Board of Directors Meeting December 1, 2015 Noon to 1:30pm EST Brand USA Board of Directors
Arne Sorenson Tom Klein Barbara Richardson Daniel Halpern Andrew Greenfield Chair Vice Chair Vice Chair Treasurer Secretary
John Edman Kyle Edmiston Maryann Ferenc
Randy Garfield Rossi Ralenkotter Mark Schwab Welcome to our New Board Members
Kyle Edmiston Maryann Ferenc Rossi Ralenkotter Thank You
Caroline Beteta George Fertitta Roy Yamaguchi Executive and Senior Management
Chris Thompson President & CEO
Anne Madison Don Richardson David Whitaker Chief Strategy & Chief Financial Officer Chief Marketing Officer Communications Officer
Carroll Rheem Tom Garzilli Karyn Gruenberg Stanley Mattos VP, Research & Analytics SVP, Global Sponsorships SVP, Partner Marketing VP, Operations & Strategic Alliances Agenda
● Opening Remarks (Arne Sorenson) Call the Meeting to Order Approval to Conduct the Meeting in Closed Session Introductions: Management, Legal Counsel, and Invited Guests
● Approval of the Minutes from the September 18, 2015 Meeting* ● CEO Report ● Finance Committee Report ● Audit Committee Report ● Governance and Nominating Committee Report ● Business Planning Update ● Marketing Committee Report ● Questions/Answers ● Discussion and Closing Remarks CEO REPORT CEO REPORT
Chris Thompson President & CEO Brand USA CEO Report
● General Updates ● Organizational Updates ● Office Renovation Updates ● Expo Milano Recap ● IPW: Proposed Sponsorship The Brand USA Marketing Organization
David Whitaker Chief Marketing Officer
Vice President, Vice President, SVP, SVP, Vice President, Global Trade Integrated Partner Marketing Global Research & Development Marketing & Strategic Alliances Sponsorships Analytics
open open
Karyn Gruenberg Tom Garzilli Carroll Rheem CEO Report
● General Updates ● Organizational Updates ● Office Renovation Updates ● Expo Milano Recap ● IPW: Proposed Sponsorship American Food 2.0: United to Feed the Planet
● The USA Pavilion showcased the United States as an innovator in the food sector and in many aspects culture, science, and business.
● Themed “Feeding the Planet: Energy for Life,” the World Expo took place in Milan, Italy from May 1 to October 31, 2015.
● More than 20 million visitors sampled the flavors of over 140 countries and international organizations. Food Truck Nation
● Brand USA was the featured partner in the USA Pavilion at Expo Milano, presenting Food Truck Nation, which exemplified the creative culinary revival of food trucks in small and large towns across the United States.
● Food Truck Nation anchored itself in the global conversation #TasteUSA, inspiring people to come experience the USA, one dish at a time. Preliminary results
Total number of days: 184 Total participating countries: > 140 Heads of state and government attending: 60 Total visitors to Expo Milano: 21.5 million. Total visitors to USA Pavilion: 6.125 million. Percentage of Expo visitors at USA Pavilion: 28.5% Total visitors to Food Truck Nation: 400,000 Average Food Truck Nation visitors/day: 2,174 Media and PR
Brand USA and our partners fared very well on earned media, where we captured nearly 20 percent of USA Pavilion-related impressions. Social Media
On social media, Brand USA leveraged Expo participation and content to the tune of more than 200 consumer posts.
These posts were global and across our markets to highlight our participation at Expo, our partners’ participation and the delightful culinary experiences across the United States. CEO REPORT
Chris Thompson President & CEO Brand USA CEO Report
● General Updates ● Organizational Updates ● Office Renovation Updates ● Expo Milano Recap ● IPW: Proposed Sponsorship Brand USA Finance Committee
Daniel Halpern Chair
Andrew Greenfield Tom Klein Barbara Richardson Arne Sorenson Finance Committee Report
Daniel Halpern Chair, Finance Committee
Don Richardson Chief Financial Officer Highlights
Above the Target of $117 Million in Contributions . $2M above the FY 2015 goal of $45 million for cash contributions YTD September 30, 2015, cash contributions above rebalanced budget by $2 million Cash contributing partners include Las Vegas Convention & Visitors Bureau; San Diego Tourism Authority; State of Texas; Los Angeles Tourism & Convention Board . $10.5M above the FY 2015 goal of $70 million for in-kind contributions YTD September 30, 2015, in-kind contributions above budget by $10.5 million $43 million of In-Kind Contributions were received during the month of September 2015 Highlights (Continued)
Expenses . Expenses are $5 million (or 3.4%) over budget at fiscal year end, primarily due to the timing and additional servicing of Partner Marketing Services spending ESTAs . We have identified and/or made ESTA submissions which exceed the FY 2015 $100 million match goal by $53 million Cash Position . Cash position remains strong and is $61.3 million, or 54% above the reserve requirement of $40 million Financial Management System Implementation Status
We successfully implemented our new financial management system, Microsoft Dynamics GP on October 1, 2015.
