AICPA Business and Industry Economic Outlook Survey. Detailed Survey Results: 1Q 2018

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1 AICPA Business and Industry Economic Outlook Survey Detailed Survey Results: 1Q 2018

2 Survey Background Conducted between February 6-21, 2018 Quarterly Survey CPA decision makers (primarily CFO s, CEOs and Controllers) AICPA members in Business & Industry only 818 qualified responses

3 Survey Highlights 81 86% 72% Overall index picks up two points Highest total CPAOI since Q peak at 78 Employment plans jump 3 points Highest optimism about U.S. Economy Retail trade, manufacturing and technology optimism continue to improve Construction optimism eases a bit from 80% optimistic in Q4 to 77% Expansion and employment plans reflect optimism Overall, expansion plans improved from 71% to 72% Expansion plans for companies of all sizes continue to be strong

4 Demographics Type of Organization Size of Organization Position 1% 17% 2% 15% 4% 6% 14% 19% 4% 4% 9% Apply accounting and finance 18% skills... 11% 10% in the context of the business... 2% 65% 12% 13% 30% 2% 41% Publicly Listed Company Privately Owned Entity Government Not for Profit Other $0 to under $10 million $10 million to under $50 million $50 million to under $100 million $100 million to under $250 million $250 million to under $500 million $500 million to under $1 billion $1 billion or more CEO/President VP/SVP COO CFO CAO/CAE CIO/CTO/KMO Controller Director Accounting, Audit, Tax or Technology Manager Other

5 CPA Outlook Index (CPAOI) The CPA Outlook Index is the composite of the following nine indicators at equal weights: U.S. Economy Optimism - Respondent optimism about the U.S. economy Organization Optimism - Respondent optimism about prospects for their own organization Expansion Plans - Respondent expectations of whether their business will expand over the next 12 months Revenue - Expectations for increases or decreases in revenue over the next 12 months Profits - Expectations for increases or decreases in profits over the next 12 months Employment - Expectations for increases or decreases in headcount over the next 12 months IT Spending - Plans for IT spending over the next 12 months Other Capital Spending - Plans for capital spending over the next 12 months Training & Development - Plans for spending on employee training and development over the next 12 months A reading above 50 indicates a generally positive outlook with increasing activity. A reading below 50 indicates a generally negative outlook with decreasing activity. The CPA Outlook Index is a robust measure of sentiment about the U.S. economy that is supported by the unique insight and knowledge that CEOs, CFOs, Controllers, and other CPA executives have about the prospects for their own organizations, their expectations for revenues and profits, and their plans for spending and employment.

6 CPA Outlook Index (CPAOI) A reading above 50 indicates a generally positive outlook with increasing activity. A reading below 50 indicates a generally negative outlook with decreasing activity. CPA Outlook Index 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q

7 CPA Outlook Index (CPAOI) Q to Y to Component 1Q17 2Q17 3Q17 4Q17 1Q18 Q Y U.S. Economic Optimism Organization Optimism Expansion Plans Revenue Profits Employment IT Spending Other Capital Spending Training & Development Total CPAOI

8 CPA Outlook Index (CPAOI) vs. GDP CPA Outlook Index 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% CPA Outlook Index Change in GDP GDP Growth 4Q16 1Q17 2Q17 3Q17 4Q17 1Q % 1.2% 3.1% 3.2% 2.5% -2.0% -4.0% -6.0% -8.0% -10.0%

9 U.S. Economy, Organization and Inflation 79% 71% 49% Optimism for U.S. economy jumps Optimists cite general strength of many economic indicators along with corporate tax cuts and deregulation Both optimists and pessimists cite ongoing concerns about political environment along with comments about inflation, interest rates, and market unease. Organization optimism still on upward trend Optimism for respondent s own organization improves another point to 71% The percentage of companies also up a point from Q4 The percentage of companies expecting their businesses to contract dropped another point from 10% to only 9% Now concerned about inflation; up from only 27% in Q4, 2017 Concern about labor costs continues to be most significant, but eased another 3 points from 41% to 38% Interest rate concerns inched up another point from 21% in Q4 to 22%

