6/4/2018 FOOTWEAR INDUSTRY REPORT Copyright © GLO-BUS Software, Inc. All rights reserved. Industry 1 Year 10 Monday, June 4th, 2018 Year 10 Scoreboard Rank 1 1 1 1 1 1 1 1 1 Company Name A Company B Company C Company D Company E Company F Company G Company H Company I Company Investor Expectation Score Best-InIndustry Score Overall Score 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Game-To-Date Scoreboard Rank 1 1 1 1 1 1 1 1 1 Investor Expectation ——– Score (I.E.) Company Name A Company B Company C Company D Company E Company F Company G Company H Company I Company Investor Expectation Score Best-InIndustry Score Overall Score 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Bonus Points 0 0 0 0 0 0 0 0 0 Overall G-T-D Score 0 0 0 0 0 0 0 0 0 Investors and company boards of directors have established annual targets for five key performance measures and the importance weighting of each: EPS (20 points), ROE (20 points), Stock Price ( 20 points), Credit Rating (20 points), and Image Rating (20 points). Pages 2 and 3 of this report show the investor expectation targets (in parenthesis just under the column heads for each year). The investor expectation score on a performance measure is equal to the percentage of the target that was achieved. Achieving higher than targeted performance results in additional awards of 0.5% for each 1% overachieved (capped at 40% over the target). Thus the investor expectation score ranges from 0 to a max of 120 (if all targets are exceeded by 40% or more). Best-In-Industry —————— This scoring standard is based on how well each company performs relative to the best-performing company in the Score (B-I-I) industry on EPS (20 points max), ROE (20 points max), Stock Price (20 points max), Credit Rating (20 points max), and Image Rating (20 points max). In order to get a score of 100 a company must be the best performing company in the industry on all five measures, achieve no lower than the investor expectation on EPS, ROE, Stock Price, and Image Rating, and have an A+ Credit Rating. Overall Score ———————– This measure is used to determine each company's ranking in the Year 10 Scoreboard and the Game-To-Date Scoreboard above. The overall score is calculated by combining the Investor Expectation Score and the Best-InIndustry Score into a single score using the 50%-50% weighting as specified by the course instructor. 1/9 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 10 Earnings Per Share ($) EPS scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected EPS shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading EPS performance. Game-To-Date scores are based on a weighted average of the annual EPS performances. Y11 (2.67) Y12 (2.85) Y13 (3.05) Y14 (3.26) Y15 (3.49) Y16 (3.66) Y17 (3.84) Y18 (4.03) Y19 (4.23) Y20 (4.44) A B C D E F G H I Wgt. Avg. Y10 Score (2.67) I.E. 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 G-T-D Score I.E. B-I-I 20 20 20 20 20 20 20 20 20 A B C D E F G H I 20 20 20 20 20 20 20 20 20 Return on Equity (%) ROE scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected ROE shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industryleading ROE performance. Game-To-Date scores are based on a weighted average of the annual ROE performances. Y11 (15.0) Y12 (15.0) Y13 (15.0) Y14 (15.0) Y15 (15.0) Y16 (15.0) Y17 (15.0) Y18 (15.0) Y19 (15.0) Y20 (15.0) A B C D E F G H I Wgt. Avg. Y10 Score (15.0) I.E. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 G-T-D Score I.E. B-I-I 20 20 20 20 20 20 20 20 20 A B C D E F G H I 20 20 20 20 20 20 20 20 20 Stock Price ($ per share) Stock Price scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor-expected stock price shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading performance. Game-To-Date scores are based solely on the most recent year's stock price. Y11 (32.00) Y12 (34.25) Y13 (36.75) Y14 (39.25) Y15 (42.00) Y16 (44.25) Y17 (46.25) Y18 (48.75) Y19 (51.25) A B C D E F G H I Footwear Industry Report Y20 (53.50) Y10 Score I.E. 20 20 20 20 20 20 20 20 20 Copyright © GLO-BUS Software, Inc. B-I-I 20 20 20 20 20 20 20 20 20 G-T-D Score I.E. 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 A B C D E F G H I Page 2 2/9 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 10 (concluded) Credit Rating Credit Rating scores are based on a 20% or 20 point weighting. Bolded credit ratings indicate meeting or beating the B+ investor expectation shown below each column head. For the Best- In-Industry scoring, companies with an A+ credit rating earn a score of 20 points and lesser credit ratings earn lower scores. Game-To-Date scores are based soley on the most recent year's credit rating. Y11 (B+) Y12 (B+) Y13 (B+) Y14 (B+) Y15 (B+) Y16 (B+) Y17 (B+) Y18 (B+) Y19 (B+) Y20 Y10 Score I.E. (B+) A B C D E F G H I 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 G-T-D Score I.E. 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 A B C D E F G H I Image Rating Image Rating scores are based on a 20% or 20 point weighting. Bolded image ratings indicate meeting or beating the yearly target shown below each column head. Best-In-Industry performers earn top scores; scores of other companies are a percentage of the industry-leading image rating. Game-To-Date scores are based on company's average image rating over the last three years. Y11 (70) Y12 (70) Y13 (70) Y14 (70) Y15 (70) Y16 (70) Y17 (70) Y18 (70) Y19 (70) Y20 (70) Y8-Y10 Average A B C D E F G H I 0 0 0 0 0 0 0 0 0 Corporate Social Responsibility and Citizenship Industry 1 Expenditures for Corporate Social Responsibility and Citizenship Total ($000s) Per Pair Sold ($/unit) High Avg. Low High Avg. Low Image Rating Points Generated from CSRC Expenditures High Avg. Low Y10 Score I.E. 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 G-T-D Score I.E. 20 20 20 20 20 20 20 20 20 B-I-I 20 20 20 20 20 20 20 20 20 A B C D E F G H I Corporate Responsibility Award for Exemplary Corporate Citizenship Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a Gold Star Award to the company spending the highest percentage of its revenues for social responsibility and citizenship initiatives. Award Winner Y14 Y13 Y12 Y11 Y10 A Company A Company A Company A Company 1st Place 2nd Place B Company B Company B Company B Company 2nd Place 3/9 6/4/2018 Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3 4/9 6/4/2018 INDUSTRY1 BONUS POINT AWARDS BULL'S EYE AWARD 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. for Accurately Forecasting Total Revenues, Earnings Per Share, and Image Rating Revenues(within ± 5%) Year 10 Year 10 Percent Forecast Actual Variance A B C D E F G H I 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 EPS(within ± 5% or ± 10¢) Year 10 Year 10 Percent Forecast Actual Variance 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 YEAR10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Image Rating (within ± 4 points) Year 10 Year 10 —Variance— Forecast Actual Pts. Percent 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Year 10 CumuBull's Eye lative Award Awards 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % No No No No No No No No No A B C D E F G H I 0 0 0 0 0 0 0 0 0 Comparisons and Trends in Projected Versus Actual Variances Range of Average Percent Variances (for Revenues, EPS, and Image Rating) for all Industry 12 Companies, World-Wide Average Percent Variance, and Company E Average Percent Variance Industry High/Low Company E Average World Average 100% 50% 0% -50% -100% Year 11 Year 10 Year LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-date overall 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. for Most Improved Overall Score (current year to current year) Current-Year Scores Δ = net change in score between years Y11 Score A B C D E F G H I Δ Y12 Score 0 0 0 0 0 0 0 0 0 Footwear Industry Report Δ Y13 Score Δ Y14 Score Δ Highlighted figure = Leap Frog Award winner Y15 Score Δ Y16 Score Δ Y17 Score 0 0 0 0 0 0 0 0 0 Δ Y18 Score Δ Y19 Score Δ Y20 Score Cumulative Awards 0 0 0 0 0 0 0 0 0 Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 3b 5/9 6/4/2018 INDUSTRY 1 FOOTWEAR INDUSTRY OVERVIEW Materials Prices —Y10 Price Adjustments for— Mat. Usage Cap. Utilization Base Price ($/pair) Standard Materials Superior Materials 6.00 12.00 0.00 0.00 YEAR 10 Year 10 Price Notes 6.00 12.00 Higher than normal (50.0%) superior materals usage lead to superior materials prices that were 0.0% below the base and standard materials prices that were 0.0% below the base. 0.00 0.00 N.A. Plants E-A Plants A-P Plants L.A. Plants All Plants Total Year 10 Production (000s of pairs) Pairs Rejected Net Year 10 Production (000s of pairs) Superior Materials Usage Capacity Utilization (branded + private-label) 19,368 945 18,423 48.8% 107.6% 0 0 0 0.0% 0.0% 31,743 2,196 29,547 50.8% 88.2% 0 0 0 0.0% 0.0% 51,111 3,141 47,970 50.0% 94.7% Branded Warehouses N.A. Region E-A Region A-P Region L.A. Region All Regions Ending Y9 Inventories (000s of pairs) Less Pairs Cleared (inventory clearance) Beginning Y10 Inventories Plus New Pairs Produced in Y10 Pairs Available for Sale in Year 10 108 0 108 12,393 12,501 108 0 108 12,393 12,501 72 0 72 8,262 8,334 72 0 72 8,262 8,334 360 0 360 41,310 41,670 Branded Demand & Sales N.A. Market E-A Market A-P Market L.A. Market All Market Projected Y10 Demand (000s of pairs) Actual Year 10 Demand Branded Pairs Sold (internet + wholesale) No. of Companies Unable to Fill All Orders Unfilled Orders (000s of pairs ordered but not shipped) 12,150 12,150 12,150 12,150 12,150 12,150 8,100 8,100 8,100 8,100 8,100 8,100 40,500 40,500 40,500 Demand Forecast N.A. Market E-A Market A-P Market L.A. Market All Market 12,879 13,651 14,470 1,800 1,980 2,205 12,879 13,651 14,470 1,800 1,980 2,205 8,910 9,814 10,781 1,800 1,980 2,205 8,910 9,814 10,781 1,800 1,980 2,205 43,578 46,931 50,503 7,200 7,920 8,820 Footwear Production (industry totals) (industry totals) (industry tot.) (industry totals) Branded Demand ————————– Year 11 (internet + wholesale) Year 12 Year 13 Private-Label Demand —————– Year 11 Year 12 Year 13 Potential Y11 Footwear Supply Beginning Y11 Inventory Potential Production (with OT) Potential Global Supply 1,170 64,800 65,970 Notes      Branded Demand Forecast Private-Label Forecast Potential Global Demand 43,578 7,200 50,778 Overall average reject rate = 6.1% Total pairs available after rejects % usage unchanged from Y9 % utilization unchanged from Y9 Notes      Unsold pairs from Y9 Average inventory clearance of 0.0% Incurred a 1-star S/Q rating penalty New Y10 production shipped from plants 2.9% higher than Y10 demand Notes  From page 4 of FIR for Year 9  Actual demand was 0.0% lower than projected demand due to decreased competitive intensity. not meaningful Expected Y11 Footwear Demand Total pairs produced before rejects { Shows extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies. Notes Global demand for Y11-Y15 is expecrted to grow at a rate of 7%-9% annually, slowing to about 5%-7% annual growth during Y16-Y20. The projected growth rates are not the same for all four regions, as indicated in the table on page 4 of the Player's Guide. Actual demand growth may vary from the forecast due to increases/decreases in competitive intensity industry-wide. Supply / Demand Analysis Excess supply of 29.9% is likely to boost competitive pressures in Year 11 significantly. Industry-wide, there is enough production capacity to meet demand and absorb demand growth for several years to come. New capacity construction is currently not needed. Plant Capacity (000s of pairs of production capacity not including overtime) Capacity Beginning Year 10 N.A. E-A A-P L.A. A B C D E F G H I 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 18,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 36,000 Footwear Industry Report Capacity Purchased (Sold) N.A. E-A A-P L.A. