1. After reviewing company reports for the past two years and the Morningstar financial statements for the past five years, respond to the following questions:

a) List and discuss two of the most important issues you observed in the financial performance of the company over the past five years.

b) List two examples of strategic objectives and discuss how well the company is performing relative to these over the past three years.

Revenue USD Mil Gross Margin % Operating Income USD Mil Operating Margin % Net Income USD Mil Earnings Per Share USD Dividends USD Payout Ratio % * Shares Mil Book Value Per Share * USD Operating Cash Flow USD Mil Cap Spending USD Mil Free Cash Flow USD Mil Free Cash Flow Per Share * USD Working Capital USD Mil 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 TTM 18,391 18,804 19,279 19,031 19,023 19,204 18,686 19,095 20,229 19,974 16,646 38.2 38.2 36.3 36.5 36.4 36.1 36.1 36.2 39.7 39.2 35.4 1,914 2,158 1,890 1,742 1,689 1,553 1,369 1,416 1,465 1,212 -161 10.4 11.5 9.8 9.2 8.9 8.1 7.3 7.4 7.2 6.1 -1 1,114 1,167 986 889 867 673 556 859 801 691 -241 3.66 4.3 4.17 4.05 4.24 3.46 3.11 5.12 4.84 4.37 -1.58 1 1.28 1.4 1.56 1.8 2 2.2 2.44 2.68 1.37 23.3 28.2 33.1 38.2 46.7 60.6 57.3 39.7 60.7 306 271 237 220 204 195 179 168 165 158 154 26.35 26.55 27.66 28.88 29.43 29.35 29.93 33.02 34.2 30.69 1,676 2,143 1,265 1,884 2,024 1,474 2,148 1,691 2,107 1,657 1,522 -761 -927 -785 -643 -682 -690 -768 -672 -578 -855 -441 915 1,216 480 1,241 1,342 784 1,380 1,019 1,529 802 1,081 4.49 3.86 4.34 5.1 4.19 8.87 5.94 9.98 5.83 2,935 2,185 2,184 2,556 2,839 2,362 2,273 2,680 2,105 1,880 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 TTM 100 100 100 100 100 100 100 100 Key Ratios -> Profitability Margins % of Sales Revenue COGS Gross Margin SG&A 100 63.87 100 60.3 100 60.78 61.76 63.74 63.51 63.92 64.64 61.82 38.18 22.56 63.6 36.4 63.77 36.23 38.24 36.26 36.49 36.13 36.08 39.7 39.22 28.56 35.36 31 24.26 22.13 22.66 22.87 23.18 23.73 23.63 27.69 4.66 5.02 4.77 5.32 R&D Other Operating Margin Net Int Inc & Other EBT Margin 3.57 10.41 4.14 11.48 4.32 9.8 4.67 9.15 4.86 8.09 -2.58 5.19 7.42 8.88 7.24 7.33 -2.64 4.59 6.07 -1.56 -1.59 -1.71 -1.78 -1.79 -1.57 -2.09 -0.72 9.69 -0.97 -1.68 -2.65 9.89 8.1 7.38 7.09 5.5 4.68 5.85 5.15 4.51 Profitability Tax Rate % Net Margin % Asset Turnover (Average) Return on Assets % Financial Leverage (Average) Return on Equity % Return on Invested Capital % Interest Coverage 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 TTM 37.49 37.22 36.84 36.68 35.73 36.33 36.46 23.1 23.13 23.31 6.06 6.21 5.11 4.67 4.56 3.5 2.98 4.5 3.96 3.46 -1.45 1.38 1.36 1.38 1.35 1.32 1.37 1.38 1.42 1.57 1.48 1.07 8.34 8.44 7.04 6.29 6.02 4.8 4.09 6.38 6.21 5.11 -1.55 1.67 2.17 2.3 2.41 2.41 2.48 2.62 2.46 2.25 2.67 3.19 13.96 15.98 15.71 14.78 14.49 11.72 10.42 16.2 14.63 12.59 -4.73 11.89 12.93 11.18 10.29 10.06 8.41 7.52 11.04 10.52 8.25 -0.42 13.64 7.14 5.74 5.15 4.97 4.23 3.84 4.74 5.07 5.35 -0.67 Key Ratios -> Growth 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 Latest Qtr 2.25 2.53 -1.29 0.95 -2.7 2.19 -13.97 -1.26 2.25 3.92 -0.13 0.13 4.69 3.88 -0.04 0.39 2.06 4.98 1.15 3.03 6.35 5.94 1.75 1.23 -0.61 -0.13 3.2 0.98 0.87 3.66 -0.19 1.49 9.64 7.77 1.86 2.13 1.52 -8.05 3.43 3.46 -78.92 12.75 12 -12.42 3.35 -7.83 -3.09 -17.27 -3.98 -3.04 -7.84 -0.27 3.17 -11.85 -7.72 -8.7 -2.78 3.53 0.93 -6.34 -4.09 0.93 2.55 5.46 -5.71 -5.61 -2.4 -1.93 -3.4 -0.47 -6.42 -3.39 9.77 5.65 Revenue % Year over Year 3-Year Average 5-Year Average 10-Year Average Operating Income % Year over Year 3-Year Average 5-Year Average 10-Year Average Net Income % Year over Year 3-Year Average 5-Year Average 10-Year Average EPS % Year over Year 3-Year Average 5-Year Average 10-Year Average 4.76 -15.51 -9.84 -2.47 -22.38 54.5 -6.75 -11.95 5.98 9.66 1.03 8.94 -0.17 -1.87 4.36 -7.24 0.09 4.16 -9.43 -2.64 1.73 -17.38 -14.48 -13.78 -6.67 -0.31 -2.72 -13.73 7.51 -4.44 -3.54 -9.59 -2.22 -2.06 -0.99 -2.3 17.81 -2.88 -5.47 -3.02 8.89 -10.12 -8.43 -9.71 -110.26 12.01 14.16 3.53 4.69 -0.47 5.59 7.18 -18.4 -6.03 -1.06 3.6 64.63 6.49 4.19 4.21 5.37 4.23 6.98 -6.27 11.84 3.63 5.29 0.61 11.48 8.35 8.94 -0.62 3.07 Key Ratios -> Cash Flow Cash Flow Ratios Operating Cash Flow Growth % YOY Free Cash Flow Growth % YOY Cap Ex as a % of Sales Free Cash Flow/Sales % Free Cash Flow/Net Income -47.55 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 TTM 27.86 -40.97 48.93 7.43 -27.17 45.73 -21.28 24.6 -21.36 32.9 -60.53 158.54 8.14 -41.58 76.02 -26.16 50.05 4.14 4.93 4.07 3.38 3.59 3.59 4.11 3.52 2.86 4.28 2.65 4.98 6.47 2.49 6.52 7.05 4.08 7.39 5.34 7.56 4.02 6.49 0.82 1.04 0.49 1.4 1.55 1.16 2.48 1.19 1.91 1.16 -4.49 3.12 2.67 Key Ratios -> Financial Health Balance Sheet Items (in %) Cash & Short-Term Investments Accounts Receivable Inventory Other Current Assets Total Current Assets Net PP&E Intangibles Other Long-Term Assets Total Assets Accounts Payable Short-Term Debt Taxes Payable Accrued Liabilities Other Short-Term Liabilities Total Current Liabilities Long-Term Debt Other Long-Term Liabilities Total Liabilities Total Stockholders' Equity Total Liabilities & Equity 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 Latest Qtr 16.79 8.55 3.86 6.75 9.75 5.2 7.91 9.81 7.49 4.97 12.56 0.74 22.38 22.7 26.95 26.94 26.43 29.68 27.96 26.55 27.87 24.3 23.36 2.45 2.63 3.11 3.31 2.43 2.78 3.61 3.42 2.17 41.62 33.88 33.94 36.81 39.48 37.31 38.65 39.96 38.78 31.94 38.82 53.49 63.18 63.8 60.82 59 61.06 59.7 58.27 59.57 66.94 60.2 1.42 3.47 2.94 2.26 2.37 1.51 1.63 1.65 1.77 1.65 1.12 0.97 100 100 100 100 100 100 100 100 100 100 100 8.39 8.93 9.4 9.49 10.47 9.19 11.1 9.53 9.52 8.29 14.14 3.08 0.94 2.12 2.09 1.81 1.82 2.31 2.17 1.87 1.8 1.58 7.57 0.88 5.99 6.76 4.63 5.14 5.25 5.05 7.01 4.93 8.24 6.45 0.76 0.97 2.89 3.31 3.39 3.42 3.57 4.23 1.86 19.98 18.38 18.23 19.03 19.81 19.95 21.91 19.87 21.89 19.02 24.24 12.37 15.19 17.92 19.42 19.35 20.52 20.59 20.97 14.93 12.75 15.86 7.92 20.26 20.35 19.97 19.32 19.18 19.36 18.49 18.85 30.78 28.57 40.27 53.82 56.5 58.42 58.49 59.64 61.86 59.33 55.67 62.56 68.67 59.73 46.18 43.5 41.58 41.51 40.36 38.14 40.67 44.33 37.44 31.33 100 100 100 100 100 100 100 100 100 100 100 2011-01 2012-01 2013-01 2014-01 2015-01 2016-01 2017-01 2018-01 2019-01 2020-01 TTM 95.74 97.88 103.17 115.08 115.97 116.84 119.69 109.97 104.97 105.41 144.07 37.37 37.61 38.09 40.34 43.38 41.1 42.14 41.64 36.77 35.97 78.67 Key Ratios -> Efficiency Ratios Efficiency Days Sales Outstanding Days Inventory Payables Period Cash Conversion Cycle Receivables Turnover Inventory Turnover Fixed Assets Turnover Asset Turnover 3.81 3.73 3.54 3.17 3.15 3.12 3.05 3.32 3.47 3.46 2.53 2.58 2.33 2.17 2.2 2.28 2.28 2.41 2.66 2.33 1.74 2.16 1.35 1.38 1.36 1.38 1.32 1.37 1.38 1.42 1.57 1.48 1.07