6/1/2016

PLANTOPERATIONSREPORT

CEO

Year11

Industry8

PLANTCAPACITY(000sofpairsw/oOT)

NorthAmerica
Plant

EuropeAfrica
Plant

2,000
0
0
0
2,000
0
2,000

PlantUpgrade Online(initiatedpriortoY11)
Options
Pending(initiatedinY11)

none
none

none
none

none
none

none
none

NorthAmerica
Plant

EuropeAfrica
Plant

AsiaPacific
Plant

LatinAmerica
Plant

GrossInvestmentattheEndofYear10
+UpgradeOptions(initiatedinYear10)
+NewConstruction(initiatedinYear10)
+CapacityPurchased(atbeginningofY11)
CapacitySoldOff(atbeginningofY11)
+EnergyEfficiencyInitiatives(inY11)
GrossInvestmentinYear11Capacity
AccumulatedDepreciation(throughY10)
CurrentDepreciation(incurredinY11)
NetInvestmentinYear11Capacity
UpgradeandConstructionWorkinProgress

LABORSTATISTICS

pairs

pairs

75,000
0
0
0
0
0
75,000
27,500
3,750
43,750
0
NorthAmerica
Year10

Year11

WorkerProductivity(pairsperworkerperyear)
NumberofWorkersEmployed
Compensation AnnualBaseWage
($000sperworker)
IncentivePay
TotalCompensation
IncentivePayPerPair($pernonrejectedpair)

4,000
501
15.0
5.1
20.1
1.25

4,021
475
15.2
4.8
19.9
1.25

CumulativeBest $PerWorker
Practices
$PerBrandedPair

1,000
0.25
NorthAmerica

PRODUCTIONSTATISTICS
Footwear RegularPairsProduced
Production
OvertimePairsProduced
(000sofpairs)
RejectedPairs
NetFootwearProduction
RejectRate(%ofregular+OTproduction)
NumberofModelsProduced
S/QRatingofPairsProduced
CapacityUtilization(maxutilizationatfullOT=120%)

BRANDEDPRODUCTIONCOSTS

Thissectionlists
costsforbranded
productiononly.
PrivateLabel
productioncosts
arelistedonthe
PrivateLabel
Operationsreport.

MaterialsCosts Standard
Superior
LaborCosts RegularPay
OvertimePay
BestPracticesTraining
PlantSupervision
EnhancedStyling/Features
TQM/6SigmaQualityProgram
ProductionRunSetUp
PlantMaintenance
Depreciation
TotalProductionCosts
CostofRejectedPairs

CompanyOperatingReports

4,000
0
0
0
4,000
0
4,000

LatinAmerica
Plant

PlantCapacityattheEndofYear10
+NewConstruction(initiatedinYear10)
+CapacityPurchased(atbeginningofY11)
CapacitySoldOff(atbeginningofY11)
CapacityAvailableforYear11Production
NewConstructionInitiatedinYear11
TotalCapacityAvailableforYear12

PLANTINVESTMENT($000s)