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Capacity Available for Y10 Production N.A. E-A A-P L.A. Total 0 0 0 0 0 0 0 0 0 0 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 18,000 Copyright © GLO-BUS Software, Inc. 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 36,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 54,000 New Construction Initiated in Y10 0 0 0 0 0 0 0 0 0 0 A B C D E F G H I Page 4 6/9 6/4/2018 INDUSTRY 1 FINANCIAL PERFORMANCE SUMMARY YEAR 10 Income Statement Data ($000s) Net Sales Cost of Warehouse Marketing Admin Operating Revenues Pairs Sold Expenses Expenses Expenses Profit A B C D E F G H I Interest Exp (Inc) Income Taxes Total Dividend Payment Net Profit ($000s) 136,417 136,417 136,417 136,417 136,417 136,417 136,417 136,417 136,417 15,286 15,286 15,286 15,286 15,286 15,286 15,286 15,286 15,286 34,374 34,374 34,374 34,374 34,374 34,374 34,374 34,374 34,374 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 7,800 45,270 45,270 45,270 45,270 45,270 45,270 45,270 45,270 45,270 9,556 9,556 9,556 9,556 9,556 9,556 9,556 9,556 9,556 10,714 10,714 10,714 10,714 10,714 10,714 10,714 10,714 10,714 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 239,147 136,417 15,286 34,374 7,800 45,270 9,556 10,714 25,000 10,000 10,000 Total Assets Shareholder Equity Current Long-Term Beginning Stock Sales Earnings Equity (purchases) Retained Liabilities Debt Year 10 No. of Dividend Changes Ending Equity Cash on Hand Current Assets 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 68,229 68,229 68,229 68,229 68,229 68,229 68,229 68,229 68,229 264,229 264,229 264,229 264,229 264,229 264,229 264,229 264,229 264,229 29,079 29,079 29,079 29,079 29,079 29,079 29,079 29,079 29,079 83,400 83,400 83,400 83,400 83,400 83,400 83,400 83,400 83,400 136,750 136,750 136,750 136,750 136,750 136,750 136,750 136,750 136,750 0 0 0 0 0 0 0 0 0 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 151,750 151,750 151,750 151,750 151,750 151,750 151,750 151,750 151,750 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 0/0 5,000 68,229 264,229 29,079 83,400 136,750 0 15,000 151,750 1.00 0.0 / 0.0 Costs and Profit as a Percent of Net Revenues Cost of Whse. Mktng. Admin Operating Net Pairs Sold Expenses Expenses Expenses Profit Profit Current Ratio ($ / share) (+/–) A B C D E F G H I Credit Rating Data Days of Inventory Interest Debt to Coverage Assets Ratio Ratio Default Risk Ratio Default Risk 57.0% 57.0% 57.0% 57.0% 57.0% 57.0% 57.0% 57.0% 57.0% 6.4% 6.4% 6.4% 6.4% 6.4% 6.4% 6.4% 6.4% 6.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 14.4% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 3.3% 19.1% 19.1% 19.1% 19.1% 19.1% 19.1% 19.1% 19.1% 19.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 4.1% 2.35 2.35 2.35 2.35 2.35 2.35 2.35 2.35 2.35 11 11 11 11 11 11 11 11 11 4.74 4.74 4.74 4.74 4.74 4.74 4.74 4.74 4.74 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 0.38 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 1.70 Medium Medium Medium Medium Medium Medium Medium Medium Medium 57.0% 6.4% 14.4% 3.3% 19.1% 4.1% 2.35 10,000 4.74 0.38 1.70 Medium Footwear Industry Report A B C D E F G H I Dividend Data Selected Financial and Operating Statistics A B C D E F G H I (000s of shares outstanding) 239,147 239,147 239,147 239,147 239,147 239,147 239,147 239,147 239,147 Selected Balance Sheet Data ($000s) A B C D E F G H I Shares of Stock Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 5 7/9 6/4/2018 INDUSTRY 1 INDUSTRY PERFORMANCE BENCHMARKS —————————— Year 9 —————————— Low Average High Co. E Plant and Production Benchmarks Materials Costs ———— Branded Footwear ($ per pair produced) Private-Label Footwear YEAR 10 —————————— Year 10 —————————— Low Average High Co. E 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 Labor —— North ———– Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Europe ——– Total Compensation ($/year) Africa Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Asia ————– Total Compensation ($/year) Pacific Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Latin ———— Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) 20,100 4,000 5.21 0 0 0.00 20,100 4,000 5.21 0 0 0.00 20,100 4,000 5.21 0 0 0.00 20,100 4,000 5.21 0 0 0.00 20,100 4,000 5.21 0 0 0.00 20,100 4,000 4.93 0 0 0.00 20,100 4,000 4.93 0 0 0.00 20,100 4,000 5.21 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 TQM / 6-Sigma Expenditures ———— Current Year ($ per pair of capacity) Cumulative 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 Reject Rates —————— Branded Production (%) Private-Label Production 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 Total Manufacturing ———— Branded —————– N.A. Cost ($/pair produced) E-A A-P L.A. Private-Label ——– N.A. E-A A-P L.A. —————————— Year 9 —————————— Low Average High Co. E Operating Benchmarks Branded ——— Cost of Pairs Sold ———————— N.A. Market ($ per pair sold. Includes manuE-A Segments facturing, shipping, import tariffs, A-P and exchange rate adjustments.) L.A. —————————— Year 10 —————————— Low Average High Co. E 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 Warehouse Expenses ——– Internet ($ per pair sold) Wholesale 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 Marketing Expenses ——— Internet ($ per pair sold) Wholesale 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 1.73 1.73 1.73 1.73 1.73 1.73 1.73 1.73 Operating —— Internet ————– N.A. Profit E-A ($/pair sold) A-P L.A. Wholesale ——— N.A. E-A A-P L.A. 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 Private ———— Cost of Pairs Sold ———————– N.A. Label ($ per pair sold. Includes manuE-A Market facturing, shipping, import tariffs, A-P Segments and exchange rate adjustments.) L.A. 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.47 23.27 25.44 20.44 24.27 Administrative Expenses ($/pair sold) Warehouse Expenses ($ per pair sold) Margin Over Direct ———————– N.A. Cost ($ per pair sold) E-A A-P L.A. Footwear Industry Report 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 Copyright © GLO-BUS Software, Inc. Page 6 8/9 6/4/2018 INDUSTRY 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS YEAR 10 Celebrity Endorsements Celebrity Payton Manyon Oprah Beyonsé Cristiano Romano Tiger Green José Montaña Mishell Wii Ace Federar Danica Sebastian Yi Lin Shakira Iglesias Nick Shavan Bronko Mars Consumer Appeal NA EA AP LA Currently Signed By Contract 85 45 35 40 100 70 65 75 70 100 70 55 95 80 85 75 60 50 60 95 55 60 95 90 50 90 50 85 70 65 55 60 75 80 95 50 45 85 60 100 80 85 75 70 60 35 100 50 [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] 0 0 0 0 0 0 0 0 0 0 0 0 ($000s/year) Year Contract Signed Length N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Most Recent Round of Bidding Bidders High Bid 2nd Bid Avg Bid Low Bid 2 years 3 years 5 years 2 years 3 years 4 years 1 years 3 years 4 years 2 years 3 years 4 years 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Branded Price and S/Q Rating Trends S/Q Rating Internet P… S/Q Rating $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 10 11 12 13 14 15 Year 16 17 18 19 20 Sales Price $80 $40 10 11 12 13 ASIA-PACIFIC Internet P… 14 15 Year 16 17 18 19 20 10 0 LATIN AMERICA Wholesal… S/Q Rating Internet P… Wholesal… S/Q Rating $80 $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 $40 10 11 12 13 Footwear Industry Report 14 15 Year 16 17 18 19 20 Sales Price 10 S/Q Rating $80 Sales Price Wholesal… 10 S/Q Rating Sales Price Wholesal… 10 11 Copyright © GLO-BUS Software, Inc. 12 13 14 15 Year 16 17 18 19 20 10 S/Q Rating Internet P… $80 EUROPE-AFRICA S/Q Rating NORTH AMERICA 0 Page 7 9/9 6/4/2018 FOOTWEAR INDUSTRY REPORT Copyright © GLO-BUS Software, Inc. All rights reserved. Industry 1 Year 11 Monday, June 4th, 2018 Year 11 Scoreboard Rank 1 2 3 4 5 6 7 7 7 Company Name Compact Exceptional Best Shoe Company Dragons A iShoes F BADER COMPANY G Company H Company I Company Investor Expectation Score Best-InIndustry Score Overall Score 117 117 112 68 63 28 0 0 0 98 96 71 44 42 18 0 0 0 108 107 92 56 53 23 0 0 0 Game-To-Date Scoreboard Rank 1 2 3 4 5 6 7 7 7 Investor Expectation ——– Score (I.E.) Company Name Compact Exceptional Best Shoe Company Dragons A iShoes F BADER COMPANY G Company H Company I Company Investor Expectation Score Best-InIndustry Score Overall Score 117 117 112 68 63 28 0 0 0 98 96 71 44 42 18 0 0 0 108 107 92 56 53 23 0 0 0 Bonus Points 1 1 1 0 0 0 0 0 0 Overall G-T-D Score 109 108 93 56 53 23 0 0 0 Investors and company boards of directors have established annual targets for five key performance measures and the importance weighting of each: EPS (20 points), ROE (20 points), Stock Price ( 20 points), Credit Rating (20 points), and Image Rating (20 points). Pages 2 and 3 of this report show the investor expectation targets (in parenthesis just under the column heads for each year). The investor expectation score on a performance measure is equal to the percentage of the target that was achieved. Achieving higher than targeted performance results in additional awards of 0.5% for each 1% overachieved (capped at 40% over the target). Thus the investor expectation score ranges from 0 to a max of 120 (if all targets are exceeded by 40% or more). Best-In-Industry —————— This scoring standard is based on how well each company performs relative to the best-performing company in the Score (B-I-I) industry on EPS (20 points max), ROE (20 points max), Stock Price (20 points max), Credit Rating (20 points max), and Image Rating (20 points max). In order to get a score of 100 a company must be the best performing company in the industry on all five measures, achieve no lower than the investor expectation on EPS, ROE, Stock Price, and Image Rating, and have an A+ Credit Rating. Overall Score ———————– This measure is used to determine each company's ranking in the Year 11 Scoreboard and the Game-To-Date Scoreboard above. The overall score is calculated by combining the Investor Expectation Score and the Best-InIndustry Score into a single score using the 50%-50% weighting as specified by the course instructor. 