10 Optimism & Expansion 100% 90% 80% 70% 60% 50% 40% 30% The economic outlook for the U.S. economy, your organization, and the expansion plans over the next 12 months 20% 10% 0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 U.S. 32% 49% 44% 38% 49% 51% 52% 64% 68% 52% 48% 45% 28% 37% 38% 62% 69% 64% 64% 74% 79% Organization 50% 57% 55% 57% 59% 61% 65% 67% 63% 58% 59% 53% 44% 53% 53% 61% 66% 64% 66% 70% 71% Expansion 58% 62% 62% 62% 63% 64% 68% 71% 64% 61% 60% 57% 52% 58% 62% 62% 67% 64% 65% 71% 72%

11 Inflation or Deflation 36% 35% 30% 31% 29% 6% 7% 7% 7% 8% 32% 38% 6% 5% 27% 10% 23% 23% 25% 23% 12% 10% 10% 11% 22% 14% 23% 12% 18% 11% 28% 33% 4% 3% 31% 26% 27% 5% 5% 5% 49% 3% For your business, over the next 6 months, which are you more concerned about? Inflation or deflation? 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Inflation Deflation

12 Inflationary Risk Factors 2% 2% 2% 2% 1% Food costs 8% 8% 8% 6% 6% Energy costs 27% 25% 25% 24% 24% Raw material costs 44% 42% 41% 40% 38% Labor costs 22% 21% Interest rates 1Q17 2% 8% 24% 40% 21% 5% 2Q17 2% 8% 25% 42% 22% 1% 3Q17 1% 6% 27% 44% 15% 7% 4Q17 2% 6% 24% 41% 21% 5% 1Q18 2% 8% 25% 38% 22% 5% 15% 22% 21% 5% 1% 7% 5% 5% Other Which of the following potential inflationary factors represents the most significant risk to your business?

13 Key Performance Indicators Revenues and Profits Revenue and Profit projections both show new highs Expected revenue increase for coming twelve months improves to 5%, a new high Profit projections also jumps from 3.8% to 4.4%, also a new high expectation Hiring and Employment Headcount plans improve; employee cost projections up; healthcare costs ease Anticipated rate of headcount increase for the coming year increased from 1.8% to 2.1% Salary and benefit costs projected to increase at a rate of 2.7%, up from 2.5% in Q4 Healthcare cost projections decline another three tenths from 5.9%, to 5.6% Spending Plans Spending plans continue to be strong across board Expected rate for IT spending now at 3.7% Other capital spending plans jump from 3.1% to 3.9% Training ticks up another two tenths from 2.2% to 2.4% Marketing spending plans improve from 2.0% to 2.1% R&D spending remains constant at 2.0%, maintaining the Q3 and Q4 post-recession high

14 Key Performance Indicators Expected Growth in Revenue and Profits 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Revenue 3.0% 3.1% 3.3% 3.6% 3.6% 3.8% 4.4% 4.7% 3.6% 3.2% 3.3% 2.9% 1.7% 3.0% 2.9% 3.6% 4.3% 3.9% 4.3% 4.8% 5.0% Profit 2.1% 2.4% 2.5% 2.7% 2.9% 2.9% 3.6% 3.9% 2.8% 2.4% 2.6% 2.0% 0.7% 1.5% 2.3% 3.1% 3.5% 3.2% 3.5% 3.8% 4.4% Thinking about the coming 12 months, please comment on the probable change for your organization for each of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.

