Transit Leap Webinar | July 10, 2019

SDForward.com Today’s Presenters

Coleen Clementson Brian Lane Katie Chalmers Ben Porritt Special Projects Director Senior Transit Planner Service Planning Senior Vice President of SANDAG SANDAG Supervisor Corporate Affairs King County Metro Virgin Trains

3 5 Big Moves NEXT OS COMPLETE Enabling technology CORRIDORS Backbone of the system

FLEXIBLE FLEETS Last mile options TRANSIT LEAP Alternatives to automobiles

MOBILITY HUBS Transfer points

4 A Bold New Vision

5 Brian Lane SANDAG Senior Transit Planner Transit Leap

high frequency | high capacity | high speed | fixed guideway | convenient

7 Improvements Underway

8 Travel Times

9 High Speed Transit

10 Faster Transit Service

11 Better Integration

12 Transition to Electric or Alternative Fuels

Source: https://www.newflyer.com

13 Transit Leap Benefits

14 Transit Leap

15 Katie Chalmers Service Planning Supervisor King County Metro

16 Growing the Transit System – System changes, expansion, and ridership growth in Seattle and King County

Katie Chalmers, Service Planning Supervisor [email protected] What’s Happening in Seattle Expansion of transit funding Supportive policy environment -- external and internal History and success with network redesigns Growing appetite for change & innovation

18 King County Metro Overview Regional & Local Funding Successful transit ballot measures Sound Transit (1996, 2008, 2016) King County (2007) Seattle (2006, 2014, 2015) Unsuccessful ballot measures King County (2014) – “roads and transit”

20 Results of Investment Ridership growth driven by bus service and light rail expansion • Metro service +20% since 2008 • Downtown Seattle commute mode split only 25% SOV Substantial capital programs • Link light rail expansion • RapidRide BRT expansion • Bus lanes and transit priority

21 Policy Environment Metro Policies • Service Guidelines & Strategic Plan • METRO CONNECTS External policies • City transit priority & capital projects • State commute trip reduction law for major employers

22 Network Redesigns

Major redesigns around RapidRide and Link expansions • Link light rail in 2009, 2010, 2016 • RapidRide in 2010, 2011, 2012 • Upcoming changes in 2020, 2021, 2023, 2024, 2025

23 What lessons transfer to other areas? Importance of building support for funding and “virtuous cycle” Transit-supportive policies must be created within agencies as well as at all levels of government Changing environment requires openness to change both in fixed- route network, and in terms of looking at new delivery models in less- developed areas

24 Transit Leap

25 Ben Porritt Senior Vice President of Corporate Affairs Virgin Trains

26 Virgin Trains USA Company Overview 2019 America’s Only Private High Speed Passenger Rail System

 We develop and operate high speed intercity passenger rail systems connecting large population centers

 We currently operate in Florida between Miami and West Palm Beach

− Under construction to Orlando and planning expansion to Central Florida theme parks

 Planning to commence construction in 2020 on our second system connecting Las Vegas to Southern California

Our Florida System(1) Our Las Vegas Expansion(2)

Jacksonville Reno

Sacramento St. Augustine San Francisco

San Jose Bakersfield Daytona Beach

Orlando Barstow Santa Barbara Cocoa Palmdale Las Vegas Victorville Ventura Melbourne Santa Clarita Disney San Bernardino Downtown Vero L.A. Barstow Stuart Palmdale

Jupiter San Diego Victorville West Palm Beach Union Station Boca Raton Fort Lauderdale Current Virgin Trains USA Station Planned Virgin Trains USA Station San Diego Target Future Virgin Trains USA Station Miami Planned Virgin Trains USA Route International Miami Airport Current Virgin Trains USA Route Future Virgin Trains USA Route

Orlando Extension Under Construction

Target Future Virgin Trains USA Route

1. We currently operate between Miami and West Palm Beach. We commenced operations from West Palm Beach to Fort Lauderdale in January 2018 and from West Palm Beach to Miami in May 2018. We have commenced construction of the expansion of our Florida passenger rail system to Orlando, and we intend to further expand our rail service to the Central Florida theme parks. 2. Subject to obtaining the necessary land and federal approvals. 28 Our Current South Florida System

 Started construction in late 2014, completed late 2017, invested $1.5bn to date  Commenced operations in January 2018, opened Miami station in May 2018  Executed a trademark and licensing agreement with Virgin Group and rebranding to Virgin Trains USA  Operating hourly service along 67 mile corridor with stops in Miami, Fort Lauderdale and West Palm Beach Carried approximately 244k passengers in Q1 2019

State-Of-The-Art Train Sets MiamiCentral Station MiamiCentral Departure Lounge

29 Our Current South Florida System

 Net Promoter Score higher than Ritz, JetBlue, Amazon and Apple.