1/9 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 11 Earnings Per Share ($) EPS scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected EPS shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading EPS performance. Game-To-Date scores are based on a weighted average of the annual EPS performances. Y11 (2.67) A B C D E F G H I Y12 (2.85) Y13 (3.05) Y14 (3.26) Y15 (3.49) Y16 (3.66) Y17 (3.84) Y18 (4.03) Y19 (4.23) Y20 (4.44) 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 Wgt. Avg. Y11 Score (2.67) I.E. 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 9 22 24 12 24 0 0 0 0 B-I-I 5 12 20 6 19 0 0 0 0 G-T-D Score I.E. B-I-I 9 22 24 12 24 0 0 0 0 A B C D E F G H I 5 12 20 6 19 0 0 0 0 Return on Equity (%) ROE scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected ROE shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industryleading ROE performance. Game-To-Date scores are based on a weighted average of the annual ROE performances. Y11 (15.0) A B C D E F G H I Y12 (15.0) Y13 (15.0) Y14 (15.0) Y15 (15.0) Y16 (15.0) Y17 (15.0) Y18 (15.0) Y19 (15.0) Y20 (15.0) 7.8 19.2 29.8 9.9 28.4 -4.3 0.0 0.0 0.0 Wgt. Avg. Y11 Score (15.0) I.E. 7.8 19.2 29.8 9.9 28.4 -4.3 0.0 0.0 0.0 10 23 24 13 24 0 0 0 0 B-I-I 5 13 20 7 19 0 0 0 0 G-T-D Score I.E. B-I-I 10 23 24 13 24 0 0 0 0 A B C D E F G H I 5 13 20 7 19 0 0 0 0 Stock Price ($ per share) Stock Price scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor-expected stock price shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading performance. Game-To-Date scores are based solely on the most recent year's stock price. Y11 (32.00) A B C D E F G H I Y12 (34.25) Y13 (36.75) Y14 (39.25) Y15 (42.00) Y16 (44.25) Y17 (46.25) Y18 (48.75) Y19 (51.25) 16.34 53.20 104.23 16.45 98.32 17.02 0.00 0.00 0.00 Footwear Industry Report Y20 (53.50) Y11 Score I.E. 10 24 24 10 24 11 0 0 0 Copyright © GLO-BUS Software, Inc. B-I-I 3 10 20 3 19 3 0 0 0 G-T-D Score I.E. 10 24 24 10 24 11 0 0 0 B-I-I 3 10 20 3 19 3 0 0 0 A B C D E F G H I Page 2 2/9 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 11 (concluded) Credit Rating Credit Rating scores are based on a 20% or 20 point weighting. Bolded credit ratings indicate meeting or beating the B+ investor expectation shown below each column head. For the Best- In-Industry scoring, companies with an A+ credit rating earn a score of 20 points and lesser credit ratings earn lower scores. Game-To-Date scores are based soley on the most recent year's credit rating. Y11 (B+) A B C D E F G H I Y12 (B+) Y13 (B+) Y14 (B+) Y15 (B+) Y16 Y17 (B+) Y18 (B+) Y19 (B+) Y20 (B+) Y11 Score I.E. (B+) B A– A B A C– n.a. n.a. n.a. 16 22 23 16 23 0 0 0 0 B-I-I 14 18 19 14 19 1 0 0 0 G-T-D Score I.E. 16 22 23 16 23 0 0 0 0 B-I-I 14 18 19 14 19 1 0 0 0 A B C D E F G H I Image Rating Image Rating scores are based on a 20% or 20 point weighting. Bolded image ratings indicate meeting or beating the yearly target shown below each column head. Best-In-Industry performers earn top scores; scores of other companies are a percentage of the industry-leading image rating. Game-To-Date scores are based on company's average image rating over the last three years. Y11 (70) A B C D E F G H I Y12 (70) Y13 (70) Y14 (70) Y15 (70) Y16 Y17 (70) Y18 (70) Y19 (70) Y20 (70) (70) 64 79 83 59 86 59 0 0 0 64 79 83 59 86 59 0 0 0 Corporate Social Responsibility and Citizenship Industry 1 Expenditures for Corporate Social Responsibility and Citizenship Total ($000s) Per Pair Sold ($/unit) High Avg. Low High Avg. Low Year 11 Y9-Y11 Average 14,425 2,151 0 3.15 0.75 0.00 18 21 22 17 22 17 0 0 0 B-I-I 15 18 19 14 20 14 0 0 0 G-T-D Score I.E. 18 21 22 17 22 17 0 0 0 B-I-I 15 18 19 14 20 14 0 0 0 A B C D E F G H I Corporate Responsibility Award Image Rating Points Generated from CSRC Expenditures High Avg. Low 3 Y11 Score I.E. 1 0 for Exemplary Corporate Citizenship Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a Gold Star Award to the company spending the highest percentage of its revenues for social responsibility and citizenship initiatives. Award Winner Y14 Y13 Y12 Y11 A Company A Company A Company none 2nd Place B Company B Company B Company none 3/9 6/4/2018 Footwear Industry Report Copyright © GLO-BUS Software, Inc. Page 3 4/9 6/4/2018 INDUSTRY1 BONUS POINT AWARDS BULL'S EYE AWARD 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. for Accurately Forecasting Total Revenues, Earnings Per Share, and Image Rating Revenues(within ± 5%) Year 11 Year 11 Percent Forecast Actual Variance A B C D E F G H I 253,821 266,557 299,497 244,507 315,744 724,235 0 0 0 218,588 274,194 312,354 217,246 321,951 36,947 0 0 0 EPS(within ± 5% or ± 10¢) Year 11 Year 11 Percent Forecast Actual Variance –13.9 % +2.9 % +4.3 % –11.1 % +2.0 % –94.9 % 0.0 % 0.0 % 0.0 % 2.63 3.21 5.07 2.67 5.13 33.22 0.00 0.00 0.00 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 YEAR11 Image Rating (within ± 4 points) Year 11 Year 11 —Variance— Forecast Actual Pts. Percent –53.6 % –3.1 % +4.9 % –40.4 % –2.1 % –99.9 % 0.0 % 0.0 % 0.0 % 70 75 80 65 82 100 0 0 0 64 79 83 59 86 59 0 0 0 Year 11 CumuBull's Eye lative Award Awards –6 –8.6 % +4 +5.3 % +3 +3.8 % –6 –9.2 % +4 +4.9 % –41 –41.0 % 0 0.0 % 0 0.0 % 0 0.0 % No Yes Yes No Yes No No No No A B C D E F G H I 0 1 1 0 1 0 0 0 0 Comparisons and Trends in Projected Versus Actual Variances Range of Average Percent Variances (for Revenues, EPS, and Image Rating) for all Industry 12 Companies, World-Wide Average Percent Variance, and Company E Average Percent Variance Industry High/Low Company E Average World Average 30% -0% -30% -60% -90% Year 11 Year LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-date overall 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. for Most Improved Overall Score (current year to current year) Current-Year Scores Δ = net change in score between years Y11 Score A B C D E F G H I Δ Y12 Score 53 92 108 56 107 23 0 0 0 Footwear Industry Report Δ Y13 Score Δ Y14 Score Δ Highlighted figure = Leap Frog Award winner Y15 Score Δ Y16 Score Δ Y17 Score 0 0 0 0 0 0 0 0 0 Δ Y18 Score Δ Y19 Score Δ Y20 Score Cumulative Awards 0 0 0 0 0 0 0 0 0 Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 3b 5/9 6/4/2018 INDUSTRY 1 FOOTWEAR INDUSTRY OVERVIEW Materials Prices —Y11 Price Adjustments for— Mat. Usage Cap. Utilization Base Price ($/pair) Standard Materials Superior Materials 6.00 12.00 –0.16 +1.30 YEAR 11 Year 11 Price Notes 5.84 13.30 Higher than normal (55.4%) superior materals usage lead to superior materials prices that were 10.8% above the base and standard materials prices that were 2.7% below the base. 0.00 0.00 N.A. Plants E-A Plants A-P Plants L.A. Plants All Plants Total Year 11 Production (000s of pairs) Pairs Rejected Net Year 11 Production (000s of pairs) Superior Materials Usage Capacity Utilization (branded + private-label) 19,588 825 18,763 53.6% 108.8% 0 0 0 0.0% 0.0% 35,650 2,160 33,490 56.4% 99.0% 0 0 0 0.0% 0.0% 55,238 2,985 52,253 55.4% 102.3% Branded Warehouses N.A. Region E-A Region A-P Region L.A. Region All Regions Ending Y10 Inventories (000s of pairs) Less Pairs Cleared (inventory clearance) Beginning Y11 Inventories Plus New Pairs Produced in Y11 Pairs Available for Sale in Year 11 351 127 224 13,476 13,700 351 59 292 13,135 13,427 234 47 187 9,418 9,605 234 40 194 9,368 9,562 1,170 273 897 45,397 46,294 Branded Demand & Sales N.A. Market E-A Market A-P Market L.A. Market All Market Projected Y11 Demand (000s of pairs) Actual Year 11 Demand Branded Pairs Sold (internet + wholesale) No. of Companies Unable to Fill All Orders Unfilled Orders (000s of pairs ordered but not shipped) 12,879 12,645 11,488 7 1,161 12,879 12,645 11,361 8 1,286 8,910 8,742 7,778 7 963 8,910 8,742 7,750 8 989 43,578 42,776 38,377 Demand Forecast N.A. Market E-A Market A-P Market L.A. Market All Market 13,404 14,208 15,060 1,980 2,205 2,475 13,404 14,208 15,060 1,980 2,205 2,475 9,442 10,197 11,013 1,980 2,205 2,475 9,442 10,197 11,013 1,980 2,205 2,475 45,692 48,810 52,146 7,920 8,820 9,900 Footwear Production (industry totals) (industry totals) (industry tot.) (industry totals) Branded Demand ————————– Year 12 (internet + wholesale) Year 13 Year 14 Private-Label Demand —————– Year 12 Year 13 Year 14 Potential Y12 Footwear Supply Beginning Y12 Inventory Potential Production (with OT) Potential Global Supply 7,917 69,600 77,517 45,692 7,920 53,612      4,399 Total pairs produced before rejects Overall average reject rate = 5.4% Total pairs available after rejects % usage up 5.4 points from Y10 % utilization up 7.6 points from Y10 Notes      Unsold pairs from Y10 Average inventory clearance of 23.3% Incurred a 1-star S/Q rating penalty New Y11 production shipped from plants 8.2% higher than Y11 demand Notes  From page 4 of FIR for Year 10  Actual demand was -1.8% lower than projected demand due to decreased competitive intensity. not meaningful Expected Y12 Footwear Demand Branded Demand Forecast Private-Label Forecast Potential Global Demand Notes { Shows extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies. Notes Global demand for Y11-Y15 is expecrted to grow at a rate of 7%-9% annually, slowing to about 5%-7% annual growth during Y16-Y20. The projected growth rates are not the same for all four regions, as indicated in the table on page 4 of the Player's Guide. Actual demand growth may vary from the forecast due to increases/decreases in competitive intensity industry-wide. Supply / Demand Analysis Excess supply of 44.6% is likely to produce FIERCE competition and hurt industry profitability in Year 12 and beyond. Construction of new capacity will not beneeded for several years, and it may be wise for some companies to sell-off unneeded production capacity. Plant Capacity (000s of pairs of production capacity not including overtime) Capacity Beginning Year 11 N.A. E-A A-P L.A. A B C D E F G H I 2,000 2,000 2,000 2,000 2,000 2,000 0 0 0 18,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 0 0 0 0 0 0 36,000 Footwear Industry Report Capacity Purchased (Sold) N.A. E-A A-P L.A. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Capacity Available for Y11 Production N.A. E-A A-P L.A. Total 0 0 0 0 0 0 0 0 0 0 2,000 2,000 2,000 2,000 2,000 2,000 0 0 0 18,000 Copyright © GLO-BUS Software, Inc. 