0
0
0
0
0
0
0

AsiaPacific
Plant

pairs

pairs

0
0
0
0
0
0
0
0
0
0
0
EuropeAfrica

pairs

180,000
0
0
0
0
0
180,000
31,500
9,000
139,500
0
AsiaPacific

Year10

Year11

Year10

Year11

0
0
0.0
0.0
0.0
0.00

0
0
0.0
0.0
0.0
0.00

2,500
1,412
2.8
0.9
3.7
0.40

2,500
1,600
2.8
0.9
3.8
0.40

0
0.00
EuropeAfrica

0
0
0
0
0
0
0

pairs

500
0.20
AsiaPacific

pairs

pairs

0
0
0
0
0
0
0
0
0
0
0

AllPlants
Combined
6,000
0
0
0
6,000
0
6,000

pairs

pairs

AllPlants
Combined
255,000
0
0
0
0
0
255,000
59,000
12,750
183,250
0

LatinAmerica
Year10

Year11

0
0
0.0
0.0
0.0
0.00

0
0
0.0
0.0
0.0
0.00

0
0.00
LatinAmerica

Overall

Branded

PLabel

Branded

PLabel

Branded

PLabel

Branded

PLabel

Branded

PLabel

1,800
0
90
1,710
5.0%
200
4

105
0
5
100
4.0%
100
4

0
0
0
0
0.0%
0
0

0
0
0
0
0.0%
0
0

3,500
0
249
3,251
7.1%
200
4

500
0
31
469
6.1%
100
4

0
0
0
0
0.0%
0
0

0
0
0
0
0.0%
0
0

5,300
0
339
4,961
6.4%

605
0
36
569
6.0%

95.3%
NorthAmerica
$000s

$/pair

4,951
11,829
8,938
0
423
2,693
2,000
945
6,000
4,607
3,544
45,930
2,296

2.90
6.92
5.23
0.00
0.25
1.57
1.17
0.55
3.51
2.69
2.07
26.86
1.34

0.0%
EuropeAfrica
$000s

$/pair

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
0.00
0.00
0.00
0.00

100.0%
AsiaPacific

$000s

$/pair

9,628
23,001
5,251
0
613
2,800
2,000
1,750
6,000
7,481
7,875
66,399
4,723

2.96
7.08
1.62
0.00
0.19
0.86
0.62
0.54
1.85
2.30
2.42
20.42
1.45

CopyrightGLOBUSSoftware,Inc.

0.0%
LatinAmerica
$000s

0
0
0
0
0
0
0
0
0
0
0
0
0

98.4%
Overall

$/pair

$000s

$/pair

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

14,579
34,830
14,189
0
1,036
5,493
4,000
2,695
12,000
12,088
11,419
112,329
7,020

2.94
7.02
2.86
0.00
0.21
1.11
0.81
0.54
2.42
2.44
2.30
22.64
1.42
Page1

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6/1/2016

CEO

DISTRIBUTION&WAREHOUSEREPORT

Year11

Industry8

WAREHOUSEOPERATIONS

(thousandsof
brandedpairs)

EndingInventoryfromYear10
InventoryClearance(atthebeginningofY11)
BeginningInventory(carriedoverfromY11)
Incoming NorthAmericaPlant
Shipmentsfrom
EuropeAfricaPlant
AsiaPacificPlant
LatinAmericaPlant
PairsAvailableforSale(inventory+shipments)
PairsSold InternetSegment
WholesaleSegment
TotalBrandedSales
RequiredInventory(neededtoachievedeliverytime)
InventorySurplus(Shortfall)
EndingInventory(pairsleftoverattheendofY11)
ModelAvailability(weightedaverage)
S/QRating(weightedaverage)

COSTOFBRANDEDPAIRSSOLD
CostofBeginningYear11Inventory
+ProductionCostofIncomingPairs
ExchangeRateCostAdjustments
+FreightonIncomingPairs
+ImportTariffsonIncomingPairs
CostofEndingYear11Inventory
CostofBrandedPairsSoldinYear11

WAREHOUSEOPERATINGEXPENSES
InventoryStorageCosts
Packaging/ShippingInternet
Wholesale
WarehouseLeaseandMaintenance
TotalWarehouseOperatingExpenses

INVENTORYCLEARANCE
NetRevenuesfromPairsCleared
DirectCostsProduction/Freight/Tariffs
ofPairs
InventoryStorage
Cleared
Packaging/Shipping
MarginOverDirectCosts

CompanyOperatingReports

NorthAmerica
Warehouse

EuropeAfrica
Warehouse

AsiaPacific
Warehouse

LatinAmerica
Warehouse

Company
Total

39
0
39
1,442
0
0
0
1,481
82
1,354
1,436
45
78
45

39
0
39
0
0
1,461
0
1,500
85
1,369
1,454
46
94
46

26
0
26
0
0
1,050
0
1,076
57
986
1,043
33
95
33

26
0
26
268
0
740
0
1,034
57
945
1,002
32
83
32

130
0
130
1,710
0
3,251
0
5,091
281
4,654
4,935
156
350
156

pairs

pairs

200
4
$000s

$/pair

1,055
38,732
0
1,442
0
1,253
39,976

27.05
26.86
0.00
1.00
0.00
27.84
27.84

NorthAmerica
$/pair

20
820
2,531
1,000
4,371

pairs

200
4

NorthAmerica

$000s

pairs

0.01
0.57
1.76
0.70
3.04

EuropeAfrica

pairs

pairs

pairs

Weighted average of
beginning inventory +
new incoming pairs
shippedfromplants.