End user training has been completed and the system has been fully operational through one monthly cycle (October 2015 financial closing). Financial Management System Implementation Status (Continued) Audit Committee Meeting of the Board of Directors
Tom Klein Vice Chair, Board of Directors Chair, Audit Committee Audit Committee Report
Tom Klein Chair
John Edman Randy Garfield Mark Schwab Audit Committee Report
Tom Klein Chair, Audit Committee
Don Richardson Chief Financial Officer FY 2015 Financial Statement Audit Status
Moss Adams, our external auditor, completed their interim audit fieldwork 3 days sooner than planned. They cited our extensive preparation as the reason for their early completion.
Final audit fieldwork began on November 30 and will continue until December 11, 2015.
Moss Adams remains on track to deliver its audit report no later than January 29, 2016. Governance & Nominating Committee Report
Andrew Greenfield Chair, Governance & Nominating Committee Governance & Nominating Committee Report
Andrew Greenfield Chair
Daniel Halpern Mark Schwab Governance & Nominating Committee Report
Andrew Greenfield Chair, Governance & Nominating Committee
Chris Thompson President & CEO Governance & Nominating Committee Report
● Adoption of amended bylaws* ● Board officer and committee appointments* ● Board and committee meeting dates Adoption of Amended Bylaws
. Article IV, Section 2: Number, Appointment, and Qualifications of the Board of Directors Changed expertise of director from “intercity passenger railroad sector” to land or sea passenger transportation sector.” Added qualifications: . Knowledge of international travel promotion or marketing . United States citizen . Current or former chief-level position or equivalent . Broadly represent various regions of the United States. . At least five directors with experience in multinational marketing budgets. . At least two directors with audit committee financial expertise . Article IV, Section 3: Term Changed 1- and 3-year terms (applicable to initial board) to 3-year terms . Article IV, Section 6: Vice-Chairman Deleted term limit . Article IV, Section 7: Vacancies Added: Directors filling vacancies may serve two additional consecutive terms . Article V, Section 6: Chairperson of Committees Added: May designate a member to preside over meeting if chair not present . Article VI, Sections 5 and 6: Secretary and Treasurer Deleted term limits Proposed Board and Committee Leadership Designations
Board Leadership Designations
Chair
Arne Sorenson
Vice Chairs
Tom Klein Barbara Richardson Proposed Board and Committee Leadership Designations
Officer Designations
Arne Sorenson Tom Klein Barbara Richardson Chair Vice Chair Vice Chair
(to be determined) Assistant Secretary
Andrew Greenfield Daniel Halpern Secretary Treasurer
Christopher Thompson Executive Director Proposed Board and Committee Leadership Designations
Committee Members Finance Daniel Halpern, Chair Andrew Greenfield To m K l e i n Barbara Richardson Arne Sorenson Audit Tom Klein, Chair John Edman Randy Garfield Mark Schwab Governance and Andrew Greenfield, Chair Daniel Halpern Nominating Maryann Ferenc Marketing Barbara Richardson, Chair John Edman Kyle Edmiston Randy Garfield Rossi Ralenkotter Mark Schwab Conflict of Interest Daniel Halpern, Chair Maryann Ferenc Andrew Greenfield Barbara Richardson Brand USA Finance Committee
Daniel Halpern Chair
Andrew Greenfield Tom Klein Barbara Richardson Arne Sorenson Brand USA Audit Committee
Tom Klein Chair
John Edman Randy Garfield Mark Schwab Brand USA Governance & Nominating Committee
Andrew Greenfield Chair
Maryann Ferenc Daniel Halpern Brand USA Marketing Committee
Barbara Richardson Chair
John Edman Kyle Edmiston Randy Garfield Rossi Ralenkotter Mark Schwab Brand USA Conflict of Interest Committee
Daniel Halpern Chair
Andrew Greenfield Maryann Ferenc Barbara Richardson Board Meeting Dates*