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 0 0 0 0 0 0 36,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 6,000 0 0 0 0 0 0 0 54,000 New Construction Initiated in Y11 0 0 0 0 0 4,000 0 0 0 4,000 A B C D E F G H I Page 4 6/9 6/4/2018 INDUSTRY 1 FINANCIAL PERFORMANCE SUMMARY YEAR 11 Income Statement Data ($000s) Net Sales Cost of Warehouse Marketing Admin Operating Revenues Pairs Sold Expenses Expenses Expenses Profit A B C D E F G H I Interest Exp (Inc) Income Taxes Total Dividend Payment Net Profit ($000s) 129,916 160,422 162,748 128,666 174,603 10,935 0 0 0 15,558 17,442 18,960 15,526 19,302 5,144 0 0 0 36,813 35,043 37,590 34,343 39,215 10,066 0 0 0 8,604 8,104 8,903 7,854 8,906 8,903 0 0 0 27,697 53,183 84,153 30,857 79,925 1,899 0 0 0 8,198 8,198 8,198 8,198 8,198 8,198 0 0 0 5,250 13,336 22,787 6,798 21,518 0 0 0 0 12,249 31,117 53,168 15,861 50,209 -6,299 0 0 0 0 10,000 0 0 0 0 0 0 0 10,000 10,000 10,000 10,000 10,000 9,900 0 0 0 234,796 132,733 15,466 32,927 8,315 45,354 8,198 11,273 25,602 4,444 9,989 Shareholder Equity Current Long-Term Beginning Stock Sales Earnings Equity (purchases) Retained Liabilities Debt Year 11 No. of Dividend Changes Ending Equity Cash on Hand Current Assets Total Assets 10,578 16,974 36,334 21,484 33,795 0 0 0 0 69,423 88,602 118,462 79,848 118,625 200,620 0 0 0 260,273 272,802 301,712 263,098 301,875 626,870 0 0 0 29,173 32,833 29,694 28,386 32,815 417,350 0 0 0 67,100 67,100 67,100 67,100 67,100 67,100 0 0 0 151,750 151,750 151,750 151,750 151,750 151,750 0 0 0 0 0 0 0 0 -3,030 0 0 0 12,250 21,119 53,168 15,862 50,210 -6,300 0 0 0 164,000 172,869 204,918 167,612 201,960 142,420 0 0 0 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0/1 0/0 0/1 0/1 0/1 0/1 0/0 0/0 0/0 18,342 101,803 313,003 73,325 67,100 151,750 -337 21,166 172,579 0.44 0.0 / 0.6 Costs and Profit as a Percent of Net Revenues Cost of Whse. Mktng. Admin Operating Net Pairs Sold Expenses Expenses Expenses Profit Profit ($ / share) (+/–) A B C D E F G H I Credit Rating Data Current Ratio Days of Inventory Interest Debt to Coverage Assets Ratio Ratio Default Risk Ratio Default Risk 59.4% 58.5% 52.1% 59.2% 54.2% 29.6% 0.0% 0.0% 0.0% 7.1% 6.4% 6.1% 7.1% 6.0% 13.9% 0.0% 0.0% 0.0% 16.8% 12.8% 12.0% 15.8% 12.2% 27.2% 0.0% 0.0% 0.0% 3.9% 3.0% 2.9% 3.6% 2.8% 24.1% 0.0% 0.0% 0.0% 12.7% 19.4% 26.9% 14.2% 24.8% 5.1% 0.0% 0.0% 0.0% 5.6% 11.3% 17.0% 7.3% 15.6% -17.0% 0.0% 0.0% 0.0% 2.38 2.70 3.99 2.81 3.61 0.48 0.00 0.00 0.00 12 9 11 11 11 7,074 0 0 0 3.38 6.49 10.27 3.76 9.75 0.23 0.00 0.00 0.00 0.32 0.31 0.28 0.32 0.28 0.74 0.00 0.00 0.00 1.56 2.08 4.04 1.76 3.86 0.02 0.00 0.00 0.00 Medium Medium Low Medium Low High N/A N/A N/A 56.5% 6.6% 14.0% 3.5% 19.3% 10.9% 1.39 796 5.53 0.36 2.04 Medium Footwear Industry Report A B C D E F G H I Dividend Data Selected Financial and Operating Statistics A B C D E F G H I (000s of shares outstanding) 218,588 274,194 312,354 217,246 321,951 36,947 0 0 0 Selected Balance Sheet Data ($000s) A B C D E F G H I Shares of Stock Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 5 7/9 6/4/2018 INDUSTRY 1 INDUSTRY PERFORMANCE BENCHMARKS —————————— Year 10 —————————— Low Average High Co. E Plant and Production Benchmarks Materials Costs ———— Branded Footwear ($ per pair produced) Private-Label Footwear YEAR 11 —————————— Year 11 —————————— Low Average High Co. E 9.87 7.91 9.87 7.91 9.87 7.91 9.87 7.91 8.17 6.67 10.63 7.73 12.74 8.64 10.50 6.67 Labor —— North ———– Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Europe ——– Total Compensation ($/year) Africa Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Asia ————– Total Compensation ($/year) Pacific Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Latin ———— Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) 20,100 4,000 5.21 0 0 0.00 20,100 4,000 4.93 0 0 0.00 20,100 4,000 4.93 0 0 0.00 20,100 4,000 5.21 0 0 0.00 18,128 3,920 4.87 0 0 0.00 20,554 4,059 5.34 0 0 0.00 23,127 4,316 5.48 0 0 0.00 21,007 4,079 5.45 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,700 2,500 1.60 0 0 0.00 3,750 2,500 1.61 0 0 0.00 3,889 2,539 1.64 0 0 0.00 4,184 2,694 1.68 0 0 0.00 3,972 2,549 1.68 0 0 0.00 TQM / 6-Sigma Expenditures ———— Current Year ($ per pair of capacity) Cumulative 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.80 0.65 2.50 1.50 0.50 0.50 Reject Rates —————— Branded Production (%) Private-Label Production 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 6.3% 5.1% 2.8% 4.3% 5.6% 4.9% 6.4% 5.2% 5.6% 4.3% 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 26.02 0.00 21.16 0.00 22.27 0.00 19.44 0.00 24.67 0.00 18.60 0.00 20.95 0.00 16.95 0.00 26.72 0.00 21.73 0.00 22.41 0.00 18.52 0.00 27.96 0.00 23.49 0.00 23.37 0.00 19.83 0.00 27.11 0.00 20.91 0.00 20.95 0.00 16.95 0.00 Total Manufacturing ———— Branded —————– N.A. Cost ($/pair produced) E-A A-P L.A. Private-Label ——– N.A. E-A A-P L.A. —————————— Year 10 —————————— Low Average High Co. E Operating Benchmarks Branded ——— Cost of Pairs Sold ———————— N.A. Market ($ per pair sold. Includes manuE-A Segments facturing, shipping, import tariffs, A-P and exchange rate adjustments.) L.A. —————————— Year 11 —————————— Low Average High Co. E 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 26.59 26.98 21.92 28.03 25.68 24.65 19.61 26.61 27.64 27.82 22.72 29.39 28.91 30.12 24.54 30.89 28.10 26.91 21.92 28.91 Warehouse Expenses ——– Internet ($ per pair sold) Wholesale 10.89 2.83 10.89 2.83 10.89 2.83 10.89 2.83 10.77 2.68 12.06 4.00 21.63 13.69 10.77 2.68 Marketing Expenses ——— Internet ($ per pair sold) Wholesale 22.19 6.87 22.19 6.87 22.19 6.87 22.19 6.87 14.32 6.47 21.06 8.99 52.89 25.99 14.32 6.78 1.73 1.73 1.73 1.73 1.68 4.39 25.59 1.68 Operating —— Internet ————– N.A. Profit E-A ($/pair sold) A-P L.A. Wholesale ——— N.A. E-A A-P L.A. 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 22.75 22.60 28.53 21.96 8.97 8.82 8.18 2.61 -5.27 -7.09 -2.50 -9.50 6.83 5.15 -18.55 -26.24 19.36 19.19 25.08 18.37 11.55 11.30 5.53 -0.36 27.73 28.51 35.24 28.24 32.83 30.94 12.73 6.73 26.13 27.39 33.46 26.48 11.10 12.32 10.83 4.87 Private ———— Cost of Pairs Sold ———————– N.A. Label ($ per pair sold. Includes manuE-A Market facturing, shipping, import tariffs, A-P Segments and exchange rate adjustments.) L.A. 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.27 23.27 25.44 20.44 24.47 23.27 25.44 20.44 24.27 21.95 23.74 17.95 24.28 23.41 25.56 19.52 25.05 24.37 26.95 20.83 25.37 21.95 26.95 17.95 24.95 Administrative Expenses ($/pair sold) Warehouse Expenses ($ per pair sold) Margin Over Direct ———————– N.A. Cost ($ per pair sold) E-A A-P L.A. Footwear Industry Report 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 10.73 8.56 13.56 9.73 7.72 5.26 10.26 6.72 10.42 7.93 13.98 8.78 13.04 9.79 17.04 10.04 13.04 8.04 17.04 10.04 Copyright © GLO-BUS Software, Inc. Page 6 8/9 6/4/2018 INDUSTRY 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS YEAR 11 Celebrity Endorsements Celebrity Payton Manyon Oprah Beyonsé Cristiano Romano Tiger Green José Montaña Mishell Wii Ace Federar Danica Sebastian Yi Lin Shakira Iglesias Nick Shavan Bronko Mars Consumer Appeal NA EA AP LA Currently Signed By Contract 85 45 35 40 100 70 65 75 70 100 70 55 95 80 85 75 60 50 60 95 55 60 95 90 50 90 50 85 70 65 55 60 75 80 95 50 45 85 60 100 80 85 75 70 60 35 100 50 A iShoes A iShoes A iShoes [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] 5,495 5,950 6,105 0 0 0 0 0 0 0 0 0 ($000s/year) Year Contract Signed Length Y11 Y11 Y11 N/A N/A N/A N/A N/A N/A N/A N/A N/A Most Recent Round of Bidding Bidders High Bid 2nd Bid Avg Bid Low Bid 2 years 3 years 5 years 2 years 3 years 4 years 1 years 3 years 4 years 2 years 3 years 4 years 4 5 3 0 0 0 0 0 0 0 0 0 5,495 5,950 6,105 0 0 0 0 0 0 0 0 0 1,100 1,800 1,800 0 0 0 0 0 0 0 0 0 2,036 2,190 2,968 0 0 0 0 0 0 0 0 0 750 1,000 1,000 0 0 0 0 0 0 0 0 0 Branded Price and S/Q Rating Trends S/Q Rating Internet P… S/Q Rating $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 10 11 12 13 14 15 Year 16 17 18 19 20 Sales Price $80 $40 10 11 12 13 ASIA-PACIFIC Internet P… 14 15 Year 16 17 18 19 20 10 0 LATIN AMERICA Wholesal… S/Q Rating Internet P… Wholesal… S/Q Rating $80 $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 $40 10 11 12 13 Footwear Industry Report 14 15 Year 16 17 18 19 20 Sales Price 10 S/Q Rating $80 Sales Price Wholesal… 10 S/Q Rating Sales Price Wholesal… 10 11 Copyright © GLO-BUS Software, Inc. 12 13 14 15 Year 16 17 18 19 20 10 S/Q Rating Internet P… $80 EUROPE-AFRICA S/Q Rating NORTH AMERICA 0 Page 7 9/9 6/4/2018 FOOTWEAR INDUSTRY REPORT Copyright © GLO-BUS Software, Inc. All rights reserved. Industry 1 Year 12 Monday, June 4th, 2018 Year 12 Scoreboard Rank 1 2 3 4 5 6 7 7 7 Company Name Exceptional Compact Best Shoe Company Dragons F BADER COMPANY A iShoes G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score Overall Score Change from Y11 111 107 106 91 80 76 0 0 0 92 84 80 69 62 57 0 0 0 102 96 93 80 71 67 0 0 0 –5 –12 +1 +24 +48 +14 0 0 0 Bonus Points Game-To-Date Scoreboard Rank 1 2 3 4 5 6 7 7 7 Investor Expectation ——– Score (I.E.) Company Name Exceptional Compact Best Shoe Company Dragons A iShoes F BADER COMPANY G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score Overall Score 116 115 108 86 70 53 0 0 0 99 94 80 63 52 39 0 0 0 108 105 94 75 61 46 0 0 0 1 1 1 0 0 1 0 0 0 Overall G-T-D Score 109 106 95 75 61 47 0 0 0 Investors and company boards of directors have established annual targets for five key performance measures and the importance weighting of each: EPS (20 points), ROE (20 points), Stock Price ( 20 points), Credit Rating (20 points), and Image Rating (20 points). Pages 2 and 3 of this report show the investor expectation targets (in parenthesis just under the column heads for each year). The investor expectation score on a performance measure is equal to the percentage of the target that was achieved. Achieving higher than targeted performance results in additional awards of 0.5% for each 1% overachieved (capped at 40% over the target). Thus the investor expectation score ranges from 0 to a max of 120 (if all targets are exceeded by 40% or more). Best-In-Industry —————— This scoring standard is based on how well each company performs relative to the best-performing company in the Score (B-I-I) industry on EPS (20 points max), ROE (20 points max), Stock Price (20 points max), Credit Rating (20 points max), and Image Rating (20 points max). In order to get a score of 100 a company must be the best performing company in the industry on all five measures, achieve no lower than the investor expectation on EPS, ROE, Stock Price, and Image Rating, and have an A+ Credit Rating. Overall Score ———————– This measure is used to determine each company's ranking in the Year 12 Scoreboard and the Game-To-Date Scoreboard above. The overall score is calculated by combining the Investor Expectation Score and the Best-InIndustry Score into a single score using the 50%-50% weighting as specified by the course instructor. 