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So the carriers are all different and we have a few sale leaseback transactions I guess with Verizon and AT&T and they're both different and the terms of those agreements are different not that I'llI won't talk about the details there.

Accounting for longterm contracts involves a judgmental process of estimating the total revenue, costs, and profit for each performance obligation. Due to the size, duration and nature of many of our longterm contracts, the estimation of total revenues and costs through completion is complicated and subject to many variables.

AnswerThomas P. Joyce: Sure, sure, absolutely. Sorry, I apologize that the transmission was so poor but I think we've got it now. We're going to see that volume continue to track. I think there was an outsized impact, certainly at Cepheid, during the course of the second quarter with that instrument volume boosting at the rate that it did. We don't expect that that necessarily will continue to grow quite at that rate. So I think that's one mitigating factor. And I think as it relates to both Pall Biotech and Cytiva, I think we'll see continued traction there.

So, our Fixed Income revenues grew 1% versus the prior year and what we really saw was a normalization of rate and credit markets at the turn of the year coming out of the fourth quarter and the dislocation that was there. Within Fixed Income results, our G10 rates outperformed, driven really by strong client activity. In North America, we did see a pickup in or an uptick, I should say, incorporate hedging deals on the back of strong DCM activity. And in EMEA, the results included increased revenue on structured note issuances as investors kind of sought out additional yields. This was offset by the weakness I mentioned earlier in FX, given the declining currency volatility. But, as you mentioned, strong performanceor solid performance, I should say, in Fixed Income also aided by solid results in spread products with strong performance in the flow credit products. And we also had a strong quarter in commodities, particularly in EMEA, driven by good client activity in oils and metals. QuestionAlevizos Alevizakos: Great.

AnswerMark Elliot Zuckerberg: Sure. I can talk about that. And that's what I'm really excited about. And there's just an opportunity I think to make that all a lot more seamless. So I think the way we're going to approach this is largely from starting with having built out this very robust ad system and then just basically working our way down the experience from there. So making it, so businesses and creators can have shops and that the ads can then link into shops and have a native shopping experience. And that will just both be a better experience for consumers and convert better for businesses. Here, our main goal is not necessarily that the creator economy is a major business by itself. And that's what we care about. And there will be some opportunity there. AnswerDavid M. Wehner: Thanks, Mark. France, if we can go ahead and go to the next question. Operator Our next question is from the line of Ross Sandler with Barclays. Analyst:Ross Sandler QuestionRoss Sandler: Hey. Question for Mark. So I think recently this week there were Congressional hearings on this concept of algorithmic amplification or how algorithms on Facebook or Instagram serve as content to kind of maximize engagement, and sometimes that means some of the more controversial content is what gets surfaced. So first off, is that a fair characterization ? I think 10 years ago the News Feed was covering a whole story, but now we're talking about many different areas within the app. So how much is from this algorithmicdriven content versus utilitystyle engagement like going into Messenger or going into Marketplace or something that's just kind of an everyday behavior ? AnswerMark Elliot Zuckerberg: Sure, I can start taking this, and then, Wehner, you can jump in if you want to add anything. We do not optimize our systems to increase the amount of time spent in News Feed. I explicitly do not give our News Feed team or the Instagram feed team goals around time spent. But you should start by trying to build something that's more valuable, not by trying to increase the time that people are spending. So we've done that for years, and I think it's yielded good results. Consumers don't like it. Advertisers don't want to be near it. I don't think we've been super successful about it. And Instagram, a lot of people are using Explore and IGTV, Video and Watch on Facebook are quite big. So I think that there are a lot of different things that people are doing across the services, but Wehner can jump in with anymore color on that if he wants to add. AnswerDavid M. Wehner: I mean, the only thing I'd add here, Mark, is that I think more than anyone else in the industry we invest on the safety and security side to sort of keep bad content off the site before it gets ranked and put So we've got over 35, 000 people on the safety and security side. We've got the most robust set of content policies out there. We do a quarterly call, public call around our content review process and procedures. Operator Our next question is from the line of Youssef Squali with Truist Securities. Analyst:Youssef Squali QuestionYoussef Squali: Great. Thank you very much. I have a twopart question on VR for Mark. Mark, you've been talking about VR for along time now, basically every quarter. What was the realization this quarter that made you want to do that ? Because the other friction point is price, and you've already lowered the unit to $299 which is a very compelling price.