Accelerating Adoption by Quarterly Ridership Business Travelers(1) Leading Net Promoter Score(2)

(Passengers 000’s) (Weekly Ridership)

3,500 78 239

3,000 75

2,500 74 160 2,000 68

106 1,500 63

75 1,000 62

500 60

+42% +50% +50% - 43 Jul-18 Jan-19 Jun-18 Oct-18 Sep-18 Dec-18 Aug-18 Nov-18 Q1'18 Q2'18 Q3'18 Q4'18 May-18

1. Business/commuter includes riders that have traveled at least 10 times; data excludes Federal holiday weeks. 2. As of 2/28/19; Net Promoter Score is an industry-wide index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. 30 High Speed Passenger Rail – Profitable Globally

 Systems frequently deliver 50%+ margins and capture 20%+ market shares(1)

 Virgin Trains USA owns all infrastructure, other comparable systems do not

Annual Revenue $615mm $514mm $1.2bn $1.5bn

EBITDA Margin(2) 47% 57% 61% 55%

Market Capture Rate(1) 27% 23% 80% N/A

1. Sources: Company and industry reports, press releases and news articles; Acela represents New York to Washington D.C.; Italo represents Rome to Milan; Eurostar represents London to Paris. 2. Amtrak: Amtrak Monthly Performance Report September 2017 - $471.7mm EBITDA / $1.3bn revenue (Northeast Corridor) and $290.7mm EBITDA / $614.7mm revenue (Acela); Eurostar: Eurostar Strategic Report, Directors’ Report and Financial Statements 2017 - $185.7 mm EBITDA + $519.0mm access payments + $14.8mm equipment lease payments / $1.2bn revenue; Italo: Italo 2017 Annual Report - $175.9mm EBITDA + $107.8mm access payments + $8.9mm equipment lease payments / $513.9mm revenue; Virgin: Virgin FY2018 Annual Report – Virgin reflects an EBIT margin due to no reporting information on D&A – $81.8mm EBIT + $173.6mm Stock Rental / Lease Installments + $241.0mm Track Access, Station and Depot Access Costs + $322.3mm Franchise Fees. Financials converted based on 2017 GBP / USD exchange rate.

31 Our First Market: Florida Stations in Core Downtowns, Linked to Multiple Transit Options

Within five block radius of Miami’s largest MiamiCentral Station 1 destinations Virgin Trains USA Tri-Rail Tri-Rail Station

Metromover Metromover Station Metrorail Metrorail Station Connecting three transit systems today 2 collectively moving over 30 million people each year, and new connectivity to Tri-Rail in 2020.

3 130,000 sq. ft. of retail, shopping and dining

Fully integrated with first/last mile travel ARENA 4 solutions – formed strategic partnership with Lyft for seamless pick-up/drop-off

33 Spurring Development in our Florida Market

 Downtown Miami experiencing significant inflow of new construction developments near MiamiCentral

 Inflow of recognized tenants in Virgin Trains USA’s office and retail space

 Virgin Trains USA MiamiCentral station serving critical transportation need in rapidly developing area

Under Construction Developments Near Station

● Recently completed: Art Plaza Towers (667 apts) − 1.5k condos, 2.7k apartments, 328 hotel units 1000 Museum (83 condos) and 140k SF of retail Paramount Miami Worldcenter (513 condos) Retail @ Miami Worldcenter (140,000 units)

Marriott Marquis (1,700 hotel rooms) Miami Worldcenter ● Under construction: (1,820 apts, 2,050 hotel rooms) − 2k condos, 5k apartments, 2k hotel units and 400k SF of retail Muze at Met Square (392 apts, 1,780 theater seats) ● Planned: Aston Martin Residences − Additional 1k condos, 2k hotel units and (390 condos) Brickell World Plaza 450k SF of retail (15,000 retail SF) Hotel Indigo (230 hotel rooms) Brickell Flatiron (549 condos) Maizon at Brickell (262 apts)

34 Florida Economic Impact During Construction and Subsequent Operation

$6.4 Billion Direct economic impact to Florida’s $653 Million In Federal, state and local government economy tax revenue

Jobs created through rail-line $3.5 Billion Added to Florida’s GDP 10,000+ construction (avg. per year)

$2.4 Billion In labor income 2,000+ Jobs created post rail-line construction

Approximately $1.5bn equity invested to date and an additional ~$400mm expected to be invested in connection with this current transaction

Source: The Washington Economics Group was retained to provide a comprehensive economic analysis study utilizing widely accepted methodologies encompassing the construction of rail infrastructure and transit-oriented development. 35 Our First Expansion: Las Vegas to SoCal Las Vegas Expansion

Travel from Southern California to Las Vegas in 90 minutes at less than the cost of driving or flying

One-third of all visitors to Las Vegas originate 1 Reno from Southern California

Sacramento San Francisco (1) San Jose 2 Addressable market of 56 million annual trips Bakersfield

Santa Barstow 1.5 hour train ride vs. nearly 3 hour drive with Barbara 3 Palmdale Victorville Las Vegas Ventura frequent departures Santa Clarita Downtown San Bernardino L.A. Barstow Multiple partnership opportunities with hotels Palmdale 4 and resorts San Diego Victorville Union Station 5 Will improve travel to the world’s top convention destination.

Planned Virgin Trains USA Station San Diego Planned Virgin Trains USA Route Future Virgin Trains USA Route

1. Represents addressable market for the Las Vegas expansion as supported by the Steer Davies Gleave Ridership & Revenue report.

37 Las Vegas Station - New Gateway to Las Vegas Strip

Las Vegas Station Area

 Evaluating several sites near Las Vegas strip

 North of new Raiders Stadium (up to 72,000 capacity)

 Directly surrounded by major hotel destinations

Virgin Trains USA Las Vegas Monorail Las Vegas Monorail Station

38 Environmental and Economic Impact for California and Nevada

$2.7 Billion Direct economic impact to $627 Million In Federal, state and local California & Nevada’s economies government tax revenue

Pounds of carbon removed from 645 Million 811 Million Vehicle miles removed annually the air

Jobs created during rail-line 4.5 Million Cars removed from I-15 annually 30,000+ construction and operations over 10 year period

Source: Beacon Economics LLC was retained to provide a comprehensive economic analysis study utilizing widely accepted methodologies encompassing the construction of rail infrastructure and transit-oriented development. 39

Transit Leap

41 Questions & Answers

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