1/8 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 12 Earnings Per Share ($) EPS scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected EPS shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading EPS performance. Game-To-Date scores are based on a weighted average of the annual EPS performances. Y11 A B C D E F G H I Y12 (2.67) (2.85) 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 2.30 3.01 3.61 2.62 4.05 2.58 0.00 0.00 0.00 Y13 (3.05) Y14 (3.26) Y15 (3.49) Y16 (3.66) Y17 (3.84) Y18 (4.03) Y19 (4.23) Y20 (4.44) Wgt. Avg. Y12 Score (2.76) I.E. 1.76 3.06 4.46 2.10 4.54 0.97 0.00 0.00 0.00 16 21 23 18 24 18 0 0 0 B-I-I 11 15 18 13 20 13 0 0 0 G-T-D Score I.E. B-I-I 13 21 24 15 24 7 0 0 0 A B C D E F G H I 8 13 20 9 20 4 0 0 0 Return on Equity (%) ROE scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected ROE shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industryleading ROE performance. Game-To-Date scores are based on a weighted average of the annual ROE performances. Y11 A B C D E F G H I Y12 (15.0) (15.0) 7.8 19.2 29.8 9.9 28.4 -4.3 0.0 0.0 0.0 13.1 16.5 16.2 14.5 18.2 16.4 0.0 0.0 0.0 Y13 (15.0) Y14 (15.0) Y15 (15.0) Y16 (15.0) Y17 (15.0) Y18 (15.0) Y19 (15.0) Y20 (15.0) Wgt. Avg. Y12 Score (15.0) I.E. 10.6 17.7 22.2 12.3 22.7 6.4 0.0 0.0 0.0 17 21 21 19 22 21 0 0 0 B-I-I 14 18 18 16 20 18 0 0 0 G-T-D Score I.E. B-I-I 14 22 24 16 24 9 0 0 0 A B C D E F G H I 9 16 20 11 20 6 0 0 0 Stock Price ($ per share) Stock Price scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor-expected stock price shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading performance. Game-To-Date scores are based solely on the most recent year's stock price. Y11 A B C D E F G H I Y12 (32.00) (34.25) 16.34 53.20 104.23 16.45 98.32 17.02 0.00 0.00 0.00 22.72 39.80 45.67 27.85 56.34 28.81 0.00 0.00 0.00 Footwear Industry Report Y13 (36.75) Y14 (39.25) Y15 (42.00) Y16 (44.25) Y17 (46.25) Y18 (48.75) Y19 (51.25) Y20 (53.50) Y12 Score I.E. 13 22 23 16 24 17 0 0 0 Copyright © GLO-BUS Software, Inc. B-I-I 8 14 16 10 20 10 0 0 0 G-T-D Score I.E. 13 22 23 16 24 17 0 0 0 B-I-I 8 14 16 10 20 10 0 0 0 A B C D E F G H I Page 2 2/8 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 12 (concluded) Credit Rating Credit Rating scores are based on a 20% or 20 point weighting. Bolded credit ratings indicate meeting or beating the B+ investor expectation shown below each column head. For the Best- In-Industry scoring, companies with an A+ credit rating earn a score of 20 points and lesser credit ratings earn lower scores. Game-To-Date scores are based soley on the most recent year's credit rating. Y11 (B+) A B C D E F G H I B A– A B A C– n.a. n.a. n.a. Y12 Y13 (B+) (B+) Y14 (B+) Y15 (B+) Y16 Y17 (B+) Y18 (B+) Y19 (B+) Y20 (B+) Y12 Score I.E. (B+) B– A– A A– A C– n.a. n.a. n.a. 12 22 23 22 23 0 0 0 0 B-I-I 11 18 19 18 19 1 0 0 0 G-T-D Score I.E. 12 22 23 22 23 0 0 0 0 B-I-I A B C D E F G H I 11 18 19 18 19 1 0 0 0 Image Rating Image Rating scores are based on a 20% or 20 point weighting. Bolded image ratings indicate meeting or beating the yearly target shown below each column head. Best-In-Industry performers earn top scores; scores of other companies are a percentage of the industry-leading image rating. Game-To-Date scores are based on company's average image rating over the last three years. Y11 Y12 64 79 83 59 86 59 0 0 0 63 72 60 55 64 95 0 0 0 (70) A B C D E F G H I Y13 (70) (70) Y14 (70) Y15 (70) Y16 Y17 (70) Y18 (70) Y19 (70) Y20 (70) (70) Industry 1 Expenditures for Corporate Social Responsibility and Citizenship Total ($000s) Per Pair Sold ($/unit) High Avg. Low High Avg. Low 14,425 10,670 Average 64 77 75 58 79 71 0 0 0 Corporate Social Responsibility and Citizenship Year 11 Year 12 Y10-Y12 2,151 3,056 0 0 3.15 2.10 0.75 0.53 0.00 0.00 13 15 13 12 13 20 0 0 0 G-T-D Score I.E. 18 21 21 17 21 20 0 0 0 B-I-I A B C D E F G H I 16 19 19 15 20 18 0 0 0 1 3 0 0 for Exemplary Corporate Citizenship Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a Gold Star Award to the company spending the highest percentage of its revenues for social responsibility and citizenship initiatives. Award Winner Y14 Y13 Y12 Footwear Industry Report 18 20 17 16 18 24 0 0 0 B-I-I Corporate Responsibility Award Image Rating Points Generated from CSRC Expenditures High Avg. Low 3 5 Y12 Score I.E. Copyright © GLO-BUS Software, Inc. A Company A Company none 2nd Place B Company B Company none Page 3 3/8 6/4/2018 INDUSTRY1 BONUS POINT AWARDS BULL'S EYE AWARD 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. for Accurately Forecasting Total Revenues, Earnings Per Share, and Image Rating Revenues(within ± 5%) Year 12 Year 12 Percent Forecast Actual Variance A B C D E F G H I 262,981 285,754 316,266 271,784 330,742 611,882 0 0 0 253,246 271,147 258,130 235,376 277,249 418,655 0 0 0 EPS(within ± 5% or ± 10¢) Year 12 Year 12 Percent Forecast Actual Variance –3.7 % –5.1 % –18.4 % –13.4 % –16.2 % –31.6 % 0.0 % 0.0 % 0.0 % 3.05 3.31 6.19 3.56 5.69 8.59 0.00 0.00 0.00 2.30 3.01 3.61 2.62 4.05 2.58 0.00 0.00 0.00 YEAR12 Image Rating (within ± 4 points) Year 12 Year 12 —Variance— Forecast Actual Pts. Percent –24.6 % –9.1 % –41.7 % –26.4 % –28.8 % –70.0 % 0.0 % 0.0 % 0.0 % 59 65 64 56 68 96 0 0 0 63 72 60 55 64 95 0 0 0 Year 12 CumuBull's Eye lative Award Awards +4 +6.8 % +7 +10.8 % –4 –6.3 % –1 –1.8 % –4 –5.9 % –1 –1.0 % 0 0.0 % 0 0.0 % 0 0.0 % No No No No No No No No No A B C D E F G H I 0 1 1 0 1 0 0 0 0 Comparisons and Trends in Projected Versus Actual Variances Range of Average Percent Variances (for Revenues, EPS, and Image Rating) for all Industry 12 Companies, World-Wide Average Percent Variance, and Company E Average Percent Variance Industry High/Low Company E Average World Average 30% -0% -30% -60% -90% Year 11 Year 12 Year LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-date overall 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. for Most Improved Overall Score (current year to current year) Current-Year Scores Δ = net change in score between years Y11 Score A B C D E F G H I 53 92 108 56 107 23 0 0 0 Δ Y12 Score +14 +1 –12 +24 –5 +48 67 93 96 80 102 71 Footwear Industry Report Δ Y13 Score Δ Y14 Score Δ Highlighted figure = Leap Frog Award winner Y15 Score Δ Y16 Score Δ Y17 Score 0 0 0 0 0 0 0 0 0 Δ Y18 Score Δ Y19 Score Δ Y20 Score Cumulative Awards 0 0 0 0 0 1 0 0 0 Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 3b 4/8 6/4/2018 INDUSTRY 1 FOOTWEAR INDUSTRY OVERVIEW Materials Prices —Y12 Price Adjustments for— Mat. Usage Cap. Utilization Base Price ($/pair) Standard Materials Superior Materials 6.00 12.00 +1.67 –0.83 YEAR 12 Year 12 Price Notes 7.67 11.17 Lower than normal (36.1%) superior materals usage lead to superior materials prices that were 7.0% below the base and standard materials prices that were 27.8% above the base. 0.00 0.00 N.A. Plants E-A Plants A-P Plants L.A. Plants All Plants Total Year 12 Production (000s of pairs) Pairs Rejected Net Year 12 Production (000s of pairs) Superior Materials Usage Capacity Utilization (branded + private-label) 11,217 495 10,722 42.7% 94.3% 0 0 0 0.0% 0.0% 27,200 1,599 25,601 36.2% 104.6% 2,075 127 1,948 0.0% 103.8% 40,492 2,221 38,271 36.1% 101.5% Branded Warehouses N.A. Region E-A Region A-P Region L.A. Region All Regions Ending Y11 Inventories (000s of pairs) Less Pairs Cleared (inventory clearance) Beginning Y12 Inventories Plus New Pairs Produced in Y12 Pairs Available for Sale in Year 12 2,083 48 2,035 9,410 11,445 1,937 35 1,902 9,345 11,247 1,740 32 1,708 7,536 9,244 1,725 0 1,725 6,718 8,443 7,485 115 7,370 33,009 40,379 Branded Demand & Sales N.A. Market E-A Market A-P Market L.A. Market All Market Projected Y12 Demand (000s of pairs) Actual Year 12 Demand Branded Pairs Sold (internet + wholesale) No. of Companies Unable to Fill All Orders Unfilled Orders (000s of pairs ordered but not shipped) 13,404 9,312 9,308 1 2 13,404 9,342 9,336 1 6 9,442 6,828 6,829 4 0 9,442 6,634 6,539 3 95 45,692 32,116 32,012 Demand Forecast N.A. Market E-A Market A-P Market L.A. Market All Market 9,871 10,463 11,091 1,458 1,638 1,794 9,903 10,497 11,127 1,464 1,644 1,794 7,374 7,964 8,601 1,482 1,662 1,812 7,165 7,738 8,357 1,458 1,638 1,788 34,313 36,662 39,176 5,862 6,582 7,182 Footwear Production (industry totals) (industry totals) (industry tot.) (industry totals) Branded Demand ————————– Year 13 (internet + wholesale) Year 14 Year 15 Private-Label Demand —————– Year 13 Year 14 Year 15 Potential Y13 Footwear Supply Beginning Y13 Inventory Potential Production (with OT) Potential Global Supply 8,367 58,800 67,167 34,313 5,862 40,175      103 Total pairs produced before rejects Overall average reject rate = 5.5% Total pairs available after rejects % usage down 19.3 points from Y11 % utilization down 0.8 points from Y11 Notes      Unsold pairs from Y11 Average inventory clearance of 1.5% Incurred a 1-star S/Q rating penalty New Y12 production shipped from plants 25.7% higher than Y12 demand Notes  From page 4 of FIR for Year 11  Actual demand was -29.7% lower than projected demand due to decreased competitive intensity. not meaningful Expected Y13 Footwear Demand Branded Demand Forecast Private-Label Forecast Potential Global Demand Notes { Shows extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies. Notes Global demand for Y11-Y15 is expecrted to grow at a rate of 7%-9% annually, slowing to about 5%-7% annual growth during Y16-Y20. The projected growth rates are not the same for all four regions, as indicated in the table on page 4 of the Player's Guide. Actual demand growth may vary from the forecast due to increases/decreases in competitive intensity industry-wide. Supply / Demand Analysis Excess supply of 67.2% is likely to produce FIERCE competition and hurt industry profitability in Year 13 and beyond. Construction of new capacity will not beneeded for several years, and it may be wise for some companies to sell-off unneeded production capacity. Plant Capacity (000s of pairs of production capacity not including overtime) Capacity Beginning Year 12 N.A. E-A A-P L.A. A B C D E F G H I 2,000 2,000 2,000 2,000 2,000 2,000 0 0 0 12,000 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 6,000 0 0 0 0 0 0 0 26,000 Footwear Industry Report 0 0 0 0 0 2,000 0 0 0 2,000 Capacity Purchased (Sold) N.A. E-A A-P L.A. –100 0 0 0 0 0 0 0 0 -100 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Capacity Available for Y12 Production N.A. E-A A-P L.A. Total 0 0 0 0 0 0 0 0 0 0 1,900 2,000 2,000 2,000 2,000 2,000 0 0 0 11,900 Copyright © GLO-BUS Software, Inc. 0 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 6,000 0 0 0 0 0 0 0 26,000 0 5,900 0 6,000 0 6,000 0 6,000 0 6,000 2,000 10,000 0 0 0 0 0 0 2,000 39,900 New Construction Initiated in Y12 3,500 0 0 0 1,600 4,000 0 0 0 9,100 A B C D E F G H I Page 4 5/8 6/4/2018 INDUSTRY 1 FINANCIAL PERFORMANCE SUMMARY YEAR 12 Income Statement Data ($000s) Net Sales Cost of Warehouse Marketing Admin Operating Revenues Pairs Sold Expenses Expenses Expenses Profit A B C D E F G H I Interest Exp (Inc) Income Taxes Total Dividend Payment Net Profit ($000s) 145,773 159,142 137,681 130,828 147,492 259,012 0 0 0 17,732 17,603 16,882 15,884 17,504 31,037 0 0 0 39,506 35,477 36,586 36,701 38,899 44,006 0 0 0 8,561 8,659 8,960 7,910 8,960 13,111 0 0 0 41,674 50,266 58,021 44,053 64,394 71,489 0 0 0 6,807 6,724 6,473 6,666 6,506 37,029 0 0 0 9,860 12,912 15,464 11,216 17,366 8,234 0 0 0 23,007 30,127 36,084 26,171 40,522 25,511 0 0 0 0 10,000 0 0 0 0 0 0 0 10,000 10,000 10,000 10,000 10,000 9,900 0 0 0 285,634 163,321 19,440 38,529 9,360 54,983 11,701 12,509 30,237 1,667 9,983 Shareholder Equity Current Long-Term Beginning Stock Sales Earnings Equity (purchases) Retained Liabilities Debt Year 12 No. of Dividend Changes Ending Equity Cash on Hand Current Assets Total Assets 36,858 20,968 76,349 30,011 0 0 0 0 0 112,499 97,518 147,911 103,310 76,047 266,172 0 0 0 468,107 276,868 318,411 273,810 325,547 905,852 0 0 0 70,298 33,072 26,610 29,229 32,266 687,119 