Thanks, Robert. That's actually very specific, probably more than I hoped for.

As you predicted earlier, I'm going to ask about the CSBG. So very impressive growth with revenue increase reaching 40%, 50% in the past few quarters. So clearly I was wrong. As you look over the next few years, how sustainable do you think this business could grow ? Maybe you can talk about the various segments within this business. Let me just ramble on about this part of the business a little bit, then you can ask me a few followups maybe to redirect me. So here's what I think about CSBG, it really is all about the installed base, right, and the important thing to understand if you'renew to the story is our equipment is useful fora very long time, decades, frankly. And so that's an important metric. We will describe how big is the installed base, we usually do it once a year at the end of the year, how much of the installed base grow, and it grows every year. And obviously with the strength in WFE this year, it's going to have nice growth this year. So what'sin this business ? I'll describethere's really four things. Spare parts, equipment and the installed base needs to be maintained and that means spares need to be replaced, right ? It'sthink of it as kind of your automobile, right, you got to take it in for maintenance and that's true of the installed base in the field. So that segment of the business is doing really well. Service, the equipment needs to be maintained.

So yeah, there's approximately 18, 000 patients in the US who were eligible for TRIKAFTA on its approval with the very broad F&E (00:47:57) label. Of those, the vast majority of those have initiated therapy and the persistence rate, as we call it, the number of patients who've stayed on the medicine, i.e. Obviously, the discontinuation rate only increases over time, right ? AnswerReshma Kewalramani: Gena, with regard to the betathal and sickle trial and what do we need to show in terms of the Phase 3 pivotal trial, I think the trials that you see that we've designed are right for the job. In terms of the endpoint, I think very clearly, in beta thalassemia, transfusion independence is key and in sickle cell, it's all about the reduction of VOCs, obviously, both metrics on which CTX001 has performed very well, early stages, few patients on all of those caveats, but I think that the studies that we've designed are the right ones and I think those are the endpoints to watch. QuestionGena Wang: Thank you. And our next question comes from the line of Matthew Harrison with Morgan Stanley. Analyst:Matthew K. Harrison QuestionMatthew K. Harrison: Great. Good afternoon. I guess two for me.

Operator Your next question comes from the line of Chad Dillard with Bernstein. Analyst:Chad Dillard QuestionChad Dillard: Hi. AnswerAndrew Robert John Bonfield: Hi, Chad. QuestionChad Dillard: So, I just wanted to go back to your comments about improving orders on the recip and solar side. And I was just hoping you could talk about how Cat is setup for this upcoming oil and gas CapEx cycle versus priors, maybe you can talk about just from a product standpoint, or even just like how much extra wallet share you can capture, now that you have Weir under the fold ? And just any interesting like productivityenhancing technology that you have now that you didn't before that would set you apart versus your competition ? AnswerDonald James Umpleby: Well, thanks for your question, and we do feel good about our competitive position. On the recip side, we made a number of changes, as you know. So, again, a whole variety of things going on there. Customers are buying our DGB engines which allow them to substitute up to 85% diesel fuel with natural gas. So, again, we believe we are quite well positioned. Operator Your next question comes from the line of Nicole DeBlase with Deutsche Bank. Analyst:Nicole DeBlase QuestionNicole DeBlase: Yeah.

That'd be interesting too. AnswerPeter B. Crawford: So, Walt, you'll start us off on that. And I think it's reflected in the financial information that we released to you last week. Peter, I'll turn it over to you for any comment in terms of spreads. QuestionWill Nance: Got it.