15 Key Performance Indicators Employees, Salary & Benefits, and Healthcare Costs 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Employees 1.1% 1.0% 1.3% 1.2% 1.5% 1.3% 1.8% 2.1% 1.6% 1.5% 1.3% 1.0% 0.5% 1.1% 1.3% 1.6% 1.8% 1.8% 1.9% 1.8% 2.1% Salary & Benefits 2.2% 2.2% 2.3% 2.2% 2.2% 2.1% 2.4% 2.5% 2.0% 2.1% 2.0% 1.8% 1.4% 1.8% 2.1% 2.3% 2.3% 2.2% 2.4% 2.5% 2.7% Healthcare 6.3% 6.7% 6.8% 6.6% 6.2% 5.7% 6.6% 5.9% 5.8% 5.8% 5.8% 5.4% 5.4% 5.7% 5.6% 6.1% 5.6% 5.5% 6.3% 5.9% 5.6% Thinking about the coming 12 months, please comment on the probable change for your organization for each of the following key performance indicators: please select one growth rate for each item, from increasing by more than 8% to decreasing by more than 8%.

16 Key Performance Indicators Pricing & Other Costs Average Change Expected 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Prices Charged 1.3% 1.1% 1.3% 1.3% 1.3% 1.8% 1.7% 1.7% 1.4% 1.4% 1.6% 1.5% 0.8% 1.3% 1.5% 1.8% 1.9% 1.9% 1.9% 2.1% 2.1% Input Prices 2.0% 1.8% 1.9% 1.8% 1.8% 2.4% 2.3% 2.1% 2.1% 2.0% 2.2% 2.1% 1.5% 2.1% 1.9% 2.4% 2.4% 2.5% 2.4% 2.5% 2.7% Thinking about the coming 12 months, please comment on the probable change for your organization for each of the following key performance indicators: please select one growth rate for each item, from increasing by more than 80% to decreasing by more than 8%.

17 Key Performance Indicators Spending Plans - IT, Other Capital & Training 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 IT 2.7% 2.8% 2.7% 2.9% 3.2% 3.1% 3.3% 3.3% 3.1% 3.1% 3.0% 2.8% 2.3% 2.6% 2.8% 2.9% 3.0% 3.2% 3.5% 3.6% 3.7% Other Capital 1.9% 2.2% 2.2% 2.1% 2.3% 2.4% 2.9% 3.2% 2.4% 2.4% 2.5% 2.4% 1.5% 2.1% 2.4% 2.7% 2.6% 2.8% 3.3% 3.1% 3.9% Training 1.3% 1.3% 1.3% 1.5% 1.7% 1.8% 2.0% 2.2% 1.6% 1.8% 1.4% 1.4% 1.1% 1.3% 1.6% 1.6% 1.8% 2.0% 2.1% 2.2% 2.4% Thinking about the coming 12 months, please comment on the probable change for your organization for each of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.

18 Key Performance Indicators Spending Plans Marketing & R&D 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Marketing 1.5% 1.4% 1.5% 1.5% 1.7% 1.6% 1.6% 1.8% 1.6% 1.8% 1.6% 1.6% 1.4% 1.4% 1.4% 1.5% 1.9% 1.8% 1.8% 2.0% 2.1% R&D 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 1.2% 1.3% 1.3% 1.2% 1.7% 1.2% 0.9% 1.1% 1.1% 1.5% 1.7% 1.5% 2.0% 2.0% 2.0% Thinking about the coming 12 months, please comment on the probable change for your organization for each of the following key performance indicators: please select one growth rate for each item, from increasing by more than 10% to decreasing by more than 10%.

19 Hiring Plans Continue to Improve 50% 6% 14% 27% Have right number of employees Have an excess of employees Have too few, but hesitating to hire Have too few and planning to hire Down 2 points from Q4, 2017 Down 2 points from Q4, 2017 Up 1 point from Q4, 2017 Up 2 points from Q4, 2017

20 Hiring Plans Overall staff situation relative to your needs 8% 8% 7% 8% 6% We have an excess number of employees 52% 52% 50% 50% 50% We have approximately the appropriate number of employees 16% 16% 15% 14% 13% We have too few employees, but are hesitating to hire 27% 24% 24% 25% 22% We have too few employees and are planning to hire 1Q17 8% 52% 16% 22% 2% 2Q17 8% 50% 16% 24% 2% 3Q17 7% 50% 15% 24% 4% 4Q17 8% 52% 13% 25% 2% 1Q18 6% 50% 14% 27% 3% 2% 2% 4% Other 2% 3% Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)?