0 0 0 210,800 50,800 50,800 50,800 50,800 50,800 0 0 0 164,000 172,869 204,918 167,612 201,960 142,420 0 0 0 0 0 0 0 0 0 0 0 0 23,009 20,127 36,083 26,169 40,521 25,513 0 0 0 187,009 192,996 241,001 193,781 242,481 167,933 0 0 0 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0/1 0/0 0/1 0/1 0/1 0/1 0/0 0/0 0/0 27,364 133,910 428,099 146,432 77,467 175,630 0 28,570 204,200 0.17 0.0 / 0.8 Costs and Profit as a Percent of Net Revenues Cost of Whse. Mktng. Admin Operating Net Pairs Sold Expenses Expenses Expenses Profit Profit ($ / share) (+/–) A B C D E F G H I Credit Rating Data Current Ratio Days of Inventory Interest Debt to Coverage Assets Ratio Ratio Default Risk Ratio Default Risk 57.6% 58.7% 53.3% 55.6% 53.2% 61.9% 0.0% 0.0% 0.0% 7.0% 6.5% 6.5% 6.7% 6.3% 7.4% 0.0% 0.0% 0.0% 15.6% 13.1% 14.2% 15.6% 14.0% 10.5% 0.0% 0.0% 0.0% 3.4% 3.2% 3.5% 3.4% 3.2% 3.1% 0.0% 0.0% 0.0% 16.5% 18.5% 22.5% 18.7% 23.2% 17.1% 0.0% 0.0% 0.0% 9.1% 11.1% 14.0% 11.1% 14.6% 6.1% 0.0% 0.0% 0.0% 1.60 2.95 5.56 3.53 2.36 0.39 0.00 0.00 0.00 36 26 19 39 17 336 0 0 0 6.12 7.48 8.96 6.61 9.90 1.93 0.00 0.00 0.00 0.57 0.24 0.21 0.25 0.22 0.79 0.00 0.00 0.00 0.65 2.02 3.00 2.39 2.73 0.08 0.00 0.00 0.00 High Medium Low Medium Medium High N/A N/A N/A 57.2% 6.8% 13.5% 3.3% 19.2% 10.6% 0.91 79 6.83 0.38 1.81 Medium Footwear Industry Report A B C D E F G H I Dividend Data Selected Financial and Operating Statistics A B C D E F G H I (000s of shares outstanding) 253,246 271,147 258,130 235,376 277,249 418,655 0 0 0 Selected Balance Sheet Data ($000s) A B C D E F G H I Shares of Stock Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 5 6/8 6/4/2018 INDUSTRY 1 INDUSTRY PERFORMANCE BENCHMARKS —————————— Year 11 —————————— Low Average High Co. E Plant and Production Benchmarks Materials Costs ———— Branded Footwear ($ per pair produced) Private-Label Footwear YEAR 12 —————————— Year 12 —————————— Low Average High Co. E 8.17 6.67 10.63 7.73 12.74 8.64 10.50 6.67 7.59 7.87 9.30 8.57 10.61 9.27 9.44 0.00 Labor —— North ———– Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Europe ——– Total Compensation ($/year) Africa Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Asia ————– Total Compensation ($/year) Pacific Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Latin ———— Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) 18,128 3,920 4.87 0 0 0.00 3,750 2,500 1.61 0 0 0.00 20,554 4,059 5.34 0 0 0.00 3,889 2,539 1.64 0 0 0.00 23,127 4,316 5.48 0 0 0.00 4,184 2,694 1.68 0 0 0.00 21,007 4,079 5.45 0 0 0.00 3,972 2,549 1.68 0 0 0.00 15,908 3,783 4.63 0 0 0.00 3,531 2,444 1.56 2,828 2,606 1.63 19,072 4,028 5.04 0 0 0.00 3,904 2,549 1.63 2,828 2,606 1.63 20,778 4,158 5.38 0 0 0.00 4,478 2,648 1.77 2,828 2,606 1.63 20,285 4,158 5.09 0 0 0.00 3,830 2,603 1.56 0 0 0.00 TQM / 6-Sigma Expenditures ———— Current Year ($ per pair of capacity) Cumulative 0.50 0.50 0.80 0.65 2.50 1.50 0.50 0.50 0.50 0.50 0.66 0.69 0.93 1.20 0.50 0.50 Reject Rates —————— Branded Production (%) Private-Label Production 2.8% 4.3% 5.6% 4.9% 6.4% 5.2% 5.6% 4.3% 4.6% 5.0% 5.6% 5.1% 6.7% 5.1% 5.3% 0.0% 24.67 0.00 18.60 0.00 20.95 0.00 16.95 0.00 26.72 0.00 21.73 0.00 22.41 0.00 18.52 0.00 27.96 0.00 23.49 0.00 23.37 0.00 19.83 0.00 27.11 0.00 20.91 0.00 20.95 0.00 16.95 0.00 25.58 0.00 16.96 0.00 21.53 0.00 17.96 17.49 27.51 0.00 20.31 0.00 22.80 0.00 17.96 17.49 30.48 0.00 23.40 0.00 24.06 0.00 17.96 17.49 28.35 0.00 21.24 0.00 0.00 0.00 0.00 0.00 Total Manufacturing ———— Branded —————– N.A. Cost ($/pair produced) E-A A-P L.A. Private-Label ——– N.A. E-A A-P L.A. —————————— Year 11 —————————— Low Average High Co. E Operating Benchmarks Branded ——— Cost of Pairs Sold ———————— N.A. Market ($ per pair sold. Includes manuE-A Segments facturing, shipping, import tariffs, A-P and exchange rate adjustments.) L.A. —————————— Year 12 —————————— Low Average High Co. E 25.68 24.65 19.61 26.61 27.64 27.82 22.72 29.39 28.91 30.12 24.54 30.89 28.10 26.91 21.92 28.91 23.48 25.48 20.37 28.91 27.56 27.01 21.80 31.17 31.37 29.48 24.38 33.54 29.35 27.34 22.24 31.63 Warehouse Expenses ——– Internet ($ per pair sold) Wholesale 10.77 2.68 12.06 4.00 21.63 13.69 10.77 2.68 10.77 2.67 10.94 2.84 11.49 3.32 10.78 2.70 Marketing Expenses ——— Internet ($ per pair sold) Wholesale 14.32 6.47 21.06 8.99 52.89 25.99 14.32 6.78 7.52 6.11 13.97 6.77 16.94 7.33 15.16 6.83 1.68 4.39 25.59 1.68 1.68 1.75 1.85 1.72 Operating —— Internet ————– N.A. Profit E-A ($/pair sold) A-P L.A. Wholesale ——— N.A. E-A A-P L.A. -5.27 -7.09 -2.50 -9.50 6.83 5.15 -18.55 -26.24 19.36 19.19 25.08 18.37 11.55 11.30 5.53 -0.36 27.73 28.51 35.24 28.24 32.83 30.94 12.73 6.73 26.13 27.39 33.46 26.48 11.10 12.32 10.83 4.87 11.04 12.70 18.49 -0.66 8.68 4.75 7.74 -5.47 20.45 19.61 26.62 9.27 11.09 10.51 11.75 -1.35 25.93 26.21 33.01 15.79 13.44 15.26 14.51 0.78 24.80 25.42 32.10 14.98 13.44 15.26 14.51 0.16 Private ———— Cost of Pairs Sold ———————– N.A. Label ($ per pair sold. Includes manuE-A Market facturing, shipping, import tariffs, A-P Segments and exchange rate adjustments.) L.A. 21.95 23.74 17.95 24.28 23.41 25.56 19.52 25.05 24.37 26.95 20.83 25.37 21.95 26.95 17.95 24.95 22.53 24.05 18.96 18.49 23.80 26.00 22.23 23.85 25.06 27.95 25.49 29.20 0.00 0.00 0.00 0.00 Administrative Expenses ($/pair sold) Warehouse Expenses ($ per pair sold) Margin Over Direct ———————– N.A. Cost ($ per pair sold) E-A A-P L.A. Footwear Industry Report 1.00 1.00 1.00 1.00 1.00 1.00 1.00 0.00 7.72 5.26 10.26 6.72 10.42 7.93 13.98 8.78 13.04 9.79 17.04 10.04 13.04 8.04 17.04 10.04 5.94 4.36 6.96 0.35 8.19 4.36 7.29 5.26 10.44 4.36 7.62 10.17 0.00 0.00 0.00 0.00 Copyright © GLO-BUS Software, Inc. Page 6 7/8 6/4/2018 INDUSTRY 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS YEAR 12 Celebrity Endorsements Celebrity Payton Manyon Oprah Beyonsé Cristiano Romano Tiger Green José Montaña Mishell Wii Ace Federar Danica Sebastian Yi Lin Shakira Iglesias Nick Shavan Bronko Mars Consumer Appeal NA EA AP LA Currently Signed By Contract 85 45 35 40 100 70 65 75 70 100 70 55 95 80 85 75 60 50 60 95 55 60 95 90 50 90 50 85 70 65 55 60 75 80 95 50 45 85 60 100 80 85 75 70 60 35 100 50 A iShoes A iShoes A iShoes F BADER COMPANY Compact Exceptional [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] [unsigned] 5,495 5,950 6,105 11,113 3,600 4,200 0 0 0 0 0 0 ($000s/year) Year Contract Signed Length Y11 Y11 Y11 Y12 Y12 Y12 N/A N/A N/A N/A N/A N/A Most Recent Round of Bidding Bidders High Bid 2nd Bid Avg Bid Low Bid 2 years 3 years 5 years 2 years 3 years 4 years 1 years 3 years 4 years 2 years 3 years 4 years 4 5 3 4 2 3 0 0 0 0 0 0 5,495 5,950 6,105 11,113 3,600 11,113 0 0 0 0 0 0 1,100 1,800 1,800 2,500 2,450 4,200 0 0 0 0 0 0 2,036 2,190 2,968 4,253 3,025 5,921 0 0 0 0 0 0 750 1,000 1,000 1,000 2,450 2,450 0 0 0 0 0 0 Branded Price and S/Q Rating Trends S/Q Rating Internet P… S/Q Rating $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 10 11 12 13 14 15 Year 16 17 18 19 20 Sales Price $80 $40 10 11 12 13 ASIA-PACIFIC Internet P… 14 15 Year 16 17 18 19 20 10 0 LATIN AMERICA Wholesal… S/Q Rating Internet P… Wholesal… S/Q Rating $80 $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 $40 10 11 12 13 Footwear Industry Report 14 15 Year 16 17 18 19 20 Sales Price 10 S/Q Rating $80 Sales Price Wholesal… 10 S/Q Rating Sales Price Wholesal… 10 11 Copyright © GLO-BUS Software, Inc. 12 13 14 15 Year 16 17 18 19 20 10 S/Q Rating Internet P… $80 EUROPE-AFRICA S/Q Rating NORTH AMERICA 0 Page 7 8/8 6/4/2018 FOOTWEAR INDUSTRY REPORT Copyright © GLO-BUS Software, Inc. All rights reserved. Industry 1 Year 13 Monday, June 4th, 2018 Year 13 Scoreboard Rank 1 2 3 4 5 6 7 7 7 Company Name Exceptional Compact Best Shoe Company F BADER COMPANY Dragons A iShoes G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score 105 98 70 61 51 39 0 0 0 93 84 60 56 44 34 0 0 0 Overall Score 99 91 65 59 48 37 0 0 0 Change from Y12 –3 –5 –28 –12 –32 –30 0 0 0 Game-To-Date Scoreboard Rank 1 2 3 4 5 6 7 7 7 Investor Expectation ——– Score (I.E.) Company Name Exceptional Compact Best Shoe Company Dragons F BADER COMPANY A iShoes G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score Overall Score 112 108 89 65 52 48 0 0 0 97 91 71 53 44 39 0 0 0 105 100 80 59 48 44 0 0 0 Bonus Points 1 1 1 0 1 0 0 0 0 Overall G-T-D Score 106 101 81 59 49 44 0 0 0 Investors and company boards of directors have established annual targets for five key performance measures and the importance weighting of each: EPS (20 points), ROE (20 points), Stock Price ( 20 points), Credit Rating (20 points), and Image Rating (20 points). Pages 2 and 3 of this report show the investor expectation targets (in parenthesis just under the column heads for each year). The investor expectation score on a performance measure is equal to the percentage of the target that was achieved. Achieving higher than targeted performance results in additional awards of 0.5% for each 1% overachieved (capped at 40% over the target). Thus the investor expectation score ranges from 0 to a max of 120 (if all targets are exceeded by 40% or more). Best-In-Industry —————— This scoring standard is based on how well each company performs relative to the best-performing company in the Score (B-I-I) industry on EPS (20 points max), ROE (20 points max), Stock Price (20 points max), Credit Rating (20 points max), and Image Rating (20 points max). In order to get a score of 100 a company must be the best performing company in the industry on all five measures, achieve no lower than the investor expectation on EPS, ROE, Stock Price, and Image Rating, and have an A+ Credit Rating. Overall Score ———————– This measure is used to determine each company's ranking in the Year 13 Scoreboard and the Game-To-Date Scoreboard above. The overall score is calculated by combining the Investor Expectation Score and the Best-InIndustry Score into a single score using the 50%-50% weighting as specified by the course instructor. 