AnswerDara Khosrowshahi: You're welcome. Next question ? Our next question comes from Justin Post with Bank of America. Analyst:Justin Post QuestionJustin Post: Good day. Can you talk about market share trends for Rides in your bigger businesses, obviously US, maybe Mexico and London, what you're seeing there and are there opportunities for you to take some And then with travel, I know it's a important topic, airport trips. Can you talk about how important they are, or just remind us on bookings and then how important they are for profitability ? AnswerDara Khosrowshahi: Sure. And that did result in some loss in category position in California markets. In Mexico and the UK, nothing, I'd say the share in general has been pretty stable. There'slots of competitors out there, multiple competitors in both in the UK and in Mexico. We haven't seen things change significantly during this period. So we don't see much remarkable. That engagement is substantial. Already with our drivers, for example, about 40% of our drivers who are active with Rides have been crossdispatched to Eats in the month of April, which is an alltime high. Nelson, do you want to talk about airports ? AnswerNelson J. Chai: Yeah. So, Justin, airports are important to us. But as Dara said in his prepared remarks, 80% of our gross bookings are actually delivered from the user's home. So, for us, airports are about 15% of our Rides gross bookings and about 16% of our Rides segment EBITDA. So it is important and we do expect that that recovery will take a little bit longer. QuestionJustin Post: Great. AnswerDara Khosrowshahi: Next question ? Operator Our next question comes from Ross Sandler with Barclays. Analyst:Ross Sandler QuestionRoss Sandler: Dara, you mentioned that Georgia and Texas cities are up 50% from the bottom. So I assume that means they're 20% of peak, now up to 30% of peak ? Does that sound right ? And how does the curve on the recovery in those opened cities look compared to Hong Kong at the same stage ? And do you think that is Hong Kong, now that they're back to 70%, are they taking share from public transportation ? Any color on that will be great. AnswerDara Khosrowshahi: Yeah. Ross, it's too soon to tell regarding the share from transportation. I'll start with Hong Kong. We've had certain weeks where Hong Kong was down 40% from peak, 50% from peak. Now it's definitely getting better. In talking to many of our U4B customers, they are expressing some consternation at bringing back their employees and using public transport. So I'd say, from a conversational basis, from feedback that we're getting especially from our U4B customers, it does seem like commute is going to be the use case that's going to lead. And I wouldn't be surprised if there's some share shift from transit. But it's too early to tell at this point. I will also say that we believe that we can help transit comeback. We absolutely believe in partnerships with transit agencies. You've seen us put transit on our app. But more and more, we're offering services to transit, for example, during offhours for MTA between midnight and I think it's 5:00 AM, during hours when it just doesn't make sense to run a transit system and / or they might want to clean. So I do think that we can be apart of the solution. As to how cities get to move again, I think we'll be one of the early movers and we're certainly going to look to partner with transit going forward. As far as Georgia and Texas, Nelson, do you know the particulars as to whether what percentage of peak they are ? I mean, it'sI'd say they're smaller markets but the trends definitely look better. But, Nelson, anything to add there ? No, I don't, Dara. Sorry, I don't. Maybe Emily can follow up. AnswerDara Khosrowshahi: All right. Analyst:Heath P. Terry QuestionHeath P. Terry: Dara, obviously, you've made a lot of progress on this commitment to rationalizing markets where you're not number one, number two. And any sense of timing that you might have ? Our EBITDA margins were running over 30% as a percentage of ANR in Jan, Feb. And I think in the Eats category, in the food category, you were seeing a bunch of consolidation. So we think there's just kind of this booster in terms of the category. My instinct is that the commercial and the capital kind of rationalization is still going to continue, but it is a big category and big categories that just got bigger tend to attract some capital. The markets seem to like rationalization and I think ultimately the markets are going to drive longterm behavior. So we'll see. It'shard to be absolutely predictive. QuestionHeath P. Terry: Great. Thanks, Dara.

