8%

Health care reform/regulations

Slow pace of recovery from economic recession

A politically divided federal government

Price of energy, including gas and oil

The federal budget deficit

Euro debt crisis

The availability of credit

Federal tax code

Interest rates

2015 response Top national and international trends

38%

34%

N/A

22%

21%

18%

16%

12%

10%

10%

2014 response

Source: Selected national and international economic analyses; Louisiana Economic Outlook, Kiplinger Report ; BRAC analysis

Impact of global and national economic trends in the Baton Rouge Area

Economic Trends 2014-2015 trends Impact Comment

Continued strength in value of the dollar

Growing consensus that the Fed may hike interest rates in 2015 after ending the asset purchase program

Continued sign of strong economy. May earn more on exports. Foreign goods become cheaper so we may see cheaper inputs for business production.

Loren Scott projects 19,600 new jobs in region through 2016 (2.4%+). LA to surpass 2M jobs in 2016. $24B in new projects, $100B across LA.

Business confidence in U.S. will support growth. European economy slowing could impact U.S. exports. China could impact world economy. U.S. Treasury rate projected to remain stable at 2.5%+/- & inflation remain at 2% +/-

WTI crude currently at $75/barrel. If oil is below ratio of 7:1 with gas, gas-based manufacturing less cost competitive, refined oil revenue lower

BR area currently meets EPA standards of 75ppb, EPA may lower eight-hr ozone standards to 60’s (return to non-attainment standard).

Lower natural gas prices are driving growth in manufacturing of petrochem feedstock products

Low natural gas prices ($3.86mmbtu currently) supports continued petrochem manufacturing, spurs further industrial construction.

Potential national EPA regulatory changes, lowering air quality standards for ozone, issues with ERC availability

Falling oil prices (from $100 in 2011 to mid $70’s today)

Foreign direct investment trends for the U.S. will continue

In 2013 U.S. received $258B in total FDI, compared to number two China at $220B

Projected U.S. GDP growth in 2015 at 3.0%+/- but uncertainty in Europe and Asia could impact world economy

-7.3

5.0 5.7 9.9 8.2 6.0 6.5

5.0 3.2

*Not seasonally adjusted; **January through September average Source: BLS; Loren Scott’s Louisiana Economic Outlook; Louisiana Workforce Commission; Economic Modeling Systems Incorporated; BRAC analysis

The Capital Region is projected to continue strong job growth through 2016 Nonfarm new net jobs and employment* (thousands of people)

Projected Growth

Historical

Low Forecast

2010 2011 2012 2013 2014 2016 364.2 369.3 375.0 384.9 393.1** 405.6-413.8

-2.0% 1.4% 1.9% 2.6%

Total Employment Growth Rate

High Forecast

2.1% 1.6-2.4%

EMSI 1.5% 1.6%

Dr. Scott 2.5% 2.4%

Moody’s 2.8% 2.3%

2015 399.1-404.1

1.5-2.8%

Forecasts

Most conservative

Least conservative

*Other includes mining & logging, federal government, wholesale trade, transportation, warehousing & utilities, information, and other services Source: Economic Modeling Systems Incorporated; Moody’s Economy; Louisiana Economic Outlook; BRAC analysis

2015 job growth forecasts by industry sector

Projected Growth

Baton Rouge Area

Construction 1,340 910

Manufacturing 555 366

Leisure & Hospitality 833 152

Other* 961 382

Retail Trade 605 238

Education & Health Services 1,729 1,149

Professional & Business Services 1,784 627

State Government & Higher Education

253 227

Financial Activities 730 164

Net New Jobs Job

Growth %

High Low

$8+ billion in industrial/commercial expansion in two years; more jobs than workers

A booming chemical and refining sector driven by low natural gas prices

Restaurant/hotel expansion follows economic expansion; Bayou Country Superfest success

Potential of Tuscaloosa Marine Shale and increased logging activities

Retail following overall economic growth

Area hospitals continue expansions; outsourcing of government to private

Engineering sector growth; particularly in services and government contracting

State employment losses expected to level out

Local Government 793 161 Slight increases predicted for local government

2.2 – 4.0

0.5 – 2.7

1.5 – 2.8

1.6 – 1.9

0.9 – 2.5

1.4 – 2.2

1.6 - 3.1

0.5 - 0.6

0.8 – 1.3

3.0 – 3.6

4,376 9,583 1.4 – 2.5

Banking and insurance seeing expansion with regional growth

Comment

Source: Economic Modeling Systems Incorporated; BRAC analysis

Job growth is expected to continue in all parishes, led by West Baton Rouge, Livingston, and Ascension

Projected Growth

Livingston 927

West Baton Rouge 513

Pointe Coupee 142

Iberville 149

Ascension 1,436

East Baton Rouge 3,685

East Feliciana 109

West Feliciana 101

Net New Jobs Job Growth %

Juban Crossing, OLOL facility open; suburban growth continues, mnfg companies interested

Louis Dreyfus major new facility, Genesis Energy exp., rail infrastructure improvements

Multiple certified sites on river (shallow draft), additional retail developments. Livonia rail yard

Heavy industrial expansions: Dow, Shintech, SE Tylose, Axial, UPRR track improvements ($500M)

Significant industrial activity expected to continue; housing, suburban, and retail growth

IT growth (IBM, Stixis, Edgear), construction firms continue growth; fabricated materials sector

New short line rail, first certified site (light industrial), Tuscaloosa Marine Shale potential

St. Helena 40 Southland Steel growth; mid-sized industrial company interest, focus on preparedness

3.4

2.5

2.6

3.9

1.8

1.3

2.2

1.0

3.6

BR Armature exp., KPAQ exp. New parish president focused on economic development

Comment

Source: Census Bureau; Moody’s; EMSI; ESRI

Local population growth is projected to continue, with the Baton Rouge Area gaining between 15,000 and 35,000 new residents by 2016

Projected Growth

825 830

835

802 808

815 820

828 835

842 835

845

855

800

810

820

830

840

850

860

2010 2011 2012 2013 2014 2015 2016

Historical*

Historical

Low Forecast

Med. Forecast

High Forecast

Population projection for the Baton Rouge Area (thousands of people)

Performance Rankings Business Facilities’ Metro Area Economic Grow Potential, 2013 #1 Southern Business & Development’s Major Market, 2012 and 2013 #1 Southern Business & Development’s Mid-markets of the Decade #2 Coldwell Banker Real Estate’s Top Booming Suburbs in America, 2013 #2 Business Facilities’ Metro Area Economic Grow Potential, 2014 #2 Milken Institute’s Best Performing Cities for Wage and Salary Growth #3 Business Journal’s Healthiest Small Business Climate in the South, 2012 #8 Forbes America's Engineering Hubs: The Cities With The Greatest Capacity For Innovation #14 Forbes Best States for Business, 2014 #29 Entrepreneur’s Emerging Entrepreneurial Hubs, 2013 Top 5 Site Selection magazine named Capital Region as one of the top ten metro areas (population between 200,000 and 1 million) for new and expanded corporate facilities, 2010-2013 Top 10 Site Selection magazine named BRAC a top ten economic development groups for 2010-2013 Top 10

Thank You Presented by Adam Knapp

President and CEO November 18, 2014