June 2012 Summer Issue

Quarterly Economic Commentary

By Tony Villamil 2011 1.7% 2.1% 1.2% Economic Indicators Real GDP Growth 2009 -3.5% 1.1% 2010 3.0% 1.2% Economy expanded at a tepid (about 2%) in first half of 2012, and its unlikely to pick up noticeably in second half, given economic recession in Eurozone and slowdowns in Brazil, China and other emerging markets. US Economic Outlook for 2012

PCE Deflator (Inflation)

Payroll Employment Growth Payroll Employment Growth Single-Family Home Sales Exports ($ in Billions)

Florid Economic Indicators

-4.4% 2009 -6.3% $60

-0.7% 2010 -0.8% 5.0% $73

Inflation rate expected to remain around the 2% tolerance range of FED. Therefore, a very low interest rate environment is likely for rest of 2012. With a sluggish US economy and the global slowdown, employment growth will remain modest this year. Elections also increasing uncertainty, so business risk aversion is high. Florida Economic Outlook for 2012

2011 1.1% $87

31.0%

8.0%

Floridas payroll employment growth likely to remain a modest 1% to 2% in 2012, given the ongoing home foreclosure work out, recession in the European Union and slower growth in Latin America. Historically, low prices are attracting bargain buyers in 2012 so sales are starting to moderately improve this year. Expect a slowdown in export growth from torrid pace of 2011 as Brazil and other emerging markets come for, hopefully, a soft landing.

US economy has the slows this year as there are strong headwinds from the Eurozone recession, a slower expansion in emerging markets and business uncertainty due to the US elections. Therefore, expect tepid payroll employment growth for the rest of 2012. Stronger economic activity and employment expansion in 2013 and beyond depend on a satisfactory resolution of Eurozone issues and a credible long-term US fiscal deficit agreement to reduce the growing Federal Debt/GDP ratio. Bottom Line:

Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, Florida Association of Realtors, Enterprise Florida and The Washington Economics Group, Inc. for 2012 Outlook.

News and Consulting Activities

WEG Completes another Economic Analysis for the University of Miami WEG was recently engaged in a new project in its long-standing relationship with The University of Miami as it recently completed a Study for the Rosensteil School of Marine and Atmospheric Sciences new Marine Technology & Life Sciences Seawater Research Building. WEGs Study found that the Seawater Research Building will generate important and positive economic impacts on the Miami-Dade County economy. WEG also concluded that the quantifiable economic impacts generated by the construction and future operations of the Seawater Building would translate into the creation of jobs in high-wage paying industries generating increases in Labor Income and Value-Added economic impacts. In addition, it was estimated that the Seawater Research Building would be a contributor of fiscal revenues to federal, state and local governments. St. Thomas University Commissioned Study by The Washington Economics Group On behalf of St. Thomas University (STU), a leading Catholic university in Miami, WEG conducted an economic impact study which found that the University has a significant overall economic impact of $1.5 billion in the State of Florida. The Study also found that the University supports close to 15,000 jobs in the State while also being a supplier of higher education-trained human resources. The most significant impact of the University was found to be attributed to the increased earning power and spending of the Universitys alumni residing in South Florida and the State. In additional to being WEGs Principal Advisor, Mr. Villamil is also the Dean of the Business School at STU. WEG Analyzing County and Statewide Impact of Major Roadway Project WEG has been retained to prepare a Study on a major roadway improvement project in Miami-Dade County. Hired by a multinational construction and engineering company, the Study will analyze the economic development benefits and impacts to the State of Florida and the County of both the construction and the ongoing operations of the Roadway once it is complete, including benefits through the improvement in mobility and the potential growth of commercial activity surrounding the Roadway. WEG will also estimate the expected Social Return on Investment of the Roadway project if it receives funding from the State of Florida.

