Case Study Analysis

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Footwear Industry Report

FIR 11-Aug-2019

Industry 1 Biegala MGT495-01

Summer

Year 18

© GLO-BUS Software, Inc.

Year 18 Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Change

from Y17

1 J-Doyen 116 98 107 +1 2 B Cielo 115 89 102 +5 3 K ASM 113 85 99 0 4 H Road Runner 112 78 95 +8 5 DTigers 82 54 68 -12 6 E Elite Footwear 78 51 65 -9 7 IPure Steps 62 46 54 +1 8 G - Star 60 44 52 +3 9 C Shoe 49 38 44 -2

10 ADragons 45 36 41 -6 11 FFlying wings 38 13 26 -7

Game-To-Date Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Bonus Points

Overall G-T-D Score

1 J-Doyen 116 98 107 4 111 2 B Cielo 114 86 100 4 104 3 K ASM 112 85 99 1 100 4 H Road Runner 111 76 94 5 99 5 DTigers 86 58 72 2 74 6 E Elite Footwear 83 57 70 4 74 7 IPure Steps 66 47 57 2 59 8 G - Star 64 46 55 2 57 9 ADragons 58 44 51 3 54

10 C Shoe 57 42 50 0 50 11 FFlying wings 51 38 45 1 46

Investor Expectation Score (I.E.)

Investors and company boards of directors have established targets for the five scoring measures that appear on pages 2 and 3 of this report. The I.E. score ranges from 0 to 120 (if all targets are exceeded by 40% or more). Click the Help button (upper-right) for more information.

Best-In- Industry Score (B-I-I)

The B-I-I score measures each company's performance relative to the best performing company on each of the five scoring measure. The B-I-I score ranges from 0 to 100. To score 100 a company must be the best performing company in the industry on all five scoring measures.

Weighted Average Score

The weighted average score combines the Investor Expectation Score and the Best-In-Industry Score using a 50%-50% weighting as specified by the course instructor. Detailed explanations of scoring are provided in the Help documents asociated with pages 1, 2, and 3 of this report.

Page 1

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Industry 1 SCORING MEASURES Year 18

Earnings Per Share ($ per share)

Earnings Per Share scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected EPS shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date EPS scores are based on a weighted average of the annual EPS performances.

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (4.47) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 2.57 2.94 1.89 1.74 3.16 2.06 1.95 1.13 2.18 3 1 10 4 A B 4.61 4.22 4.79 6.70 8.58 10.65 12.62 17.54 8.61 24 16 24 15 B C 2.26 2.57 1.10 2.19 1.91 1.65 2.14 1.81 1.93 5 2 9 3 C D 2.37 4.59 5.19 5.21 7.79 6.88 8.25 8.42 6.04 22 8 24 11 D E 1.42 2.94 2.97 3.66 5.23 5.34 6.02 5.79 4.13 17 5 18 7 E F 1.48 3.86 3.96 4.14 3.96 1.31 2.16 1.49 2.76 4 1 12 5 F G 2.32 2.84 2.90 3.58 2.09 3.27 3.29 4.05 3.04 12 4 14 5 G H 4.05 6.74 7.40 6.57 6.02 5.94 9.19 13.73 7.29 24 13 24 13 H I 2.71 3.11 2.70 2.87 2.32 2.24 3.06 3.84 2.86 11 4 13 5 I J 2.27 4.74 7.14 10.47 13.10 14.72 17.42 21.45 11.19 24 20 24 20 J K 2.31 4.19 5.29 7.81 9.46 10.86 12.12 15.28 8.14 24 14 24 15 K

Return On Equity (%)

Return On Equity scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected ROE shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date ROE scores are based on a weighted average of the annual ROE performances.

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (25.0) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 21.8 20.2 11.2 9.2 14.9 9.0 8.4 4.7 11.4 3 2 9 7 A B 36.0 24.5 22.1 24.5 24.5 24.5 26.1 32.7 26.8 22 17 21 15 B C 19.4 18.6 7.7 12.4 9.7 7.8 9.5 7.5 10.5 5 4 8 6 C D 22.7 41.5 38.4 24.4 27.3 22.7 26.9 28.8 27.8 20 15 21 16 D E 12.6 21.9 18.1 18.3 21.1 18.8 19.3 16.4 18.5 12 8 15 11 E F 13.2 28.1 23.3 24.6 26.3 44.7 n.m. n.m. 34.9 20 0 24 20 F G 19.9 20.0 19.2 21.9 10.9 15.0 13.1 14.0 16.0 10 7 13 9 G H 33.0 38.7 29.4 19.9 15.7 14.6 22.3 29.0 23.4 20 15 19 13 H I 22.9 21.0 15.3 14.1 10.0 9.2 11.4 12.9 13.6 9 7 11 8 I J 19.6 31.8 34.2 35.3 32.9 29.6 30.4 36.3 32.2 23 19 23 18 J K 19.8 28.1 26.9 32.8 33.0 31.5 34.1 38.9 32.1 24 20 23 18 K

Stock Price ($ per share)

Stock Price scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected stock price shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based solely on the most recent year's stock price.

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 33.46 45.06 18.88 8.82 27.24 20.37 9.24 5.61 1 0 1 0 A B 121.59 83.05 88.69 130.89 188.88 239.82 277.78 403.63 24 16 24 16 B C 22.86 21.18 8.49 14.03 13.22 12.09 9.36 9.53 1 0 1 0 C D 48.77 120.70 122.75 99.07 159.71 119.06 130.34 107.40 12 4 12 4 D E 11.86 35.44 32.74 58.32 86.32 80.94 86.67 63.73 7 2 7 2 E F 11.76 58.38 68.43 72.32 45.87 18.65 10.81 8.18 1 0 1 0 F G 20.47 31.72 57.28 38.44 16.03 21.55 14.80 35.14 4 1 4 1 G H 102.76 178.88 185.71 124.92 94.96 76.43 165.45 296.13 24 12 24 12 H I 35.55 46.77 24.37 24.71 18.73 14.96 29.91 29.20 3 1 3 1 I J 22.39 102.04 186.55 275.83 340.67 368.88 418.71 515.00 24 20 24 20 J K 26.32 92.42 111.75 191.48 222.74 239.49 267.42 336.38 24 13 24 13 K

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 2

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Industry 1 SCORING MEASURES Year 18 (concluded)

Credit Rating Credit Rating scores are based on a 20% (20-point) weighting. A bolded credit rating indicates achievement of the investor expected credit rating shown below each yearly column head. Game-To-Date credit rating scores are based solely on the most recent year's credit rating performance.

Y11 (B+)

Y12 (B+)

Y13 (B+)

Y14 (A–)

Y15 (A–)

Y16 (A–)

Y17 (A)

Y18 (A)

Y19 (A)

Y20 (A) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A A A A– A A+ A+ A+ A+ 24 20 24 20 A B A A+ A+ A+ A+ A+ A+ A+ 24 20 24 20 B C A– A A+ A+ A+ A+ A A+ 24 20 24 20 C D A A– B– A A B– B C+ 8 8 8 8 D E B A A+ A– A A+ A+ A+ 24 20 24 20 E F B A A+ A A– A– C– C– 0 1 0 1 F G A– A A+ A+ A+ B+ B B+ 16 16 16 16 G H A A A A+ A+ A+ A+ A+ 24 20 24 20 H I A A A A+ A+ A+ A+ A+ 24 20 24 20 I J A– A A+ A+ A+ A+ A+ A+ 24 20 24 20 J K A– A A+ A A A A A 20 19 20 19 K

Image Rating Image Rating scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected image rating shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based on an average of the most recent three years.

Y11 (70)

Y12 (72)

Y13 (72)

Y14 (75)

Y15 (75)

Y16 (77)

Y17 (77)

Y18 (80)

Y19 (80)

Y20 (80)

Y16-Y18 Average I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 70 67 61 58 62 55 56 56 56 14 13 14 13 A B 75 74 76 82 83 91 88 89 89 21 20 21 20 B C 68 57 64 51 57 63 63 54 60 14 12 15 13 C D 71 68 81 76 84 81 84 83 83 20 19 21 19 D E 68 69 68 75 77 76 72 73 74 18 16 19 17 E F 76 73 72 67 58 42 70 50 54 13 11 14 12 F G 65 68 66 64 58 64 68 70 67 18 16 17 15 G H 84 85 84 78 81 80 75 78 78 20 18 20 18 H I 68 65 68 62 65 60 58 61 60 15 14 15 13 I J 64 71 83 85 87 89 86 85 87 21 19 21 20 J K 74 87 84 90 87 91 87 85 88 21 19 21 20 K

High Average Low Total Dollars ($000s)

High Average Low Per Unit Sold ($/unit)

Industry 1 Cash Outlays for Corporate Social Responsibility and Citizenship

High Average Low

Image Rating Points Generated from

CSRC Expenditures

Year 11 15,457 8,714 0 1.85 1.03 0.00 5 3 0 Year 12 15,222 4,502 0 1.77 0.51 0.00 9 4 0 Year 13 18,323 6,596 0 1.45 0.61 0.00 12 6 0 Year 14 22,403 5,486 0 2.13 0.53 0.00 15 7 0 Year 15 12,725 6,926 0 2.86 0.79 0.00 18 8 0 Year 16 20,427 5,416 0 2.15 0.49 0.00 19 8 0 Year 17 12,705 5,526 0 1.34 0.50 0.00 19 8 0 Year 18 13,048 5,811 0 1.80 0.50 0.00 20 9 0 Year 19 Year 20

Corporate Social Responsibility and Citizenship

Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a distinguished award to the company making the highest cash outlays as a percentage of revenues for corporate social respon- sibility and citizenship initiatives.

Award Winner 2nd Place Y14 E Elite Footwear K ASM Y15 FFlying wings C Shoe Y16 G - Star E Elite Footwear Y17 G - Star E Elite Footwear Y18 E Elite Footwear G - Star Y19 Y20

Corporate Responsibility Award for Exemplary Corporate Citizenship

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3

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Industry 1 BONUS POINT AWARDS Year 18

BULL'S EYE AWARD for Accurately Forecasting Total Revenues,

Earnings Per Share, and Image Rating

One bonus point added to any company's game-to-date score when actual performance on Total Revenues AND Earnings Per Share vary by no more than 5% from projected performance AND when Image Rating varies by no more than 4 points from the projected image rating.

Year 18 Forecast

Year 18 Actual

Percent Variance

Revenues (within ± 5%) Year 18

Forecast Year 18 Actual

Percent Variance

EPS (within ± 5% or ± 10¢) Year 18

Forecast Year 18 Actual

Point Variance

Image Rating (within ± 4 points) Year 18 Bull's Eye

Award

Cumu- lative

Awards A 394,901 396,229 +0.3% 1.30 1.13 -12.9% 56 56 0 pts. No 2 A B 1,731,969 1,755,205 +1.3% 17.08 17.54 +2.7% 90 89 -1 pts. Yes 4 B C 0 578,339 0.0% 0.00 1.81 0.0% 0 54 0 pts. No 0 C D 1,447,078 1,417,365 -2.1% 8.58 8.42 -1.9% 88 83 -5 pts. No 2 D E 890,999 820,264 -7.9% 7.04 5.79 -17.8% 75 73 -2 pts. No 4 E F 319,355 284,939 -10.8% 2.06 1.49 -27.5% 52 50 -2 pts. No 0 F G 704,219 687,050 -2.4% 4.08 4.05 -0.7% 71 70 -1 pts. Yes 2 G H 1,170,213 1,184,456 +1.2% 13.38 13.73 +2.6% 77 78 +1 pts. Yes 3 H I 754,002 682,374 -9.5% 5.05 3.84 -23.9% 63 61 -2 pts. No 2 I J 1,779,180 1,778,634 0.0% 21.53 21.45 -0.4% 85 85 0 pts. Yes 3 J K 1,177,899 1,357,403 +15.2% 11.54 15.28 +32.4% 79 85 +6 pts. No 0 K

Trends in Variances Between Projected and Actual Performance (company and industry variances bertween projected and actual revenues, EPS, and image rating)

Industry 1 Variance

Largest Average Smallest

Company K Variance

Year 11 +9.6% -0.4% -7.4% -4.5%

Year 12 +30.1%

+5.2% -15.2% +23.3%

Year 13 +27.4%

-3.3% -20.0% +10.1%

Year 14 +10.0%

-4.8% -18.9% +10.0%

Year 15 +11.5%

-5.6% -21.1% +5.3%

Year 16 +22.5%

-4.3% -21.9% +22.5%

Year 17 +35.8%

-2.8% -42.0% +16.7%

Year 18 +18.4%

-2.1% -14.7% +18.4%

Year 19 Year 20

Y11 Score Δ

Y12 Score Δ

Y13 Score Δ

Y14 Score Δ

Y15 Score Δ

Y16 Score Δ

Y17 Score Δ

Y18 Score Δ

Y19 Score Δ

Y20 Score

Current-Year Scores and Net Changes Cumu- lative

Awards A 83 -5 78 -22 56 -7 49 +12 61 -13 48 -1 47 -6 41 1 A B 107 -15 92 +1 93 +1 94 +2 96 0 96 +1 97 +5 102 0 B C 74 -8 66 -15 51 +2 53 -2 51 -4 47 -1 46 -2 44 0 C D 86 +11 97 -6 91 -4 87 +7 94 -21 73 +7 80 -12 68 0 D E 55 +23 78 -6 72 0 72 +9 81 -7 74 0 74 -9 65 0 E F 58 +32 90 -3 87 -7 80 -10 70 -13 57 -24 33 -7 26 1 F G 73 +2 75 +2 77 -5 72 -20 52 0 52 -3 49 +3 52 0 G H 105 +3 108 -3 105 -15 90 -8 82 -9 73 +14 87 +8 95 2 H I 84 -5 79 -14 65 -4 61 -6 55 -5 50 +3 53 +1 54 0 I J 73 +22 95 +13 108 0 108 +1 109 -5 104 +2 106 +1 107 1 J K 77 +19 96 +2 98 +4 102 -1 101 -3 98 +1 99 0 99 1 K

Δ = net change in score between years Highlighted figure = Leap Frog Award winner

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3b

for Most Improved Overall Score (current year to current year)

LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-dateoverall score of the company whose current-year overall score is most improved over the prior year. If all companies fail to improve their scores from one year to the next, then no Leap Frog bonus is awarded.