21 Top Challenges Facing Organizations Availability of skilled personnel and Domestic competition remained the #1 and #2 challenges Employee and benefit costs moved up to the third ranking Regulatory requirements/changes dropped to the fourth ranking Developing new products/services and Domestic economic conditions remained in the fifth and sixth slot Staff turnover moved from ninth to seventh Changing customer preferences dropped to eighth Financing (access/cost of capital) moved to ninth last seen in the top ten 3Q16 Materials/supplies/equipment costs remained in the tenth slot Please indicate the top three challenges for your organization

22 Top Challenges 1Q17 2Q17 3Q17 4Q17 1Q18 1 Employee and benefits costs Employee and benefits costs Availability of skilled personnel Availability of skilled personnel Availability of skilled personnel 2 Regulatory requirements/changes Availability of skilled personnel Regulatory requirements/changes Domestic competition Domestic competition 3 Availability of skilled personnel Regulatory requirements/changes Domestic competition Regulatory requirements/changes Employee and benefits costs 4 Domestic economic conditions Domestic economic conditions Domestic economic conditions Employee and benefits costs Regulatory requirements/changes 5 Domestic competition Domestic competition Employee and benefits costs Developing new products/services/markets Developing new products/services/markets 6 Changing customer preferences Staff Turnover Developing new products/services/markets Domestic economic conditions Domestic economic conditions 7 Domestic political leadership Developing new products/services/markets Stagnant/declining markets Changing customer preferences Staff Turnover 8 Developing new products/services/markets Materials/supplies/ equipment costs Changing customer preferences Domestic political leadership Changing customer preferences 9 Staff Turnover Domestic political leadership Domestic political leadership Staff Turnover Financing (access/cost of capital) 10 Materials/supplies/ equipment costs Changing customer preferences Staff Turnover Materials/supplies/ equipment costs Materials/supplies/ equipment costs

23 Industry, Region and Business-size Outlook 1 of 3 Retail rebound continues Optimism for Manufacturing and Technology both improve Retail trade optimism continued its recovery, improving to 66% after falling off to 52% in Q3 Wholesale trade gives back most of its 3 rd quarter gain, falling from 81% to 64% Manufacturing optimism also continued its rebound to 77% after falling to 63% in Q3 Technology optimism continued its climb; now 80% being optimistic Hiring for retail also improves from an expected rate of increase of 1.9% in Q4 to 2.5% in Q1, 2018 Manufacturing hiring also improved from 2.6% to 3.0% Technology hiring recovered from a dip to 1.4% in Q4, to 2.5% in Q1 Construction and real estate optimism also remain strong Construction eased a bit from 80% in Q4 to 77% in Q1 Real Estate and Property also maintained its high level of optimism, improving a point to 76% Construction hiring eased from 3.0% in Q4, to 2.8% in Q1 Real Estate hiring expectations recovered to 2.3% after dipping to 1.4% in Q4

24 Industry, Region and Business-size Outlook 2 of 3 Finance and Insurance and Professional Services both improve Finance and Insurance optimism improves from 73% to 79% Professional service optimism continued its rebound, improving to 78% optimistic after declining to only 50% in Q3, 2017 Finance and Insurance planned hiring falls, from 1.8% in Q4 to only 1.3% in Q1 Professional service hiring also falls again from 2.7% to only 1.5% Healthcare providers and Healthcare others ease in both optimism and hiring Healthcare provider optimism continues declined from 65% in Q4, to 61% in Q1 Healthcare other optimism also eased slightly from 79% in Q4 to 76% optimistic in Q1 Expected hiring by Healthcare providers declined to previous levels after topping the list in Q4, falling from 3.0% to an expected hiring rate of 1.8% in Q1, 2018

