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2006

2007
2008
Cash flows from operating activities
Net income
38,979
52,558
38,229
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization
9,824
14,622
21,347
Unrealized foreign currency exchange rate (gains) losses
161
-2,567
5,459
Loss on disposal of property and equipment
115
15
Stock-based compensation
1,982
4,182
8,466
Gain on bargain purchase of corporate headquarters (excludes transaction costs of $1.9 million)
Deferred income taxes
-6,721
-4,909
-2,818
Changes in reserves and allowances
3,832
4,551
8,711
Changes in operating assets and liabilities:
Accounts receivable
-20,828
-24,222
2,634
Inventories
-26,504
-83,966
-19,497
Prepaid expenses and other assets
-3,997
-2,067
-7,187
Accounts payable
8,203
11,873
16,957
Accrued expenses and other liabilities
10,681
11,825
-5,316
Income taxes payable and receivable
-5,026
3,492
2,516
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property and equipment
Purchase of corporate headquarters and related expenditures
Purchase of intangible assets
Purchase of trust owned life insurance policies

Purchase of long term investment


Purchases of other assets
Change in restricted cash
Net cash used in investing activities

2009
46,785
28,249
-5,222
37
12,910
-5,212
1,623
3,792
32,998
1,870
-4,386
11,656
-6,059

10,701

-14,628

69,516

119,041

-15,115

-33,959

-38,594

-19,845

-125

-600

-2,893
-35
21
-89,650
-62,860

89,650
62,860
-15,115
-34,084
-42,066
-19,880

Cash flows from financing activities


Proceeds from revolving credit facility
40,000
Payments on revolving credit facility
-15,000
-25,000
Proceeds from term loan
Proceeds from long term debt
2,119
11,841
13,214
7,649
Payments on long term debt
-2,413
-2,973
-6,490
-7,656
Payments on capital lease obligations
-1,840
-794
-464
-361
Excess tax benefits from stock-based compensation arrangements 11,260
6,892
2,131
5,127
Proceeds from exercise of stock options and other stock issuances 3,544
3,182
1,990
5,128
Payments of debt financing costs
-260

-1,354
169
Net cash provided by (used in) financing activities
12,579
18,148
35,381
-16,467
Effect of exchange rate changes on cash and cash equivalents
-487
497
-1,377
2,561
Net increase (decrease) in cash and cash equivalents

7,678

-30,067

61,454

85,255

Cash and cash equivalents


Beginning of year

62,977

70,655

40,588

102,042

End of year

70,655

40,588

102,042

187,297

30,502
525

29,561
1,444

40,834
1,273

Non-cash financing and investing activities


Debt assumed in connection with purchase of corporate headquarters
Other supplemental information
Cash paid for income taxes
Cash paid for interest

