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2020 Mission Report

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2020 Mission Report PROTECTING THE FORCE PRESERVING THE BENEFIT 2020 MISSION REPORT STRENGTHENING THE BENEFIT IN UNPRECEDENTED TIMES As the COVID-19 pandemic upended the retail industry, the Army & Air Force Exchange Service leaned forward in 2020 to provide mission-essential support whileEarly inpreserving the pandemic, the benefit the Exchange for Warfighters resolved past, to keep present associates and future. working when Exchange continued to honor this commitment, ending 2020 without a single military communities needed them most. As worldwide job losses soared, the layoff or furlough. Likemortar its retail, private-sector concession counterparts,and restaurant the sales, Exchange e-commerce saw salesa significant through reduction in daily foot traffic. While this negatively impacted brick-and- ShopMyExchange.comThe Exchange responded increased quickly byto the47%. in-store sales drop, making responsible decisions to improve liquidity. Besides reducing expenses, the Exchange dramatically rebalanced inventory purchases to reflect changes in pandemic needs, delayed capital projects, and worked with suppliers and creditors to improve merchandise flow and liquidity. Through these measures, the Exchange ended 2020 with an even stronger balance sheet than before the pandemic began. This strength will provide operational flexibility to reinvest in the post-pandemic recovery. Theprograms Exchange that recorded promote $7.5military billion readiness in revenue and in resiliency 2020 with including $218 million Child, in dividend-eligibleYouth and School earnings. Services, This enabled the Exchange to contribute $153 million in dividends to support critical Quality-of-Life Armed Forces recreation Centers and more. In the past 10 years, the Exchange distributed more than $2.1 billion to these programs. CDC recommended face coverings or the Department of Defense mandated their wear, the Exchange Providing a safe, sanitized and secure environment was the Exchange’s top priority in 2020. Before the distributed personal protective equipment to all frontline and distribution center associates. PXs andduring BXs the worldwide holiday shopping required season, physical the distancing, Exchange regularlyspread out disinfected its holiday frequently sales over atouched 12-week surfaces, period, and placed clear acrylic barriers at cash registers and customer service desks. To reduce crowds an industry-leading approach that proved successful. Despite an unprecedented 2020, the Exchange’s long-term financial outlook is strong, and the organization remains cash flow positive. The Exchange is well-positioned for a post-pandemic rebound, with plans to intensify online shopping, increase capital efficiencies and further emphasize collaboration with the commissary and sister exchanges. community knows it can count on its Exchange to maintain mission-essential support, even in times In the words of then-Joint Base San Antonio Commander Brig. Gen Laura Lenderman, “Our of widespread disruption and uncertainty.” have the same peace of mind, knowing the Exchange will always provide care and comfort—no It is the Exchange’s mission to ensure all Soldiers, Airmen, Guardians and military communities matter the circumstances. Tom Shull 2 Director/Chief Executive Officer 2020 BOARD OF DIRECTORS Secretary of the Air Force have oversight responsibility of the Army & Air Force Exchange Service Per Army Regulation 215-8/Air Force Instruction 24-211 (I), the Secretary of the Army and the Board of Directors and exchange operations. Lt Gen LTG Mr. Brian T. Kelly Duane A. Gamble Tom C. Shull, SES Chairman Vice Chairman Director/CEO, Army & Air Force Deputy Chief of Staff, Manpower, Exchange Service Deputy Chief of Staff, G-4, HQDA Personnel & Services (HQ USAF/A1) (DALO-ZA) LTG LTG CMSAF Thomas A. Horlander Jason T. Evans JoAnne S. Bass Chief Master Sergeant of the Air Military Deputy for Budget, HQDA Deputy Chief of Staff, G-9, HQDA (ASA FM) (DAIN-ZA) Force (AF/CCC) SMA MG Maj Gen Michael A. Grinston Tammy S. Smith James D. Peccia Special Assistant, Assistant Deputy Assistant Secretary of the Air Secretary of the Army (Manpower & Sergeant Major of the Army (DACS/ SM) of Life Force, Budget (SAF/FMB) Reserve Affairs) & Director, Quality MG Ms. Brig Gen Mr. David W. Ling Kimberly K. Toney, SES John N. Tree Horace “H.L.” Larry, SES Executive Director, Air Force Mobilization Assistant to the Air Commanding General, 79th Theater Director, Air Force Services (HQ AF/A1S) Sustainment (AFRC-RCA-CG) Personnel Center (AFPC/CA) Force Chief of Staff (HQ USAF/CC) 3 MILITARY COMMUNITY SUPPORT Mission Support • • Asia691,000 and