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Footwear Industry Report

FIR 17-Jul-2019

Industry 1 Biegala MGT495-01

Summer

Year 11

Year 11 Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

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

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

Game-To-Date Scoreboard

Rank

Company Name

Investor Expectation

Score

Best-In- Industry Score

Weighted Average

Score

Bonus Points

Overall G-T-D Score

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

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

Investor Expectation Score (I.E.)

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

Best-In- Industry Score (BII)

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

Weighted Average Score

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

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Page 1

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Industry 1 SCORING MEASURES Year 11

Earnings Per Share ($ per share)

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

Y11 (2.50)

Y12 (3.00)

Y13 (3.50)

Y14 (4.00)

Y15 (4.50)

Y16 (5.25)

Y17 (6.00)

Y18 (7.00)

Y19 (8.50)

Y20 (10.00)

Wgt. Avg. (2.50) I.E. BII

Y11 Score I.E. BII

G-T-D Score

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

Return On Equity (%)

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

Y11 (21.0)

Y12 (22.0)

Y13 (23.0)

Y14 (24.0)

Y15 (25.0)

Y16 (26.0)

Y17 (27.0)

Y18 (28.0)

Y19 (29.0)

Y20 (30.0)

Wgt. Avg. (21.0) I.E. BII

Y11 Score I.E. BII

G-T-D Score

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

Stock Price ($ per share)

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

Y11 (40.00)

Y12 (50.00)

Y13 (65.00)

Y14 (80.00)

Y15 (100.00)

Y16 (125.00)

Y17 (150.00)

Y18 (180.00)

Y19 (215.00)

Y20 (250.00) I.E. BII

Y11 Score I.E. BII

G-T-D Score

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

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Industry 1 SCORING MEASURES Year 11 (concluded)

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

Y11 (B+)

Y12 (B+)

Y13 (B+)

Y14 (A–)

Y15 (A–)

Y16 (A–)

Y17 (A)

Y18 (A)

Y19 (A)

Y20 (A) I.E. BII

Y11 Score I.E. BII

G-T-D Score

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

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

Y11 (70)

Y12 (72)

Y13 (72)

Y14 (75)

Y15 (75)

Y16 (77)

Y17 (77)

Y18 (80)

Y19 (80)

Y20 (80)

Y9-Y11 Average I.E. BII

Y11 Score I.E. BII

G-T-D Score

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

High Average Low Total Dollars ($000s)

High Average Low Per Unit Sold ($/unit)

Industry 1 Cash Outlays for Corporate Social Responsibility and Citizenship

High Average Low

Image Rating Points Generated from

CSRC Expenditures

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

Corporate Social Responsibility and Citizenship

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

Award Winner 2nd Place

Y14 Y15 Y16 Y17 Y18 Y19 Y20

Corporate Responsibility Award for Exemplary Corporate Citizenship

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Industry 1 BONUS POINT AWARDS Year 11

BULL'S EYE AWARD for Accurately Forecasting Total Revenues,

Earnings Per Share, and Image Rating

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

Year 11 Forecast

Year 11 Actual

Percent Variance

Revenues (within ± 5%) Year 11

Forecast Year 11 Actual

Percent Variance

EPS (within ± 5% or ± 10¢) Year 11

Forecast Year 11 Actual

Point Variance

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

Award

Cumu- lative

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

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

Industry 1 Variance

Largest Average Smallest

Company D Variance

Year 11 +9.6% -0.4% -7.4% -3.7%

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

Y11 Score Δ

Y12 Score Δ

Y13 Score Δ

Y14 Score Δ

Y15 Score Δ

Y16 Score Δ

Y17 Score Δ

Y18 Score Δ

Y19 Score Δ

Y20 Score

Current-Year Scores and Net Changes Cumu- lative

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

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

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

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

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Industry 1 INDUSTRY OVERVIEW Year 11