Q1-FY2016 November 10, 2015 Marketing Committee (conference call) December 1, 2015 Finance Committee and Board Meeting
Q2-FY2016 March 31, 2016 Board Meeting
Q3-FY2016 June 9, 2016 Board Meeting
Q4-FY2016 September 21, 2016 Board Meeting
Q1-FY2017 December 9, 2016 Board Meeting
* Additional committee meeting dates to be announced BUSINESSCEO PLANNING REPORT Business Plan Update
Chris Thompson President and CEO
Anne Madison Chief Strategy & Communications Officer FY16 Dashboard
Travel Lifecycle Consumer Destination Favorable Familiarity
2013 2014 2015 2016 Target Trending
90% 92% 93% 93% (2% increase (1% increase (maintain from from 2013) from 2014) 2015) FY16 Dashboard
Website and Social Engagement
2013 2014 2015 2016 Target Trending
9.9 million 40.1 million 41.6 million 44.2 million (305% increase (4% increase (8% increase from 2013) from 2014) from 2015) FY16 Dashboard
Intent to Visit the USA
2013 2014 2015 2016 Target Trending
52% 60% 59% 67% (15% increase (1% decrease (13% increase from 2013) from 2014) from 2014) FY16 Dashboard
Market Share
2013 2014 2015 2016 Target Trending
2015 results 6.40% total; 6.65% total; 6.75% total; expected mid‐ 13.00% long‐haul 13.30% long‐haul 13.70% long‐haul 2016 Global Long Haul Arrivals and Market Share FY16 Dashboard
Consumer Net Promoter Score
2013 2014 2015 2016 Target Trending
43.4% 46.4% 44.7% 48.0% FY16 Dashboard
Percentage of Federal Match Received
2013 2014 2015 2016 Target Trending
100% 100% 100% 100% FY16 Dashboard
Ratio of Cash/In-Kind Contributions
2013 2014 2015 2016 Target Trending
27% cash; 31% cash; 42% cash; 50% cash; 73% in‐kind 69% in‐kind 58% in‐kind 50% in‐kind FY16 Dashboard
Partner Value
2013 2014 2015 2016 Target Trending
610 partners 339 partners; 475 partners; 577 partners; 90%+ program 97% retention 94% retention 94% retention retention rate FY16 Dashboard
Compliance
2013 2014 2015 2016 Target Trending
100% 100% 100% 100% FY16 Dashboard
Cycle Time
2013 2014 2015 2016 Target Trending
Cash: 88 days; Cash: 107 days; Cash: 85 days; N/A In‐Kind: 140 days In‐Kind: 167 days 120 days in‐kind U.S. China Tourism Year VISIT THE USA URL UPDATE America is:
● 1 Continent ● 3 Sub-continents – North America – Central America North America – South America ● 35 Countries
Central America
South America VisitTheUSA.com Introduction
Strategy: . Soft Launch . Keep DiscoverAmerica.com Live in Market . Expand GoUSA.com in Asian Markets . Completed Steps (Prep and Communication) Registered URL and finalizing communications strategy and marketing implementation plan (June/July) Announced at ESTO in Portland, Oregon (August 23-26) Announced during 3 board and committee meetings (September) . Next Steps (Continue to Communicate and Prepare for Launch) . Continue communicating to key stakeholders through primary channels (Sept.- Nov.) . Formally announce at WTM (November) . Develop brand / identity standards and related creative (November-December) . Prepare for launch / finalize marketing and communications logistics, stationery, core materials (December-January) . Promote through planned channels and as part of major campaigns (January 2016 onward) Marketing Committee Meeting Report
Barbara Richardson Vice Chair, Board of Directors Chair, Marketing Committee Brand USA Marketing Committee
Barbara Richardson Chair
John Edman Kyle Edmiston Randy Garfield Rossi Ralenkotter Mark Schwab Marketing Committee Report
Barbara Richardson Chair, Marketing Committee
David Whitaker Chief Marketing Officer GIANT SCREEN FILM: NATIONAL PARKS ADVENTURE NATIONAL PARKS ADVENTURE Targeted Key International City Launch Events
AUSTRALIA DENMARK NETHERLANDS Sydney Copenhagen The Hague .IMAX Theatre Sydney .Tycho Brahe Planetarium .Omniversum Melbourne FRANCE SWEDEN . Museum Victoria Paris Stockholm CANADA .La Geode .Cosmonova Ontario GERMANY UNITED KINGDOM .Ontario Science Centre Frankfurt London Montreal .Auto & Technik Museum British Film Institute Montreal Science Centre, Old Port HONG KONG CHINA Hong Kong BRAZIL Beijing .Hong Kong Space Museum TBD .China Science & Technology Museum INDIA ITALY .National Film Museum Mumbai TBD Shanghai .Nehru Science Center JAPAN .Shanghai Science & Technology MEXICO Museum TBD Mexico City .Papalote Museo del Nino National Parks Adventure