AnswerBrian Newman: Thanks, Amit. Operator Our next question comes from the line of Tom Wadewitz of UBS. Analyst:Thomas Wadewitz QuestionThomas Wadewitz: Yes. I wanted to ask you for a little bit more perspective just on the volume framework. I mean, I'm guessing you don't want to give us a kind of precise monthbymonth, but what didif you do, greatbut what did March look like in terms of how much weaker and then what does April look like ? I don't know if you want to comment. I'masking primarily on Domestic Package. If you want to offer International thought as well. But just kind of that volume trajectory and how that fits into the overall outlook and expectation for second quarter ? AnswerCarol B. Tome: Well, I'll start, Brian, and then please join in. So Tom, as Brian mentioned, we planned for our US Domestic volume to decline slightly in the first quarter. We actually missed our plan by about 500, 000 pieces per day, and when we started to peel back the layers of the onion to understand what happened, because there was a lot of variability in the demand, January was soft because of Omicron, then February came back and was nicely positive, and then March turned negative again, and we're like, why ? Well, as we looked at the impact of the stimulus, we found an aha moment. When the stimulus checks hit last year, we saw our average daily volume jump by 400, 000 pieces per day. And in fact, if you look at the performance of our SurePost product, last year SurePost grew 35%. This year, SurePost declined in the first quarter 10.5%. And if you look through that, you can see that five customers actually drove more than 60% of the yearoveryear decline, and in talking to those customers, they tell us it was just too hard to comp those stimulus checks. So that explains what happens in the quarter. Why do we feel good about the volume going forward ? Well, the comparisons get easier, and I can look at what's happening in April. Our April volume is better than our March volume. So we're trending in the right direction. So over the next several months, we've got new volume coming into our business both from enterprise customers as well as SMB customers, so we feel very good about the volume projections that are coming into our network. We did not. We had flight cancellations. It was a tough environment. In fact, we still have people who are sleeping in sleeping bags in the hub. It's a tough environment there. If you back out the COVID lockdowns and some shift from air to freight, our Asia export business would have been up in the quarter. So we're going to get through this. Brian, what would you like to add ? AnswerBrian Newman: Carol, I think you covered it well. The only thing I would add is one point in International. We did prove agile with the COVID lockdowns in Asia as you referenced. We were able to move some of that aircraft and airlift over to Europe, and as I mentioned, the Europe to US air lane was up 10%. So moving the equipment despite the volume softness I think plays very well in the integrated network. QuestionThomas Wadewitz: Great. Operator Our next question will come from the line of Jordan Alliger of Goldman Sachs.

We're going to do the best we possibly can. Operator From Bank of America, we have Andrew Obin.

QuestionJoseph Moore: Yeah. I guess you may have touched on this and I missed it. But any change in your own lead times over the last three months ? AnswerDavid Pahl: Generally, our lead times have remained stable. Even through the period of very strong demand, our lead times had remained stable. That's really what's driving that.

And that revenue just moves to our balance sheet as inventory.

RTG's therapies tend to be used in procedures that are more deferrable including those in Core Spine, pain stim, ENT, and Pelvic Health. RTG also was impacted by the reduction in customer bulk purchases and capital equipment purchases. RTG's Neurosurgery business in particular has a high mix of capital sales.

So, for this year, for the base business, we're guiding the 5% to 6% growth for the year. So, we like where we are and we think we have the pipeline that's going to deliver improved growth. So, whether it's just for the HIV business, you can focus on that or whether it's for the business overall. I wouldn't say that there aren't that many analysts that have a longterm model and it seems to us that many of them are in the process of updating their models as a result of some of the recent announcements, including the TAF patent settlement as well as the progress that we've made this year on the commercial side. So, maybe, let me just stick to this highlevel picture fora second, Andy. Do you anticipate or you guys, in these sort of forecast between now and 2030, anticipate BIKTARVY and perhaps some other products like YESCARTA to be in the IRA basket ? Well, I guess, kind of maybe not (00:05:05) because it's cell therapy, but... AnswerAndrew D. Dickinson: Yes, exactly. YESCARTA is unlikely because it's cell therapy. Conceivably, part of it could be Part Bin the future, but it's unlikely. BIKTARVY, it's possible, yes. I mean, it's too early to say definitively that BIKTARVY would be one of the products that's impacted. If it was, the earliest that it would be impacted is 2028 and we think that the impact is manageable. And perhaps, extending that same logic over to EPS line item then, consensus is obviously sort of in the mid7s or so. If the growth trajectory really is what you're talking about, Andy, sounds like it's going to be well north of 10, 000 (00:06:17) earnings power here.

Maybe another question on thejust thinking about the recovery in memory spending, is the utilization level the first thing you guys monitor ahead of the CapEx recovery ? AndhowmuchofalagdoyouexpectmemoryCapExtorecoveronceutilizationstartstoimprove ?