200
4

$/pair

$000s

AsiaPacific

$/pair

LatinAmerica
$000s

$/pair

$000s

$/pair

1,060
29,840
0
2,922
5,844
1,216
38,450

27.18
20.42
0.00
2.00
4.00
26.43
26.44

578
21,445
0
1,050
0
708
22,365

22.23
20.42
0.00
1.00
0.00
21.45
21.44

749
22,312
0
2,016
4,440
913
28,604

28.81
22.13
0.00
2.00
4.40
28.53
28.55

3,442
112,329
0
7,430
10,284
4,090
129,395

26.48
22.64
0.00
1.50
2.07
26.22
26.22

EuropeAfrica
$000s

AsiaPacific

$/pair

20
850
2,554
1,000
4,424

0
0
0
0
0

$000s

$000s

0.01
0.58
1.76
0.69
3.04

0
0
0
0
0

0.00
0.00
0.00
0.00
0.00

pairs

$000s

EuropeAfrica

$/pair

pairs

200
4

NorthAmerica
$000s

pairs

$/pair

$/pair

13
570
1,972
1,000
3,555

CopyrightGLOBUSSoftware,Inc.

$000s

$/pair

13
570
1,890
1,000
3,473

0.01
0.57
1.89
1.00
3.47

AsiaPacific

LatinAmerica

0
0
0
0
0

0
0
0
0
0

$000s

0.00
0.00
0.00
0.00
0.00

0.01
0.55
1.89
0.96
3.41

LatinAmerica

$/pair

0.00
0.00
0.00
0.00
0.00

$000s

$/pair

0.00
0.00
0.00
0.00
0.00

Overall

Overall

$000s

$/pair

66
2,810
8,947
4,000
15,823

0.01
0.57
1.81
0.81
3.21

Overall

$000s

$/pair

0
0
0
0
0

0.00
0.00
0.00
0.00
0.00

Page2

2/5

6/1/2016

MARKETING&ADMINISTRATIVEREPORT

CEO

Year11

Industry8

MARKETINGEXPENSES

NorthAmerica
$000s

$/pair

EuropeAfrica
$000s

AsiaPacific

$/pair

$000s

$/pair

LatinAmerica
$000s

$/pair

Overall

$000s

$/pair

Advertising 1

Internet
Segments
WebSiteMaintenance
CelebrityEndorsements2
TotalInternetMarketing

400
1,177
0
1,577

4.88
14.35
0.00
19.23

410
1,221
0
1,631

4.82
14.36
0.00
19.19

191
818
0
1,009

3.35
14.35
0.00
17.70

199
818
0
1,017

3.49
14.35
0.00
17.84

1,200
4,034
0
5,234

4.27
14.36
0.00
18.63

Wholesale Advertising 1
Segments
RebateRedemption
RetailerSupport
OnTimeDelivery
CelebrityEndorsements2
TotalWholesaleMarketing

6,600
1,016
1,200
1,016
0
9,832

4.87
0.75
0.89
0.75
0.00
7.26

6,590
1,027
1,200
1,027
0
9,844

4.81
0.75
0.88
0.75
0.00
7.19

3,309
740
600
740
0
5,389

3.36
0.75
0.61
0.75
0.00
5.47

3,301
378
600
709
0
4,988

3.49
0.40
0.63
0.75
0.00
5.28

19,800
3,161
3,600
3,492
0
30,053

4.25
0.68
0.77
0.75
0.00
6.46

1. Totalregionaladvertisingexpendituresareallocatedtointernetandwholesaleseg
mentsbasedoneachsegment'spercentageoftotalbrandedpairssoldintheregion.

ADMINISTRATIVEEXPENSES
GeneralAdministration
OtherCorporateOverhead
TotalAdministrativeExpenses

NorthAmerica
$000s

540
1,746
2,286

$/pair

0.38
1.22
1.59

2. Totalexpendituresforcelebrityendorsementsareallocatedtointernetandwhole
salesegmentsbasedoneachsegment'spercentageoftotalbrandedpairssold.