25 Industry, Region and Business-size Outlook 3 of 3 Regional optimism mixed Employment projections by business size and expansion plans by size also reflecting level of optimism Midwest optimism declined from its high level of 74% in Q4 to 71% in Q1 West optimism improves another two points to 75% in Q1 South picks up three points, improving to 72% optimistic Northeast continues to be least optimistic, but improves to 65% in Q1 For employers with > $1 billion in revenues, 15% now have excess employees, while 39% have too few employees. Of those with too few employees, only 15% remain hesitant while 24% are planning to hire. Of those in the $100 million to $1 billion category, 45% now say they have too few employees and 31% are hiring; only 14% are hesitant. In the $10 - $100 million range, 46% now have too few employees, up from 34% in Q4; of those with too few, 32% have plans to hire; but 14% are hesitant Employers with revenues < $10 million also remain mixed; while 33% have too few employees, 18% are planning to hire; 15% are hesitant. Expectations for expansion by businesses with revenues < $10 million hit another post-recession high of 67%. In all three of the larger size categories, more than 70% of businesses say the have plans to expand over the course of the next year

26 Organization Optimism by Industry 1 of 3 100% 80% 60% 40% 39% 50% Retail Trade 58% 58% 50% 52% 38% 33% 66% 100% 80% 60% 40% Wholesale Trade 79% 42% 50% 57% 45% 48% 81% 64% 72% 20% 20% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 100% 80% 60% Manufacturing 71% 72% 77% 66% 63% 55% 48% 48% 47% 100% 80% 60% 53% 61% Technology 71% 67% 65% 56% 64% 72% 80% 40% 40% 20% 20% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

27 Organization Optimism by Industry 2 of 3 100% 80% 60% 59% 59% Construction 69% 75% 74% 66% 70% 80% 77% 100% 80% 60% 52% Real Estate 79% 62% 62% 69% 63% 78% 75% 76% 40% 40% 20% 20% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 100% 80% 60% 40% 41% Finance & Insurance 79% 66% 64% 65% 58% 57% 73% 79% 100% 80% 60% 40% 46% Professional Service 70% 67% 66% 62% 48% 50% 72% 78% 20% 20% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

28 Organization Optimism by Industry 3 of 3 100% Health Care Provider 100% Health Care - Other 80% 60% 40% 52% 69% 68% 69% 43% 52% 56% 65% 61% 80% 60% 40% 67% 63% 50% 80% 70% 60% 79% 76% 67% 20% 20% 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

29 Expected Employment Change by Industry Trans & Distribution Manufacturing Construction Banking Retail Trade Technology Real Estate Property Mining Healthcare Provider Not for Profit Professional Services Finance and Insurance Thinking about the coming 12 months, please comment on the probable change for your organization for Number of Employees Q4 Q1

30 Organization Optimism by Region 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Midwest 62% 65% 65% 74% 74% 71% West 59% 68% 62% 61% 73% 75% South 68% 71% 65% 68% 69% 72% Northeast 56% 57% 60% 59% 64% 65% Please select the rating that best describes your view for the economic outlook for your own organization for the next 12 months.

31 Expansion Plans by Business Size 100% 90% 80% 70% 60% 50% 40% Please indicate whether you expect your business to expand or contract over the next 12 months 30% 20% 10% 58% of all businesses expect to expand a little in the next twelve months 14% expect to expand a lot 26% expect to contract a little or stay the same Only 2% expect to contract a lot 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 < $10 million 44% 55% 53% 52% 61% 55% 61% 63% 67% $10 to <$100 million 59% 61% 65% 63% 72% 53% 58% 70% 74% $100 million to <$1 billion 50% 61% 59% 67% 67% 73% 68% 78% 72% > $1 billion 49% 50% 66% 62% 66% 69% 65% 75% 76%