Materials Prices

Price Adjustments

Materials Usage Facilities Utilization

Base Prices of Materials ($ per pair)

Materials Prices in Year 11 ($ per pair)

$6.00 -0.06 +0.29 $6.23

Standard $12.00 +0.48 +0.58

$13.06

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

Notes

Footwear Production and Sales

Branded Demand

(000s of pairs) Forecast Actual

Stockouts No. of Companies Unfilled Orders (000s)

Pairs Available (000s)

Pairs Sold (internet + wholesale)

Private Label

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

Superior Materials Usage Utilization of Production Capability

North America

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

4 0

2,664 2,672 2,460

Europe Africa

0% 0.0%

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

4 17

2,664 2,420 2,420

Asia Pacific

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

5 277

2,712 2,641 2,641

Latin America

0% 0.0%

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

5 1

2,712 2,228 2,228

Average or Total

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

295

10,752 9,961 9,749

⇦ % usage up 0.8 points from Year 10. ⇦ % usage up 0.3 points from Year 10.

⇦ 3.3% higher than Year 11 demand.

⇦ From page 4 of FIR for Year 10. ⇦ Actual branded demand was about equalto forecast branded demand.

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

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

actual private-label demand by 7.4%.

Notes

Demand Forecast

Branded Demand (internet + wholesale)

Year 12 Year 13 Year 14

Private-Label Demand Year 12 Year 13 Year 14

North America

29,214 30,962 32,822 2,706 3,003 3,333

Europe Africa 24,643 26,123 27,692 2,706 3,003 3,333

Asia Pacific 19,905 21,901 24,095 2,805 3,168 3,575

Latin America

19,905 21,901 24,095 2,805 3,168 3,575

Global Total 93,668

100,887 108,703

11,022 12,342 13,816

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

Notes

Supply / Demand Analysis

Beginning Year 12 Inventory Potential Y12 Production (with OT)

Potential Global Supply

3,442 118,800 122,242

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

Expected Global Demand

102,183 12,024

114,207

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

Analysis

Facility Space Production Equipment

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

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

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

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

Total Space

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

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

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

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

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Industry 1 FINANCIAL PERFORMANCE SUMMARY Year 11

Income Statement Data ($000s)

Internet Wholesale P-label Total Net Sales Revenues Cost of

Pairs Sold Warehouse Expenses

Marketing Expenses

Admin Expenses

Operating Profit

Interest Exp (Inc)

Income Taxes

Net Profit

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

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

Selected Balance Sheet Data ($000s)

Cash On Hand

Current Assets

Fixed Assets

Total Assets

Assets Current Liabilities

Long-Term Loans

Total Liabilities

Liabilities Beginning

Equity Stock Sale (Purchase)

Earnings Retained

Ending Equity

Shareholder Equity

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

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

Selected Financial Statistics

Gross Profit

Margin

Operating Profit

Margin

Net Profit

Margin

Profitability Measures Div. Per Share ($/share)

Total Div. Payment

($000s)

Payout (percent of net profit)

Dividend Data Credit Rating Measures Interest Coverage

Ratio

Debt to Assets Ratio

Default Risk Ratio

Risk of

Default Current Ratio

Days of Inventory

Shares of Stock

Outstanding (000s of shares)

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

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

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Industry 1 PERFORMANCE BENCHMARKS Year 11