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Industry 1 INDUSTRY OVERVIEW Year 18

Materials Prices

Price Adjustments

Materials Usage Facilities Utilization

Base Prices of Materials ($ per pair)

Materials Prices in Year 18 ($ per pair)

$6.00 -0.27 +0.25 $5.98

Standard $12.00 +2.16 +0.49

$14.65

Superior High industry-wide superior materials usage (49.0%) lead to superior materials prices that were 18.0% above the base and standard materials prices that were 4.5% below the base. Industry-wide utilization of production capability was above 110% and resulted in materials price increases of 4.1%.

Notes

Footwear Production and Sales

Branded Demand

(000s of pairs) Forecast Actual

Stockouts No. of Companies Unfilled Orders (000s)

Pairs Available (000s)

Pairs Sold (internet + wholesale)

Private Label

Demand Forecast (000s of pairs) Pairs Offered (000s) Pairs Sold (000s)

Superior Materials Usage Utilization of Production Capability

North America

45% 113.2% 53,106 39,802 40,601 40,600

1 0

4,785 6,883 4,785

Europe Africa

46% 118.0% 43,234 34,413 35,200 35,199

2 0

4,785 5,372 4,651

Asia Pacific

52% 114.8% 46,768 34,131 35,541 35,526

4 15

5,522 7,478 5,522

Latin America

50% 113.1% 43,791 34,801 35,695 35,692

1 2

5,522 7,303 5,434

Average or Total

49% 114.1% 186,899 143,147 147,037 147,017

17

20,614 27,036 20,392

ꔃ % usage up 2.0 points from Year 17. ꔃ % usage down 1.3 points from Year 17. ꔃ 27.1% higher than Year 18 demand. ꔃ From page 4 of FIR for Year 17. ꔃ Actual branded demand was 2.7% higherthan forecast branded demand due to

increased competitive intensity.

ꔃ Extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies.

ꔃ From page 4 of FIR for Year 17. ꔃ Private-label pairs offered was higher than

actual private-label demand by 23.8%.

Notes

Demand Forecast

Branded Demand (internet + wholesale)

Year 19 Year 20 Year 21

Private-Label Demand Year 19 Year 20 Year 21

North America

41,469 43,127 44,852

5,214 5,687 6,028

Europe Africa 36,197 37,643 39,146

5,214 5,687 6,028

Asia Pacific 37,879 40,908 43,362

6,127 6,798 7,205

Latin America

38,060 41,104 43,569

6,127 6,798 7,205

Global Total

153,605 162,782 170,929

22,682 24,970 26,466

Global demand for Y11-Y15 is expected to grow by 7%-9% annually, slowing to 5%-7% during Y16-Y20. The projected growth rates are not the same for all regions, as shown in the table on page 5 of the Player's Guide. Actual demand growth may vary from the forecast due to stronger or weaker competitive efforts on the part of rival companies.

Notes

Supply / Demand Analysis

Beginning Year 19 Inventory Potential Y19 Production (with OT)

Potential Global Supply

39,882 196,200 236,082

Potential Footwear Suppy in Year 19 Branded Demand Forecast Private-Label Demand Forecast

Expected Global Demand

153,605 22,682

176,287

Expected Footwear Demand in Year 19 Potential global supply (at max OT) in the upcoming year is 33.9% greater than projected global demand. This much excess potential supply is certain to greatly intensify competition for the next few years and reduce industry profitability. It is advisable to NOT add more production capability at this time.

Analysis

Facility Space Production Equipment

N.A. E-A A-P L.A.

Year 18 Facility Space (000s of pairs available for prod. equipmernt)

N.A. E-A A-P L.A.

Construction of New Space (initiated in Y18 and available in Y19)

Total Space

Available in Y19 N.A. E-A A-P L.A. Total

Year 18 Production Equipment (000s of pairs available for production)

A 6,000 0 7,000 0 0 0 0 0 13,000 A 4,000 0 2,000 0 6,000 A B 6,000 3,000 7,000 6,000 0 0 0 0 22,000 B 6,000 3,000 7,000 6,000 22,000 B C 6,000 1,000 6,000 1,000 0 0 0 0 14,000 C 5,500 0 4,250 1,000 10,750 C D 7,000 5,000 8,000 6,000 0 0 0 0 26,000 D 6,000 5,000 7,000 5,500 23,500 D E 7,000 2,000 8,000 2,000 0 0 0 0 19,000 E 5,750 1,250 5,250 500 12,750 E F 5,000 3,000 7,000 3,000 0 0 0 0 18,000 F 750 750 1,000 750 3,250 F G 5,000 3,000 6,000 3,000 0 0 0 0 17,000 G 5,000 500 4,500 1,000 11,000 G H 5,000 0 8,000 2,000 0 0 1,000 2,000 18,000 H 4,500 0 8,000 2,000 14,500 H I 5,000 0 6,000 2,000 0 0 0 0 13,000 I 4,250 0 6,000 1,500 11,750 I J 5,000 0 14,000 11,000 0 0 0 0 30,000 J 5,000 0 12,000 9,000 26,000 J K 5,000 0 8,000 9,000 0 0 0 0 22,000 K 5,000 0 8,000 9,000 22,000 K

62,000 17,000 85,000 45,000 0 0 1,000 2,000 212,000 51,750 10,500 65,000 36,250 163,500

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 4

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Industry 1 FINANCIAL PERFORMANCE SUMMARY Year 18

Income Statement Data ($000s)

Internet Wholesale P-label Total Net Sales Revenues Cost of

Pairs Sold Warehouse Expenses

Marketing Expenses

Admin Expenses

Operating Profit

Interest Exp (Inc)

Income Taxes

Net Profit

A 161,320 161,948 72,961 396,229 209,094 45,393 86,680 17,335 37,727 -1,483 9,663 22,547 A B 397,589 1,141,609 136,252 1,755,205 768,581 112,229 360,209 33,435 480,751 12,202 140,565 327,984 B C 170,393 407,946 0 578,339 294,012 57,371 134,933 26,112 65,911 1,299 19,384 45,228 C D 473,853 882,428 45,471 1,417,365 596,650 130,372 327,633 38,334 324,376 70,052 75,534 176,247 D E 272,387 455,243 92,634 820,264 420,087 72,082 151,837 27,583 148,675 1,150 44,258 103,267 E F 70,187 152,706 62,046 284,939 142,420 28,081 10,662 13,584 90,192 39,658 15,160 35,374 F G 221,002 466,048 0 687,050 368,073 71,120 95,543 25,835 126,479 9,904 34,673 80,902 G H 446,191 667,549 49,555 1,184,456 525,299 102,995 212,422 25,333 318,407 -2,477 95,303 222,372 H I 212,061 448,279 22,034 682,374 331,797 66,107 157,949 22,586 103,935 -302 31,271 72,966 I J 442,665 1,044,036 228,792 1,778,634 822,404 138,485 243,998 35,335 538,412 1,475 161,081 375,856 J K 320,596 842,460 178,661 1,357,403 642,287 101,878 191,669 35,085 386,484 24,455 107,523 250,886 K

289,840 606,387 80,764 994,751 465,519 84,192 179,412 27,323 238,304 14,176 66,765 155,784

Selected Balance Sheet Data ($000s)

Cash On Hand

Current Assets

Fixed Assets

Total Assets

Assets Current Liabilities

Long-Term Loans

Total Liabilities

Liabilities Beginning

Equity Stock Sale (Purchase)

Earnings Retained

Ending Equity

Shareholder Equity

A 157,763 254,047 247,907 501,954 23,936 0 23,936 475,440 0 2,578 478,018 A B 260,405 674,952 697,180 1,372,132 81,678 160,000 241,678 877,320 -56,150 309,284 1,130,454 B C 70,966 244,684 408,385 653,069 23,895 0 23,895 583,946 0 45,228 629,174 C D 175,260 897,651 677,056 1,574,707 182,142 575,000 757,142 405,558 235,760 176,247 817,565 D E 0 200,104 488,436 688,540 58,992 0 58,992 629,939 -103,658 103,267 629,548 E F 0 72,009 334,237 406,246 97,041 357,200 454,241 -126,019 42,650 35,374 -47,995 F G 35,981 358,567 427,103 785,670 90,440 77,000 167,440 537,328 0 80,902 618,230 G H 107,215 318,935 499,266 818,201 43,568 0 43,568 757,081 -175,660 193,212 774,633 H I 29,830 208,041 424,802 632,843 35,576 0 35,576 533,801 0 63,466 597,267 I J 9,165 404,352 695,110 1,099,462 91,198 0 91,198 1,063,647 -396,189 340,806 1,008,264 J K 32,381 341,398 755,747 1,097,145 117,208 300,000 417,208 610,042 -180,991 250,886 679,937 K

79,906 361,340 514,112 875,452 76,879 133,564 210,443 577,098 -57,658 145,568 665,009

Selected Financial Statistics

Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Profitability Measures Div. Per Share ($/share)

Total Div. Payment

($000s)

Payout (percent of net profit)

Dividend Data Credit Rating Measures Interest Coverage

Ratio

Debt to Assets Ratio

Default Risk Ratio

Risk of

Default Current Ratio

Days of Inventory

Shares of Stock

Outstanding (000s of shares)

A 47.2% 9.5% 5.7% 1.00 19,969 88.5% 1,000.00 0.05 4.11 Low 10.61 97 days 19,969 A B 56.2% 27.4% 18.7% 1.00 18,700 5.7% 39.40 0.18 13.13 Low 8.26 55 days 18,700 B C 49.2% 11.4% 7.8% 0.00 0 0.0% 50.74 0.04 4.27 Low 10.24 87 days 25,000 C D 57.9% 22.9% 12.4% 0.00 0 0.0% 4.63 0.48 0.69 High 4.93 328 days 20,928 D E 48.8% 18.1% 12.6% 0.00 0 0.0% 129.28 0.09 14.09 Low 3.39 69 days 17,840 E F 50.0% 31.7% 12.4% 0.00 0 0.0% 2.27 1.12 0.39 High 0.74 75 days 23,690 F G 46.4% 18.4% 11.8% 0.00 0 0.0% 12.77 0.21 1.93 High 3.96 197 days 20,000 G H 55.7% 26.9% 18.8% 1.80 29,160 13.1% 1,000.00 0.05 1,000.00 Low 7.32 25 days 16,200 H I 51.4% 15.2% 10.7% 0.50 9,500 13.0% 1,000.00 0.06 1,000.00 Low 5.85 68 days 19,000 I J 53.8% 30.3% 21.1% 2.00 35,050 9.3% 365.03 0.08 44.89 Low 4.43 43 days 17,525 J K 52.7% 28.5% 18.5% 0.00 0 0.0% 15.80 0.38 6.60 Low 2.91 37 days 16,416 K