32 Businesses in the >$1 billion range are most likely to have excess employees 4% 6% 3% 15% We have an excess number of employees 61% 45% 50% We have approximately the appropriate number of employees 15% 14% 14% 15% We have too few employees, but are hesitating to hire We have too few employees and are planning to hire < $10 million 4% 61% 15% 18% 2% $10 to <$100 million 6% 45% 14% 32% 3% $100 million to <$1 billion 3% 50% 14% 31% 2% > $1 billion 15% 45% 15% 24% 1% 45% 18% 32% 31% 24% 2% 3% Other 2% 1% Given current conditions, how would you characterize your overall staffing situation relative to your needs (i.e., do you have excess capacity or are employees stretched)?

33 AICPA Economic Outlook Survey Survey within a Survey Federal Tax Reform and Potential Interest Rate Hikes

34 Federal Tax Reform Impact on your earnings No increase or impact Projected Increase of more than 20 percent Projected increase of 10 to 20 percent Projected increase of 5 to 10 percent Projected increase of 3-5 percent 3% 7% 13% 17% 50% 36% How do you expect the changes to corporate taxes under the recently enacted federal tax reform legislation will impact your company s earnings this year? Projected increase of 1-3 percent Not sure 10% 9% Projected decrease 5% 0% 10% 20% 30% 40% Excludes not-for-profit entities Within A Survey

35 Federal Tax Reform Deployment of tax savings Increase capital expenditures and business expansion spending Pay down debt Hire more full-time workers 11% 17% 29% What are the likeliest ways your company will deploy any tax savings from federal tax reform? Issue or increase dividend 10% Acquire or merge with another company Buy back stock 3% 5% Hire more part-time workers 2% Other (please specify) 23% 0% 5% 10% 15% 20% 25% 30% 35% Within A Survey

36 Deployment of tax savings Other plans for deploying tax savings Increase compensation and benefits Build cash, capital, reserves Increase distributions to owners, members Product development and new product offerings Invest in technology Increase philanthropy In addition to several companies not experiencing tax savings due to their entity type not-for-profit, credit union, S-Corps, other passthroughs, other plans for deploying tax savings are summarized here.

37 Federal Tax Reform Steps already taken to benefit workers Raised hourly pay or salaries Announced a one-time bonus for workers Increased pension benefits or 401K match Increased paid time off 3% 1% 5% 12% What steps has your company already taken to benefit workers as a direct result of any tax savings under federal tax reform? Increased stock option awards for workers Improved other benefits (if yes, please specify) 1% 4% Other benefit improvements primarily healthcare related No action taken 74% 0% 10% 20% 30% 40% 50% 60% 70% 80% Within A Survey

38 Federal Tax Reform Anticipated additional benefits to employees Raise pay for employees Increase pension benefits or 401K match One-time bonus for workers Increase paid time off Increase stock option awards for workers Improve other benefits (if yes, please specify) 2% 1% 7% 5% 3% 15% What additional, anticipated benefits does your company plan to pass on to workers over the next 12 months because of tax savings under federal tax reform? No action taken 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% Within A Survey

39 Potential Interest Rate Hikes Impact on your company Significant concern 10% Moderate concern Slight concern No concern 15% 30% 35% 75% How do you view the impact of potential interest rate hikes on your company in the next 12 months? Slight optimism 6% Moderate optimism Significant optimism 0% 2% Not sure 1% 0% 5% 10% 15% 20% 25% 30% 35% 40% Excludes not-for-profit entities

40 AICPA Business and Industry Economic Outlook Survey 1Q 2018 For additional information contact: Kenneth W. Witt, CPA, CGMA Lead Manager MA Research & Member Engagement - Americas Ken.Witt@aicpa-cima.com Cary Jones Associate Manager Business, Industry & Government Team Cary.Jones@aicpa-cima.com