20,522
531

2010

2011

68,477

96,919

31,321
1,280
44
16,227
-10,337
2,322

36,301
4,027
36
18,063
-3,300
3,620
5,536

-32,320
-65,239
-4,099
16,158
21,330
4,950

-33,923
-114,646
-42,633
17,209
23,442
4,567

50,114

15,218

-30,182

-56,228
-23,164

-11,125
-478

-3,862
-1,153
-5,029

-41,785

-89,436

30,000
-30,000
25,000
5,644
-7,418

5,262
-9,446
-97
4,189
10,260
7,335
14,645

-2,324
7,243
1,001

45,807
-75

16,573

-28,486

NCC
-28,278
-28,278

-67,186
-67,186

10,701

-14,628

31,287
72,256
31,287
72,256
0.04314 0.084371

69,516

119,041

16,637
-18,363

13,299
-81,701

50,114

15,218

187,297

203,870

203,870

175,384

38,556

38,773
992

56,940
2,305

6,336
-15,331

Net revenues
Cost of goods sold

2006
430,689
215,089

2007
606,561
301,517

2008
725,244
370,296

2009
2010
856,411 1,063,927
443,386 533,420

Gross profit
Selling, general and administrative expenses

215,600
158,682

305,044
218,779

354,948
278,023

413,025
327,752

530,507
418,152

Income from operations


Interest expense, net
Other expense, net

56,918

86,265

2,169

2,778

76,925
-850
-6,175

85,273
-2,344
-511

112,355
-2,258
-1,178

Income before income taxes


Provision for income taxes

59,087
20,108

89,043
36,485

69,900
31,671

82,418
35,633

108,919
40,442

Net income

38,979

52,558

38,229

46,785

68,477

0.83
0.79

1.09
1.05

0.78
0.76

0.94
0.92

1.35
1.34

46,983
49,587

48,021
49,959

49,086
50,342

49,848
50,650

50,798
51,282

9%

9%

5%

5%

6%

Net income available per common share


Basic
Diluted
Weighted average common shares outstanding
Basic
Diluted

profit margin

2011
1,472,684
759,848

29,923
0.07

712,836
550,069
162,767
-3,841
-2,064
156,862
59,943
96,919

1.88
1.85

51,570
52,526

7%

7%

52,332
0.09

73,548
0.10

72,926
0.09

76,127
0.07

159,135
0.11

2.419368
0.09

2006
Assets
Current assets
Cash and cash equivalents
70,655
Accounts receivable, net
71,867
Inventories
81,031
Prepaid expenses and other current assets 8,944
Income tax receivables
4,310
Deferred income taxes
8,145

2007

2008

2009

2010

2011

40,588
93,515
166,082
11,028
614
10,418

102,042
81,302
182,232
18,023

187,297
79,356
148,488
19,989

203,870
102,034
215,355
19,326

175,384
134,043
324,409
39,643

12,824

12,870

15,265

16,184

Total current assets


Property and equipment, net
Intangible assets, net
Deferred income taxes
Other long term assets

244,952
29,923
7,875
5,180
1,438

322,245
52,332
6,470
8,173
1,393

396,423
73,548
5,470
8,687
3,427

448,000
72,926
5,681
13,908
5,073

555,850
76,127
3,914
21,275
18,212

689,663
159,135
5,535
15,885
48,992

Total assets

289,368

390,613

487,555

545,588

675,378

919,210

68,710
40,885
9,178
97
1,292
120,162
10,948
14,481

84,679
55,138
6,865

100,527
69,285
6,882

2,465
149,147
9,077
20,188

6,913
183,607
70,842
28,329

145,591

178,412

282,778

Liabilities and Stockholders Equity


Current liabilities
Revolving credit facility
Accounts payable
Accrued expenses
Current maturities of long term debt

42,718
25,403
2,648
794

55,012
36,111
4,111
465

Other current liabilities


Total current liabilities
Long term debt, net of current maturities
Other long term liabilities
Capital lease obligations

71,563
1,893
602
922

95,699
9,298
4,673
458

25,000
72,435
25,905
7,072
361
2,337
133,110
13,061
10,190
97

Total liabilities

74,980

110,128

156,458

Commitments and contingencies (see Note 8)

Stockholders equity
Class A Common Stock, $.0003 1/3 par value; 100,000,000
12
shares
12
authorized
12 as of December
13
31,
13 2011 and132010; 40,496,126
Class B Convertible Common Stock, $.0003 1/3 par
4 value; 11,250,000
4
shares
4 authorized,
4 issued 4and outstanding
4
as of Decem
Additional paid-in capital
148,562 162,362 174,725 197,342 224,887 268,223
Retained earnings
66,376 117,782 156,011 202,188 270,021 366,164
Accumulated other comprehensive income -463
-182
405
464
2,041
2,028
Unearned compensation
-103
507
-60
-14
Total stockholders equity

214,388

280,485

331,097

399,997

496,966

636,432

Total liabilities and stockholders equity

289,368

390,613

487,555

545,588

675,378

919,210

WC
173,389 226,546 263,313 327,838 406,703 506,056
0.402585 0.373493 0.363068 0.382805 0.382266 0.343628
0.374641

106,053,000

0.107887
0.307632

Net revenue
Operating Inc
Op inc %

2010 results
1.064 billion
112 mm
10.60%

2011 targets
1.2 billion
120-160mm
10.5%-11.5%

2011 results
1.473 billion
163mm
11.10%

2011 vs 2010
results
38%
45%
0.005%

Scenario Summary
Current Values:

WACC Sensitivity

s2

Changing Cells:
$B$4
20.00%
20.00%
22.00%
$B$9
6.50%
4.00%
6.50%
$B$11
4.00%
4.00%
4.00%
Result Cells:
$B$56
36.35
39.04
40.33
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.
41.32

s3

25.00%
6.50%
5.79%
42.63

s4

s5

s6

s7

25.00%
6.50%
4.00%

20.00%
6.50%
3.00%

25.00%
4.00%
5.79%

20.00%
6.50%
4.00%

46.81

38.28

45.78

36.35

Inputs
Beta_equity
Growth Rates:
UA
Industry
Sector
S&P 500
Economy
RF_10yr
Excess period
Risk Premium
Cost of equity
Cost of debt
Tax rate - Cedc 10-Q
Profit margin
operating argin %
NCC % of rev
Working Cap % of rev
Share price
Shares outstanding
MV of equity
MV of debt
D/V
E/V
WACC

FCFF
Period
Revenue
NI
CFO
Operating income
NCC
Interest expense
After-tax int exp

1.82

20.00%
15.00%
13.00%
10.30%
3.50%
6.50%
5
4.00%
13.78%
3.50%
38.00%
7%
11%
8%
37%
56
104,460,000
5,849,760,000
106,053,000
0.017806637 They have a revolving credit line which is nonrecourse
0.982193363 This is one area which im confused about. Using book value the d/e is
13.57%

2006

2007

430,689,000
38,979,000
10,701,000
59,087,000
-28,278,000
0

606,561,000
52,558,000
-14,628,000
89,043,000
-67,186,000
0

FCInv - Cap expenditures


Working Capital
Increase in WC
FCFF
PV of FCFF
Sum of FCFF
Enterprise value
Value to comm equity
Intrinsic value
Expected value

Projected P/E

173,389,000

(628,083,779)
61,579,221
(44,473,779)
(0.43)
41.32

(0.45)

226,546,000

56.00 price
x
s
value
59.57 total profit

ne which is nonrecourse
used about. Using book value the d/e is about 10%

2008

2009

725,244,000
38,229,000
69,516,000
69,900,000
31,287,000
850000

856,411,000
46,785,000
119,041,000
82,418,000
72,256,000
2,344,000

2010
-2
1,063,927,000
68,477,000
50,114,000
108,919,000
-18,363,000
2,258,000

2011
-1
1,472,684,000
96,919,000
15,218,000
156,862,000
-81,701,000
3,841,000

2012
0
1,767,220,800
123,705,456
130,041,289
201,816,615
6,335,833
3,841,000
2,381,420

263,313,000
36,767,000
33,276,000

327,838,000
64,525,000
55,969,280

406,703,000
78,865,000
(27,351,040)

16,000,000
506,056,000
99,353,000
(97,753,580)

65,000,000
662,072,960
156,016,960
(88,594,250)
-88,594,250

1.9
55
(0.43)
53.53
5,352.57

1.9
55
41.32
11.78
1,178.20

1.9
55
45
8.10
810.00

1.9
55
50.00
3.10
310.00

1.9
55
53.10
(0.00)
(0.00)

2013
1
2,120,664,960
148,446,547
155,415,964
242,179,938
6,969,417
3,841,000
2,381,420

2014
2
2,544,797,952
178,135,857
185,802,215
290,615,926
7,666,358
3,841,000
2,381,420

2015
3
3,053,757,542
213,763,028
222,196,022
348,739,111
8,432,994
3,841,000
2,381,420

2016 Residual
4
3,664,509,051
256,515,634
265,791,927
418,486,934
9,276,294
3,841,000
2,381,420

65,000,000
794,487,552
132,414,592
(39,617,208)
-34,882,512

65,000,000
953,385,062
158,897,510
(35,713,875)
-27,687,565

1.9
55
52.00
1.10
110.00

1.9
55
55.00
(1.90)
(190.00)

