7/27/2019 Kelly Bird PHI Earnings Gap _IJ Edits 21 August 2

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@ags Fallgig G`ufcthae Ecrraw tbg Gcreheis Icp jgtwgge Yamge ce` Mge1

Pbg Fcsg ao tbg ^bhlhpphegs

Ht hs ce he`hsputcjlg ocft tbct, ae cvgrcig, wamge gcre lgss tbce mge% Ybct hs `hsputg`,bawgvgr, crg tbg fcusgs ao tbg gcreheis icp jgtwgge tbgm% Vafhcl earms heolugefhei yauei

wamges g`ufcthae ce` fcrggr fbahfgs tawcr`s trc`hthaeclly lawgr pcyhei affupcthaes, cs wgllcs lcjar mcrkgt `hsfrhmhecthae, bcvg jgge h`gethohg` cs samg ocftars tbct bglp gxplche tbgige`gr gcreheis icp he samg `gvglaphei fauetrhgs% Pbhs crthflg laaks ct tbg gcreheis ao wamgece` mge he tbg ^bhlhpphegs% Pbg ^bhlhpphegs hs ce hetgrgsthei fcsg stu`y jgfcusg ht faeshstgetlyrceks fampcrcthvgly bhib he ilajcl survgys ao ige`gr gquclhty, ce` fallgig geralmget rctgs oarwamge mctfb tbasg ao mge% Pbgrgoarg wg mhibt gxpgft ta sgg tbhs pgroarmcefg he ige`grgquclhty jghei rgolgftg` he c ecrrawgr gcreheis icp jgtwgge wamge ce` mge%

Wshei paalg` `ctc oram tbg ^bhlhpphegs Bausgbal` Lcjar Oarfg Vurvgy, :>>8 ta :>33, wgstcthsthfclly h`gethohg` tbg `gtgrmhecets ao gcreheis ce` gsthmctg` tbg shzg ao tbghr hmpcft aegcreheis `hoogrgethcls cfrass cppraxhmctgly 3>7,>>> he`hvh`ucls% Jy ushei c `ummy vcrhcjlg hetbg gqucthae ta h`gethoy mge, wg gsthmctg` tbg gcreheis icp jgtwgge wamge ce` mge

faetrallhei oar c sgt ao atbgr ocftars tbct mhibt heolugefg he`hvh`ucl gcreheis `hoogrgethcls, sufb cstbg lgvgl ao g`ufcthae, cig, tbg sgftar ao gmplaymget, affupcthaecl stctus, ce` oull thmg wark%

Pcjlg 3 rgparts tbg mchestcthsthfcl rgsults oarg`ufcthaecl cttchemget,cig ce` ige`gr% Yg ohe`tbct fallgig irc`uctgs gcre07%>' marg tbce bhibsfbaal irc`uctgs cotgrfaetrallhei oar mast atbgrocftars, heflu`hei

praogsshaecl stctus ao tbgwarkgr ce` sgftar aogmplaymget% Cig pashthvglyheolugefgs gcreheis jut ct c`hmhehsbhei rctg "h%g%, cehevgrtg` u sbcpg cig-gcreheis praohlg(% Yg ohe`tbct tbgrg hs ce gcreheisicp jgtwgge wamge ce`mge ao cjaut 39%>'; h%g%,mge ae cvgrcig gcre39%>' marg tbce wamgecotgr faetrallhei oar tbgatbgr ocftars% Ybhlg tbhs hsrglcthvgly bhib, ht hs mufblawgr tbce tbg rcw gsthmctgs ao irass gcreheis icp ao 6>' ta 0>' rgpartg` he rgfget ige`grcssgssmgets oar tbg ^bhlhpphegs%

Yg ourtbgr `hvh`g` aur scmplg jy bhib sfbaal ce` fallgig irc`uctgs ta sgg ho tbg shzg ao tbggcreheis icp hs faeshstget cfrass `hoogrget g`ufcthae iraups; ho tbg ige`gr icp hs eat faeshstgetcfrass g`ufcthae iraups tbge ht hs uelhkgly tbct lcjar mcrkgt `hsfrhmhecthae hs ce gxplcecthae oar

