Capital Markets Summer 2020

I

Physical → Digital Lasting Change

I • We believe companies will increasingly invest in digital transformation and deemphasize physical capital expenditures ‒ Driven by increasing consumer demand for digital commerce, communication, and media as well as the opportunity for productivity improvement

II

The Digital Transformation Marches Onward

Physical Investment

Digital Investment

III

56%

54%

52%

IV

50%

48%

46%

V

44%

42%

Share of U.S. Business Investment

1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20

VI

Source: U.S. Bureau of Economic Analysis and Alger. Digital investment comprises nonresidential fixed investment of intellectual property products (software and R&D) and information processing equipment. Physical investment comprises nonresidential structures and equipment (ex-information processing).

4