militaryEastern uniformsEurope outfitted at cost in 2020 • More than 300 facilities in austere locations in Southwest Overseas Support Mobile field exchanges for military exercises and disaster support • • • 7 plants (bakeries and water) Activity5.9 million schools baked goods produced Retail1.8 million meals served in Department of Defense Education • • 4,920 stores with operations in more than 30 countries, 50 states and • four U.S. territories 121 main PXs/BXs stocked with national brands • 605 convenience stores (Expresses, gas stations, troop stores, specialty Camp Taji, Iraq • Onlinestores, shopping,Class Six locations) including privileges for honorably discharged Veterans Restaurants167 Military Clothing stores • • • 1,700 restaurants with BE FIT options Services45 restaurants opened in 2020 74 million meals served • dentistry and optometry • 3,618 mall stores and kiosks, including wellness services such as • internet16 of 75 movieservices theaters operational during the pandemic • 183,000 subscribers directly supported through Exchange-contracted Veteran and Spouse Employment 36 self-serve micro markets opened in 2020 • • • 85% of associates are connected to the military 45% of associates are Veterans, spouses or dependents • 9,624 Veterans and 37,888 military spouses have joined the Exchange Worldwideworkforce since Logistics 2013 1,719 Wounded Warriors hired since 2010 • rd largest shipper in the Defense Transportation System • 11 distribution centers • 3 • 11th • 45 million cases shipped largest private retail fleet ® MILITARY13.8 million STAR miles driven • • • Total benefit: $429 million • Lowest flat-rate retail MILITARYAPR (10.24%) STAR® 0% interest Military Clothing line 1 in 5 transactions on 4 $2.1B IN DIVIDENDS TO QUALITY-OF-LIFE PROGRAMS IN LAST 10 YEARS FINANCIAL HIGHLIGHTS finance revenue & other inc. concession sales $10.6 $10.6 gas sales $0.3 $0.3 sales excluding gas $402 $386 $9.8 $384 $376 $0.3 $9.3 $373 $369 $1.6 $1.7 $0.3 $8.6 $8.7 $8.6 $8.5 $8.4 $342 $1.7 $0.3 $0.3 $0.3 $0.3 $332 $1.6 $0.3 $1.9 $2.0 $1.5 $1.6 $1.7 $279 $1.6 $1.7 $1.8 $7.5 $1.6 $0.3 $1.1 $1.0 $1.1 $1.2 $1.2 $1.4 $218 $0.7 $6.8 $6.6 $6.0 $5.8 $5.6 $5.5 $5.6 $5.5 $5.4 $5.1 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 TOTAL REVENUE ($ BILLIONS) EARNINGS SUBJECT TO DIVIDENDS ($ MILLIONS) MARINES/NAVY 6.0% AIR FORCE 5.9% 5.8% 5.6% 5.6% $238 ARMY 5.1% $224 $225 $22 $219 $223 $209 $217 4.3% $206 $25 $21 $19 $17 4.0% $203 $16 $23 3.7% $13 $21 $80 $76 $77 $153 3.2% $74 $76 $75 $16 $69 $68 $69 $48 $121 $117 $117 $125 $136 $128 $124 $129 $126 $89 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 EARNINGS PERCENT OF SALES ARMY, AIR FORCE, MARINES/NAVY DIVIDENDS ($ MILLIONS) 899 883 863 $400 825 816 819 $346 803 802 793 799 $284 $265 $252 $228 $246 $217 $208 $198 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 ACTIVE DUTY ARMY & AIR FORCE (THOUSANDS) CAPITAL EXPENDITURES ($ MILLIONS) RESTAURANTS/FOOD ® CONVENIENCE MAIN STORE MALL E-COMMERCE MILITARY CLOTHING MILITARY STAR % SALES BY TENDER TYPE with gas (Direct and Concession) Finance Revenue MILITARY STAR® Bank-Issued 19% Credit/Debit Cards 33% 28% 15% 10% 7% 3% 3% 76% Cash/Check/ Other 5% TOTAL 2020 REVENUE COMPOSITION 5 Cairo Cairo Agadez Agadez Niamey Niamey Cairo Manda Bay Manda Bay Agadez Niamey RESILIENCY DOWNRANGE: Serving at the Tip of the Spear For more than 125 years, the Exchange has Misawa AB Rodriguez Range been a lifeline to America for Warfighters Cp Bonifas Cp Casey Manda Bay Cp Hovey serving in austere locations. Korea DC/Bakery USAG Yongsan Misawa AB Cp Market Rodriguez Range Pohang Mujuk Cp Bonifas K-16 USAG Daegu Cp Casey Osan AB Japan DC/ Yokota AB Cp Walker Bakery Cp Hovey Cp Humphreys Through small storefronts, imprest fund activities and storesPusan Korea DC/Bakery Sagimahara USAG Yongsan Kunsan AB Cp Market Cp Zama Pohang Mujuk Cp Carroll K-16 Jinhae Cp Fuji USAG Daegu Cp Henry Osan AB Japan DC/ Yokota AB Cp Walker Bakery offers deployed troops a taste of home, including drinks, snacks, Cp Humphreys Pusan Sagimahara Kunsan AB Cp Zama on wheels known as mobile field exchanges, the Exchange Cp Carroll Jinhae Cp Fuji Cp Henry hygiene products and more. Torii Station Cp Shields JWTC Cp Gonsalves Kadena AB Cp Schwab Misawa AB Cp Lester Rodriguez Range Cp Hansen Cp Foster Cp Bonifas MCAS Futenma Cp Courtney Cp Casey During Exercise DEFENDER-Europe 20, the largest U.S. exercise Torii Station Cp Hovey Cp McTureous Cp Shields Korea DC/Bakery Okinawa DC/Bakery White Beach JWTC Cp Gonsalves USAG Yongsan Kadena AB Cp Market in Europe in more than 25 years, the Exchange servedCp Kinser more Cp Schwab Pohang Mujuk Cp Lester K-16 Naha Port Cp Hansen USAG Daegu Japan DC/ than 17,000 troops.
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