EuropeAfrica
$000s

AsiaPacific

$/pair

546
1,768
2,314

$000s

0.38
1.22
1.59

$/pair

392
1,268
1,660

0.38
1.22
1.59

LatinAmerica
$000s

$/pair

376
1,218
1,594

0.38
1.22
1.59

Overall

$000s

1,854
6,000
7,854

$/pair

0.38
1.22
1.59

Totalcompanyadministrativeexpensesareallocatedtoeachregionbasedontheregion'spercentageoftotalbrandedpairssold.

CEO

PRIVATELABELREPORT

Year11

Industry8

OFFERSSUBMITTED
OfferstoPrivate PairsOffered(000s)
LabelBuyers
S/QRating
BidPrice($perpair)
PairsOffered(000s)

PRODUCTIONSHIPPING
Production MaterialsStandard
Costs
Superior
LaborRegular
Overtime
Styling/Features
ProductionRunSetUp
OtherAllocatedCosts1
TotalProductionCosts

NorthAmerica
Market

EuropeAfrica
Market

AsiaPacific
Market

LatinAmerica
Market

Company
Total

100pairs
4
40.00

0pairs
0
35.00

469pairs
4
37.00

0pairs
0
35.00

569pairs

569pairs

100pairs

0pairs

469pairs

0pairs

NorthAmerica

EuropeAfrica

AsiaPacific

LatinAmerica

$000s

389
486
521
0
400
625
711
3,132

$/pair

$000s

3.89
4.86
5.21
0.00
4.00
6.25
7.11
31.32

$/pair

0
0
0
0
0
0
0
0

$000s

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

1,854
2,312
752
0
600
625
2,931
9,074

$/pair

$000s

3.95
4.93
1.60
0.00
1.28
1.33
6.25
19.35

$/pair

0
0
0
0
0
0
0
0

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

Overall

$000s

$/pair

2,243
2,798
1,273
0
1,000
1,250
3,642
12,206

3.94
4.92
2.24
0.00
1.76
2.20
6.40
21.45

PairsProduced(000sofpairsafterrejects)2

100

pairs

pairs

469

pairs

pairs

569

pairs

ShipmentsTo N.A.Warehouse
(000sofpairs)
EAWarehouse
APWarehouse
L.A.Warehouse

100
0
0
0

pairs

0
0
0
0

pairs

0
0
469
0

pairs

0
0
0
0

pairs

100
0
469
0

pairs

pairs

1. Bestpractices,plantsupervision,TQM/6Sigma,plantmaintenance,anddeprecia
tioncostallocationsbasedonpercentageoftotalpairsproducedbeforerejects.

REVENUES/COSTS/MARGINS
GrossPrivateLabelRevenues
ExchangeRateAdjustments
NetPrivateLabelRevenues
DirectProductionCosts
Costs
ExchangeRateAdjustments
Freight
ImportTariffs
Packaging/Shipping
MarginOverDirectCosts

CompanyOperatingReports

NorthAmerica
$000s

4,000
0
4,000
3,132
0
100
0
100
668

$/pair

40.00
0.00
40.00
31.32
0.00
1.00
0.00
1.00
6.68

pairs

pairs

pairs

pairs

2. Formoreprivatelabelproductioninfo(rejectedpairs,rejectrate,numberofmodels,
andS/Qrating)seetheProductionStatisticssectionofthePlantOperationsReport.

EuropeAfrica
$000s

AsiaPacific

$/pair

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

$000s

$/pair

17,353
0
17,353
9,074
0
469
0
469
7,341

37.00
0.00
37.00
19.35
0.00
1.00
0.00
1.00
15.65

CopyrightGLOBUSSoftware,Inc.