Pcjlg 3Vummcry ao Vtcthsthfcl Zgsults ao tbg @gtgrmhecets ao Gcreheis

"@gpge`get vcrhcjlg hs `chly gcreheis(

Gxplcectary vcrhcjlgsCllwarkgrs

Fallgigirc`uctg

Bhibsfbaal arlgssg`ufcthae

@ummy vcrhcjlgs oar g`ufcthaelgvgls "whtb bhib sfbaalirc`ucthae cs tbg faetral iraup(

--Vamg glgmgetcry sfbaalhei ->%38$ ->%32$--Glgmgetcry sfbaalhei famplgtg` ->%33$ ->%3:$

--Bhib sfbaal ue`grirc`uctg ->%>2$ ->%3>$

--Vamg fallgig g`ufcthae >%37$

--Fallgig irc`uctg >%07$@ummy vcrhcjlg oar mge "wamge csfaetral iraup(

>%39$ >%>8$ >%::$

Cig >%>:$ >%>:$ >%>6$

Cig squcrg` ->%>>>:$ ->%>>>3$ ->%>>>6$

C`dustg` Z squcrgEa% ao ajsgrvcthaes

>%?:3>7,099

>%68:0,393

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Eatg4 Ybhlg eat sbawe bgrg, `ummy vcrhcjlgs wgrg clsa heflu`g` tafaetral oar gcreheis `hoogrgethcls cfrass rgihaes, urjcehty, mcrhtcl stctus,

ea ao fbhl`rge, flcss ao warkgr, sgftar ao gmplaymget, affupcthaeclstctus, oull thmg wark, pgrmceget wark, ygcrs ce` tbg hetgrfgpt%

7/27/2019 Kelly Bird PHI Earnings Gap _IJ Edits 21 August 2

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tbg icp% Pbg stcthsthfcl rgsults rgpartg` he falume : ao Pcjlg 3 sbaw c smcll gcreheis icpjgtwgge wamge ce` mge whtb fallgig g`ufcthae, whtb mge gcrehei ae cvgrcig 8%>' marg tbcewamge% Ce gcreheis icp ao ::%>' gxhsts jgtwgge wamge ce` mge whtb bhib sfbaal g`ufcthaear lgss "falume 6 ao Pcjlg 3(%

Ourtbgr heshibt heta tbg gcreheis icp cfrass cig

ce` g`ufcthae iraups hs pravh`g` he Ohiurgs 3cce` j% Pbg ohiurgs `gphft tbg cig-gcreheispraohlgs oar wamge ce` mge he :>33 iraupg` jyg`ufcthae flcss% Ht hs cppcrget oram Ohiurg 3ctbct tbg cvgrcig gcreheis ao fallgig irc`uctgscrg shmhlcr oar wamge ce` mge oar mufb ao tbghrwarkhei lhvgs% Gcreheis rhsg whtb cig oar jatbwamge ce` mge, rgolgfthei c prgmhum oar lcjarmcrkgt gxpgrhgefg% C smcll gcreheis icpcppgcrs oar mcturg wamge avgr 7> ygcrs aocig%

Laakhei ct Ohiurg 3j, wg sgg c famplgtgly`hoogrget cig-gcreheis praohlg oar wamge whtbbhib sfbaal g`ufcthae% Ybhlg tbg cig-gcreheispraohlg oar mge oallaws tbg gxpgftg` pcttgre aogcreheis rhshei whtb cig wg `a eat sgg sufb cpcttgre oar wamge% Hestgc`, tbg cig-gcreheispraohlg hs gssgethclly olct, suiigsthei tbgrg hs eaprgmhum oar cig oar tbhs iraup ao wamge%

Ybct fcusgs tbg gcreheis icp jgtwgge lgssg`ufctg` wamge ce` mge1 @ug ta c lcfk ao`ctc, tbg stcthsthfcl ma`gl cjavg `h` eat heflu`g

c vcrhcjlg ta fcpturg tbg he`hvh`ucl pgrsaeseumjgr ao ygcrs ao faetheuaus gxpgrhgefg hetbg warkoarfg, wbhfb hs faesh`grg` ce hmpartcetheolugefg ae pramathaes ce` gcreheis%Bawgvgr, tbgrg hs samg gvh`gefg ta suiigsttbct tbhs gcreheis icp jgtwgge lgss g`ufctg`wamge ce` mge mhibt crhsg jgfcusg wamgewhtb bhib sfbaal g`ufcthae crg marg lhkgly talgcvg tbg lcjar mcrkgt ce` jgfamggfaeamhfclly hecfthvg marg aotge ce` oar laeigrpgrha`s fampcrg` ta tbghr mclg fauetgrpcrts%Gfaeamhfclly hecfthvg rgogrs ta pgrsaes eat

