The document proposes that Under Armour acquire Columbia Sportswear to quickly expand its product offerings and strategically position itself in growing international markets. It analyzes the athletic apparel industry, identifying opportunities for growth. The document recommends that Under Armour acquire Columbia to preserve its brand equity while allowing for expansion into new product segments and geographic markets. It asserts that the acquisition would meet Under Armour's goals of organic growth and international expansion.

1. UNDER ARMOUR: GROWTH STRATEGY “WE MUST PROTECT THIS HOUSE” November 16, 2007

2. Agenda Conclusion Growth Strategy Proposals Opportunities Industry Analysis Executive Summary

3. Executive Summary Situation Under Armour is looking to define a growth strategy that will align with current initiatives while focusing efforts on continued product expansion and strategic growth opportunities. Complication Growing competition among smaller, fragmented market players Increasing costs of inputs, specifically petroleum-based production Declining stock price Solution Under Armour should acquire a major competitor to quickly expand product offerings while strategically positioning themselves in growing international markets.

4. Industry Overview Market Size ~$42B Highly fragmented and competitive Industry consolidation Rapidly changing fashion needs and customer sentiment Luxury goods is dominating growth The athletic apparel industry has progress dramatically with a 67% growth rate over the last 10 years. Conclusion Growth Strategy Proposal Opportunities Industry Analysis

5. Trends & Opportunities Trends Women’s market is the fastest growing segment overall Stagnant growth with the exception of niche markets Opportunities Grow line of women’s clothing Target youth segment encouraging healthy living Continue developing brand in specialty sports industry Several opportunities exist for niche players in the apparel industry specifically focusing towards women who control 42% of the market. Conclusion Growth Strategy Proposal Opportunities Industry Analysis

6. Under Armour has implemented the right strategies for growth thus far leading to a 71.7% CAGR in Net Revenues Yet, investments are questioning Under Armour’s current market valuation Conclusion Growth Strategy Proposal Opportunities Industry Analysis Strong product line focused on seasonality and major sports Strategic sponsorships gaining exposure and credibility to the brand Trade marketing effective in activating the retailer channel Innovative media mix through product placement, co-branding, TV, print Marketing Successfull distribution or product line to sports retail segment Direct sales with growth (2006) of over 87% Licencing business strategically improves Under Armour’s exposure Distribution Under Armour team has in depth knowledge of the leading fabric suppliers & branded athletic apparel industry Human Capital International partners enables the selection of the highest quality for the products Successful partnerships have facilitated the aggressive growth Design & Development

7. Solution Criteria Allows for organic expansion through international growth Maintains specialization in niche market Establishes Sustainable and achievable growth … We will develop a fully integrated growth strategy that will continue to grow the Under Armour brand by capturing more share in the athletic apparel market through enhanced product assortments and international expansion . Three Criteria for Success Conclusion Growth Strategy Proposal Opportunities Industry Analysis

8. Several options have been analyzed but is imperative to have a focused strategy Penetrate overall apparel market with non-athletic products to replace cotton Gain more control of the suppliers by purchasing a stake in the largest ones Find alternative communication mediums Increase product line Expand Current Business to increase market share Time Frame Pursue ? Acquire Columbia Sportswear Conclusion Growth Strategy Proposal Opportunities Industry Analysis Long Term Short Term

9. Why Columbia? Acquisition criteria Preserves Brand Equity Allows for Expansion to new niche product segments Allows for expansion to new geographical markets Priced at a discount to its peers Conclusion Growth Strategy Proposal Opportunities Industry Analysis

10. Why acquisition with Columbia makes financial sense 2007E EPS Accretion / (Dilution) % Source: Equity research reports; Yahoo! Finance Note: Assumes 7.5% cost of debt with no synergies. COLM’s stock price as of 11/15/2007 was $51.72 % Stock Conclusion Growth Strategy Proposal Opportunities Industry Analysis Strong Stock Price Gives UA Acquisition Power

11. Acquisition Diversifies Under Armour’s Geographic Footprint Under Armour Columbia Sportswear Pro Forma U.S. 94% Other International 2% Canada 4% Source: UA and COLM 2006 10-K; Hoovers research report U.S. 58% Europe 15% Other International 17% Canada 9% U.S. 68% Europe 12% Other International 13% Canada 8% Conclusion Growth Strategy Proposal Opportunities Industry Analysis Product Segments (as % of 2006 Sales)

12. Why Columbia would agree to acquisition Combination with industry leader Consolidation of earnings power Increased power with retailers and distributors Diversification of products on a global scale Strong brand equity Expanded technological know-how Conclusion Growth Strategy Proposal Opportunities Industry Analysis

13. Execution of Merger between Under Armour and Columbia Retain the Columbia brand and its products Position Columbia as an outdoors adventure brand camping, skiing, mountaineering, hiking Position Under Armour as an athletic brand running, basketball, football, golf Transfer Under Armour’s technology to Columbia allows Columbia to differentiate itself from its competitors like North Face Conclusion Growth Strategy Proposal Opportunities Industry Analysis

14. Merger allows Under Armour to cater to other sports enthusiasts Patented mountaineering products Gore-Tex Shells for mountaineering Sleeping Systems, Technically Advanced Tents Footwear for mountaineering, rock climbing, backpacking Hunting and Fishing – Fleeces, bib pants, water sport trunks Titanium and XCO outerwear for trekking and adventure travel Acquisition preserves Under Armour’s Brand Equity Conclusion Growth Strategy Proposal Opportunities Industry Analysis

15. Under Armour can benefit from Columbia’s Distribution Channels Japan S. Korea France Spain Canada Germany Russia Columbia’s 48% revenues come from outside U.S. Distribution Centers/ Direct Outlets Sales Offices Retail Channels Conclusion Growth Strategy Proposal Opportunities Industry Analysis

16. International Expansion : Case Study India Asia-Pacific represents 34% of global revenues China’s market will grow from $45 Billion in 2005 to $170 Billion in 2025 India’s branded sports apparel industry Trends Acquiring taste for Western Brands, early stages of chain stores Growth segments for women 35%, men 22% annually for last two years Strategy Establish a profit-sharing partnership for distribution and manufacturing with a leading player Potential candidate - Reliance Leading manufacturer of textiles Establishing a chain of stores Mitigates IP issues; allows easy market penetration Conclusion Growth Strategy Proposal Opportunities Industry Analysis

17. Conclusion Apparel Industry Intense Rivalry Bigger margins for high-end, niche products High growth in emerging economies Under Armour Brand for people passionate about sports Technologically advanced product Columbia Acquisition Allows penetration in other niche product segments for sports enthusiasts Facilitates geographical expansion Conclusion Growth Strategy Proposal Opportunities Industry Analysis

18. Appendix-Merger Analysis Source: Equity research reports; Yahoo! Finance Note: COLM’s stock price as of 11/15/2007 was $51.72 Short Form Merger Analysis

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