LatinAmerica
$000s

$/pair

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

Overall

$000s

$/pair

21,353
0
21,353
12,206
0
569
0
569
8,009

37.53
0.00
37.53
21.45
0.00
1.00
0.00
1.00
14.08

Page3

3/5

6/1/2016

INCOMESTATEMENT

CEO

Year11

Industry8

CONSOLIDATEDINCOMESTATEMENT
SegmentRevenues Internet
Wholesale1
PrivateLabel
GrossRevenuesfromFootwearSales
ExchangeRateAdjustments
NetRevenuesfromFootwearSales
OperatingCostofPairsSold 1
Costs
WarehouseExpenses
MarketingExpenses
AdministrativeExpenses
OperatingProfit(Loss)
PROFITABILITY&PAYOUT
EarningsPerShare
DividendPerShare

NorthAmerica
$000s

$/pair

6,806
64,992
4,000
75,798
0
75,798
43,208
4,471
11,409
2,286
14,424

83.00
48.00
40.00
49.35
0.00
49.35
28.13
2.91
7.43
1.49
9.39

Year10

Year11

$2.50
$1.00

$3.19
$0.00

EuropeAfrica
$000s

$/pair

$000s

AsiaPacific

$/pair

LatinAmerica
$000s

$/pair

$000s

$/pair

7,055
65,712
0
72,767
0
72,767
38,450
4,424
11,475
2,314
16,104

83.00
48.00
0.00
50.05
0.00
50.05
26.44
3.04
7.89
1.59
11.08

4,731
40,426
17,353
62,510
0
62,510
31,908
4,024
6,398
1,660
18,520

83.00
41.00
37.00
41.34
0.00
41.34
21.10
2.66
4.23
1.10
12.25

4,731
39,690
0
44,421
0
44,421
28,603
3,473
6,005
1,594
4,746

83.00
42.00
0.00
44.33
0.00
44.33
28.55
3.47
5.99
1.59
4.74

23,323
210,820
21,353
255,496
0
255,496
142,169
16,392
35,287
7,854
53,794

83.00
45.30
37.53
46.42
0.00
46.42
25.83
2.98
6.41
1.43
9.77

8,183
0
45,611
13,683
31,928

1.49
0.00
8.29
2.49
5.80

InterestIncome(Expenses)
OtherIncome(Expenses)2
PreTaxProfit(Loss)
IncomeTaxes3
NetProfit(Loss)

Overall

1. TheseitemsincluderevenuescollectedfromandcostsassociatedwithinventoryliquidatedatthebeginningofY11.SeethelastsectionoftheDistribution&WarehouseReport.
2. Thisitemincludesanycharitablecontributionsand/orinstructorimposedfines(appearingasnegative)and/orinstructorawardedrefunds(appearingaspositive).
3. Theincometaxrateis30%.IfanetlosswasrecordedinY10,thelossiscarriedforwardandmayoffsetsomeoralltaxableY11profitandreduceY11incometaxes.

REVENUECOSTPROFITPERFORMANCE
INTHEBRANDEDSEGMENTS

CEO
Industry8

INTERNETMARKETPERFORMANCE
RevenuesfromInternetSales
CustomerPaidShippingFees
GrossInternetRevenues
ExchangeRateAdjustments
NetInternetRevenues
Operating CostofPairsSold
Costs
WarehouseExpenses
MarketingExpenses
AdministrativeExpenses
OperatingProfit(Loss)
MARKETSTATISTICS
PairsSold(000s)
MarketShare
OperatingProfitMargin

WHOLESALEMARKETPERFORMANCE
GrossWholesaleRevenues
ExchangeRateAdjustments
NetWholesaleRevenues
Operating CostofPairsSold
Costs
WarehouseExpenses
MarketingExpenses
AdministrativeExpenses
OperatingProfit(Loss)
MARKETSTATISTICS
PairsSold(000s)
MarketShare
OperatingProfitMargin