WEG Analyzes Destination Resorts Legislation during Floridas 2012 Legislative Session In preparation for the 2012 Legislative Session, WEG completed a study on the economic development impacts of one Destination Resort. The Study concluded that economic impacts from a Destination Resort in South Florida, as they were planned, would begin during a period of slow economic recovery, when unemployment is in double digits, and would contribute to employment growth when additional jobs are sorely needed. As part of this effort, an Op-Ed by Tony Villamil was published in the Tallahassee Democrat. The opinion piece stated that the export business model that would be used by the Destination Resort, which was based on the preliminary business plan of Resorts World Miami, a WEG client, whose business plan was to invest $3.8 billion in the state, had as its strategy, the attraction of high-net worth visitors from outside of the region, the State and the US. WEGs Study concluded that a Destination Resort would strongly enhance the entertainment assets of the entire State, and serve as a catalyst to Floridas leading position as a top global entertainment and visitor destination. WEG Economic Consultants Study Sales Tax Holidays across the US In the second half of 2011 and into 2012, the Senior Economics Consulting Team of WEG completed a series of studies on sales tax holidays in the states of Georgia, Illinois, Indiana and Washington. The Retail Associations of these states retained WEG to quantify the economic impacts of both planned and proposed Back to School Sales Tax Holidays in their states. With varying conclusions, WEGs studies assessed the impacts of the Sales Tax Holidays in terms of increases in economic activity to each state and overall fiscal impacts to state and local governments as well as anticipated sales increases during the month that the Sales Tax Holiday was to take place. The Washington Economics Group Study Found Tallahassee, FL to be the Number One Retirement Destination for Baby Boomers In April 2012, WEG released its analysis, Best Choice for Retiring Boomers: Head South - An Analysis of Selected US Cities" which followed a Mason-Dixon survey on retirement relocation preferences among Baby Boomers. The survey found that retirees prefer a mid-sized town that offers a pleasant warm climate with a mild hint of winter, a low cost of living and favorable tax rate, and a top quality health care system, among other key priorities. Following up on this, the WEG Study compared 20 prospective ideal Baby Boomer retirement communities and found that Floridas capital city, Tallahassee, ranked number one in the country among these. The Study was highlighted by news organizations from around the country. WEG Retained to Study the Return on Investment of Statewide Distributor of Food for the Poor A recently completed WEG study examined the Return on Investment (ROI) to the State of Florida from its investment in Farm Share programs. Farm Share focuses on the recovery, use and distribution of surplus food from Floridas farmers to feed the needy population throughout the State of Florida. In its analysis, WEG found that, on a proportional basis, the benefits to the State resulting from its investment include the employment of individuals who would otherwise lose their jobs if the investment was not made, as well as the distribution of millions of pounds of fresh produce that would otherwise be thrown away and wasted if the Organization were to reduce capacity. WEG also found that if Farm Share did not receive funding from the State of Florida, there would be additional unemployed individuals in the State that would eventually file for unemployment benefits and other public assistance programs. WEGs analysis was used to successfully secure Farm Shares funding from the State of Florida for this fiscal year Embry-Riddle Aeronautical University Retained WEG to conduct System-wide Economic Impact Analysis In the Spring 2012, WEG completed an economic impact study that presented the economic impacts of Embry-Riddle Aeronautical Universitys operations in the State of Florida and in the State of Arizona as well as in the cities that the University operates. The Study quantified the direct, indirect and induced impacts of the Universitys operations on jobs, labor income, business revenues, gross state and regional product, and state and local taxes for Florida and Arizona. The Study also presented the key contributions of the Universitys alumni and the Universitys role as a foundation for economic development in the states and regions it serves. WEG Completed Study on International Music Festival in Miami WEG was retained to prepare an independent Study quantifying the economic impacts generated by an annual three-day music festival in Miami. As a top asset of the Entertainment and Visitor Industry in Miami-Dade County, the Festival generates significant and quantifiable economic impacts for the local economy in the form of the generation of jobs, Labor Income, fiscal revenues and overall economic impact. The Study also concluded that the Festivals yearly presence is a positive force and a key addition as it builds on the Countys global brand as a top entertainment and leisure destination for both domestic and international visitors

WEG Principal Economic Advisor Appointed to the Florida District Export Council by the US Secretary of Commerce In February 2012, Tony Villamil, Princpal Economic Advisor of WEG was designated by the US Secretary of Commerce, John Bryson, as a Member of the Florida District Export Council. Members of the Council work to advance Florida trade through education, mentoring, and special initiatives designed to take advantage of unique developments and timely overseas business opportunities. Mr. Villamil will serve until 2015 when his term ends.