53.2% 24.0% 15.7% 0.57 10,216 11.8% 77.49 0.25 8.19 5.69 98 days 19,570

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Industry 1 PERFORMANCE BENCHMARKS Year 18

Production Benchmarks

North America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 38,817

4,663 6.98

64,328 10% 0.60

37,637 26.18 1.6% 4.14

83% 46,181

5,373 9.07

67,139 44% 1.90

72,299 29.30 6.0% 5.36

100% 51,885

7,847 10.28

73,641 72% 5.00

229,885 33.79

10.8% 7.24

100% 46,582

5,049 9.71

64,328 50% 1.00

54,935 30.02

10.8% 5.18

Europe-Africa Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 24,284

3,753 6.54

38,597 10% 1.00

5,000 22.32 2.2% 4.44

63% 27,101

3,956 7.17

40,172 44% 2.54

19,603 31.13 4.3% 6.06

100% 29,913

4,063 7.73

42,550 78% 5.00

48,000 42.55 7.3% 7.60

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

Asia-Pacific Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

11% 15,158

3,637 3.92

26,804 10% 0.60

34,742 21.14 1.6% 3.52

86% 17,697

4,034 4.57

27,921 46% 1.83

87,293 24.92 5.7% 4.56

100% 21,279

4,257 5.26

29,546 72% 5.00

266,210 30.85

11.0% 7.01

100% 19,763

3,919 5.26

26,804 52% 1.00

72,485 24.24

11.0% 4.25

Latin America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 12,865

3,633 3.50

26,804 10% 1.00

1,440 19.65 2.3% 3.61

80% 16,556

4,179 4.18

27,621 46% 2.06

28,914 26.14 6.1% 4.77

100% 21,107

5,963 4.74

29,549 72% 5.00

95,580 38.83

11.3% 6.96

100% 21,107

5,963 3.67

26,804 54% 1.00

37,375 24.57

11.3% 4.24

Note: To protect individual companies from having competitively sensitive data revealed to rival companies, only the industry averages are reported for regions with 2 or 3 production facilities. Industry low and high numbers are reported only for regions with 4 or more production facilities. No benchmark data is reported for regions with only 1 production facility.

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Industry 1 PERFORMANCE BENCHMARKS Year 18 (concluded)

Branded Operating Benchmarks

North America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

4.11 26.96

3.92 -0.94

-1.5% 2.62 4.02

8.0%

6.39 30.71 18.88 19.48

22.3% 11.25 10.32

17.0%

8.67 34.30 28.27 29.21

35.4% 16.80 22.12

32.5%

5.98 30.93 16.80 29.15

31.9% 10.22

9.64 17.2%

Europe-Africa Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.95 27.83

4.76 1.98

2.6% 2.85 6.60

11.9%

9.81 31.71 19.47 27.91

28.7% 10.80 15.41

23.4%

12.55 37.30 27.10 48.40

40.0% 16.95 30.94

43.2%

11.21 31.28 16.25 38.77

38.4% 9.90

15.64 25.2%

Asia-Pacific Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

3.07 23.82

4.86 -6.35

-8.1% 3.16 0.00

0.0%

7.37 27.01 20.29 24.04

27.0% 9.32

13.68 23.2%

15.42 31.59 34.06 42.95

42.2% 16.35 27.70

40.3%

5.61 25.20 15.96 31.52

36.1% 8.87

13.27 25.2%

Latin America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

4.41 24.74

5.12 -5.75

-7.6% 2.66

-3.15 -6.0%

10.49 32.00 18.14 22.01

24.4% 9.83

10.92 17.7%

24.09 43.18 25.41 42.84

44.0% 17.24 29.92

44.0%

5.39 25.59 11.94 31.39

37.6% 7.35

12.09 24.2%

Private-Label Operating Benchmarks

Low Average High Industry 1 Company

K

North America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

28.19 -1.13

30.99 +8.27

37.13 +16.00

29.94 +14.03

Europe-Africa Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

27.32 +4.73

31.61 +13.37

34.17 +21.15

28.99 +19.49

Asia-Pacific Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

21.15 -4.01

27.56 +12.84

38.25 +21.32

23.31 +21.16

Latin America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

21.48 -4.31

31.74 +9.64

43.16 +24.51

22.61 +23.36

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Industry 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS Year 18

Celebrity Endorsements

Celebrity Year 19

Contract Holder No. of Offers

Highest Offer

2nd Highest

3rd Highest

Most Recent Contract Offers (letter in parens indicates company that made offer)

Judy Judge H Road Runner 3 12,001 (H) 5,000 (E) 3,339 (K) Kimmie Jimmel J-Doyen 5 16,000 (J) 14,900 (H) 14,001 (B) Bud Birkenstock G - Star 6 15,000 (A) 15,000 (G) 14,001 (B) Jose Montana H Road Runner 6 14,001 (B) 11,001 (H) 11,000 (A) Samuelle Jackson B Cielo 8 14,001 (B) 14,000 (J) 11,001 (H) Bronko Mars J-Doyen 9 16,000 (J) 14,001 (B) 11,001 (I) Steff Caraway B Cielo 6 14,001 (B) 11,001 (I) 10,500 (H) Jay XYZ G - Star 6 9,000 (G) 6,001 (C) 6,000 (J) Nunchuck Norris ADragons 5 19,000 (A) 16,001 (B) 15,001 (H) Roger Federation IPure Steps 4 10,001 (I) 10,001 (H) 7,005 (E) Nick Shavan IPure Steps 4 10,001 (I) 10,001 (H) 6,750 (E) Anderson Blooper ADragons 4 14,000 (A) 13,001 (H) 6,500 (E) Mic Jagermeister H Road Runner 3 15,001 (H) 7,500 (E) 505 (K) Jim Hardball H Road Runner 4 13,001 (H) 11,111 (A) 6,250 (E) LaBron Game B Cielo 3 20,001 (B) 15,050 (E) 505 (K)

Co. N.A. E-A A-P L.A. A 155 140 170 145 B 215 245 240 245 C 0 0 0 0 D 0 0 0 0 E 0 0 0 0 F 0 0 0 0 G 145 170 125 145 H 290 260 265 280 I 145 160 135 155 J 160 115 165 140 K 0 0 0 0

Avg. 101 99 100 101

Year 19 Consumer Appeal (sum of consumer appeal indexes for each company in the upcoming year)

Pricing and S/Q Rating Trends

NORTH AMERICA EUROPE-AFRICA

ASIA-PACIFIC LATIN AMERICA

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 8

Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $40

$50

$60

$70

$80

$90

4.0̣

4.5̣

5.0̣

5.5̣

6.0̣

Year

P ric

e

S /Q

R at

in g

Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $50

$60

$70

$80

$90

4.0̣

4.5̣

5.0̣

5.5̣

6.0̣

Year

P ric

e

S /Q

R at

in g

Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $40

$50

$60

$70

$80

4.0̣

4.5̣

5.0̣

5.5̣

6.0̣

Year

P ric

e

S /Q

R at

in g

Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $50

$60

$70

$80

$90

4.0̣

4.5̣

5.0̣

5.5̣

6.0̣

Year

P ric

e

S /Q

R at

in g

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Footwear Industry Report

FIR 17-Jul-2019

Industry 1 Biegala MGT495-01

Summer

Year 11

© GLO-BUS Software, Inc.

Year 11 Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

1 B Company 116 97 107 2 H Company 117 92 105 3 DTigers 105 67 86 4 I Company 102 66 84 5 A Company 100 65 83 6 K Company 93 61 77 7 C Shoe 88 59 74 8 G Company 89 57 73 8 J Company 88 58 73

10 L Company 81 53 67 11 F Company 68 47 58 12 E Company 64 45 55

Game-To-Date Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Bonus Points

Overall G-T-D Score

1 B Company 116 97 107 0 107 2 H Company 117 92 105 1 106 3 DTigers 105 67 86 0 86 4 I Company 102 66 84 0 84 5 A Company 100 65 83 0 83 6 K Company 93 61 77 0 77 7 C Shoe 88 59 74 0 74 8 G Company 89 57 73 1 74 8 J Company 88 58 73 0 73

10 L Company 81 53 67 0 67 11 F Company 68 47 58 0 58 12 E Company 64 45 55 1 56

Investor Expectation Score (I.E.)

Investors and company boards of directors have established targets for the five scoring measures that appear on pages 2 and 3 of this report. The I.E. score ranges from 0 to 120 (if all targets are exceeded by 40% or more). Click the Help button (upper-right) for more information.

Best-In- Industry Score (B-I-I)

The B-I-I score measures each company's performance relative to the best performing company on each of the five scoring measure. The B-I-I score ranges from 0 to 100. To score 100 a company must be the best performing company in the industry on all five scoring measures.

Weighted Average Score

The weighted average score combines the Investor Expectation Score and the Best-In-Industry Score using a 50%-50% weighting as specified by the course instructor. Detailed explanations of scoring are provided in the Help documents asociated with pages 1, 2, and 3 of this report.

Page 1

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Industry 1 SCORING MEASURES Year 11

Earnings Per Share ($ per share)

Earnings Per Share scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected EPS shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date EPS scores are based on a weighted average of the annual EPS performances.

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (2.50) I.E. B-I-I

Y11 Score I.E. B-I-I

G-T-D Score

A 2.57 2.57 20 11 20 11 A B 4.61 4.61 24 20 24 20 B C 2.26 2.26 18 10 18 10 C D 2.37 2.37 19 10 19 10 D E 1.42 1.42 11 6 11 6 E F 1.48 1.48 12 6 12 6 F G 2.32 2.32 19 10 19 10 G H 4.05 4.05 24 18 24 18 H I 2.71 2.71 21 12 21 12 I J 2.27 2.27 18 10 18 10 J K 2.31 2.31 18 10 18 10 K

Return On Equity (%)

Return On Equity scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected ROE shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date ROE scores are based on a weighted average of the annual ROE performances.

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (21.0) I.E. B-I-I

Y11 Score I.E. B-I-I

G-T-D Score

A 21.8 21.8 20 12 20 12 A B 36.0 36.0 24 20 24 20 B C 19.4 19.4 18 11 18 11 C D 22.7 22.7 21 13 21 13 D E 12.6 12.6 12 7 12 7 E F 13.2 13.2 13 7 13 7 F G 19.9 19.9 19 11 19 11 G H 33.0 33.0 24 18 24 18 H I 22.9 22.9 21 13 21 13 I J 19.6 19.6 19 11 19 11 J K 19.8 19.8 19 11 19 11 K

Stock Price ($ per share)

Stock Price scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected stock price shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based solely on the most recent year's stock price.

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. B-I-I

Y11 Score I.E. B-I-I

G-T-D Score

A 33.46 17 6 17 6 A B 121.59 24 20 24 20 B C 22.86 11 4 11 4 C D 48.77 22 8 22 8 D E 11.86 6 2 6 2 E F 11.76 6 2 6 2 F G 20.47 10 3 10 3 G H 102.76 24 17 24 17 H I 35.55 18 6 18 6 I J 22.39 11 4 11 4 J K 26.32 13 4 13 4 K

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Industry 1 SCORING MEASURES Year 11 (concluded)

Credit Rating Credit Rating scores are based on a 20% (20-point) weighting. A bolded credit rating indicates achievement of the investor expected credit rating shown below each yearly column head. Game-To-Date credit rating scores are based solely on the most recent year's credit rating performance.

Y11 (B+)

Y12 (B+)

Y13 (B+)

Y14 (A–)

Y15 (A–)

Y16 (A–)

Y17 (A)

Y18 (A)

Y19 (A)

Y20 (A) I.E. B-I-I

Y11 Score I.E. B-I-I

G-T-D Score

A A 23 19 23 19 A B A 23 19 23 19 B C A– 22 18 22 18 C D A 23 19 23 19 D E B 16 14 16 14 E F B 16 14 16 14 F G A– 22 18 22 18 G H A 23 19 23 19 H I A 23 19 23 19 I J A– 22 18 22 18 J K A– 22 18 22 18 K

Image Rating Image Rating scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected image rating shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based on an average of the most recent three years.