CompanyOperatingReports

NorthAmerica
$000s

5,986
820
6,806
0
6,806
2,283
878
1,577
131
1,937

$/pair

73.00
10.00
83.00
0.00
83.00
27.84
10.71
19.23
1.60
23.62

EuropeAfrica
$000s

6,205
850
7,055
0
7,055
2,248
910
1,631
135
2,131

AsiaPacific

$/pair

$000s

73.00
10.00
83.00
0.00
83.00
26.45
10.71
19.19
1.59
25.07

4,161
570
4,731
0
4,731
1,222
625
1,009
91
1,784

$/pair

73.00
10.00
83.00
0.00
83.00
21.44
10.96
17.70
1.60
31.30

Year11
LatinAmerica
$000s

4,161
570
4,731
0
4,731
1,627
628
1,017
91
1,368

Overall

$/pair

$000s

$/pair

73.00
10.00
83.00
0.00
83.00
28.54
11.02
17.84
1.60
24.00

20,513
2,810
23,323
0
23,323
7,380
3,041
5,234
448
7,220

73.00
10.00
83.00
0.00
83.00
26.26
10.82
18.63
1.59
25.69

Year10

Year11

Year10

Year11

Year10

Year11

Year10

Year11

Year10

Year11

68
8.3%
26.8%

82
9.3%
28.5%

68
8.3%
26.6%

85
9.7%
30.2%

45
8.3%
33.6%

57
9.2%
37.7%

45
8.3%
25.8%

57
9.2%
28.9%

226
8.3%
27.9%

281
9.4%
31.0%

NorthAmerica
$000s

$/pair

64,992
0
64,992
37,693
3,493
9,832
2,155
11,819

48.00
0.00
48.00
27.84
2.58
7.26
1.59
8.73

EuropeAfrica
$000s

$/pair

$000s

AsiaPacific

$/pair

LatinAmerica
$000s

$/pair

$000s

Overall

$/pair

65,712
0
65,712
36,202
3,514
9,844
2,179
13,973

48.00
0.00
48.00
26.44
2.57
7.19
1.59
10.21

40,426
0
40,426
21,143
2,930
5,389
1,569
9,395

41.00
0.00
41.00
21.44
2.97
5.47
1.59
9.53

39,690
0
39,690
26,976
2,845
4,988
1,503
3,378

42.00
0.00
42.00
28.55
3.01
5.28
1.59
3.57

210,820
0
210,820
122,014
12,782
30,053
7,406
38,565

45.30
0.00
45.30
26.22
2.75
6.46
1.59
8.29

Year10

Year11

Year10

Year11

Year10

Year11

Year10

Year11

Year10

Year11

1,282
8.3%
18.7%

1,354
10.7%
18.2%

1,282
8.3%
18.4%

1,369
11.0%
21.3%

855
8.3%
20.0%

986
11.8%
23.2%

855
8.3%
6.2%

945
11.3%
8.5%

4,274
8.3%
16.4%

4,654
11.1%
18.3%

CopyrightGLOBUSSoftware,Inc.

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6/1/2016

BALANCESHEET&CASHFLOWREPORT

CEO

Year11

Industry8

BALANCESHEET

CASHFLOWSTATEMENT

ASSETS

$000s

CashOnHand
AccountsReceivable(seeNote1)
FootwearInventories
TotalCurrentAssets
NetPlantInvestment(seeNote2)
ConstructionWorkinProgress
TotalFixedAssets

29,475
63,874
4,090
97,439
183,250
0
183,250

TotalAssets

280,689

LIABILITIES

$000s

AccountsPayable(seeNote3)
OverdraftLoanPayable(seeNote4)
1YearBankLoanPayable(seeNote5)
CurrentPortionofLongTermLoans(seeNote6)
TotalCurrentLiabilities
LongTermBankLoansOutstanding(seeNote7)

13,613
0
0
16,300
29,913
67,100

TotalLiabilities

97,013
Beginning
Balance

SHAREHOLDEREQUITY
CommonStock(seeNote8)
AdditionalCapital(seeNote9)
RetainedEarnings(seeNote10)
TotalShareholderEquity

Change
inY11

$000s

10,000
100,000
41,750

0
0
+31,926

10,000
100,000
73,676

151,750

+31,926

183,676

ReturnonAverageEquityforYear11(seeNote11)

19.0%

BalanceSheetNotes(alldollarandsharefiguresinthousands)
Note1: Ofthe$255,496netrevenuesreportedintheY11incomestatement,25%have
notbeencollectedfromcustomers(andwillbecollectedinY12).
Note2: For more details on net plant investment, see the Plant Investment section of
thePlantOperationsReport.
Note3: Ofthe$54,452inmaterialsusedforfootwearproductioninY11,25%havenot
beenpaidfor(andwillbepaidforinY12).
Note4: Loansforoverdraftsareincurredautomaticallytopreventanegativeyearend
cashbalanceandcarryaninterestrate2%abovetheratefor1yearloans.
Note5: Thecompany'sinterestratefora1yearloaninY11was7.0%.
Note6: Thisitemrepresentstheprincipalportionofalloutstanding5yearand10year
bankloansduetoberepaidinYear12.
Note7: Longtermbankloansoutstanding:
Loan
Number