1/8 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 13 Earnings Per Share ($) EPS scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected EPS shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading EPS performance. Game-To-Date scores are based on a weighted average of the annual EPS performances. Y11 A B C D E F G H I Y12 Y13 (2.67) (2.85) (3.05) 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 2.30 3.01 3.61 2.62 4.05 2.58 0.00 0.00 0.00 0.99 1.68 3.28 0.90 3.62 1.95 0.00 0.00 0.00 Y14 (3.26) Y15 (3.49) Y16 (3.66) Y17 (3.84) Y18 (4.03) Y19 (4.23) Y20 (4.44) Wgt. Avg. Y13 Score (2.86) I.E. 1.51 2.60 4.07 1.70 4.23 1.30 0.00 0.00 0.00 6 11 21 6 22 13 0 0 0 B-I-I 5 9 18 5 20 11 0 0 0 G-T-D Score I.E. B-I-I 11 18 24 12 24 9 0 0 0 A B C D E F G H I 7 12 19 8 20 6 0 0 0 Return on Equity (%) ROE scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected ROE shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industryleading ROE performance. Game-To-Date scores are based on a weighted average of the annual ROE performances. Y11 A B C D E F G H I Y12 Y13 (15.0) (15.0) (15.0) 7.8 19.2 29.8 9.9 28.4 -4.3 0.0 0.0 0.0 13.1 16.5 16.2 14.5 18.2 16.4 0.0 0.0 0.0 5.1 8.6 12.7 4.5 13.9 10.9 0.0 0.0 0.0 Y14 (15.0) Y15 (15.0) Y16 (15.0) Y17 (15.0) Y18 (15.0) Y19 (15.0) Y20 (15.0) Wgt. Avg. Y13 Score (15.0) I.E. 8.6 14.4 18.5 9.5 19.2 8.0 0.0 0.0 0.0 7 11 17 6 19 15 0 0 0 B-I-I 7 11 17 6 19 15 0 0 0 G-T-D Score I.E. B-I-I 11 19 22 13 23 11 0 0 0 A B C D E F G H I 9 15 19 10 20 8 0 0 0 Stock Price ($ per share) Stock Price scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor-expected stock price shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading performance. Game-To-Date scores are based solely on the most recent year's stock price. Y11 A B C D E F G H I Y12 Y13 (32.00) (34.25) (36.75) 16.34 53.20 104.23 16.45 98.32 17.02 0.00 0.00 0.00 22.72 39.80 45.67 27.85 56.34 28.81 0.00 0.00 0.00 12.73 21.50 37.85 15.61 43.92 19.87 0.00 0.00 0.00 Footwear Industry Report Y14 (39.25) Y15 (42.00) Y16 (44.25) Y17 (46.25) Y18 (48.75) Y19 (51.25) Y20 (53.50) Y13 Score I.E. 7 12 20 8 22 11 0 0 0 Copyright © GLO-BUS Software, Inc. B-I-I 6 10 17 7 20 9 0 0 0 G-T-D Score I.E. 7 12 20 8 22 11 0 0 0 B-I-I 6 10 17 7 20 9 0 0 0 A B C D E F G H I Page 2 2/8 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 13 (concluded) Credit Rating Credit Rating scores are based on a 20% or 20 point weighting. Bolded credit ratings indicate meeting or beating the B+ investor expectation shown below each column head. For the Best- In-Industry scoring, companies with an A+ credit rating earn a score of 20 points and lesser credit ratings earn lower scores. Game-To-Date scores are based soley on the most recent year's credit rating. Y11 (B+) A B C D E F G H I B A– A B A C– n.a. n.a. n.a. Y12 Y13 (B+) (B+) B– A– A A– A C– n.a. n.a. n.a. Y14 (B+) Y15 (B+) Y16 Y17 (B+) Y18 (B+) Y19 (B+) Y20 (B+) Y13 Score I.E. (B+) C– B+ A B A C– n.a. n.a. n.a. 0 20 23 16 23 0 0 0 0 B-I-I 1 17 19 14 19 1 0 0 0 G-T-D Score I.E. 0 20 23 16 23 0 0 0 0 B-I-I A B C D E F G H I 1 17 19 14 19 1 0 0 0 Image Rating Image Rating scores are based on a 20% or 20 point weighting. Bolded image ratings indicate meeting or beating the yearly target shown below each column head. Best-In-Industry performers earn top scores; scores of other companies are a percentage of the industry-leading image rating. Game-To-Date scores are based on company's average image rating over the last three years. Y11 Y12 Y13 64 79 83 59 86 59 0 0 0 63 72 60 55 64 95 0 0 0 67 56 58 54 67 87 0 0 0 (70) A B C D E F G H I (70) (70) Y14 (70) Y15 (70) Y16 Y17 (70) Y18 (70) Y19 (70) Y20 (70) (70) 65 69 67 56 72 80 0 0 0 Corporate Social Responsibility and Citizenship Industry 1 Expenditures for Corporate Social Responsibility and Citizenship Total ($000s) Per Pair Sold ($/unit) High Avg. Low High Avg. Low Year 11 Year 12 Year 13 14,425 10,670 6,744 2,151 3,056 2,565 Y11-Y13 Average 0 0 0 3.15 2.10 1.67 0.75 0.53 0.55 0.00 0.00 0.00 15 13 13 12 15 20 0 0 0 G-T-D Score I.E. 19 20 19 16 20 21 0 0 0 B-I-I A B C D E F G H I 16 17 17 14 18 20 0 0 0 1 3 4 0 0 3 for Exemplary Corporate Citizenship Beginning in Year 14, the World Council for Exemplary Corporate Citizenship presents a Gold Star Award to the company spending the highest percentage of its revenues for social responsibility and citizenship initiatives. Award Winner Y14 Y13 Footwear Industry Report 19 16 17 15 19 22 0 0 0 B-I-I Corporate Responsibility Award Image Rating Points Generated from CSRC Expenditures High Avg. Low 3 5 7 Y13 Score I.E. Copyright © GLO-BUS Software, Inc. A Company none 2nd Place B Company none Page 3 3/8 6/4/2018 INDUSTRY1 BONUS POINT AWARDS BULL'S EYE AWARD 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. for Accurately Forecasting Total Revenues, Earnings Per Share, and Image Rating Revenues(within ± 5%) Year 13 Year 13 Percent Forecast Actual Variance A B C D E F G H I 344,832 295,725 311,011 265,736 374,521 625,401 0 0 0 298,341 225,475 248,207 202,491 306,412 515,135 0 0 0 EPS(within ± 5% or ± 10¢) Year 13 Year 13 Percent Forecast Actual Variance –13.5 % –23.8 % –20.2 % –23.8 % –18.2 % –17.6 % 0.0 % 0.0 % 0.0 % 2.37 3.42 4.99 2.22 5.51 5.17 0.00 0.00 0.00 0.99 1.68 3.28 0.90 3.62 1.95 0.00 0.00 0.00 YEAR13 Image Rating (within ± 4 points) Year 13 Year 13 —Variance— Forecast Actual Pts. Percent –58.2 % –50.9 % –34.3 % –59.5 % –34.3 % –62.3 % 0.0 % 0.0 % 0.0 % 74 72 72 62 84 94 0 0 0 67 56 58 54 67 87 0 0 0 –7 –16 –14 –8 –17 –7 0 0 0 Year 13 CumuBull's Eye lative Award Awards –9.5 % –22.2 % –19.4 % –12.9 % –20.2 % –7.4 % 0.0 % 0.0 % 0.0 % No No No No No No No No No A B C D E F G H I 0 1 1 0 1 0 0 0 0 Comparisons and Trends in Projected Versus Actual Variances Range of Average Percent Variances (for Revenues, EPS, and Image Rating) for all Industry 12 Companies, World-Wide Average Percent Variance, and Company E Average Percent Variance Industry High/Low Company E Average World Average 30% -0% -30% -60% -90% Year 11 Year 12 Year 13 Year LEAP FROG AWARD Beginning in Year 12, one bonus point is added to the game-to-date overall 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. for Most Improved Overall Score (current year to current year) Current-Year Scores Δ = net change in score between years Y11 Score A B C D E F G H I 53 92 108 56 107 23 0 0 0 Δ Y12 Score +14 +1 –12 +24 –5 +48 67 93 96 80 102 71 Footwear Industry Report Δ –30 –28 –5 –32 –3 –12 0 0 0 Y13 Score Δ Y14 Score Δ Highlighted figure = Leap Frog Award winner Y15 Score Δ Y16 Score Δ Y17 Score 37 65 91 48 99 59 Δ Y18 Score Δ Y19 Score Δ Y20 Score Cumulative Awards 0 0 0 0 0 1 0 0 0 Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 3b 4/8 6/4/2018 INDUSTRY 1 FOOTWEAR INDUSTRY OVERVIEW Materials Prices —Y13 Price Adjustments for— Mat. Usage Cap. Utilization Base Price ($/pair) Standard Materials Superior Materials 6.00 12.00 +1.50 –0.75 YEAR 13 Year 13 Price Notes 7.50 11.25 Lower than normal (37.5%) superior materals usage lead to superior materials prices that were 6.3% below the base and standard materials prices that were 25.0% above the base. 0.00 0.00 N.A. Plants E-A Plants A-P Plants L.A. Plants All Plants 8,786 400 8,386 59.4% 88.7% 500 34 466 45.0% 33.3% 28,905 1,707 27,198 32.5% 100.0% 6,762 473 6,289 29.8% 102.5% 44,953 2,614 42,339 37.5% 95.8% N.A. Region E-A Region A-P Region L.A. Region All Regions Ending Y12 Inventories (000s of pairs) Less Pairs Cleared (inventory clearance) Beginning Y13 Inventories Plus New Pairs Produced in Y13 Pairs Available for Sale in Year 13 2,137 530 1,607 11,598 13,205 1,911 385 1,526 10,311 11,837 2,415 26 2,389 7,240 9,629 1,904 18 1,886 7,310 9,196 8,367 959 7,408 36,459 43,867 Branded Demand & Sales N.A. Market E-A Market A-P Market L.A. Market All Market 9,871 9,954 9,954 0 0 9,903 9,882 9,875 2 8 7,374 7,506 7,507 0 0 7,165 7,285 7,282 2 3 34,313 34,627 34,618 N.A. Market E-A Market A-P Market L.A. Market All Market 10,551 11,184 11,855 1,650 1,800 1,968 10,475 11,104 11,770 1,638 1,788 1,968 8,106 8,754 9,454 1,662 1,812 1,992 7,868 8,497 9,177 1,650 1,800 1,980 37,000 39,539 42,256 6,600 7,200 7,920 Footwear Production (industry totals) Total Year 13 Production (000s of pairs) Pairs Rejected Net Year 13 Production (000s of pairs) Superior Materials Usage Capacity Utilization (branded + private-label) Branded Warehouses (industry totals) (industry tot.) Projected Y13 Demand (000s of pairs) Actual Year 13 Demand Branded Pairs Sold (internet + wholesale) No. of Companies Unable to Fill All Orders Unfilled Orders (000s of pairs ordered but not shipped) Demand Forecast (industry totals) Branded Demand ————————– Year 14 (internet + wholesale) Year 15 Year 16 Private-Label Demand —————– Year 14 Year 15 Year 16 Potential Y14 Footwear Supply Beginning Y14 Inventory Potential Production (with OT) Potential Global Supply 9,249 61,080 70,329      11 Total pairs produced before rejects Overall average reject rate = 5.8% Total pairs available after rejects % usage up 1.4 points from Y12 % utilization down 5.7 points from Y12 Notes      Unsold pairs from Y12 Average inventory clearance of 11.5% Incurred a 1-star S/Q rating penalty New Y13 production shipped from plants 26.7% higher than Y13 demand Notes  From page 4 of FIR for Year 12  Actual demand was 0.9% higher than pro- jected demand due to increased competitive intensity. not meaningful Expected Y14 Footwear Demand Branded Demand Forecast Private-Label Forecast Potential Global Demand Notes { Shows extent to which orders for branded pairs went unfilled due to inventory shortages at one or more companies. Notes Global demand for Y11-Y15 is expecrted to grow at a rate of 7%-9% annually, slowing to about 5%-7% annual growth during Y16-Y20. The projected growth rates are not the same for all four regions, as indicated in the table on page 4 of the Player's Guide. Actual demand growth may vary from the forecast due to increases/decreases in competitive intensity industry-wide. Supply / Demand Analysis 37,000 6,600 43,600 Excess supply of 61.3% is likely to produce FIERCE competition and hurt industry profitability in Year 14 and beyond. Construction of new capacity will not beneeded for several years, and it may be wise for some companies to sell-off unneeded production capacity. Plant Capacity (000s of pairs of production capacity not including overtime) A B C D E F G H I Capacity Beginning Year 13 N.A. E-A A-P L.A. Capacity Purchased (Sold) N.A. E-A A-P L.A. 1,900 2,000 2,000 2,000 2,000 2,000 0 0 0 11,900 0 0 +100 –100 0 –2,000 0 0 0 -2,000 1,500 4,000 0 4,000 0 4,000 0 4,000 0 4,000 0 9,000 0 0 0 0 0 0 1,500 29,000 Footwear Industry Report 2,000 0 0 0 1,600 3,000 0 0 0 6,600 0 0 0 0 0 0 0 0 0 0 0 0 0 –100 0 0 0 0 0 -100 Capacity Available for Y13 Production N.A. E-A A-P L.A. Total 0 0 0 0 0 0 0 0 0 0 1,900 2,000 2,100 1,900 2,000 0 0 0 0 9,900 Copyright © GLO-BUS Software, Inc. 1,500 4,000 0 4,000 0 4,000 0 3,900 0 4,000 0 9,000 0 0 0 0 0 0 1,500 28,900 2,000 9,400 0 6,000 0 6,100 0 5,800 1,600 7,600 3,000 12,000 0 0 0 0 0 0 6,600 46,900 New Construction Initiated in Y13 0 500 2,000 0 0 1,500 0 0 0 4,000 A B C D E F G H I Page 4 5/8 6/4/2018 INDUSTRY 1 FINANCIAL PERFORMANCE SUMMARY YEAR 13 Income Statement Data ($000s) Net Sales Cost of Warehouse Marketing Admin Operating Revenues Pairs Sold Expenses Expenses Expenses Profit A B C D E F G H I Interest Exp (Inc) Income Taxes Total Dividend Payment Net Profit ($000s) 175,847 137,124 133,294 125,663 169,862 297,643 0 0 0 19,578 16,463 17,395 15,932 20,563 37,664 0 0 0 56,158 33,699 37,674 34,585 47,697 56,666 0 0 0 12,717 8,717 9,117 8,518 10,767 13,968 0 0 0 34,041 29,472 50,727 17,793 57,523 109,194 0 0 0 19,197 5,147 3,928 4,948 5,827 81,651 0 0 0 4,153 7,209 14,040 3,854 15,509 8,263 0 0 0 9,691 16,821 32,759 8,991 36,187 19,280 0 0 0 0 10,000 0 0 0 0 0 0 0 9,800 10,000 10,000 10,000 10,000 9,900 0 0 0 299,344 173,239 21,266 44,413 10,634 49,792 20,116 8,838 20,622 1,667 9,950 Shareholder Equity Current Long-Term Beginning Stock Sales Earnings Equity (purchases) Retained Liabilities Debt Year 13 No. of Dividend Changes Ending Equity Cash on Hand Current Assets Total Assets 