Y11 (70)

Y12 (72)

Y13 (72)

Y14 (75)

Y15 (75)

Y16 (77)

Y17 (77)

Y18 (80)

Y19 (80)

Y20 (80)

Y9-Y11 Average I.E. B-I-I

Y11 Score I.E. B-I-I

G-T-D Score

A 70 70 20 17 20 17 A B 75 75 21 18 21 18 B C 68 68 19 16 19 16 C D 71 71 20 17 20 17 D E 68 68 19 16 19 16 E F 76 76 21 18 21 18 F G 65 65 19 15 19 15 G H 84 84 22 20 22 20 H I 68 68 19 16 19 16 I J 64 64 18 15 18 15 J K 74 74 21 18 21 18 K

High Average Low Total Dollars ($000s)

High Average Low Per Unit Sold ($/unit)

Industry 1 Cash Outlays for Corporate Social Responsibility and Citizenship

High Average Low

Image Rating Points Generated from

CSRC Expenditures

Year 11 15,457 8,714 0 1.85 1.03 0.00 5 3 0 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Corporate Social Responsibility and Citizenship

Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a distinguished award to the company making the highest cash outlays as a percentage of revenues for corporate social respon- sibility and citizenship initiatives.

Award Winner 2nd Place Y14 Y15 Y16 Y17 Y18 Y19 Y20

Corporate Responsibility Award for Exemplary Corporate Citizenship

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Industry 1 BONUS POINT AWARDS Year 11

BULL'S EYE AWARD for Accurately Forecasting Total Revenues,

Earnings Per Share, and Image Rating

One bonus point added to any company's game-to-date score when actual performance on Total Revenues AND Earnings Per Share vary by no more than 5% from projected performance AND when Image Rating varies by no more than 4 points from the projected image rating.

Year 11 Forecast

Year 11 Actual

Percent Variance

Revenues (within ± 5%) Year 11

Forecast Year 11 Actual

Percent Variance

EPS (within ± 5% or ± 10¢) Year 11

Forecast Year 11 Actual

Point Variance

Image Rating (within ± 4 points) Year 11 Bull's Eye

Award

Cumu- lative

Awards A 475,666 479,468 +0.8% 2.81 2.57 -8.7% 70 70 0 pts. No 0 A B 565,099 595,616 +5.4% 4.39 4.61 +5.0% 73 75 +2 pts. No 0 B C 447,046 445,040 -0.4% 2.52 2.26 -10.4% 69 68 -1 pts. No 0 C D 496,065 493,692 -0.5% 2.61 2.37 -9.2% 72 71 -1 pts. No 0 D E 431,766 450,334 +4.3% 1.43 1.42 -0.5% 66 68 +2 pts. Yes 1 E F 415,400 443,061 +6.7% 1.29 1.48 +15.0% 71 76 +5 pts. No 0 F G 394,718 411,454 +4.2% 2.37 2.32 -2.1% 62 65 +3 pts. Yes 1 G H 622,529 643,888 +3.4% 4.07 4.05 -0.5% 84 84 0 pts. Yes 1 H I 478,284 481,020 +0.6% 2.94 2.71 -7.8% 70 68 -2 pts. No 0 I J 450,945 449,590 -0.3% 2.48 2.27 -8.5% 64 64 0 pts. No 0 J K 474,596 470,759 -0.8% 2.61 2.31 -11.4% 75 74 -1 pts. No 0 K

Trends in Variances Between Projected and Actual Performance (company and industry variances bertween projected and actual revenues, EPS, and image rating)

Industry 1 Variance

Largest Average Smallest

Company K Variance

Year 11 +9.6% -0.4% -7.4% -4.5%

Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

Y11 Score Δ

Y12 Score Δ

Y13 Score Δ

Y14 Score Δ

Y15 Score Δ

Y16 Score Δ

Y17 Score Δ

Y18 Score Δ

Y19 Score Δ

Y20 Score

Current-Year Scores and Net Changes Cumu- lative

Awards A 83 0 A B 107 0 B C 74 0 C D 86 0 D E 55 0 E F 58 0 F G 73 0 G H 105 0 H I 84 0 I J 73 0 J K 77 0 K

Δ = net change in score between years Highlighted figure = Leap Frog Award winner

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3b

for Most Improved Overall Score (current year to current year)

LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-dateoverall score of the company whose current-year overall score is most improved over the prior year. If all companies fail to improve their scores from one year to the next, then no Leap Frog bonus is awarded.

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Industry 1 INDUSTRY OVERVIEW Year 11

Materials Prices

Price Adjustments

Materials Usage Facilities Utilization

Base Prices of Materials ($ per pair)

Materials Prices in Year 11 ($ per pair)

$6.00 -0.06 +0.29 $6.23

Standard $12.00 +0.48 +0.58

$13.06

Superior High industry-wide superior materials usage (42.0%) lead to superior materials prices that were 4.0% above the base and standard materials prices that were 1.0% below the base. Industry-wide utilization of production capability was above 110% and resulted in materials price increases of 4.8%.

Notes

Footwear Production and Sales

Branded Demand

(000s of pairs) Forecast Actual

Stockouts No. of Companies Unfilled Orders (000s)

Pairs Available (000s)

Pairs Sold (internet + wholesale)

Private Label

Demand Forecast (000s of pairs) Pairs Offered (000s) Pairs Sold (000s)

Superior Materials Usage Utilization of Production Capability

North America

35% 113.0% 30,949 29,892 30,000 30,000

4 0

2,664 2,672 2,460

Europe Africa

0% 0.0%

26,614 25,440 25,368 25,349

4 17

2,664 2,420 2,420

Asia Pacific

49% 116.6% 20,063 19,800 19,752 19,475

5 277

2,712 2,641 2,641

Latin America

0% 0.0%

20,389 19,800 19,752 19,749

5 1

2,712 2,228 2,228

Average or Total

42% 114.8% 98,015 94,932 94,872 94,573

295

10,752 9,961 9,749

ꔃ % usage up 0.8 points from Year 10. ꔃ % usage up 0.3 points from Year 10. ꔃ 3.3% higher than Year 11 demand. ꔃ From page 4 of FIR for Year 10. ꔃ Actual branded demand was about equalto forecast branded demand.

ꔃ Extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies.

ꔃ From page 4 of FIR for Year 10. ꔃ Private-label pairs offered was lower than

actual private-label demand by 7.4%.

Notes

Demand Forecast

Branded Demand (internet + wholesale)

Year 12 Year 13 Year 14

Private-Label Demand Year 12 Year 13 Year 14

North America

29,214 30,962 32,822

2,706 3,003 3,333

Europe Africa 24,643 26,123 27,692

2,706 3,003 3,333

Asia Pacific 19,905 21,901 24,095

2,805 3,168 3,575

Latin America

19,905 21,901 24,095

2,805 3,168 3,575

Global Total 93,668

100,887 108,703

11,022 12,342 13,816

Global demand for Y11-Y15 is expected to grow by 7%-9% annually, slowing to 5%-7% during Y16-Y20. The projected growth rates are not the same for all regions, as shown in the table on page 5 of the Player's Guide. Actual demand growth may vary from the forecast due to stronger or weaker competitive efforts on the part of rival companies.

Notes

Supply / Demand Analysis

Beginning Year 12 Inventory Potential Y12 Production (with OT)

Potential Global Supply

3,442 118,800 122,242

Potential Footwear Suppy in Year 12 Branded Demand Forecast Private-Label Demand Forecast

Expected Global Demand

102,183 12,024

114,207

Expected Footwear Demand in Year 12 Potential global supply (at max OT) in the upcoming year is 7.0% greater than projected global demand — a condition which will likely intensify competitive pressures somewhat until growing demand creates a need to use more of production capability currently available industry-wide.

Analysis

Facility Space Production Equipment

N.A. E-A A-P L.A.

Year 11 Facility Space (000s of pairs available for prod. equipmernt)

N.A. E-A A-P L.A.

Construction of New Space (initiated in Y11 and available in Y12)

Total Space

Available in Y12 N.A. E-A A-P L.A. Total

Year 11 Production Equipment (000s of pairs available for production)

A 5,000 0 6,000 0 0 0 0 0 11,000 A 4,000 0 4,000 0 8,000 A B 5,000 0 6,000 0 1,000 0 1,000 0 13,000 B 4,000 0 4,000 0 8,000 B C 5,000 0 6,000 0 0 0 0 0 11,000 C 4,000 0 4,000 0 8,000 C D 5,000 0 6,000 0 0 0 0 0 11,000 D 4,000 0 4,000 0 8,000 D E 5,000 0 6,000 0 0 0 0 0 11,000 E 4,000 0 4,000 0 8,000 E F 5,000 0 6,000 0 0 0 0 0 11,000 F 4,000 0 4,000 0 8,000 F G 5,000 0 6,000 0 0 0 0 0 11,000 G 4,000 0 4,000 0 8,000 G H 5,000 0 6,000 0 0 0 2,000 0 13,000 H 4,500 0 6,000 0 10,500 H I 5,000 0 6,000 0 0 0 0 0 11,000 I 4,000 0 4,000 0 8,000 I J 5,000 0 6,000 0 0 0 0 2,000 13,000 J 4,000 0 4,000 0 8,000 J K 5,000 0 6,000 0 0 0 0 0 11,000 K 4,000 0 4,500 0 8,500 K

60,000 0 72,000 0 1,000 0 3,000 2,000 138,000 48,500 0 50,500 0 99,000

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Industry 1 FINANCIAL PERFORMANCE SUMMARY Year 11

Income Statement Data ($000s)

Internet Wholesale P-label Total Net Sales Revenues Cost of

Pairs Sold Warehouse Expenses

Marketing Expenses

Admin Expenses

Operating Profit

Interest Exp (Inc)

Income Taxes

Net Profit

A 95,605 356,263 27,600 479,468 251,140 43,144 84,958 18,149 82,077 8,708 22,011 51,358 A B 124,771 444,900 25,945 595,616 299,568 43,024 97,385 15,150 140,489 8,708 39,534 92,247 B C 90,697 325,618 28,725 445,040 236,342 41,971 76,806 16,649 73,272 8,708 19,369 45,195 C D 125,852 366,932 0 493,692 251,531 48,390 96,047 16,252 81,472 8,708 21,829 50,935 D E 115,582 304,540 30,212 450,334 249,214 46,352 86,048 17,551 51,169 8,708 12,138 28,323 E F 105,867 310,058 27,136 443,061 250,220 46,459 78,399 15,551 52,432 8,708 12,517 29,207 F G 79,430 317,948 14,076 411,454 206,658 39,694 71,815 18,153 75,134 8,708 19,928 46,498 G H 146,355 454,031 43,502 643,888 339,486 56,687 105,133 18,053 124,529 8,708 34,746 81,075 H I 97,665 355,755 27,600 481,020 245,912 43,381 87,377 18,150 86,200 8,708 23,248 54,244 I J 107,906 313,976 26,800 449,590 246,965 44,503 70,146 15,150 72,826 8,708 19,235 44,883 J K 87,228 325,027 56,611 470,759 258,811 42,768 75,268 18,650 75,262 8,708 19,766 46,122 K

105,872 349,887 27,984 484,052 256,305 44,902 84,223 16,884 81,737 8,708 21,792 50,848

Selected Balance Sheet Data ($000s)

Cash On Hand

Current Assets

Fixed Assets

Total Assets

Assets Current Liabilities

Long-Term Loans

Total Liabilities

Liabilities Beginning

Equity Stock Sale (Purchase)

Earnings Retained

Ending Equity

Shareholder Equity

A 43,935 146,204 236,424 382,628 39,961 81,300 121,261 210,000 0 51,358 261,367 A B 41,339 173,342 249,700 423,042 39,467 81,300 120,767 210,000 0 92,247 302,275 B C 41,110 135,928 236,964 372,892 36,597 81,300 117,897 210,000 0 44,995 254,995 C D 969 101,244 256,424 357,668 38,065 81,300 119,365 210,000 41,865 -13,565 238,303 D E 33,122 124,117 232,990 357,107 37,422 81,300 118,722 210,000 0 28,323 238,385 E F 59,914 147,603 227,860 375,463 36,987 105,300 142,287 210,000 -6,060 29,207 233,176 F G 28,945 132,029 236,424 368,453 30,623 81,300 111,923 210,000 0 46,498 256,530 G H 42,443 176,494 330,700 507,194 64,814 161,300 226,114 210,000 0 71,075 281,080 H I 45,438 147,851 236,424 384,275 38,722 81,300 120,022 210,000 0 54,244 264,253 I J 10,332 103,103 263,700 366,803 36,670 81,300 117,970 210,000 -6,060 44,883 248,833 J K 7,217 108,794 267,406 376,200 38,766 81,300 120,066 210,000 0 46,122 256,134 K

31,902 134,917 250,060 384,977 39,558 89,967 129,524 210,000 2,479 42,957 255,453

Selected Financial Statistics

Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Profitability Measures Div. Per Share ($/share)