Production Benchmarks

North America Low Average High Industry 1 Company

Labor Statistics

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

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

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

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

100% 38,273 4,928 7.76

60,000 8%

1.00 4,463 22.56 1.5% 3.87

100% 41,657 5,106 8.48

60,250 36% 1.71

7,655 25.60 6.1% 5.56

100% 44,973 5,207 9.04

61,800 68% 5.00

21,240 33.04 8.0% 6.15

100% 42,505 5,207 8.62

60,000 34% 1.00

4,800 25.15 7.5% 6.13

Europe-Africa Low Average High Industry 1 Company

Labor Statistics

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

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

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

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

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

Asia-Pacific Low Average High Industry 1 Company

Labor Statistics

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

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

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

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

0% 14,535 3,410 4.14

25,000 10% 0.90

4,224 20.62 2.1% 3.62

4% 15,500 3,621 4.46

25,104 51% 1.65

8,003 22.63 8.7% 5.02

33% 16,810 3,734 4.78

25,750 70% 5.00

23,465 28.32

10.6% 5.57

0% 15,432 3,705 4.37

25,000 54% 0.90

4,320 22.34

10.6% 5.45

Latin America Low Average High Industry 1 Company

Labor Statistics

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

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

Cumulative ($000s)

Superior Materials Usage

Total Production Cost ($ per pair produced) Reject Rate

Percentage of New Production Equipment

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

0% 0 0

0.00 0

0% 0.00

0 0.00

0.0% 0.00

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

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Industry 1 PERFORMANCE BENCHMARKS Year 11 (concluded)

Branded Operating Benchmarks

North America Low Average High Industry 1 Company

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

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

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

5.77 23.60 13.42 10.04

15.0% 7.58 4.77

10.2%

6.37 26.62 21.12 19.81

23.9% 8.38 9.78

18.8%

9.09 33.78 33.76 24.56

30.4% 10.15 20.18

28.8%

6.27 26.13 19.45 21.15

25.9% 8.79 8.35

17.0%

Europe-Africa Low Average High Industry 1 Company

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

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

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

11.88 29.45 14.93 9.62

12.9% 4.85 5.11

9.5%

13.04 32.30 22.28 16.79

19.3% 8.29 8.27

14.9%

13.47 38.93 29.02 23.62

25.3% 9.62

13.77 21.5%

13.11 31.91 21.35 18.40

21.3% 8.83 7.41

13.7%

Asia-Pacific Low Average High Industry 1 Company

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

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

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

6.35 21.64 15.22 4.50

6.7% 7.67 4.84

10.1%

7.00 24.08 26.14 16.60

20.0% 8.61

11.31 21.9%

11.47 29.12 38.72 23.52

29.9% 9.45

22.74 33.9%

6.72 23.31 25.19 18.02

22.1% 9.45

10.04 20.5%

Latin America Low Average High Industry 1 Company

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

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

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

16.98 32.64 15.04 3.44

4.8% 7.48 1.26

2.4%

17.31 34.98 25.30 10.85

12.4% 8.18 5.35

9.5%

17.73 40.55 34.41 17.40

21.1% 8.99

12.21 18.2%

17.14 34.88 24.50 12.21

14.1% 8.20 4.89

9.0%

Private-Label Operating Benchmarks

Low Average High Industry 1 Company

North America Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 26.65 +1.98

27.99 +3.36

29.49 +8.97

0.00 0.00

Europe-Africa Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 28.29 -3.89

34.94 +0.91

43.89 +5.68

0.00 0.00

Asia-Pacific Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 21.29 +1.95

24.80 +6.79

29.05 +11.03

0.00 0.00

Latin America Cost Per Pair Sold (production, freight, tariffs, x-rates)Margin Over Direct Cost ($ per pair sold) 32.74 -1.79

35.66 +0.59

38.97 +2.16

0.00 0.00

8/13/2019 BSG Decisions & Reports

https://www.bsg-online.com/users/sim/fir/page5 10/10

Industry 1 CELEBRITY ENDORSEMENTS AND INDUSTRY TRENDS Year 11

Celebrity Endorsements

Celebrity Year 12

Contract Holder No. of Offers

Highest Offer

2nd Highest

3rd Highest

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

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

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

Avg. 47 47 47 48

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

Pricing and S/Q Rating Trends

NORTH AMERICA EUROPE-AFRICA

ASIA-PACIFIC LATIN AMERICA

Internet Price Wholesale Price S/Q Rating

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

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

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