And RIS, I don't know other than Next Gen Jammer, which as part of the sales equation that I just mentioned really across the entire portfolio, and just as a reminder, RIS, the characteristic of that portfolio, they have a ton of programs that aren't huge, right ? They don't have many billion dollar programs. And if anything, as I mentioned, Next Gen Jammer stands out a little bit. Some of the key competitions that are out there right now, Next Gen Interceptor for RMD, Next Gen OPIR for RIS, (25:22), which is an enterprise collaboration effort primarily between RIS and Collins and the B52 reengineering program that relates to both Collins and Pratt. Some classified competitions in space and also some hypersonics. QuestionCai von Rumohr: So if you look at all of that, I think we asked Northrop before you, I think they have projected they expect their backlog to remain relatively flat. You had a year with good and certainly a legacy rate, yeah, and a good positive booktobill above 1. Any rough sense, does it look about flat or anything you can say or maybe you can't ? AnswerAnthony F. O'Brien: No, I think sitting here today, we'd expect to be able to grow the backlog. We've had to your point, we had on the legacy Raytheon side a proforma booktobill last year of like 1.06, 1.07 and the couple years before that, if you remember, it was even higher, right ? One year was 1.25 and the like. So we've had a really good run. But I think there's the ability here depending upon how a few of these orders land for us to continue to be able to show a little bit of growth in the backlog. QuestionCai von Rumohr: Terrific. And so we've got a Democratcontrolled government now.

AnswerMurdo J. Gordon: Thanks, David, for the question. I would say right now that in our conversations with payers and insurers, and for that matter, physicians, interchangeability has not been a barrier to have them consider AMGEVITA as an option and an alternative to the innovator. We are pursuing interchangeability with AMGEVITA and will expect those data to readout later on in the launch. But we'll follow quickly with our own interchangeability data. As for ABP 938, I won't speculate on what the FDA might say about that.

Talked about the investments thereRuth did, I think, in terms of head count growth in technical and sales roles. And for the new leadership that you mentioned, what are the things that Thomas Kurian can kind of do at cloud to accelerate the next phase of growth in that business ?

You're right that reimbursement is the most important thing we have to get right. A few things. So we have regulatory approvals in CE Mark countries right now, and we have now the European Society of Cardiologyof Hypertension has put out a statement in July recommending Guardian as part of the treatment paradigm. In the US, you're right, MCIT would be the best way to get that coverage approved. That's been delayed by the change in administration. It'sunder review right now. But our plan really would be whether or not MCIT gives you the coverage that would just go the same way we do it in every other therapy we go, building it payer by payer, geography by geography, including the United States where you have to get into the payment and the coding as next steps. So it is going to be in the commercial world payer by payer, and it's going to be for Medicare get the MCIT ruling. We'll have coverage right away. We'll work on payment coding from there. But it'shard to handicap just how fast the ramp goes because we don't have clarity on that last point. AnswerRyan Weispfenning: Okay. Thank you, Travis.

I mean the other obvious related trend that is a great thing for our business longerterm is the acceleration in the long running trend where card members and our merchants wanting to interact with us ever more digitally. And boy that the pace of that desire to accelerate digitally has accelerated and that's just going to help our cost structure. QuestionLisa Ellis: All right.

We never anticipated that that would occur. And again, that merchandise services team has really made these recess a lot more efficient than kind of what we experienced last year. But so far the partnership with STANLEY, BLACK + DECKER and CRAFTSMAN has been strong. We think there are other categories that we can expand it into. On the Pro side, the most relevant attachment to CRAFTSMAN is on the mechanics tools because a lot of the Pros still like to do their own work on their vehicles and their own personal and business vehicles and they have this long legacy relationship with CRAFTSMAN. So that allows us to continue to pull them in. But again, we think we have the foundation to build on. QuestionBrian Nagel: And then talking about the longterm financial targets, you've mentioned a 12% operating margin.

We've got the DRP now coming and we think that customers can expect to get accurate, transparent pricing consideration. And so we see this as a huge opportunity as we roll the DRP out. So that again, time will tell. The second, the third owner back into, OnStar or other services, I think is going to be additive as well. QuestionRod Lache: So, just to clarify the, there's clearly some opportunity that you're targeting for eliminating inefficiency, whether it's extra advertising, IT costs, carrying inventory, things like that. Do you have any kind of estimate for what the opportunity really is ? But will there be a kind of a minimal gap between that wholesale and retail that is offset by other things ? AnswerMary Teresa Barra: I think it will be offset, right ?

So when we go into a market we go in with the strength of Merrill Lynch, the private bank and the commercial bank all together and that's been a consistent plan over the last three years. QuestionBetsy L. Graseck: Got it.

Globally, there are 3 billion Mastercard and Maestrobranded cards issued. Now let's turn to page 6 for the highlights on the revenue line items, again, described on a currency neutral basis, excluding special items, unless otherwise noted.