65,000,000
1,144,062,074
190,677,012
(31,099,570)
-21,228,830

65,000,000
1,372,874,489
228,812,415
(25,639,068)
-15,409,828

(732,544,791)
-440,280,794

Inputs
Beta_equity
Growth Rates:
UA
Industry
Sector
S&P 500
Economy
RF_10yr
Excess period
Risk Premium
Cost of equity
Cost of debt
Tax rate - Cedc 10-Q
Profit margin
operating margin %
NCC % of rev
Working Cap % of rev
Share price
Shares outstanding
MV of equity
MV of debt
D/V
E/V
WACC

FCFF
Period
Revenue
NI
CFO
Operating income
NCC
Interest expense
After-tax int exp

1.82

25.00%
15.00%
13.00%
10.30%
3.00%
4.00% He had 6.5% - I think that is alittle to high
5
4.00%
11.28%
3.50%
38.00%
7%
11%
8%
37%
30%
57
104,460,000
5,954,220,000
106,053,000
0.017499707 They have a revolving credit line which is nonrecourse
0.982500293 This is one area which im confused about. Using book value the d/e is
11.12%

2011
-1
1,472,684,000
96,919,000
15,218,000
156,862,000
-81,701,000
3,841,000

2012
0
1,840,855,000
128,859,850
135,195,683
210,225,641
6,335,833
3,841,000
2,381,420

FCInv - Cap expenditures


Working Capital
Increase in WC
FCFF
PV of FCFF
Sum of FCFF
Enterprise value
Value to comm equity
Intrinsic value

Projected P/E

159,000,000
506,056,000
99,353,000
(240,753,580)
4,078,492,096
4,768,155,096
4,662,102,096
44.63

36.18

28.94

65,000,000
657,872,800
151,816,800
(79,239,697)
-79,239,697

which is nonrecourse
ed about. Using book value the d/e is about 10%

25%
Excess Growth Period
2013
1
2,301,068,750
161,074,813
168,044,229
262,782,051
6,969,417
3,841,000
2,381,420

20%

2014
2
2,876,335,938
201,343,516
209,009,874
328,477,564
7,666,358
3,841,000
2,381,420

2015
3
3,595,419,922
251,679,395
260,112,389
410,596,955
8,432,994
3,841,000
2,381,420

2016
4
4,494,274,902
314,599,243
323,875,537
513,246,194
9,276,294
3,841,000
2,381,420

2017
5
5,393,129,883
377,519,092
387,723,015
615,895,433
10,203,923
3,841,000
2,381,420

68,250,000
862,074,166
204,201,366
(102,025,717)
-91,815,323

71,662,500
1,077,592,708
215,518,542
(75,789,748)
-61,379,236

75,245,625
1,346,990,885
269,398,177
(82,149,993)
-59,872,041

79,007,906
1,683,738,606
336,747,721
(89,498,671)
-58,700,071

82,958,302
2,020,486,327
336,747,721
(29,601,588)
-17,471,997

15%
10%
Second Period - Slowed Growth
2018
6
6,202,099,365
434,146,956
445,371,271
708,279,748
11,224,315
3,841,000
2,381,420

2019
7
6,822,309,302
477,561,651
489,908,398
779,107,722
12,346,747
3,841,000
2,381,420

5%

3.50%
Perpetuity

2020 Residual
8
7,163,424,767
501,439,734
515,021,155
818,063,108
13,581,421
3,841,000
2,381,420

87,106,217
2,323,559,276
303,072,949
57,573,525
30,581,295

91,461,527
2,555,915,204
232,355,928
168,472,363
80,531,768

96,034,604
2,683,710,964
127,795,760
293,572,211
126,287,109

9,785,740,370 For the model, we keep profit margin


4,209,570,288

model, we keep profit margin at 7% thorugh 2nd period and residual- this is something I should look at-it is most likely sick optomistic

ost likely sick optomistic

Inputs
Beta_equity
Growth Rates:
UA
Industry
Sector
S&P 500
Economy
RF_10yr
Excess period
Risk Premium
Cost of equity
Cost of debt
Tax rate - Cedc 10-Q
Profit margin
operating margin %
NCC % of rev
Working Cap % of rev
Share price
Shares outstanding
MV of equity
MV of debt
D/V
E/V
WACC

FCFF
Period
Revenue
NI
CFO
Operating income
NCC
Interest expense
After-tax int exp