Total Div. Payment

($000s)

Payout (percent of net profit)

Dividend Data Credit Rating Measures Interest Coverage

Ratio

Debt to Assets Ratio

Default Risk Ratio

Risk of

Default Current Ratio

Days of Inventory

Shares of Stock

Outstanding (000s of shares)

A 47.6% 17.1% 10.7% 0.00 0 0.0% 9.43 0.32 4.44 Low 3.66 10 days 20,000 A B 49.7% 23.6% 15.5% 0.00 0 0.0% 16.13 0.29 7.00 Low 4.39 19 days 20,000 B C 46.9% 16.5% 10.2% 0.01 200 0.4% 8.41 0.32 4.06 Low 3.71 11 days 20,000 C D 49.1% 16.5% 10.3% 3.00 64,500 126.6% 9.36 0.33 4.42 Low 2.66 12 days 21,500 D E 44.7% 11.4% 6.3% 0.00 0 0.0% 5.88 0.33 3.00 Medium 3.32 12 days 20,000 E F 43.5% 11.8% 6.6% 0.00 0 0.0% 6.02 0.38 3.05 Medium 3.99 5 days 19,800 F G 49.8% 18.3% 11.3% 0.00 0 0.0% 8.63 0.30 4.14 Low 4.31 35 days 20,000 G H 47.3% 19.3% 12.6% 0.50 10,000 12.3% 14.30 0.45 6.61 Low 2.72 12 days 20,000 H I 48.9% 17.9% 11.3% 0.00 0 0.0% 9.90 0.31 4.62 Low 3.82 11 days 20,000 I J 45.1% 16.2% 10.0% 0.00 0 0.0% 8.36 0.32 4.02 Low 2.81 12 days 19,800 J K 45.0% 16.0% 9.8% 0.00 0 0.0% 8.64 0.32 4.18 Low 2.81 11 days 20,000 K

47.1% 16.9% 10.5% 0.38 7,892 15.8% 9.39 0.33 4.44 3.46 13 days 20,092

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Industry 1 PERFORMANCE BENCHMARKS Year 11

Production Benchmarks

North America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

100% 38,273

4,928 7.76

60,000 8%

1.00 4,463 22.56 1.5% 3.87

100% 41,657

5,106 8.48

60,250 36% 1.71

7,655 25.60 6.1% 5.56

100% 44,973

5,207 9.04

61,800 68% 5.00

21,240 33.04 8.0% 6.15

100% 42,184

5,200 8.55

60,000 32% 1.00

4,762 24.07 7.0% 6.02

Europe-Africa Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

Asia-Pacific Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 14,535

3,410 4.14

25,000 10% 0.90

4,224 20.62 2.1% 3.62

4% 15,500

3,621 4.46

25,104 51% 1.65

8,003 22.63 8.7% 5.02

33% 16,810

3,734 4.78

25,750 70% 5.00

23,465 28.32

10.6% 5.57

11% 15,338

3,734 4.31

25,000 54% 0.90

4,860 21.41 9.9% 5.22

Latin America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

Note: To protect individual companies from having competitively sensitive data revealed to rival companies, only the industry averages are reported for regions with 2 or 3 production facilities. Industry low and high numbers are reported only for regions with 4 or more production facilities. No benchmark data is reported for regions with only 1 production facility.

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Industry 1 PERFORMANCE BENCHMARKS Year 11 (concluded)

Branded Operating Benchmarks

North America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.77 23.60 13.42 10.04

15.0% 7.58 4.77

10.2%

6.37 26.62 21.12 19.81

23.9% 8.38 9.78

18.8%

9.09 33.78 33.76 24.56

30.4% 10.15 20.18

28.8%

5.98 25.07 20.36 18.65

23.5% 7.64 8.89

18.5%

Europe-Africa Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

11.88 29.45 14.93

9.62 12.9%

4.85 5.11

9.5%

13.04 32.30 22.28 16.79

19.3% 8.29 8.27

14.9%

13.47 38.93 29.02 23.62

25.3% 9.62

13.77 21.5%

13.08 29.45 22.04 17.50

20.7% 8.35 8.61

16.2%

Asia-Pacific Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

6.35 21.64 15.22

4.50 6.7% 7.67 4.84

10.1%

7.00 24.08 26.14 16.60

20.0% 8.61

11.31 21.9%

11.47 29.12 38.72 23.52

29.9% 9.45

22.74 33.9%

6.42 22.40 25.34 16.12

20.3% 7.67

11.06 23.1%

Latin America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

16.98 32.64 15.04

3.44 4.8% 7.48 1.26

2.4%

17.31 34.98 25.30 10.85

12.4% 8.18 5.35

9.5%

17.73 40.55 34.41 17.40

21.1% 8.99

12.21 18.2%

17.27 35.63 25.30

7.91 9.4% 7.87 2.58

4.9%

Private-Label Operating Benchmarks

Low Average High Industry 1 Company

K

North America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

26.65 +1.98

27.99 +3.36

29.49 +8.97

26.65 +2.32

Europe-Africa Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

28.29 -3.89

34.94 +0.91

43.89 +5.68

28.29 +5.68

Asia-Pacific Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

21.29 +1.95

24.80 +6.79

29.05 +11.03

21.29 +7.68

Latin America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

32.74 -1.79

35.66 +0.59

38.97 +2.16

35.28 +0.69

Footwear Industry Report © 2018 GLO-BUS Software, Inc. Page 7

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Industry 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS Year 11

Celebrity Endorsements

Celebrity Year 12

Contract Holder No. of Offers

Highest Offer

2nd Highest

3rd Highest

Most Recent Contract Offers (letter in parens indicates company that made offer)

Judy Judge H Company 5 3,000 (H) 678 (E) 650 (B) Kimmie Jimmel H Company 8 3,000 (H) 2,200 (D) 1,731 (K) Bud Birkenstock H Company 4 3,000 (H) 607 (K) 515 (E) Jose Montana K Company 4 2,000 (H) 607 (K) 507 (E) Samuelle Jackson J Company 4 2,000 (H) 1,199 (J) 607 (K) Bronko Mars DTigers 6 3,000 (H) 2,200 (D) 1,199 (J) Steff Caraway J Company 4 3,000 (H) 1,199 (J) 1,031 (K) Jay XYZ J Company 4 2,000 (H) 1,199 (J) 1,031 (K) Nunchuck Norris [unsigned] 0 0 0 0 Roger Federation [unsigned] 0 0 0 0 Nick Shavan [unsigned] 0 0 0 0 Anderson Blooper [unsigned] 0 0 0 0 Mic Jagermeister [unsigned] 0 0 0 0 Jim Hardball [unsigned] 0 0 0 0 LaBron Game [unsigned] 0 0 0 0

Co. N.A. E-A A-P L.A. A 0 0 0 0 B 0 0 0 0 C 0 0 0 0 D 60 45 100 65 E 0 0 0 0 F 0 0 0 0 G 0 0 0 0 H 255 235 195 170 I 0 0 0 0 J 190 235 210 250 K 60 50 60 95

Avg. 47 47 47 48

Year 12 Consumer Appeal (sum of consumer appeal indexes for each company in the upcoming year)

Pricing and S/Q Rating Trends

NORTH AMERICA EUROPE-AFRICA

ASIA-PACIFIC LATIN AMERICA

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 8

Internet Price Wholesale Price S/Q Rating

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$20

$40

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$80

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Year

P ric

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S /Q

R at

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

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Year

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

$40

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P ric

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R at

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

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Footwear Industry Report

FIR 31-Jul-2019

Industry 1 Biegala MGT495-01

Summer

Year 15

© GLO-BUS Software, Inc.

Year 15 Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Change

from Y14

1 J - Doyen 117 100 109 +1 2 K ASM 115 86 101 -1 3 B Cielo 113 78 96 +2 4 DTigers 112 76 94 +7 5 H Road Runner 100 64 82 -8 6 E Elite Footwear 98 63 81 +9 7 FFlying wings 83 56 70 -10 8 ADragons 72 50 61 +12 9 IPure Steps 63 46 55 -6

10 G - Star 60 44 52 -20 11 C Shoe 58 43 51 -2

Game-To-Date Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Bonus Points

Overall G-T-D Score

1 J - Doyen 117 100 109 3 112 2 K ASM 115 85 100 1 101 3 B Cielo 114 80 97 3 100 4 DTigers 114 77 96 0 96 5 H Road Runner 109 76 93 1 94 6 E Elite Footwear 94 62 78 2 80 7 FFlying wings 87 60 74 1 75 8 G - Star 76 53 65 1 66 8 IPure Steps 76 53 65 1 66

10 ADragons 72 52 62 2 64 11 C Shoe 64 47 56 0 56

Investor Expectation Score (I.E.)

Investors and company boards of directors have established targets for the five scoring measures that appear on pages 2 and 3 of this report. The I.E. score ranges from 0 to 120 (if all targets are exceeded by 40% or more). Click the Help button (upper-right) for more information.

Best-In- Industry Score (B-I-I)

The B-I-I score measures each company's performance relative to the best performing company on each of the five scoring measure. The B-I-I score ranges from 0 to 100. To score 100 a company must be the best performing company in the industry on all five scoring measures.

Weighted Average Score

The weighted average score combines the Investor Expectation Score and the Best-In-Industry Score using a 50%-50% weighting as specified by the course instructor. Detailed explanations of scoring are provided in the Help documents asociated with pages 1, 2, and 3 of this report.

Page 1

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Industry 1 SCORING MEASURES Year 15

Earnings Per Share ($ per share)

Earnings Per Share scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected EPS shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date EPS scores are based on a weighted average of the annual EPS performances.

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (3.50) I.E. B-I-I

Y15 Score I.E. B-I-I

G-T-D Score

A 2.57 2.94 1.89 1.74 3.16 2.46 14 5 14 7 A B 4.61 4.22 4.79 6.70 8.58 5.78 24 13 24 15 B C 2.26 2.57 1.10 2.19 1.91 1.97 8 3 11 5 C D 2.37 4.59 5.19 5.21 7.79 5.04 24 12 24 13 D E 1.42 2.94 2.97 3.66 5.23 3.26 22 8 19 9 E F 1.48 3.86 3.96 4.14 3.96 3.47 18 6 20 9 F G 2.32 2.84 2.90 3.58 2.09 2.75 9 3 16 7 G H 4.05 6.74 7.40 6.57 6.02 6.16 23 9 24 16 H I 2.71 3.11 2.70 2.87 2.32 2.75 10 4 16 7 I J 2.27 4.74 7.14 10.47 13.10 7.53 24 20 24 20 J K 2.31 4.19 5.29 7.81 9.46 5.74 24 14 24 15 K

Return On Equity (%)

Return On Equity scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected ROE shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date ROE scores are based on a weighted average of the annual ROE performances.

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (23.0) I.E. B-I-I

Y15 Score I.E. B-I-I

G-T-D Score

A 21.8 20.2 11.2 9.2 14.9 14.8 12 9 13 9 A B 36.0 24.5 22.1 24.5 24.5 25.4 20 15 21 16 B C 19.4 18.6 7.7 12.4 9.7 12.6 8 6 11 8 C D 22.7 41.5 38.4 24.4 27.3 29.5 21 17 23 18 D E 12.6 21.9 18.1 18.3 21.1 18.9 17 13 16 12 E F 13.2 28.1 23.3 24.6 26.3 23.5 21 16 20 15 F G 19.9 20.0 19.2 21.9 10.9 17.9 9 7 16 11 G H 33.0 38.7 29.4 19.9 15.7 24.4 13 10 21 15 H I 22.9 21.0 15.3 14.1 10.0 15.7 8 6 14 10 I J 19.6 31.8 34.2 35.3 32.9 32.2 23 20 24 20 J K 19.8 28.1 26.9 32.8 33.0 29.3 23 20 23 18 K

Stock Price ($ per share)

Stock Price scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected stock price shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based solely on the most recent year's stock price.

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. B-I-I

Y15 Score I.E. B-I-I

G-T-D Score

A 33.46 45.06 18.88 8.82 27.24 5 2 5 2 A B 121.59 83.05 88.69 130.89 188.88 24 11 24 11 B C 22.86 21.18 8.49 14.03 13.22 3 1 3 1 C D 48.77 120.70 122.75 99.07 159.71 24 9 24 9 D E 11.86 35.44 32.74 58.32 86.32 17 5 17 5 E F 11.76 58.38 68.43 72.32 45.87 9 3 9 3 F G 20.47 31.72 57.28 38.44 16.03 3 1 3 1 G H 102.76 178.88 185.71 124.92 94.96 19 6 19 6 H I 35.55 46.77 24.37 24.71 18.73 4 1 4 1 I J 22.39 102.04 186.55 275.83 340.67 24 20 24 20 J K 26.32 92.42 111.75 191.48 222.74 24 13 24 13 K

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Industry 1 SCORING MEASURES Year 15 (concluded)

Credit Rating Credit Rating scores are based on a 20% (20-point) weighting. A bolded credit rating indicates achievement of the investor expected credit rating shown below each yearly column head. Game-To-Date credit rating scores are based solely on the most recent year's credit rating performance.