Let'stalk about Shorts, then. For YouTube Shorts, you have Shorts receiving 15 billion daily views, 5 trillion alltime views, probably higher now since that blog came out. Susan has spoken quite a bit about the importance of the creator economy. Maybe just help us understand how you look to differentiate YouTube and the creator economy for both creators versus other platforms as well as how do you ensure that you're getting users engagement and monetizing those Shorts ? AnswerRuth M. Porat: So, it's still early in Shorts to state the obvious, but I think when we look at it, we'restarting with a strong base. The YouTube Partner Program was started about 15 years ago and it was a way to provide support to creators so they could build thriving businesses, basically, on YouTube. We have 2 million creators who are building businesses through the Partner Program. And as we look at extending this to Shorts, we're still experimenting with what's the best approach to monetization. So, as many of you are aware, we did create $100 million fund for creators. That's one of the early iterations, but it is early and we're continuing to look at what monetization is. I would say one of the other important elements of YouTube generally and as it relates to Shorts is the investments that we continue to make in content moderation and really protecting what is a healthy, appropriate, vibrant ecosystem. Unidentified speaker QuestionUnidentified speaker: YouTube, it's fascinating. And when Iwe're putting together these questions, I look at all the questions over the years on YouTube and there's been a lot of different strategies. YouTube, when you have billions of users, trillions of hours of content, there's a lot of opportunities. And we've gone from a subscriptions, premium video, music content, YouTube TV, Shorts, creator economy, Shopping.

We'll get to monetize that. Ad partners will agree that it's worth more. That's the experiment we have to prove out the next year and make it reality and not slip back into what many providers have done with maybe starting with a similar thesis that said let's add another ad to each break because that's the easiest way to increase revenue. We worry that down that path lies, let's just say, a path to not being premium. QuestionKannan Venkateshwar: And I guess when you think about other pieces ofother kinds of content that are coming into HBO Max in the future, sports and news being the prominent ones, they might be a bit more supportive of the AVOD model compared to some of the other premium content that you have on the service. So could you give us the thinking around sports and news ? What should we expect therein terms of the kind of product you'rethinking about ? Is there something different in terms of the kind of content you're planning to put there ? AnswerAndy Forssell: So let me take sports and news separately because they're a little bit different. But before I go there, look, sports and news are still a huge part of what makes cable and satellite TV such a powerful engine. Got 85 million households in the US that are still subscribing to some form of cable subscription or via satellite and that's larger than any of the SVOD providers right now. Now, is that number going to go up or down ? Sports and news are at the heart of it and the whole model of sports rights that has been so successful in cable involves leagues selling whatif you looked at them on their own or kind of odd little slices of sports rights, Thursday night games and football or or... QuestionKannan Venkateshwar: Yeah. AnswerAndy Forssell:...this conference in baseball, so that has been phenomenal in cable because we all subscribe and you had all the pieces. In SVOD, it's harder. I don't think that rights landscape is going to be nearly as successful in SVOD. So, welook, we announced the Premier League in LatAm and Brazil and Mexico.

So two very good questions. And that would be based on potentially your CXL interface. Yeah, absolutely right. So your question is absolutely right on.

First question is just a little bit of help in interpreting the guidance. And if you could speak to the March quarter perhaps in terms of seasonality and seasonal performance. And, Luca, as you mentioned last year because of the late launch, later launch of the phone, some of that came into the March quarter and that was better than seasonal performance in March. Should we interpret because the supply constraints are easing somewhat as you go into the March quarter that we should see something similar that March quarter we get some better than seasonal performance ? Is that the correct way to interpret your guidance ? AnswerLuca Maestri: Well, and we talked about it on a yearoveryear basis because that's probably how most people look at it. And so, just to recap what we said, first of all, we expect a record for the March quarter. We expect solid growth on a yearoveryear basis. But as Tim was saying, we still expect significant supply constraints, but less than what we've seen in December. So, I think on that basis, you can do the math around sequential. QuestionChris Caso: Got it.

Fortunately, based on the latest projections, we do expect the second quarter to be the most severely impacted. With that said, there is still a good deal of uncertainty around the trajectory of the pandemic, as well as the resulting macroeconomic impact. While we're seeing different impacts across geographies and at different times, generally we expect three phases: the outbreak with its corresponding social distancing measures; a period of graduated re openings; and finally, a return to new normal.

