A joint survey effort between Duke University and CFO Magazine Asian Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University and CFO Magazine

Top Concerns of Asian CFOs 1. Difficulty attracting qualified employees 2. Economic uncertainty 3. Government policies 4. Weak demand for product/services 5. Currency risk 6. Rising wages and salaries 7. Regulatory requirements 8. Data security 9. Geopolitical/health crises 10. Access to capital

Business Optimism Index The Asian Country Index saw a marginal decline relative to the previous quarter, even as the Own-Firm Index saw a moderate uplift owing to greater optimism among CFOs in Japan India, and Singapore Global Trends June 2018 Outlook Sep 2017 Outlook Country Business Optimism Index Country / Region Country / Region Own-Firm Business Optimism Index Within Asia itself, there’s a varying level of business optimism. China & India CFOs seem most optimistic. CFOs are relatively optimistic about the future of their own firms in Asia. Own firm-optimism is highest in China, India and then Australia. CFOs in Japan and Singapore are less optimistic. Own Company Own Company Notes: Presented data are the mean value for each region or country, Scale from 0-100

Expected Product Price Inflation Similar to the Latin American and African outlook, the Asian inflation outlook remained stable over the previous quarter, which also reflected in the outlook for India and China Sep 2017 Outlook Global Trends June 2018 Outlook Product Prices Product Prices 18q2: delete Japan, too large Inflation expectations continue to be high for most regions Except Europe’s outlook, which scaled back to Q4-2017 levels, inflation for most other regions continued to be high and comparable to previous quarters US inflation saw a modest increase this quarter, reaching levels similar to Latin America, Africa, and Asia Inflation expectation for most regions (except Europe) is hovering around 4% For CFOs in China and India, inflation expectation for product price inflation is lower than that for Asia but consistent with the previous quarter Notes: Presented data are the mean or median values for each region or country.

Expected Growth in Sales Revenue While revenue outlook for Asian CFOs declined sharply this quarter, Q2-2018 remains comparable and consistent with Q2 levels of previous years Sep 2017 Outlook Global Trends June 2018 Outlook Revenue Revenue 18q1: Asian countries all using median. Means are : 22.91 6.11 8.00 2.78 Asian revenue growth expectations declined, while Europe saw the biggest gain Asian revenue growth expectations are following a trajectory similar to Latin America over the previous 2 quarters CFO expectations saw a notable increase in Europe, a modest increase in Africa, and remained flat in the US Asian economies anticipate lower revenue growth than their American and European counterparts Revenue growth optimism for Asian CFOs across major Asian economies has declined relative to the previous quarter Relative to the previous year, Indian and Japanese CFOs are more optimistic in their outlook, while Chinese CFOs are relatively more bearish Notes: Presented data are the mean or median values for each region or country.

Capital Spending Plans Capital spending outlook among CFOs in Asia has tempered after previous quarter’s high, reaching levels similar to those observed in other regions Sep 2017 Outlook Global Trends June 2018 Outlook Capital Spending Capital Spending Capital spending outlook continues to be high Capital spend outlook across regions is similar to last quarter Latin America and Asia both saw similar rates of decline in their capital spend outlooks in this quarter Capital spending outlook is strong for some of the major Asian economies Aggregate outlook for Asia in line with country-level expectations of CFOs in China, Japan, and India Except Latin America, CFOs in most other region are anticipating capital spending between 5% and 10% Notes: Presented data are the mean or median values for each region or country.

Expected Change in Earnings CFOs in Asia expect a modest increase in earnings growth outlook, with the largest gains expected from India and Singapore Sep 2017 Outlook Global Trends June 2018 Outlook Earnings Earnings Earnings expectations are varied across regions Asia saw the largest increase in earnings expectations after 3 consecutive quarters where expectations were the lowest across regions Regional trends varied, from increases that were notable (Asia) and modest (US), to declines that were marginal (Africa), modest (Latin America), and sharp (Europe) Major Asian economies such as India, Singapore, and China expect earnings growth to outpace the broader Asian region and most regions (except US) European outlook falls to its lowest in 12 months, comparable to Q2-2017 levels Latin American CFOs also expect outlook to remain strong, even though it registered its second consecutive quarterly decline 18q2: India using median, mean=20 Notes: Presented data are the mean or median values for each region or country.