Y11 (B+)

Y12 (B+)

Y13 (B+)

Y14 (A–)

Y15 (A–)

Y16 (A–)

Y17 (A)

Y18 (A)

Y19 (A)

Y20 (A) I.E. B-I-I

Y15 Score I.E. B-I-I

G-T-D Score

A A A A– A A+ 24 20 24 20 A B A A+ A+ A+ A+ 24 20 24 20 B C A– A A+ A+ A+ 24 20 24 20 C D A A– B– A A 22 19 22 19 D E B A A+ A– A 22 19 22 19 E F B A A+ A A– 20 18 20 18 F G A– A A+ A+ A+ 24 20 24 20 G H A A A A+ A+ 24 20 24 20 H I A A A A+ A+ 24 20 24 20 I J A– A A+ A+ A+ 24 20 24 20 J K A– A A+ A A 22 19 22 19 K

Image Rating Image Rating scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected image rating shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based on an average of the most recent three years.

Y11 (70)

Y12 (72)

Y13 (72)

Y14 (75)

Y15 (75)

Y16 (77)

Y17 (77)

Y18 (80)

Y19 (80)

Y20 (80)

Y13-Y15 Average I.E. B-I-I

Y15 Score I.E. B-I-I

G-T-D Score

A 70 67 61 58 62 60 17 14 16 14 A B 75 74 76 82 83 80 21 19 21 18 B C 68 57 64 51 57 57 15 13 15 13 C D 71 68 81 76 84 80 21 19 21 18 D E 68 69 68 75 77 73 20 18 20 17 E F 76 73 72 67 58 66 15 13 18 15 F G 65 68 66 64 58 63 15 13 17 14 G H 84 85 84 78 81 81 21 19 21 19 H I 68 65 68 62 65 65 17 15 18 15 I J 64 71 83 85 87 85 22 20 21 20 J K 74 87 84 90 87 87 22 20 22 20 K

High Average Low Total Dollars ($000s)

High Average Low Per Unit Sold ($/unit)

Industry 1 Cash Outlays for Corporate Social Responsibility and Citizenship

High Average Low

Image Rating Points Generated from

CSRC Expenditures

Year 11 15,457 8,714 0 1.85 1.03 0.00 5 3 0 Year 12 15,222 4,502 0 1.77 0.51 0.00 9 4 0 Year 13 18,323 6,596 0 1.45 0.61 0.00 12 6 0 Year 14 22,403 5,486 0 2.13 0.53 0.00 15 7 0 Year 15 12,725 6,926 0 2.86 0.79 0.00 18 8 0 Year 16 Year 17 Year 18 Year 19 Year 20

Corporate Social Responsibility and Citizenship

Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a distinguished award to the company making the highest cash outlays as a percentage of revenues for corporate social respon- sibility and citizenship initiatives.

Award Winner 2nd Place Y14 E Elite Footwear K ASM Y15 FFlying wings C Shoe Y16 Y17 Y18 Y19 Y20

Corporate Responsibility Award for Exemplary Corporate Citizenship

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Industry 1 BONUS POINT AWARDS Year 15

BULL'S EYE AWARD for Accurately Forecasting Total Revenues,

Earnings Per Share, and Image Rating

One bonus point added to any company's game-to-date score when actual performance on Total Revenues AND Earnings Per Share vary by no more than 5% from projected performance AND when Image Rating varies by no more than 4 points from the projected image rating.

Year 15 Forecast

Year 15 Actual

Percent Variance

Revenues (within ± 5%) Year 15

Forecast Year 15 Actual

Percent Variance

EPS (within ± 5% or ± 10¢) Year 15

Forecast Year 15 Actual

Point Variance

Image Rating (within ± 4 points) Year 15 Bull's Eye

Award

Cumu- lative

Awards A 651,705 570,237 -12.5% 4.53 3.16 -30.2% 67 62 -5 pts. No 1 A B 1,124,415 1,119,705 -0.4% 8.81 8.58 -2.6% 85 83 -2 pts. Yes 3 B C 569,047 477,896 -16.0% 3.06 1.91 -37.7% 63 57 -6 pts. No 0 C D 1,011,334 1,114,752 +10.2% 6.62 7.79 +17.7% 83 84 +1 pts. No 0 D E 769,937 760,645 -1.2% 5.36 5.23 -2.4% 80 77 -3 pts. Yes 2 E F 317,669 280,357 -11.7% 4.70 3.96 -15.7% 62 58 -4 pts. No 0 F G 345,766 331,258 -4.2% 2.44 2.09 -14.5% 61 58 -3 pts. No 1 G H 990,490 972,470 -1.8% 6.48 6.02 -7.1% 76 81 +5 pts. No 1 H I 619,997 597,066 -3.7% 2.77 2.32 -16.1% 66 65 -1 pts. No 1 I J 1,379,303 1,293,555 -6.2% 14.63 13.10 -10.5% 92 87 -5 pts. No 2 J K 970,657 1,024,955 +5.6% 8.95 9.46 +5.6% 83 87 +4 pts. No 0 K

Trends in Variances Between Projected and Actual Performance (company and industry variances bertween projected and actual revenues, EPS, and image rating)

Industry 1 Variance

Largest Average Smallest

Company K Variance

Year 11 +9.6% -0.4% -7.4% -4.5%

Year 12 +30.1%

+5.2% -15.2% +23.3%

Year 13 +27.4%

-3.3% -20.0% +10.1%

Year 14 +10.0%

-4.8% -18.9% +10.0%

Year 15 +11.5%

-5.6% -21.1% +5.3%

Year 16 Year 17 Year 18 Year 19 Year 20

Y11 Score Δ

Y12 Score Δ

Y13 Score Δ

Y14 Score Δ

Y15 Score Δ

Y16 Score Δ

Y17 Score Δ

Y18 Score Δ

Y19 Score Δ

Y20 Score

Current-Year Scores and Net Changes Cumu- lative

Awards A 83 -5 78 -22 56 -7 49 +12 61 1 A B 107 -15 92 +1 93 +1 94 +2 96 0 B C 74 -8 66 -15 51 +2 53 -2 51 0 C D 86 +11 97 -6 91 -4 87 +7 94 0 D E 55 +23 78 -6 72 0 72 +9 81 0 E F 58 +32 90 -3 87 -7 80 -10 70 1 F G 73 +2 75 +2 77 -5 72 -20 52 0 G H 105 +3 108 -3 105 -15 90 -8 82 0 H I 84 -5 79 -14 65 -4 61 -6 55 0 I J 73 +22 95 +13 108 0 108 +1 109 1 J K 77 +19 96 +2 98 +4 102 -1 101 1 K

Δ = net change in score between years Highlighted figure = Leap Frog Award winner

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3b

for Most Improved Overall Score (current year to current year)

LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-dateoverall score of the company whose current-year overall score is most improved over the prior year. If all companies fail to improve their scores from one year to the next, then no Leap Frog bonus is awarded.

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Industry 1 INDUSTRY OVERVIEW Year 15

Materials Prices

Price Adjustments

Materials Usage Facilities Utilization

Base Prices of Materials ($ per pair)

Materials Prices in Year 15 ($ per pair)

$6.00 -0.16 +0.26 $6.10

Standard $12.00 +1.22 +0.52

$13.74

Superior High industry-wide superior materials usage (45.1%) lead to superior materials prices that were 10.2% above the base and standard materials prices that were 2.6% below the base. Industry-wide utilization of production capability was above 110% and resulted in materials price increases of 4.3%.

Notes

Footwear Production and Sales

Branded Demand

(000s of pairs) Forecast Actual

Stockouts No. of Companies Unfilled Orders (000s)

Pairs Available (000s)

Pairs Sold (internet + wholesale)

Private Label

Demand Forecast (000s of pairs) Pairs Offered (000s) Pairs Sold (000s)

Superior Materials Usage Utilization of Production Capability

North America

45% 102.7% 39,976 35,622 35,904 35,904

5 0

3,696 3,110 2,168

Europe Africa

45% 120.0% 35,182 30,419 30,393 30,392

2 1

3,696 2,266 2,266

Asia Pacific

44% 119.3% 37,662 26,906 27,247 27,245

0 0

4,037 4,400 4,037

Latin America

49% 120.0% 34,027 27,066 27,951 27,947

1 1

4,037 3,221 3,221

Average or Total

45% 114.3% 146,847 120,013 121,495 121,488

2

15,466 12,997 11,692

ꔃ % usage down 0.1 points from Year 14. ꔃ % usage up 1.6 points from Year 14. ꔃ 20.9% higher than Year 15 demand. ꔃ From page 4 of FIR for Year 14. ꔃ Actual branded demand was 1.2% higherthan forecast branded demand due to

increased competitive intensity.

ꔃ Extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies.

ꔃ From page 4 of FIR for Year 14. ꔃ Private-label pairs offered was lower than

actual private-label demand by 16.0%.

Notes

Demand Forecast

Branded Demand (internet + wholesale)

Year 16 Year 17 Year 18

Private-Label Demand Year 16 Year 17 Year 18

North America

37,103 38,589 40,133

4,026 4,389 4,785

Europe Africa 31,573 32,832 34,148

4,026 4,389 4,785

Asia Pacific 29,198 31,536 34,064

4,477 4,972 5,522

Latin America

30,088 32,497 35,103

4,477 4,972 5,522

Global Total

127,962 135,454 143,448

17,006 18,722 20,614

Global demand for Y11-Y15 is expected to grow by 7%-9% annually, slowing to 5%-7% during Y16-Y20. The projected growth rates are not the same for all regions, as shown in the table on page 5 of the Player's Guide. Actual demand growth may vary from the forecast due to stronger or weaker competitive efforts on the part of rival companies.

Notes

Supply / Demand Analysis

Beginning Year 16 Inventory Potential Y16 Production (with OT)

Potential Global Supply

25,359 158,400 183,759

Potential Footwear Suppy in Year 16 Branded Demand Forecast Private-Label Demand Forecast

Expected Global Demand

127,962 17,006

144,968

Expected Footwear Demand in Year 16 Potential global supply (at max OT) in the upcoming year is 26.8% greater than projected global demand. This much excess potential supply is certain to greatly intensify competition for the next few years and reduce industry profitability. It is advisable to NOT add more production capability at this time.

Analysis

Facility Space Production Equipment

N.A. E-A A-P L.A.

Year 15 Facility Space (000s of pairs available for prod. equipmernt)

N.A. E-A A-P L.A.