1.82

25.00%
15.00%
13.00%
10.30%
3.50%
2.00%
5
4.00%
9.28%
3.50%
38.00%
7%
11%
8%
37%
30%
57
104,460,000
5,954,220,000
106,053,000
0.017499707 They have a revolving credit line which is nonrecourse
0.982500293 This is one area which im confused about. Using book value the d/e is
9.16%

2011
-1
1,472,684,000
96,919,000
15,218,000
156,862,000
-81,701,000
3,841,000

2012
0
1,840,855,000
128,859,850
135,195,683
210,225,641
6,335,833
3,841,000
2,381,420

FCInv - Cap expenditures


Working Capital
Increase in WC
FCFF
PV of FCFF
Sum of FCFF
Enterprise value
Value to comm equity
Intrinsic value

16,000,000
506,056,000
99,353,000
(97,753,580)
4,053,335,519
4,742,998,519
4,636,945,519
44.39

Ours
EPS 2011
EPS 2012
EPS 2013
Projected P/E
Forward P/E
Implied growth 2012
Implied growth 2013

0.93
1.23
1.54
35.98
28.79
32.96%
25.00%

Analyst Projections
0.93
1.19
1.54
47.90
37.01
28.26%
29.41%

65,000,000
657,872,800
151,816,800
(79,239,697)
-79,239,697

which is nonrecourse
ed about. Using book value the d/e is about 10%

25%
Excess Growth Period
2013
1
2,301,068,750
161,074,813
168,044,229
262,782,051
6,969,417
3,841,000
2,381,420

20%

2014
2
2,876,335,938
201,343,516
209,009,874
328,477,564
7,666,358
4,033,050
2,500,491

2015
3
3,595,419,922
251,679,395
260,112,389
410,596,955
8,432,994
4,033,050
2,500,491

2016
4
4,494,274,902
314,599,243
323,875,537
513,246,194
9,276,294
4,033,050
2,500,491

2017
5
5,393,129,883
377,519,092
387,723,015
615,895,433
10,203,923
4,033,050
2,500,491

68,250,000
862,074,166
204,201,366
(102,025,717)
-93,468,167

71,662,500
1,077,592,708
215,518,542
(75,670,677)
-63,509,071

44.39
20%
22%
25%
28.26%
29.41%

Growth Rate

Average

75,245,625
1,346,990,885
269,398,177
(82,030,922)
-63,072,465

9%
42.08
43.67
44.86
43.88
42.79

37.94

79,007,906
1,683,738,606
336,747,721
(89,379,600)
-62,958,545

WACC
10%
39.40
40.85
41.92
40.94
39.91

82,958,302
2,020,486,327
336,747,721
(29,482,517)
-19,025,449

12%
34.67
35.87
36.70
35.75
34.81

15%
10%
Second Period - Slowed Growth
2018
6
6,202,099,365
434,146,956
445,371,271
708,279,748
11,224,315
4,033,050
2,500,491

2019
7
6,822,309,302
477,561,651
489,908,398
779,107,722
12,346,747
4,033,050
2,500,491