TJ Villamil Elected as University of Florida Student Body President for 2012-2013 Jose TJ Antonio Villamil, IV was elected Student Body President at the University of Florida (UF) serving his term until May 2013. TJ is the son of WEG Founders, Tony and Marielena Villamil and is a member of WEGs Executive Team. TJ earned his undergraduate degree from UFs College of Journalism and Communications in telecommunications news and will be enrolled in the Master of Science program in Entrepreneurship at UF. Prior to being elected Student Body President, he served as a Student Senator and in other leadership roles until Spring 2011, when he was elected UF Student Body Treasurer where he oversaw a $4.8 million budget. TJ is also a co-founder of Floridanomics, LLP. Marielena Villamil Appointed as Chair of the Hispanic Scholarship Funds Miami Advisory Board CEO of WEG, Marielena Villamil has been appointed to Chair the Miami Advisory Board of the Hispanic Scholarship Fund (HSF). Founded in 1975, the HSF is the nations leading organization working to address the barriers that keep many Latinos from earning a college degree. The Organization will host a reception to welcome Mrs. Villamil as their new Chair on June 20th in Coral Gables.

WEG Joins the Transportation and Expressway Authority Membership of Florida -TeamFL In April 2012, WEG Principal Advisor Tony Villamil and Managing Director of Client Services, Mary Snow attended the quarterly meeting of TeamFL in Tampa hosted by the Florida Transportation Committee and the Tampa-Hillsborough Expressway Authority. At the April meeting, the WEG team participated in pertinent discussions and breakout sessions focused on mobility and smart transportation throughout the State of Florida. Members of TeamFL represent statewide expressway and transit authorities, the Florida Department of Transportation and the private sector. WEG has significant experience providing the economic impact analyses as part of transportation and infrastructure projects. WEG Executives Participated in Quarterly SUAGM Advisory Board On June 5th, 2012, Marielena Villamil, CEO of WEG and WEG staff participated in the quarterly South Florida campus Advisory Board meeting of the Ana G. Mendez University System (SUGAM). Ms. Villamil is the Chairman of the Advisory Board. The Advisory Board consists of local leading professionals and serves to link the University with the regional business community. SUAGM is the second largest university system in Puerto Rico, providing bachelor and master degrees in an accelerated dual-language format. The System has expanded into the United States with campuses in Orlando, Tampa and Miramar, Florida, and in Maryland and Colorado and continues to strategically plan its next campus in the US. WEG has provided market research and advisory services to SUAGM since 2004. WEG Principal Economic Advisor Will Participate in Daily Business Review's Business Advisory Board Panel On June 25th, Tony Villamil will participate in the Daily Business Review's Business Advisory Board panel discussion. As a regular panelist, Villamil will speak about South Floridas role among the issues currently facing countries in Europe, Latin America and Asia. Villamil is a member of the Advisory Board of the Daily Business Review. WEG Principal Advisor Headlines Economic Summit in Lakeland, Florida Tony Villamil was the keynote speaker at the Lakeland Chamber of Commerce-sponsored Annual Economic Forecast Breakfast. The Breakfast, attended by over 600 members of the Lakeland business and civic communities, focused on the Florida economy and what should be expected for the remainder of 2012. This was Tonys fourth time participating in the event Tony Villamil addressed the 33rd Hemispheric Congress hosted by CAMACOL Tony Villamil Founder and Principal Advisor of The Washington Economics Group delivered the opening remarks during the Plenary Session "Free Trade. What's Next" at the 33rd Hemispheric Congress of Latin Chambers of Commerce an Industry on May 30, 2012 at the Biltmore Hotel. For over 33 years CAMACOL has been active in the international business sector through its Hemispheric Congress of Latin Chambers of Commerce and Industry. Tony Villamil Presented at the CNCs 16th Biennial National Conference On May 18th, 2012, Tony Villamil participated at the session on Educational Challenges in the Global Economy at the CNCs (Cuban National Council) 16th Biennial National Conference Hispanics in Americas Future. Distinguished educational leaders and administrators, and experts on globalization discussed the state of American Education from Pre-K to post graduate studies