Construction of New Space (initiated in Y15 and available in Y16)

Total Space

Available in Y16 N.A. E-A A-P L.A. Total

Year 15 Production Equipment (000s of pairs available for production)

A 5,000 0 6,000 0 1,000 0 1,000 0 13,000 A 4,000 0 5,000 0 9,000 A B 6,000 1,000 7,000 2,000 0 1,000 0 2,000 19,000 B 5,000 1,000 6,000 2,000 14,000 B C 6,000 1,000 6,000 1,000 0 0 0 0 14,000 C 3,500 0 4,250 0 7,750 C D 7,000 4,000 7,000 4,000 0 1,000 0 1,000 24,000 D 5,000 4,000 7,000 4,000 20,000 D E 6,000 1,000 7,000 1,000 0 0 0 1,000 16,000 E 3,750 1,000 4,500 750 10,000 E F 5,000 1,000 6,000 1,000 0 0 0 0 13,000 F 0 0 4,250 0 4,250 F G 5,000 0 6,000 0 0 3,000 0 3,000 17,000 G 5,000 0 3,750 0 8,750 G H 5,000 0 8,000 2,000 0 0 0 0 15,000 H 1,000 0 8,000 2,000 11,000 H I 5,000 0 6,000 0 0 0 0 0 11,000 I 3,250 0 5,000 0 8,250 I J 5,000 0 10,000 7,000 0 0 2,000 2,000 26,000 J 5,000 0 10,000 7,000 22,000 J K 5,000 0 8,000 4,000 0 0 0 3,000 20,000 K 5,000 0 8,000 4,000 17,000 K

60,000 8,000 77,000 22,000 1,000 5,000 3,000 12,000 188,000 40,500 6,000 65,750 19,750 132,000

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Industry 1 FINANCIAL PERFORMANCE SUMMARY Year 15

Income Statement Data ($000s)

Internet Wholesale P-label Total Net Sales Revenues Cost of

Pairs Sold Warehouse Expenses

Marketing Expenses

Admin Expenses

Operating Profit

Interest Exp (Inc)

Income Taxes

Net Profit

A 143,486 362,926 37,195 570,237 286,344 50,946 122,539 19,797 90,611 251 27,108 63,252 A B 252,740 792,651 13,503 1,119,705 540,592 80,792 227,777 24,895 245,649 577 73,522 171,550 B C 105,951 350,398 21,547 477,896 247,147 44,514 97,523 20,073 68,639 586 20,416 47,637 C D 293,882 783,234 0 1,114,752 516,667 99,915 208,735 34,294 255,141 11,523 72,355 168,827 D E 256,822 503,823 0 760,645 357,307 74,708 143,720 24,295 160,615 7,023 46,078 107,514 E F 92,641 187,716 0 280,357 103,390 33,265 14,830 19,678 109,194 3,340 31,756 74,098 F G 138,503 192,755 0 331,258 160,329 39,288 38,050 31,325 62,266 1,496 17,931 41,839 G H 229,603 565,774 72,878 972,470 515,951 95,349 164,864 21,295 175,011 3,762 50,861 118,676 H I 171,970 358,208 44,332 597,066 334,544 60,746 121,847 16,445 63,484 599 18,866 44,019 I J 311,947 828,601 131,012 1,293,555 622,675 104,851 167,851 30,797 367,381 2,556 109,448 255,377 J K 203,902 668,371 135,278 1,024,955 503,336 77,183 142,723 29,547 272,166 15,509 76,227 177,863 K

200,132 508,587 41,431 776,627 380,753 69,232 131,860 24,767 170,014 4,293 49,506 115,514

Selected Balance Sheet Data ($000s)

Cash On Hand

Current Assets

Fixed Assets

Total Assets

Assets Current Liabilities

Long-Term Loans

Total Liabilities

Liabilities Beginning

Equity Stock Sale (Purchase)

Earnings Retained

Ending Equity

Shareholder Equity

A 58,460 236,672 281,280 517,952 32,364 29,700 62,064 392,636 0 63,252 455,888 A B 112,540 388,810 477,456 866,266 51,652 29,700 81,352 613,364 0 171,550 784,914 B C 60,772 235,171 337,596 572,767 31,450 29,700 61,150 466,480 0 45,137 511,617 C D 150,669 548,896 682,342 1,231,238 223,758 410,000 633,758 638,998 -210,345 168,827 597,480 D E 4,698 166,289 445,663 611,952 32,145 29,700 61,845 466,980 -24,387 107,514 550,107 E F 26,358 88,726 231,181 319,907 14,838 28,800 43,638 287,789 -29,548 18,028 276,269 F G 100,072 164,963 374,208 539,171 36,282 97,700 133,982 363,350 0 41,839 405,189 G H 210,705 422,510 387,108 809,618 31,235 0 31,235 733,602 -64,045 108,826 778,383 H I 46,925 176,247 288,745 464,992 24,397 0 24,397 437,786 -26,010 28,819 440,595 I J 0 310,656 671,710 982,366 89,925 29,700 119,625 691,385 -84,021 255,377 862,741 J K 0 272,791 647,384 920,175 92,196 200,000 292,196 450,116 0 177,863 627,979 K

70,109 273,794 438,607 712,400 60,022 80,455 140,477 503,862 -39,851 107,912 571,924

Selected Financial Statistics

Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Profitability Measures Div. Per Share ($/share)

Total Div. Payment

($000s)

Payout (percent of net profit)

Dividend Data Credit Rating Measures Interest Coverage

Ratio

Debt to Assets Ratio

Default Risk Ratio

Risk of

Default Current Ratio

Days of Inventory

Shares of Stock

Outstanding (000s of shares)

A 49.8% 15.9% 11.1% 0.00 0 0.0% 361.00 0.12 8.54 Low 7.31 128 days 20,000 A B 51.7% 21.9% 15.3% 0.00 0 0.0% 425.73 0.09 20.87 Low 7.53 59 days 20,000 B C 48.3% 14.4% 10.0% 0.10 2,500 5.2% 117.13 0.11 7.18 Low 7.48 128 days 25,000 C D 53.7% 22.9% 15.1% 0.00 0 0.0% 22.14 0.51 8.82 Low 2.45 164 days 21,668 D E 53.0% 21.1% 14.1% 0.00 0 0.0% 22.87 0.10 2.56 Medium 5.17 36 days 20,540 E F 63.1% 38.9% 26.4% 3.00 56,070 75.8% 32.69 0.14 0.87 High 5.98 54 days 18,690 F G 51.6% 18.8% 12.6% 0.00 0 0.0% 41.62 0.25 6.35 Low 4.55 39 days 20,000 G H 46.9% 18.0% 12.2% 0.50 9,850 8.3% 46.52 0.04 4.23 Low 13.53 56 days 19,700 H I 44.0% 10.6% 7.4% 0.80 15,200 34.5% 105.98 0.05 6.58 Low 7.22 37 days 19,000 I J 51.9% 28.4% 19.7% 0.00 0 0.0% 143.73 0.12 31.09 Low 3.45 50 days 19,500 J K 50.9% 26.6% 17.4% 0.00 0 0.0% 17.55 0.32 9.17 Low 2.96 67 days 18,800 K

51.0% 21.9% 14.9% 0.40 7,602 11.3% 121.54 0.17 9.66 6.15 74 days 20,263

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Industry 1 PERFORMANCE BENCHMARKS Year 15

Production Benchmarks

North America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

73% 37,228

4,893 8.16

62,436 20% 1.00

22,706 27.31 3.0% 4.11

85% 44,323

5,124 9.12

64,152 45% 2.00

43,057 30.30 7.1% 5.46

100% 49,888

5,415 9.85

72,197 60% 5.00

129,595 39.08 9.8% 6.69

100% 44,459

5,072 9.26

62,436 58% 1.20

37,162 29.40 9.8% 5.35

Europe-Africa Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

50% 22,645

3,892 6.18

37,462 20% 1.00

3,000 23.09 4.1% 5.56

72% 25,740

3,963 6.87

37,712 41% 2.67

4,544 32.24 7.4% 5.95

100% 29,186

4,067 7.84

37,837 52% 5.00

13,719 44.73

11.2% 6.41

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

Asia-Pacific Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

0% 14,109

3,439 4.15

26,016 2%

0.90 24,198

16.97 2.7% 2.83

33% 16,731

3,755 4.67

26,453 41% 1.97

52,217 23.08 7.3% 4.31

72% 19,480

4,168 5.32

29,236 72% 5.00

141,970 26.43

12.1% 5.17

50% 19,082

3,742 5.32

26,016 46% 1.00

44,220 23.54

12.1% 4.36

Latin America Low Average High Industry 1 Company

K

Labor Statistics

Total Regular Compensation ($ / worker / year) Workforce Productivity (pairs / worker / year) Production Labor Cost ($ per pair after rejects) Supervisory Compensation ($ / supervisor / year)

Branded Production TQM/6-Sigma Spending Current ($/pair produced)

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

Cost Per S/Q Star (total production cost per pair ÷ S/Q rating)

50% 12,487

3,772 3.58

26,016 20% 1.00

2,790 19.61 4.1% 4.22

84% 16,675

4,290 4.13

26,190 50% 2.05

9,262 26.05 7.4% 4.81

100% 20,972

6,098 5.03

26,798 64% 5.00

20,400 32.52

11.2% 5.94

100% 20,972

6,098 3.58

26,016 62% 1.30

10,920 27.43

10.0% 4.99

Note: To protect individual companies from having competitively sensitive data revealed to rival companies, only the industry averages are reported for regions with 2 or 3 production facilities. Industry low and high numbers are reported only for regions with 4 or more production facilities. No benchmark data is reported for regions with only 1 production facility.

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Industry 1 PERFORMANCE BENCHMARKS Year 15 (concluded)

Branded Operating Benchmarks

North America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.18 22.21

3.49 16.26

17.9% 3.25

-6.99 -13.2%

7.47 29.31 19.30 24.20

27.5% 10.78 10.64

18.0%

12.44 32.86 28.47 32.87

37.7% 17.57 25.29

42.1%

5.52 30.37 16.73 27.95

31.1% 8.56

10.50 19.1%

Europe-Africa Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.75 24.60

3.25 14.54

16.2% 2.84 3.95

7.5%

10.79 32.17 19.04 24.07

26.6% 9.14

11.06 18.4%

14.38 41.28 28.12 34.98

36.1% 15.19 22.25

37.7%

11.04 31.70 20.66 34.98

34.2% 9.51

16.73 26.2%

Asia-Pacific Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

3.81 18.57

3.56 10.31

12.1% 0.78 6.21

11.7%

6.09 25.08 22.95 20.50

24.8% 9.94

12.09 22.2%

10.40 28.48 44.01 27.87

38.9% 16.55 25.22

44.0%

4.93 24.48 17.86 25.29

30.6% 8.33

10.96 22.1%

Latin America Low Average High Industry 1 Company

K

Internet Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Wholesale Segment Marketing Expenses ($ per pair sold) Operating Profit ($ per pair sold) Operating Profit Margin

Distribution and Warehouse Costs ($ per pair available for sale) Cost of Branded Pairs Sold (production, freight, x-rate cost adjustment)

5.17 24.91

3.59 11.61

13.1% 2.98 1.84

3.3%

11.92 32.08 19.69 24.46

26.7% 8.82

11.74 19.4%

17.27 37.37 32.09 37.04

43.3% 12.28 24.21

37.3%

5.17 28.58 19.14 34.29

35.3% 8.25

16.78 28.2%

Private-Label Operating Benchmarks

Low Average High Industry 1 Company

K

North America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

25.57 +2.74

28.96 +6.43

30.91 +10.47

29.52 +10.47

Europe-Africa Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

27.44 +4.97

28.17 +11.44

28.66 +14.81

28.66 +14.55

Asia-Pacific Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

21.00 +2.90

24.63 +9.83

28.86 +16.13

22.26 +15.86

Latin America Cost Per Pair Sold (production, freight, tariffs, x-rates) Margin Over Direct Cost ($ per pair sold)

21.13 +1.65

27.80 +13.32

40.85 +22.86

27.68 +16.31

Footwear Industry Report © 2018 GLO-BUS Software, Inc. Page 7

2019-08-14, 2*00 PMBSG Decisions & Reports

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Industry 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS Year 15

Celebrity Endorsements

Celebrity Year 16

Contract Holder No. of Offers

Highest Offer

2nd Highest

3rd Highest

Most Recent Contract Offers (letter in parens indicates company that made offer)

Judy Judge ADragons 6 10,001 (A) 9,001 (I) 7,000 (H) Kimmie Jimmel B Cielo 6 13,000 (B) 9,999 (J) 9,001 (I) Bud Birkenstock B Cielo 5 13,000 (B) 9,001 (I) 8,900 (H) Jose Montana IPure Steps 4 9,001 (I) 7,000 (H) 5,009 (K) Samuelle Jackson J - Doyen 4 9,000 (J) 2,000 (G) 1,500 (E) Bronko Mars J - Doyen 4 8,800 (J) 8,000 (D) 1,500 (E) Steff Caraway J - Doyen 4 9,100 (J) 2,009 (E) 2,000 (G) Jay XYZ E Elite Footwear 4 9,100 (J) 2,005 (E) 2,000 (G) Nunchuck Norris DTigers 5 8,001 (B) 8,000 (D) 8,000 (J) Roger Federation K ASM 5 11,000 (B) 7,779 (K) 7,000 (H) Nick Shavan E Elite Footwear 4 5,500 (J) 3,525 (E) 3,500 (D) Anderson Blooper J - Doyen 4 10,505 (J) 7,000 (H) 6,001 (I) Mic Jagermeister DTigers 5 8,800 (J) 8,001 (B) 8,000 (D) Jim Hardball J - Doyen 4 10,605 (J) 6,001 (I) 6,000 (H) LaBron Game B Cielo 5 9,050 (B) 8,600 (J) 8,000 (D)

Co. N.A. E-A A-P L.A. A 85 65 60 40 B 270 250 220 215 C 0 0 0 0 D 170 180 175 140 E 145 145 125 145 F 0 0 0 0 G 0 0 0 0 H 0 0 0 0 I 60 50 60 95 J 305 315 395 375 K 75 85 65 100

Avg. 101 99 100 101

Year 16 Consumer Appeal (sum of consumer appeal indexes for each company in the upcoming year)

Pricing and S/Q Rating Trends

NORTH AMERICA EUROPE-AFRICA

ASIA-PACIFIC LATIN AMERICA

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 8

Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

$40

$60

$80

0.0̣

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2.0̣

3.0̣

4.0̣

5.0̣

6.0̣

Year

P ric

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S /Q

R at

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

$40

$60

$80

$100

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2.0̣

3.0̣

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5.0̣

6.0̣

Year

P ric

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R at

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

$40

$60

$80

0.0̣

1.0̣

2.0̣

3.0̣

4.0̣

5.0̣

6.0̣

Year

P ric

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S /Q

R at

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Internet Price Wholesale Price S/Q Rating

10 11 12 13 14 15 16 17 18 19 20 $0

$20

$40

$60

$80

$100

0.0̣

1.0̣

2.0̣

3.0̣

4.0̣

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6.0̣

Year

P ric

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2019-08-14, 2*00 PMBSG Decisions & Reports

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2019-08-14, 1*58 PMBSG Decisions & Reports

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Industry 1 SCORING MEASURES Year 18

Earnings Per Share ($ per share)

Earnings Per Share scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected EPS shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date EPS scores are based on a weighted average of the annual EPS performances.