gmplayg`, eat cfthvgly laakhei oar wark, ce` eatjghei g`ufctg`% Pbg faesgqugefg ao hecfthvhtyoar c pralaeig` pgrha` ao thmg hs tbct c pgrsaes warkplcfg skhlls `gprgfhctg, ce` wbge sbg rg-getgrs tbg lcjar mcrkgt bgr last ygcrs ao warkplcfg gxpgrhgefg whll jg pgeclhzg`, tbrauib lawgrgcreheis fampcrg` ta mge, wba stcy laeigr he tbg lcjar mcrkgt ce` cffumulctg marggxpgrhgefg%

Ohiurg :c sbaws tbg rctgs ao hecfthvhty oar wamge ce` mge% Ht hs cppcrget oram Ohiurg :c tbctwamge bcvg vgry bhib rctgs ao hecfthvhty, ce` tbg rctgs vcry cfrass cig pcrtly rglctg` ta

Ohiurg 3 cCig-Gcreheis ^raohlg ao Fallgig Irc`uctgs

Vaurfg4 ^bhlhpphegs Bausgbal` Lcjar Oarfg Vurvgy,:>33

Ohiurg 3jCig-Gcreheis raohlg ao Bhib Vfbaal Irc`uctgs

Vaurfg4 ^bhlhpphegs Bausgbal` Lcjar Oarfg Vurvgy,

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Mclgs Ogmclgs

7/27/2019 Kelly Bird PHI Earnings Gap _IJ Edits 21 August 2

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fbhl`jgcrhei ce` fbhl` fcrg ygcrs `urhei wbhfbwamge crg ct bamg fcrhei oar yauei fbhl`rge%Pbgsg rctgs crg pcrthfulcrly bhib oar yaueigrwamge% Oar gxcmplg, aeg aut ao tbrgg wamge cttbg cig ao :3 ygcrs al` hs gfaeamhfclly hecfthvgfampcrg` ta cjaut 7%>' oar mge ao tbg scmg

cig% Pbg hecfthvhty rctg pgcks oar wamge he tbggcrly 6> ygcrs al` cig iraup% Pbgrgcotgr tbg rctgstcrts ta `gflheg cs marg wamge rg-getgr tbglcjar mcrkgt, jut rhsgs ciche cs wamge cppracfbrgthrgmget% Yamge whtb c fallgig g`ufcthae bcvgmufb lawgr hecfthvhty rctgs fampcrg` ta wamgewhtb bhib sfbaal g`ufcthae "Ohiurg :j(% Ybhlg eatsbawe bgrg, aur stcthsthfcl ceclyshs ao tbg`gtgrmhecets ao hecfthvhty cfrass he`hvh`uclsfaeohrms tbct fallgig g`ufctg` wamge crg ocrlgss lhkgly ta jg gfaeamhfclly hecfthvg fampcrg`ta wamge whtb bhib sfbaal g`ufcthae, jgfcusg ao

tbg bhib gfaeamhf rgtures oram tbghr fallgigg`ufcthae% Pbg shzg ao tbg ocmhly clsa heolugefgswamge rctgs ao hecfthvhty% Yamge whtb tbrgg armarg fbhl`rge crg ocr marg lhkgly ta jggfaeamhfclly hecfthvg oar samg thmg fampcrg` tawamge whtb aeg ar twa fbhl`rge, ar ea fbhl`rge%

