Technology Companies = Rising R&D + Capex as % of Revenue…18% vs. 13% (2007) USA Technology Company Research & Development Spend + Capital Expenditures vs. % of Revenue $800B 20% 18% $600B 15% USA 13% x, ue en Cape $400B 10% Rev + of R&D % $200B 5% $0 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 R&D + Capex % of Revenue Source: ClariFi, Katy Huberty @ Morgan Stanley. GICS = Global Industry Classification Standard, an industry taxonomy developed in 1999 by MSCI and Standard & Poor's (S&P) for use by the global financial community. Note: Amazon, Netflix and Expedia removed 42 from Discretionary Sector & added to Technology. Discretionary includes companies that sell goods & services that are considered non-essential by consumers such as Starbucks (restaurants) & Nike (apparel). See appendix for detailed GICs definition.