• Multi-million dollar sponsors and partnerships Expedia - 1st Global sponsor Subaru - 1st non-industry global sponsor
Other Sponsors: REI and Youku More to come! as a will generate significant revenue while rnational media reach value* media reach rnational More than $42 million in inte More $6 ($3 cash million from contributions million in ESTA Subaru) Expedia and $3 million from (of eligible in-kind contributions million in ESTA-match $23.7 million are $8 and committed million are which $15.7 projected) More than 4 million international movie-goers million international 4 than More million in cash and in-kind contributions $29.7 revenue producer office box million in $8 Approximately additional $1 million An of in-kind $150k and in cash (domestic) REI from contributions . . . . *Source: Wasserman/Geometry Joint ROI Study inspiring global travelers to Visit the USA the USA to Visit inspiring global travelers National Parks Adventure National Parks is 2018, National Parks Adventure year-end By generate: to projected National Parks Adventure Adventure National Parks Driver and Visitation Revenue $8 million* $8 million $6 million date to : $15.7 million : $15.7 to * International and Domestic Total Return: Total $37.70 Million in Revenue $37.70 Box Office-Producer Revenue: Revenue: Office-Producer Box Cash Contributions: Contributions: Cash In-Kind Contributions date Contributions: Projected . . . . and $42 Million+ in Media Value and $42 Million+ in Media Value $13.65 Million over 36 Months over Total Investment: $10.15 million $10.15 Total Production Costs: Production Total Costs: and Marketing Distribution Total $3.5 million – –
National Parks Adventure Adventure Parks National Driver as a Revenue Proposed: The Next Big Film*
Estimated Budget
Expense Category FY2016 FY2017 FY2018 TOTAL Film Production $1,500,000 $6,750,000 $2,062,500 $10,312,500 Distribution/Marketing - - $2,750,000 $2,750,000 $1,500.000 $6,750,000 $4,812,500 $13,062,500
*Requires board approval to proceed and a $1.5 million budget increase for FY2016 Proposed: The Next Big Film
America’s Treasures: A cross-country and cosmopolitan journey through the USA, focusing on popular culture, music, entertainment, and innovation – Leverage the first film experience to: • Optimize contributions and film marketing • Develop additional content-driven marketing tools – Estimated to deliver combined marketing, media, and contributions of nearly $100 million • Estimated Investment: $13 million – Proposed Timeline: • Post Board Meeting: Finalize contract • February 2018: Launch film Proposed Producer & Distributor: MacGillivray Freeman Films
Why MacGillivray Freeman? Known Return on Invested Revenue Uniquely Qualified • Best of the Best – World’s leading producer and distributor of giant-screen films – 2 Academy Award nominations – 5 of the top 10 highest-grossing IMAX films • Proven – 38 films for IMAX® and giant-screen theaters over 40 years – $1 billion in worldwide ticket sales – Actual costs of National Parks Adventure in line with budget • Destination Experience – Produced Adventures in Wild California and National Parks Adventure showcasing destinations through immersive documentary-style storytelling – Benefit of experience gained from more than two years working together on National Parks Adventure Time is of the Essence Decision is Based on Good Faith and Good Will REQUESTS FOR PROPOSALS UPDATE Agencies of Record Update DISCUSSION AND QUESTIONS/ANSWERS Thank You!
Travel Industry Information @BrandUSA on Twitter TheBrandUSA.com
Consumer Information @DiscoverAmerica on Twitter Facebook.com/DiscoverAmerica DiscoverAmerica.com VisitTheUSA.com #VisitTheUSA