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (4.47) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 2.57 2.94 1.89 1.74 3.16 2.06 1.95 1.13 2.18 3 1 10 4 A B 4.61 4.22 4.79 6.70 8.58 10.65 12.62 17.54 8.61 24 16 24 15 B C 2.26 2.57 1.10 2.19 1.91 1.65 2.14 1.81 1.93 5 2 9 3 C D 2.37 4.59 5.19 5.21 7.79 6.88 8.25 8.42 6.04 22 8 24 11 D E 1.42 2.94 2.97 3.66 5.23 5.34 6.02 5.79 4.13 17 5 18 7 E F 1.48 3.86 3.96 4.14 3.96 1.31 2.16 1.49 2.76 4 1 12 5 F G 2.32 2.84 2.90 3.58 2.09 3.27 3.29 4.05 3.04 12 4 14 5 G H 4.05 6.74 7.40 6.57 6.02 5.94 9.19 13.73 7.29 24 13 24 13 H I 2.71 3.11 2.70 2.87 2.32 2.24 3.06 3.84 2.86 11 4 13 5 I J 2.27 4.74 7.14 10.47 13.10 14.72 17.42 21.45 11.19 24 20 24 20 J K 2.31 4.19 5.29 7.81 9.46 10.86 12.12 15.28 8.14 24 14 24 15 K

Return On Equity (%)

Return On Equity scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected ROE shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date ROE scores are based on a weighted average of the annual ROE performances.

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (25.0) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 21.8 20.2 11.2 9.2 14.9 9.0 8.4 4.7 11.4 3 2 9 7 A B 36.0 24.5 22.1 24.5 24.5 24.5 26.1 32.7 26.8 22 17 21 15 B C 19.4 18.6 7.7 12.4 9.7 7.8 9.5 7.5 10.5 5 4 8 6 C D 22.7 41.5 38.4 24.4 27.3 22.7 26.9 28.8 27.8 20 15 21 16 D E 12.6 21.9 18.1 18.3 21.1 18.8 19.3 16.4 18.5 12 8 15 11 E F 13.2 28.1 23.3 24.6 26.3 44.7 n.m. n.m. 34.9 20 0 24 20 F G 19.9 20.0 19.2 21.9 10.9 15.0 13.1 14.0 16.0 10 7 13 9 G H 33.0 38.7 29.4 19.9 15.7 14.6 22.3 29.0 23.4 20 15 19 13 H I 22.9 21.0 15.3 14.1 10.0 9.2 11.4 12.9 13.6 9 7 11 8 I J 19.6 31.8 34.2 35.3 32.9 29.6 30.4 36.3 32.2 23 19 23 18 J K 19.8 28.1 26.9 32.8 33.0 31.5 34.1 38.9 32.1 24 20 23 18 K

Stock Price ($ per share)

Stock Price scores are based on a 20% (20-point) weighting. A bolded number indicates achievement of the investor expected stock price shown below each yearly column head. A highlighted number indicates best-in- industry performance. Game-To-Date scores are based solely on the most recent year's stock price.

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. B-I-I

Y18 Score I.E. B-I-I

G-T-D Score

A 33.46 45.06 18.88 8.82 27.24 20.37 9.24 5.61 1 0 1 0 A B 121.59 83.05 88.69 130.89 188.88 239.82 277.78 403.63 24 16 24 16 B C 22.86 21.18 8.49 14.03 13.22 12.09 9.36 9.53 1 0 1 0 C D 48.77 120.70 122.75 99.07 159.71 119.06 130.34 107.40 12 4 12 4 D E 11.86 35.44 32.74 58.32 86.32 80.94 86.67 63.73 7 2 7 2 E F 11.76 58.38 68.43 72.32 45.87 18.65 10.81 8.18 1 0 1 0 F G 20.47 31.72 57.28 38.44 16.03 21.55 14.80 35.14 4 1 4 1 G H 102.76 178.88 185.71 124.92 94.96 76.43 165.45 296.13 24 12 24 12 H I 35.55 46.77 24.37 24.71 18.73 14.96 29.91 29.20 3 1 3 1 I J 22.39 102.04 186.55 275.83 340.67 368.88 418.71 515.00 24 20 24 20 J K 26.32 92.42 111.75 191.48 222.74 239.49 267.42 336.38 24 13 24 13 K

Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 2

2019-08-14, 1*56 PMBSG Decisions & Reports

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K ASM (Industry 1)

PERFORMANCE HIGHLIGHTS Year 18

Financial Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 EPS (earnings per share) ROE (return on equity) Stock Price Credit Rating Image Rating Net

Revenues ($000s)

Internet Wholesale Private-Label

Total

$2.00 20.0%

$30.00 B

70 90,315

314,731 27,600

432,646

$2.31 19.8%

$26.32 A– 74

87,228 325,027 56,611

468,866

$4.19 28.1%

$92.42 A

87 154,970 424,924 68,947

648,841

$5.29 26.9%

$111.75 A+ 84

150,606 473,176 88,344

712,126

$7.81 32.8%

$191.48 A

90 214,651 588,722 102,691 906,064

$9.46 33.0%

$222.74 A

87 203,902 668,371 135,278

1,007,551

$10.86 31.5%

$239.49 A

91 268,970 722,672 178,389

1,170,031

$12.12 34.1%

$267.42 A

87 287,272 786,587 144,715

1,218,574

$15.28 38.9%

$336.38 A

85 320,596 842,460 178,661

1,341,717

Branded Production Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 N.A. Productivity (pairs/worker/year)

Labor Cost ($ per pair produced) Production Cost ($/pair prod.)

E-A Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Production Cost ($/pair prod.)

A-P Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Production Cost ($/pair prod.)

L.A. Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Production Cost ($/pair prod.)

5,000 8.98

23.98 0

0.00 0.00

3,500 4.89

21.15 0

0.00 0.00

5,200 8.74

24.07 0

0.00 0.00

3,734 4.56

21.41 0

0.00 0.00

5,186 9.12

27.41 0

0.00 0.00

3,808 4.53

22.39 0

0.00 0.00

5,183 9.38

29.99 0

0.00 0.00

3,791 5.03

24.70 0

0.00 0.00

5,082 9.84

28.98 0

0.00 0.00

3,764 5.30

22.90 4,086 4.82

29.30

5,072 9.72

29.40 0

0.00 0.00

3,742 5.80

23.54 6,098 3.82

27.43

5,062 9.95

29.64 0

0.00 0.00

3,972 5.54

23.91 6,058 3.91

26.03

5,079 10.10 29.09

0 0.00 0.00

3,966 5.53

23.69 5,975 3.96

25.00

5,049 10.34 30.02

0 0.00 0.00

3,919 5.67

24.24 5,963 3.99

24.57

Branded Operations Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 N.A.

Internet Pairs Sold (000s) Market Share (%) Operating Profit

Whsle Pairs Sold (000s) Market Share (%) Operating Profit

S/Q Rating (of pairs sold in region)

E-A Internet Pairs Sold (000s)

Market Share (%) Operating Profit

Whsle Pairs Sold (000s) Market Share (%) Operating Profit

S/Q Rating (of pairs sold in region)

A-P Internet Pairs Sold (000s)

Market Share (%) Operating Profit

Whsle Pairs Sold (000s) Market Share (%) Operating Profit

S/Q Rating (of pairs sold in region)

L.A. Internet Pairs Sold (000s)

Market Share (%) Operating Profit

Whsle Pairs Sold (000s) Market Share (%) Operating Profit

S/Q Rating (of pairs sold in region)

4.0̣ 353

8.3% 17.88 1,997 8.3% 8.80

4.0̣ 300

8.3% 15.15 1,700 8.3% 7.04

4.0̣ 225

8.3% 13.92 1,275 8.3%

10.51 4.0̣

225 8.3% 8.25

1,275 8.3% 4.84

4.0̣ 329

6.9% 18.65 2,076 8.2% 8.89

4.1̣ 290

7.1% 17.50 1,695 8.0% 8.61

4.1̣ 222

7.0% 16.12 1,371 8.4%

11.06 4.0̣

224 7.1% 7.91

1,317 7.9% 2.58

5.4̣ 573

11.6% 22.47 2,452 10.0%

7.92 5.5̣

466 11.0% 25.50 2,083 10.0% 10.07 5.5̣

376 11.0% 26.37 1,693 10.2% 15.00 5.4̣

366 10.7% 18.45 1,798 10.9%

4.07

6.0̣ 452

8.0% 25.99 2,263 8.9%

11.64 6.0̣

407 8.6%

29.37 2,041 9.4%

13.36 6.0̣

344 8.5%

25.89 1,728 9.5%

15.70 6.0̣

342 8.4%

20.13 1,809 10.2%

6.69

5.5̣ 678

10.6% 26.19 2,894 10.6%

8.95 5.4̣

602 11.1% 27.75 2,744 11.8% 10.16 5.4̣

657 14.0% 24.58 2,899 14.6% 10.11 5.5̣

495 10.7% 29.51 2,393 12.0% 13.16

5.5̣ 674

9.2% 27.95 3,578 12.5% 10.50 5.4̣

492 8.1%

34.98 2,718 11.2% 16.73 5.4̣

544 9.7%

25.29 2,989 13.8% 10.96 5.5̣

494 8.7%

34.29 2,517 11.3% 16.78

5.8̣ 819

10.4% 28.28 3,791 13.2%

9.45 5.7̣

683 10.1% 30.27 2,983 12.0% 10.09 5.7̣

766 11.9% 25.07 3,551 15.4%

9.03 5.8̣

817 12.6% 30.36 3,309 14.0% 11.57

5.9̣ 827

9.5% 28.19 3,890 13.0%

9.31 5.8̣

695 9.2%

34.32 3,179 12.3% 13.20 5.8̣

809 11.0% 28.26 3,717 15.1% 11.64 5.8̣

927 12.5% 30.02 3,827 15.2% 11.52

5.8̣ 911

9.2% 29.15 3,704 12.1%

9.64 5.7̣

770 9.2%

38.77 3,461 12.9% 15.64 5.7̣

839 9.9%

31.52 3,710 13.7% 13.27 5.8̣ 1,033 12.1% 31.39 4,503 16.6% 12.09

P-Label Operations Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 N.A. Pairs Sold (000s)

Margin Over Direct Cost E-A Pairs Sold (000s)

Margin Over Direct Cost A-P Pairs Sold (000s)

Margin Over Direct Cost L.A. Pairs Sold (000s)

Margin Over Direct Cost

200 +3.07

200 +1.07

200 +6.86

200 +0.86

437 +2.32

423 +5.68

423 +7.68

434 +0.69

488 +3.19

491 +8.99

509 +9.97

509 +4.94

545 +8.15

545 +15.66

574 +8.98

574 +12.78

604 +7.13

604 +16.14

648 +10.95

648 +22.00

670 +10.47

753 +14.55

732 +15.86

1,020 +16.31

1,219 +16.71

1,249 +15.86

812 +14.42

814 +22.93

798 +16.56

798 +18.87

513 +21.88

1,030 +22.68

870 +14.03

870 +19.49

962 +21.16

1,123 +23.36

Performance Highlights Copyright © GLO-BUS Software, Inc.