5%

3.50%
Perpetuity

2020 Residual
8
7,163,424,767
501,439,734
515,021,155
818,063,108
13,581,421
4,033,050
2,500,491

87,106,217
2,323,559,276
303,072,949
57,692,596
34,107,077

13.58%
31.43
32.47
33.15
32.21
31.33

91,461,527
2,555,915,204
232,355,928
168,591,434
91,309,086

96,034,604
2,683,710,964
127,795,760
293,691,282
145,721,494

8,391,179,488
4,163,471,256

1.1%

3.5%

3.0%

2.5%

2.1%

1.8%

1.5%

1.4%

1.3%

1.3%
2.0%

Nike comparison
sales
% growth

net income
%growth
% of sales

1977
28711

1978
71001
147%

1979
149830
111%

1980
269775
80%

1981
457742
70%

1982
693582
52%

1983
867212
25%
0.807677

1522

3856
153%
5%

9723
152%
6%

12505
29%
5%

25955
108%
6%

49036
89%
7%

57004
16%
7%

10166
4%

16172
59%
4%

39731
-100% #DIV/0!
0%
5%

29624
123%
11%

74687
152%
16%

5%

ppe net
% growth
%of sales
working capital
% growth
% of sales

2645
9%

5351
102%
8%

13266
148%
9%

92%

112170
50%
16%

209871
87%
24%

1984
919806
6%

1985
956371
4%

1986
1069222
12%

1987
877257
-18%

1988
1203440
37%

1989
1710803
42%

1990
2235244
31%

1991
3003000
34%

1992
3405000
13%
43%

40690
-29%
4%

10270
-75%
1%

59211
477%
6%

35879
-39%
4%

101695
183%
8%

167047
64%
10%

242958
45%
11%

287000
18%
10%

329000
15%
10%

55915
41%
6%

50748
-9%
5%

39834
-22%
4%

48480
22%
6%

57703
19%
5%

89900
56%
5%

159000
77%
7%

292000
84%
10%

346000
18%
10%

234247
12%
25%

217849
-7%
23%

278784
28%
26%

325200
17%
37%

298816
-8%
25%

422000
41%
25%

564000
34%
25%

666000
18%
22%

967000
45%
28%

13%

1993
3930000
15%

1994
3789000
-4%

1995
4760000
26%

1996
6470000
36%

1997
9186000
42%

1998
9553000
4%

1999
8776000
-8%

2000
8995000
2%

2001
9488000
5%

365000
11%
9%

298000
-18%
8%

399000
34%
8%

553000
39%
9%

795000
44%
9%

399000
-50%
4%

451000
13%
5%

579000
28%
6%

589000
2%
6%

378000
9%
10%

406000
7%
11%

554000
36%
12%

642000
16%
10%

922000
44%
10%

1153000
25%
12%

1265000
10%
14%

1583000
25%
18%

1618000
2%
17%

1165000
20%
30%

1209000
4%
32%

938000
-22%
20%

1246000
33%
19%

1964000
58%
21%

1829000
-7%
19%

1818000
-1%
21%

1456000
-20%
16%

1839000
26%
19%

2002
2003
2004
2005
2006
2007
2008
2009
2010
9893000 10697000 12253000 13739000 14954000 16325000 18627000 19176000 19014000
4%
8%
15%
12%
9%
9%
14%
3%
-1%

663000
13%
7%

474000
-29%
4%

945000
99%
8%

1211000
28%
9%

1392000
15%
9%

1491000
7%
9%

1883000
26%
10%

1487000
-21%
8%

1907000
28%
10%

1614000
0%
16%

1620000
0%
15%

1586000
-2%
13%

1605000
1%
12%

1657000
3%
11%

1678000
1%
10%

1891000
13%
10%

1957000
3%
10%

1931000
-1%
10%

2321000
26%
23%

2767000
19%
26%

3503000
27%
29%

4352000
24%
32%

4736000
9%
32%

5492000
16%
34%

5518000
0%
30%

6457000
17%
34%

7595000
18%
40%

0.344121

2011
20862000
10%

Average
25%

2133000
12%
10%

7.3%

2115000
10%
10%

9%

7339000
-3%
35%

24%

40%

if you exclude the first six years of growth of 92% growth, nike has averaged 13

92% growth, nike has averaged 13%.

US maket share approach


1 Damadarian Approach
Inputs (2011)
Enter revenues in current year =
Enter size of overall market in current year =
Enter expected growth rate in overall market =
Enter expected market share in 5 years =
Enter expected market share in 10 years =
Output
Expected revenues in year 5 =
Expected compounded growth rate; Yr 1-5 =
Expected revenues in year 10 =
Expected compounded growth rate: Yr 6-10 =
Expected compounded growth rate: Yr 1-10:

$
$

1,472,684,000
47,200,000,000
0.025
0.064
0.096

3,417,757,930
0.18338578
5,800,319,087
0.111583565
0.14692292

2 Take a backing out approach


what % of market share will UA need to get the projected
Used the data of sports apparel (use UA and its competitors)
Sports apparel industry

Market Share

3 Conclusion
1. In this model, UA is projected to double market share in five years; and triple market share in 10 years

2. In the right link, it states that the US Sports apparel market is growing at .8%. http://www.marketresearch.com
3. In this model, a 2.5% market growth rate was assumed- substantially optomistic

market share substantially


since it started in the late

what we have modeled


Difference
4,500,000,000 $
(1,082,242,071)
7,100,000,000 $

should we weight this to apparel?