Initial
Year

Original
Principal

Interest
Rate

Term

Out
standing
Principal

Annual
Principal
Payment

Year12
Interest
Payable

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Y7
Y9

115,000
24,000

8.5%
7.5%

10Yr
5Yr

69,000
14,400

11,500
4,800

5,865
1,080

Note8: There are 10,000 shares issued and outstanding at a par value of $1.00 per
share.Theauthorizedmaximumnumberofsharesoutstandingis40,000.
Note9: AdditionalCapitalrepresentstheamountoverandaboveparvaluethatshare
holdershavepaidtopurchasenewsharesofstock.
Note10: Retained Earnings is a summation of all aftertax profits the company has
earnedthathavenotbeendistributedtoshareholdersintheformofdividends.
Note11: TheformulaforReturn
onAverageEquityis:

AfterTaxprofit
(BeginningEquity+EndingEquity)2

CASHAVAILABLEINYEAR11
BeginningCashBalance
Cash ReceiptsfromSales(seeNote1)
Inflows
BankLoans 1Year
5Year
10Year
StockIssues(0sharesissued)
SaleofExistingPlantCapacity
LoantoCoverOverdrafts
InterestonY10CashBalance
TotalCashAvailablefromAllSources

CASHOUTLAYSINYEAR11
PaymentstoMaterialsSuppliers(seeNote2)
ProductionExpenses(seeNote3)
DistributionandWarehouseExpenses
MarketingandAdministrativeExpenses
CapitalPlantUpgradeOptionsInitiated
Outlays
PurchaseofUsedPlantCapacity
ConstructionofNewCapacity
EnergyEfficiencyInitiatives
RepaymentofPrincipal OverdraftLoan
onBankLoans(seeNote4)
1YearLoan
5YearLoans
10YearLoans
InterestPaymentson OverdraftLoan
BankLoans
StockRepurchases(0sharesrepurchased)
IncomeTaxPayments
DividendPaymentstoShareholders
CharitableContributions
TotalCashOutlays
NetCashBalance(attheendofYear11)

$000s
5,000
251,409
0
0
0
0
0
0
100
256,509

$000s
53,617
57,335
34,675
43,141
0
0
0
0
0
0
4,800
11,500
0
8,283
0
13,683
0
0
227,034
29,475

CashFlowNotes
Note1: ReceiptsfromSalesrepresents75%ofYear11revenuesand25%ofYear10
revenuesduetoa3monthlaginreceivablescollections.
Note2: Payments to Materials Suppliers represents 75% of the cost of materials used
forY11productionand25%oftehcostofmaterialsusedforY10productiondue
toa3monthlaginpaymentsmadetomaterialssuppliers.
Note3: ProductionExpensesincludeallY11productionrelatedexpenses(adjustedfor
the exchange rate effects of shipping to regional warehouses) except for
depreciation(whichisanoncashaccountingcharge).
Note4: Overdraft and 1year loans received in Year 10 were repaid in full in Year 11.
InterestonanoverdraftloanreceivedinY10wouldalsoberepaidinY11.

SELECTEDFINANCIALSTATISTICS
Credit InterestCoverageRatio(oper.profitinterestexp.)
6.57
Rating
DebtToAssetsRatio(totaldebttotalassets)
0.30
Measures DefaultRiskRatio(freecashflowprincipalpayments)
2.74
DefaultRiskRating(seeNote1)
Medium
CreditRating(attheendofYear11)
A
CurrentRatio(currentassetscurrentliabilities)
OperatingProfitMargin(operatingprofitnetsalesrevenues)
NetProfitMargin(aftertaxprofitnetsalesrevenues)
DividendPayout(dividendpershareearningspershare)
FreeCashFlow(aftertaxprofit+[depreciationdividends])
TotalPrincipalPayments($000stobepaidinYear12)

3.26
21.1%
12.5%
0.0%
44,678
16,300

Note1: Adefaultriskratioof3.00orhigherresultsinaLowdefaultriskrating,1.00to
3.00resultsinaMediumrating,andbelow1.00resultsinaHighrating.

CompanyOperatingReports

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