Fulltime Employment Outlook African employment outlook continues to be strong even as other regions such as Asia, Europe, and the US see stable and comparable outlooks Sep 2017 Outlook Global Trends June 2018 Outlook # FT Employees # FT Employees 18q2: china using median, mean=-1.92 Delete india, too large Except for Africa, employment outlook is similar across regions While the African outlook saw a correction, its CFOs continue to be most optimistic across regions Asia and Europe witnessed a modest uptick in employment outlook, while Latin America saw a moderate decline Asia expects a marginally stronger growth outlook relative to most other regions Asian growth outlook is attributable to strong positive sentiment among major economies such as Singapore Chinese CFOs scale back on their employment outlook for the first time in 12 months Notes: Presented data are the mean value for each region or country | #FT=Number of Fulltime Employees

Expected Wage and Salary Increases Asian CFOs similar in their wage outlook to te US and Latin America, even as Africa continues to expect a relatively stronger wage growth outlook Sep 2017 Outlook Global Trends June 2018 Outlook Wages & Salaries Wages & Salaries 18Q2: China, median is used, mean=-2.6 Wage growth outlook remains stable even as some variations exist across regions African CFOs continue to expect strong growth outlook Asia, US, and Latin America saw comparable wage outlook even though Asia and Latin America saw a moderate decline Europe saw a moderate increase but continues to be behind other regions Most regions (except China) expect wage outlook to be comparable and stable China sees declining outlook even as other regions continue to be optimistic Europe is marginally lower than other major regions Notes: Presented data are the mean or median values for each region or country.

Borrowing Cost and Leverage Ratio What is your current long-term borrowing interest rate and debt-to-assets ratio?

Projected Borrowing Cost and Leverage Ratio Low Interest Rate Case There is a 1-in-10 chance that your long-term borrowing rate will be X or lower in June 2019: At this borrowing rate, what do you expected expect your debt-to-assets ratio and your planned growth in capital spending will be in June 2019? Mexico is removed because it looks very weird for the high interest rate case

Projected Borrowing Cost and Leverage Ratio Best Guess Case You expect that in one year your long-term borrowing interest rate will be X in June 2019: At this borrowing rate, what do you expected expect your debt-to-assets ratio and your planned growth in capital spending will be in June 2019?

Projected Borrowing Cost and Leverage Ratio High Interest Rate Case There is a 1-in-10 chance that your long-term borrowing rate will be X or higher in June 2019: At this borrowing rate, what do you expected expect your debt-to-assets ratio and your planned growth in capital spending will be in June 2019?

Data security To your knowledge, have hackers ever successfully penetrated your systems in an attempt to steal, change, or make public important data?

Data security During the past year, indicate which of the following (if any) steps your firm has taken as a result of concerns about hacking and data security.

Role of CFO Over the next five years, which of the following issues will have the most impact on the role played by the Finance Function in your company, as well as on the role of the CFO? Top 10 shown for role of CFO

Funding Environment In general, how would you describe the current funding environment for your company? Asia US

M&A Activities – Country Level During the next 12 months how do you expect M&A activity to change in your country?

M&A Activities – Industry Level During the next 12 months how do you expect M&A activity to change in your industry?

Return on Assets (ROA) Return on assets expected to rise for most regions in 2018, with Africa expected to see the largest absolute increase in ROA While Asian CFOs saw the highest RoA for 2017, flat expectations for 2018 Asian RoA in 2018 Regional ROAs expected to rise by 1.5-4 percentage points between 2017 and 2018 CFOs in many major Asian countries expect ROA to be higher in 2018 relative to 2017, with Chinese and Indian CFOs expecting notable increases CFOs in India expect the highest ROA in 2018 relative to other major Asian countries

A joint survey effort between Duke University and CFO Magazine Asian Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University and CFO Magazine