Nike
UA
$
24,000,000,000 $
50.8%

(1,299,680,913)

ADDYY
COLM
1,500,000,000 $ 18,000,000,000 $ 1,700,000,000
3.2%
38.1%
3.6%

rs; and triple market share in 10 years

owing at .8%. http://www.marketresearch.com/AM-Mindpower-Solutions-v3771/Athletic-Apparel-Footwear-Outlook-Evolving-6846675/

ially optomistic

UA has increased in
market share substantially
since it started in the late
90's

How will UA continue growing market share


against strong incumbents

The US & Global Industry


analysis models show
what UA needs to sustain
its equity

LULU
SKINs(private)
Total
$ 1,000,000,000 $ 1,000,000,000 $ 47,200,000,000
2.1%
2.1%

rel-Footwear-Outlook-Evolving-6846675/ - claims that US sports apparel industry is growing at .8%

Nike: has a selection


of cool to warm
compression at price
point of $30 - $65

UA : Multiple
compression gear
offerings from $30 $70

$70

point of $30 - $65

Addidas: $55
Reebok:
compression shirts
starting at $20.98

Sports Apparel
Market
US = $47Bil
Many low price point
producers: $10 and
up

Global = $122
bil

competitors
have stronger
global
distribution

No patents on
materials

In what ways
other than its
brand can UA
differentiate?

UA 2015 & 2020 market share

established globa

Addidas: $55-$65

Skins: a private
company that is
established globally.
Prices range from
$70 - $250

Global Market share approach


1 Damadarian Approach
Inputs (2011)
Enter revenues in current year =
Enter size of overall market in current year =
Enter expected growth rate in overall market =
Enter expected market share in 5 years =
Enter expected market share in 10 years =
Output
Expected revenues in year 5 =
Expected compounded growth rate; Yr 1-5 =
Expected revenues in year 10 =
Expected compounded growth rate: Yr 6-10 =
Expected compounded growth rate: Yr 1-10:

2 Understanding UA global athlethic apparel market share

1,472,684,000
1.22E+11
0.032
0.024142361
0.036213541

3,447,768,128
0.185456702
6053796195
0.119174868
-0.259428838

2011
1.2%

Given UA's global psotion relative to competitors without any competitive advantage, it is difficult to see there m
http://www.reportlinker.com/ci02121/Sport-Clothing-and-Accessories.html - reports that sports apparel industry

3 Conclusions

1. It should first be noted that in our fcff model, UA needs to reach the goals by 2020 (8 years). In this model, they
2. UA current global market share is 1.2%, I project them doubling market share in five years, and tripling market

should perform sensitivity on expected growth rate of the market-also a scenario analysis

what we have modeled


Difference
4500000000 $
(1,052,231,872)
7100000000 $

(1,046,203,805)

antage, it is difficult to see there market share increasing greatly


eports that sports apparel industry will be 126bil by 2015

y 2020 (8 years). In this model, they are given 10 years to get there.

e in five years, and tripling market in 10 years

2008 American Apparel & Footware Association stats


US Apparel imports (Page 21)
(In Number of Units)
2002

Other man-made fiber apparel Kg.


% growth

2003

2004

$ 81,919,102 $ 89,610,203 $ 102,679,775


9.4%
14.6%

Page 13
Profile of US Apparel consumption (Wholesale market; page 13)
(In millions of Garments)

$
% growth

1997
15,578 $

1998
16,092 $
3.3%

1999
17,654
9.7%

2005

2006

2007

$ 121,842,944 $ 125,406,023 $ 130,629,894 $


18.7%
2.9%
4.2%

2000
18,690 $
5.9%

2001
17,967 $
-3.9%

2002
18,193 $
1.3%

2008

average

130,271,231
-0.3%

8.2%

2003
18,990 $
4.4%

2004
19,052 $
0.3%

2005
20,397
7.1%

It would be nice to know the past 3 years given the downtrend

2006
20,481
0.4%

2007
20,137.60
-1.7%

2008
19,507.80
-3.1%

average
2.1%