Canada benefited from strong marketing activity, featuring our core menu, including the BTS Famous Orders meal.

Bill hasn't talked about that so much. Were those changes sort of put on the backburner, while you worked through the leadership changes, COVID and this amazing demand you've experienced or is that still under some consideration ?

BH Primary insurers continue to write significant levels of workers' compensation, commercial and professional liability insurance and the related claim costs maybe subject to high severity and long claimtails.

So, there's three other fintech competitor things I want to talk about before I go into some of the things you'redoing in payments strategically, one is Buy Now, Pay Later.

So, lots of companies are experimenting with generative AI. AnswerTimothy Donald Cook: If you kind of zoom out and look at what we've done on AI and machine learning and how we've used it, we view AI and machine learning as fundamental technologies and they're integral to virtually every product that we show. And so, just recently, when we shipped iOS 17, it had features like personal voice and live voicemail.

Event Type: Deutsche Bank Media, Internet & Telecom Conference Date: 20200310 Company: AT&T, Inc. Ticker: T COMPANY PARTICIPANTS John J. Stephens OTHER PARTICIPANTS Bryan KraftAnalyst MANAGEMENT DISCUSSION SECTION Bryan Kraft Okay. Thanks everyone for joining us. I'm Bryan Kraft; I'm the telecom, cable, media analyst at Deutsche Bank. And I'm pleased to be herewith John Stephens, the CFO of AT&T. John, welcome. And I know, John, you want to start off with some Safe Harbor language, so I'll hand it over to you. John J. Stephens Great. Thanks, Bryan. And thanks for everyone to be on the call today. Thanks for your interest in AT&T. Before we begin, I want to call your attention to our Safe Harbor statement which is that some of the comments I may be making today will be forwardlooking and they're subject to risk and uncertainties. Actual results may differ materially and we'd suggest you look at our SEC filings and the information on our AT&T website for further information. With that, I'll add one more thing, folks. We used to give it at the end, but please on your way home tonight, don't text and drive. It's a serious matter for all of us, and we take it seriously right here. With that, Bryan, let me hand it back to you. Let's just start asking questions. QUESTION AND ANSWER SECTION Analyst:Bryan Kraft QuestionBryan Kraft: Okay.

The World Economic Forum's Annual Global Risk Report, which was released last week and prepared with the support of Marsh & McLennan and other partners, highlights some of the most likely and impactful risks facing the world today, and we are working with clients to navigate these issues.

Good afternoon. QuestionMichael S. Lavery: Just wanted to check on Ricolino. You've said that the integration is progressing well. How quickly is that ramping up ? Can you give an update on just how that's progressing and if that's coming along with your expectations ? How is that coming along ?

The other thing I would say is, many of our expenses in those markets are passthrough expenses. So some of the land down in Latin America, even in Europe, some of the rooftop in Europe that gets passed through to the carriers. So as inflation takes hold there, all those expenses just get passed right back through to the carrier. So in our revenue, we have about $1 billion of revenue that really is direct passthrough primarily coming from power and ground rents or rooftop rents. QuestionPhilip A. Cusick: So just sticking with the US on thefor one more second there, for virtually my entire tower career, I've watched carriers talk about getting their tower expenses lower. QuestionPhilip A. Cusick: And one of the things they focused on was inflation at zero and escalators at 3% and drove them up a little batty. So as inflation goes potentially above 3%, do you have any conversation about, hey, listen, we need to grow faster, we need more escalator or the effective escalator higher through amendments over the next 5 years versus the last 10 years ?

And Frank, do you think there's any channels where a cheaper WACC priced PD1 would be preferred ? Let's say VA channel or, like, are there channels or none at all ? AnswerFranklin K. Clyburn: Well, I think, Umer, there will be some channels that maybe more pricesensitive than others.

Marketing, selling and administrative expenses increased 2%, primarily driven by the increased costs associated with the launch of Mounjaro, partially offset by the favorable impact of foreign exchange rates.

Our first question comes from Rob Wertheimer with Melius Research. Analyst:Rob Wertheimer QuestionRob Wertheimer: Howdy. You touched a little bit more on the external features than the internal, and I wonder what if you can just do a little bit more on nimbleness or responsiveness or the internal cost that you sort of see potentially changing as a result of the way you've organized yourselves ?