He summcry, samg ohe`heis wcrrcet pcrthfulcrgmpbcshs% Ohrst, fallgig g`ufcthae cppgcrs ta jgce hmpartcet `rhvgr oar glhmhecthei tbg gcreheisicp jgtwgge wamge ce` mge% Vgfae`, tbggxfgsshvgly bhib rctg ao gfaeamhf hecfthvhty

cmaei yauei wamge whtb bhib sfbaal g`ufcthae`cmcigs tbghr outurg gcreheis praspgfts% Pbhsohe`hei bcs palhfy hmplhfcthaes oar c``rgsshei tbggcreheis icp jgtwgge lgss g`ufctg` wamge ce`mge% Pbhr` , safhcl, g`ufcthae ce` gmplaymgetpraircms sbaul` c``rgss tbg prgvclgefg aogfaeamhf hecfthvhty cmaei yaueigr wamge%^raircms sbaul` jg `gshieg` ta fbceig yaueiwamges ctthtu`gs cjaut pcrthfhpcthei he tbg lcjarmcrkgt, ce` ta pravh`g jgttgr heoarmcthae aeg`ufcthae ce` fcrggr fbahfgs% Hetgrvgethaesfaul` heflu`g, oar gxcmplg "h( c ecthaecl rallaut ao

fcrggr fauesglhei sgrvhfgs ct pujlhf bhib sfbaalstbct pravh`g yauei pgaplg, ce` he pcrthfulcr ihrls,whtb fcrggr `gvglapmget plces, "hh( lhog skhllstrchehei ct pujlhf sfbaals whtb spgfhohf trcheheima`ulgs oar ihrls ae prgpcrhei oar daj cpplhfcthaes, ohecefhcl lhtgrcfy, ce` rgpra`ufthvg bgcltb,ce` "hhh( yautb daj sgcrfb praircms tcrigthei bhib sfbaal irc`uctgs, whtb prapgr rgprgsgetcthaeao yauei wamge he tbg praircms% Vufb praircms sbaul` heflu`g oue`hei oar warkplcfggxpgrhgefg% Pbgsg praircms crg gxpgeshvg ce` mcy egg` ta jg sglgfthvg oram tbg stcrt%

Ohiurg :cCig ^raohlg ao Zctgs ao Gfaeamhf Hecfthvhty

ao Yamge ce` Mge"' ao tbg rglgvcet warkhei cig papulcthae(

Vaurfg4 ^bhlhpphegs Bausgbal` Lcjar Oarfg Vurvgy,:>3>

Ohiurg :jGfaeamhf Hecfthvhty jgtwgge Fallgig ce`

Bhib Vfbaal G`ufctg` Yamge"' ao tbg rglgvcet warkhei cig papulcthae oar

tbct g`ufcthae iraup(

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Bhib sfbaal Fallgig

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Oaurtb, ce` faetrcry ta fammae vhgws, ce cfthvg mhehmum wcig palhfy ta flasg tbg gcreheisicp hs fauetgrpra`ufthvg cs ht `ags eat c``rgss tbg fcusgs ao tbg gcreheis icp jgtwgge wamgece` mge, wbhfb tbhs stu`y suiigsts mcy prhmcrhly jg fcusg` jy tbg bhibgr prgvclgefg aohecfthvhty cmaei yauei wamge% Pbgrg hs clsa samg gvh`gefg tbct mhehmum wcigs sgt taa bhibmhibt burt tbg oarmcl gmplaymget appartuehthgs ao yauei wamge whtb bhib sfbaal g`ufcthae%Vamg fauetrhgs c``rgss tbhs jy hetra`ufhei c yautb mhehmum wcig sgt jglaw tbg ecthaecl

mhehmum rctg%

Oheclly, lcjar mcrkgt rgoarms crg egfgsscry ta jaast gmplaymget appartuehthgs oar yaueipgaplg, gspgfhclly oar tbasg vulegrcjlg ta ocllhei aut ao tbg lcjar mcrkgt% Zgoarms sbaul` rgmavgrgstrhfthaes ae gmplaymget crrceigmgets% He tbg ^bhlhpphegs, gxtge`hei tbg gmplaymgetprajcthae pgrha` jgyae` ? maetbs, pgrbcps ta 3: maetbs, ce` cllawhei gmplaygrs ce` warkgrswhtb marg fbahfgs ta getgr heta laeigr ohxg` tgrm gmplaymget faetrcfts waul` jaast yautbgmplaymget% Vufb rgoarms waul` jgegoht wamge gspgfhclly tbasg laakhei oar marg olgxhjlgwarkplcfg crrceigmgets `urhei tbghr fbhl`jgcrhei ygcrs ce` rg-getry heta tbg lcjar mcrkgt%