54,048 0 0 12,049 18,082 0 0 0 0 178,142 72,734 80,328 103,743 112,830 221,169 0 0 0 511,774 265,484 337,602 267,294 345,630 863,526 0 0 0 93,210 31,170 29,343 30,023 32,463 641,811 0 0 0 226,500 34,500 34,500 34,500 34,500 34,500 0 0 0 187,009 192,996 241,001 193,781 242,481 167,933 0 0 0 -4,636 0 0 0 0 0 0 0 0 9,691 6,818 32,758 8,990 36,186 19,282 0 0 0 192,064 199,814 273,759 202,771 278,667 187,215 0 0 0 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0/1 0/0 0/1 0/1 0/1 0/1 0/0 0/0 0/0 14,030 128,158 431,885 143,003 66,500 204,200 -773 18,954 222,382 0.17 0.0 / 0.8 Costs and Profit as a Percent of Net Revenues Cost of Whse. Mktng. Admin Operating Net Pairs Sold Expenses Expenses Expenses Profit Profit ($ / share) (+/–) A B C D E F G H I Credit Rating Data Current Ratio Days of Inventory Interest Debt to Coverage Assets Ratio Ratio Default Risk Ratio Default Risk 58.9% 60.8% 53.7% 62.1% 55.4% 57.8% 0.0% 0.0% 0.0% 6.6% 7.3% 7.0% 7.9% 6.7% 7.3% 0.0% 0.0% 0.0% 18.8% 14.9% 15.2% 17.1% 15.6% 11.0% 0.0% 0.0% 0.0% 4.3% 3.9% 3.7% 4.2% 3.5% 2.7% 0.0% 0.0% 0.0% 11.4% 13.1% 20.4% 8.8% 18.8% 21.2% 0.0% 0.0% 0.0% 3.2% 7.5% 13.2% 4.4% 11.8% 3.7% 0.0% 0.0% 0.0% 1.91 2.33 2.74 3.46 3.48 0.34 0.00 0.00 0.00 99 46 52 112 40 191 0 0 0 1.77 5.73 12.91 3.60 9.87 1.34 0.00 0.00 0.00 0.59 0.20 0.16 0.19 0.15 0.76 0.00 0.00 0.00 0.43 1.11 2.42 1.31 3.24 0.08 0.00 0.00 0.00 High Medium Medium Medium Low High N/A N/A N/A 57.9% 7.1% 14.8% 3.6% 16.6% 6.9% 0.90 90 5.87 0.34 1.43 Medium Footwear Industry Report A B C D E F G H I Dividend Data Selected Financial and Operating Statistics A B C D E F G H I (000s of shares outstanding) 298,341 225,475 248,207 202,491 306,412 515,135 0 0 0 Selected Balance Sheet Data ($000s) A B C D E F G H I Shares of Stock Copyright © GLO-BUS Software, Inc. A B C D E F G H I Page 5 6/8 6/4/2018 INDUSTRY 1 INDUSTRY PERFORMANCE BENCHMARKS —————————— Year 12 —————————— Low Average High Co. E Plant and Production Benchmarks Materials Costs ———— Branded Footwear ($ per pair produced) Private-Label Footwear YEAR 13 —————————— Year 13 —————————— Low Average High Co. E 7.59 7.87 9.30 8.57 10.61 9.27 9.44 0.00 7.45 7.78 9.39 7.78 11.48 7.78 9.35 0.00 Labor —— North ———– Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Europe ——– Total Compensation ($/year) Africa Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Asia ————– Total Compensation ($/year) Pacific Productivity (pairs/worker/year) Labor Cost ($ per pair produced) Latin ———— Total Compensation ($/year) America Productivity (pairs/worker/year) Labor Cost ($ per pair produced) 15,908 3,783 4.63 0 0 0.00 3,531 2,444 1.56 2,828 2,606 1.63 19,072 4,028 5.04 0 0 0.00 3,904 2,549 1.63 2,828 2,606 1.63 20,778 4,158 5.38 0 0 0.00 4,478 2,648 1.77 2,828 2,606 1.63 20,285 4,158 5.09 0 0 0.00 3,830 2,603 1.56 0 0 0.00 17,171 3,649 4.47 15,727 3,936 4.32 3,319 2,383 1.31 2,856 2,623 1.38 20,002 4,196 5.03 15,727 3,936 4.32 3,881 2,693 1.56 3,227 2,686 1.41 21,460 5,036 5.43 15,727 3,936 4.32 4,224 3,443 1.78 3,485 2,746 1.45 20,457 4,157 5.11 0 0 0.00 3,880 2,654 1.55 3,485 2,688 1.39 TQM / 6-Sigma Expenditures ———— Current Year ($ per pair of capacity) Cumulative 0.50 0.50 0.66 0.69 0.93 1.20 0.50 0.50 0.13 0.50 0.58 0.63 1.07 0.86 0.63 0.53 Reject Rates —————— Branded Production (%) Private-Label Production 4.6% 5.0% 5.6% 5.1% 6.7% 5.1% 5.3% 0.0% 4.8% 6.2% 5.7% 6.2% 7.2% 6.2% 5.3% 0.0% 25.58 0.00 16.96 0.00 21.53 0.00 17.96 17.49 27.51 0.00 20.31 0.00 22.80 0.00 17.96 17.49 30.48 0.00 23.40 0.00 24.06 0.00 17.96 17.49 28.35 0.00 21.24 0.00 0.00 0.00 0.00 0.00 26.56 53.00 14.77 22.74 0.00 0.00 15.28 16.41 29.46 53.00 20.57 23.38 0.00 0.00 15.28 16.41 34.08 53.00 24.34 24.01 0.00 0.00 15.28 16.41 29.39 0.00 21.04 24.01 0.00 0.00 0.00 0.00 Total Manufacturing ———— Branded —————– N.A. Cost ($/pair produced) E-A A-P L.A. Private-Label ——– N.A. E-A A-P L.A. —————————— Year 12 —————————— Low Average High Co. E Operating Benchmarks Branded ——— Cost of Pairs Sold ———————— N.A. Market ($ per pair sold. Includes manuE-A Segments facturing, shipping, import tariffs, A-P and exchange rate adjustments.) L.A. —————————— Year 13 —————————— Low Average High Co. E 23.48 25.48 20.37 28.91 27.56 27.01 21.80 31.17 31.37 29.48 24.38 33.54 29.35 27.34 22.24 31.63 18.38 22.84 19.30 23.89 27.17 28.97 22.35 29.53 31.55 34.13 26.58 35.59 28.94 27.92 22.04 25.08 Warehouse Expenses ——– Internet ($ per pair sold) Wholesale 10.77 2.67 10.94 2.84 11.49 3.32 10.78 2.70 10.66 2.51 10.97 2.82 11.34 3.27 10.66 2.51 Marketing Expenses ——— Internet ($ per pair sold) Wholesale 7.52 6.11 13.97 6.77 16.94 7.33 15.16 6.83 8.09 6.34 13.98 7.21 18.72 8.58 12.25 7.18 Administrative Expenses 1.68 1.75 1.85 1.72 1.70 1.86 2.11 1.72 Operating —— Internet ————– N.A. Profit E-A ($/pair sold) A-P L.A. Wholesale ——— N.A. E-A A-P L.A. 11.04 12.70 18.49 -0.66 8.68 4.75 7.74 -5.47 20.45 19.61 26.62 9.27 11.09 10.51 11.75 -1.35 25.93 26.21 33.01 15.79 13.44 15.26 14.51 0.78 24.80 25.42 32.10 14.98 13.44 15.26 14.51 0.16 13.57 7.96 20.15 -1.14 6.28 0.29 4.74 -4.64 20.11 14.30 25.49 9.67 8.54 5.54 9.94 1.34 27.18 18.84 28.00 18.26 10.81 9.38 16.63 4.50 20.67 18.16 28.00 16.60 8.55 7.95 11.46 4.50 Private ———— Cost of Pairs Sold ———————– N.A. Label ($ per pair sold. Includes manuE-A Market facturing, shipping, import tariffs, A-P Segments and exchange rate adjustments.) L.A. 22.53 24.05 18.96 18.49 23.80 26.00 22.23 23.85 25.06 27.95 25.49 29.20 0.00 0.00 0.00 0.00 15.89 21.93 16.28 17.41 15.89 21.93 16.28 17.41 15.89 21.93 16.28 17.41 0.00 0.00 0.00 0.00 Warehouse Expenses ($ per pair sold) 1.00 1.00 1.00 0.00 1.00 1.00 1.00 0.00 Margin Over Direct ———————– N.A. Cost ($ per pair sold) E-A A-P L.A. 5.94 4.36 6.96 0.35 8.19 4.36 7.29 5.26 10.44 4.36 7.62 10.17 0.00 0.00 0.00 0.00 11.04 3.30 6.69 6.91 11.04 3.30 6.69 6.91 11.04 3.30 6.69 6.91 0.00 0.00 0.00 0.00 Footwear Industry Report ($/pair sold) Copyright © GLO-BUS Software, Inc. Page 6 7/8 6/4/2018 INDUSTRY 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS YEAR 13 Celebrity Endorsements Celebrity Payton Manyon Oprah Beyonsé Cristiano Romano Tiger Green José Montaña Mishell Wii Ace Federar Danica Sebastian Yi Lin Shakira Iglesias Nick Shavan Bronko Mars Consumer Appeal NA EA AP LA Currently Signed By Contract 85 45 35 40 100 70 65 75 70 100 70 55 95 80 85 75 60 50 60 95 55 60 95 90 50 90 50 85 70 65 55 60 75 80 95 50 45 85 60 100 80 85 75 70 60 35 100 50 A iShoes A iShoes A iShoes F BADER COMPANY Compact Exceptional Compact Exceptional Compact A iShoes [unsigned] [unsigned] 5,200 5,950 6,105 11,113 3,600 4,200 2,000 7,000 7,500 5,900 0 0 ($000s/year) Year Contract Signed Length Y13 Y11 Y11 Y12 Y12 Y12 Y13 Y13 Y13 Y13 N/A N/A Most Recent Round of Bidding Bidders High Bid 2nd Bid Avg Bid Low Bid 2 years 3 years 5 years 2 years 3 years 4 years 1 years 3 years 4 years 2 years 3 years 4 years 2 5 3 4 2 3 1 2 3 2 0 0 5,200 5,950 6,105 11,113 3,600 11,113 2,000 7,000 7,500 5,900 0 0 501 1,800 1,800 2,500 2,450 4,200 0 6,200 6,200 3,333 0 0 2,851 2,190 2,968 4,253 3,025 5,921 2,000 6,600 5,678 4,617 0 0 501 1,000 1,000 1,000 2,450 2,450 2,000 6,200 3,333 3,333 0 0 Branded Price and S/Q Rating Trends S/Q Rating Internet P… S/Q Rating $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 10 11 12 13 14 15 Year 16 17 18 19 20 Sales Price $80 $40 10 11 12 13 ASIA-PACIFIC Internet P… 14 15 Year 16 17 18 19 20 10 0 LATIN AMERICA Wholesal… S/Q Rating Internet P… Wholesal… S/Q Rating $80 $70 8 $70 8 $60 5 $60 5 $50 3 $50 3 0 $40 $40 10 11 12 13 Footwear Industry Report 14 15 Year 16 17 18 19 20 Sales Price 10 S/Q Rating $80 Sales Price Wholesal… 10 S/Q Rating Sales Price Wholesal… 10 11 Copyright © GLO-BUS Software, Inc. 12 13 14 15 Year 16 17 18 19 20 10 S/Q Rating Internet P… $80 EUROPE-AFRICA S/Q Rating NORTH AMERICA 0 Page 7 8/8 6/4/2018 FOOTWEAR INDUSTRY REPORT Copyright © GLO-BUS Software, Inc. All rights reserved. Industry 1 Year 14 Monday, June 4th, 2018 Year 14 Scoreboard Rank 1 2 3 4 5 6 7 7 7 Company Name Exceptional Compact Best Shoe Company Dragons A iShoes F BADER COMPANY G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score Overall Score Change from Y13 116 111 104 101 36 25 0 0 0 99 79 72 68 28 21 0 0 0 108 95 88 85 32 23 0 0 0 +9 +4 +23 +37 –5 –36 0 0 0 Bonus Points Game-To-Date Scoreboard Rank 1 2 3 4 5 6 7 7 7 Investor Expectation ——– Score (I.E.) Company Name Exceptional Compact Best Shoe Company Dragons A iShoes F BADER COMPANY G (deleted) H (deleted) I (deleted) Investor Expectation Score Best-InIndustry Score Overall Score 114 110 100 88 42 28 0 0 0 96 81 70 62 33 24 0 0 0 105 96 85 75 38 26 0 0 0 1 1 1 1 0 1 0 0 0 Overall G-T-D Score 106 97 86 76 38 27 0 0 0 Investors and company boards of directors have established annual targets for five key performance measures and the importance weighting of each: EPS (20 points), ROE (20 points), Stock Price ( 20 points), Credit Rating (20 points), and Image Rating (20 points). Pages 2 and 3 of this report show the investor expectation targets (in parenthesis just under the column heads for each year). The investor expectation score on a performance measure is equal to the percentage of the target that was achieved. Achieving higher than targeted performance results in additional awards of 0.5% for each 1% overachieved (capped at 40% over the target). Thus the investor expectation score ranges from 0 to a max of 120 (if all targets are exceeded by 40% or more). Best-In-Industry —————— This scoring standard is based on how well each company performs relative to the best-performing company in the Score (B-I-I) industry on EPS (20 points max), ROE (20 points max), Stock Price (20 points max), Credit Rating (20 points max), and Image Rating (20 points max). In order to get a score of 100 a company must be the best performing company in the industry on all five measures, achieve no lower than the investor expectation on EPS, ROE, Stock Price, and Image Rating, and have an A+ Credit Rating. Overall Score ———————– This measure is used to determine each company's ranking in the Year 14 Scoreboard and the Game-To-Date Scoreboard above. The overall score is calculated by combining the Investor Expectation Score and the Best-InIndustry Score into a single score using the 50%-50% weighting as specified by the course instructor. 1/8 6/4/2018 INDUSTRY 1 COMPANY PERFORMANCE OVERVIEW YEAR 14 Earnings Per Share ($) EPS scores are based on a 20% or 20 point weighting. Bold numbers indicate achievement of the investor expected EPS shown below each yearly column head. Best-In-Industry performers earn a top score, and scores of other companies are a percentage of the industry-leading EPS performance. Game-To-Date scores are based on a weighted average of the annual EPS performances. Y11 A B C D E F G H I Y12 Y13 Y14 (2.67) (2.85) (3.05) (3.26) 1.22 3.11 5.32 1.59 5.02 -0.64 0.00 0.00 0.00 2.30 3.01 3.61 2.62 4.05 2.58 0.00 0.00 0.00 0.99 1.68 3.28 0.90 3.62 1.95 0.00 0.00 0.00 0.95 3.45 4.65 3.21 6.35 -5.77 0.00 0.00 0.00 Y15 (3.49) Y...
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