Okay. No, that's helpful. And then just, Arvind, on the cognitive app side, there's been a lot of portfolio changeover there. You mentioned some of the exits that you had in that. What is it that's going to drive growth in that piece of the business ? AnswerArvind Krishna: So the reason we call it apps is because that drives productivity. And what'sin there is security and I think cybersecurity is the issue of this decade, right ? I mean, much as people talk about, I think it's the fundamental issue and it's kind of cliched because you do work fora bank, Wamsi, but you can sort of say what do people rob banks in the early part of the century. That's where the money is. So why is it all cyber attacks, because people want the data. The data actually is not implicit values, explicit value. They can sell it. QuestionWamsi Mohan: Yes. AnswerArvind Krishna:...for dollars, right ? And if you go to the dark web, you see it. That's one piece. We see the growth there. We saw it last year. We saw it in this first quarter and we expect to see continuing growth down that side. That's the biggest piece inside our AI applications, right ? And the reason we focus only on those two is we fundamentally believe that applying AI and applying data techniques into those unlocks even more value. People will remove (00:41:26) products like MQ and CrossWorlds and all of those. Tome, supply chain is another example of those. For example our supply chain integrates with Adobe. You can imagine how somebody's retail side could begin to come backwards and say, now I need to optimize my supply side, right, or how Maximo integrates with Siemens, as they do industrial automation, hey you need an asset manager to understand what is your capital structure, what's your factory (00:42:10) high capital machine, who repaired it, what happened to it. And then you can both begin to say, hey, can I do more analytics on this combined data. So I'm excited by the opportunities ahead of us. But a big difference from the past, Wamsi, I think five years ago, we might have thought, hey, I want all that value, let me try and build it up. That adds a really slow path to success. I wouldn't say it's wrong path, but it's just a really slow path. If I say instead, look I'm really good at doing the analytics, I'm really good at doing asset management, but maybe I'm not so good at doing census, maybe I'm not so good at doing what they call IoT or Industry 4.0. Maybe those partners are. They should do that, let's work together. They actually benefit because their stuff goes faster, ours (00:43:05) benefits. And so I'm back to my example of, hey, there's a biglet's expand the pie and actually the speed also that's important. And so that's why you see me so excited on our AI apps. As long as we stick to our core meeting (00:43:19), stick to where we have brand permission, because when things are described, we have brand permission. I mean, they own those spaces and they should own those spaces. They have way more skills and way more investment.

Operator, we're ready to begin the Q&A session now. [ Operator Instructions ] Our first question today is coming from Toshiya Hari from Goldman Sachs. How would you characterize the current gap between supply and demand ? And importantly, you know, as we look ahead to 2022, how comfortable are you from a foundry wafer capacity and [ ABS substraight capacity ] perspective, as you continue to grow the business strong doubledigits ? And then I've got a quick followup. Well, hey, thanks for the question. You know, I think it's fair to say that the semiconductor demand environment, and particularly the AMD demand environment has been very strong in 2021. And we made progress in the second quarter that enabled us to exceed the original guidance. So, we've been planning with that with our supply chain partners. And then as a quick follow up, I guess a multipart question on your server, CPU business or data center business more broadly. I was hoping you could speak to, sort of the revenue construct in the second quarter. And if you can differentiate between second gen and third gen, Rome versus Milan, and then what you're seeing on the Cloud side versus Enterprise side of your business, and the outlook into the second half as you think about, sort of the different segments of that business ? And then finally, you talked about data center being more than 20% of revenue, in Q2, what's embedded in your second half guidance ?

So for Talzenna and the TALAPRO2, what's your expectations for your label here, given the strength of your data ? And could that affect your $1 billion peak sales number that you gave in December ? And then for the RSV flu coadministration study, what flu vaccine did you test that with ? Is that the high dose or the low dose ? And if it's the low dose, could you be approved for use with a high dose, which is more relevant today ?

The trial will continue to analyze DFS in patients whose tumors express high levels of PDL1, the other dualprimary endpoint which did not meet statistical significance at the time of the planned interim analysis, as well as overall survival, a key secondary endpoint.

So -- but I think the biggest impact from Marvell will be just driving broader adoption of our data center flash controllers, which again, are well positioned across a number of NAND OEMs.