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+cik,ticker,company_name,form,filing_date,report_date,acceptance_datetime,accession_number,primary_document,primary_doc_description,size,is_xbrl,is_inline_xbrl,document_url,filing_index_url,year,fiscal_year,is_primary_filing
+0000320187,NKE,"NIKE, Inc.",10-K,2001-08-09,2001-05-31,2001-08-09T08:00:00.000Z,0001095811-01-503828,v74223e10-k.txt,"FORM 10-K PERIOD ENDED MAY 31, 2001",216922,0,0,https://www.sec.gov/Archives/edgar/data/320187/000109581101503828/v74223e10-k.txt,https://www.sec.gov/Archives/edgar/data/320187/000109581101503828/,2000,2000,1

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+ITEM 1. BUSINESS
+GENERAL
+NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon.
+As used in this report, the terms "we", "us", "NIKE" and the "Company" refer to
+NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless the context
+indicates otherwise.
+Our principal business activity involves the design, development and
+worldwide marketing of high quality footwear, apparel, equipment, and accessory
+products. NIKE is the largest seller of athletic footwear and athletic apparel
+in the world. We sell our products to approximately 17,000 retail accounts in
+the United States and through a mix of independent distributors, licensees and
+subsidiaries in approximately 140 countries around the world. Virtually all of
+our products are manufactured by independent contractors. Virtually all footwear
+products are produced outside the United States, while apparel products are
+produced both in the United States and abroad.
+PRODUCTS
+NIKE's athletic footwear products are designed primarily for specific
+athletic use, although a large percentage of the products are worn for casual or
+leisure purposes. We place considerable emphasis on high quality construction
+and innovative design. Running, basketball, children's, cross-training and
+women's shoes are currently our top-selling product categories and we expect
+them to continue to lead in product sales in the near future. However, we also
+market shoes designed for outdoor activities, tennis, golf, soccer, baseball,
+football, bicycling, volleyball, wrestling, cheerleading, aquatic activities,
+hiking, and other athletic and recreational uses.
+We sell active sports apparel covering most of the above categories,
+athletically inspired lifestyle apparel, as well as athletic bags and accessory
+items. NIKE apparel and accessories are designed to complement our athletic
+footwear products, feature the same trademarks and are sold through the same
+marketing and distribution channels. We often market footwear, apparel and
+accessories in "collections" of similar design or for specific purposes. We also
+market apparel with licensed college and professional team and league logos.
+We sell a line of performance equipment under the NIKE brand name,
+including sport balls, timepieces, eyewear, skates, bats, gloves, and other
+equipment designed for sports activities. We also have agreements for licensees
+to produce and sell NIKE brand swimwear, women's sports bras, cycling apparel,
+children's clothing, posters, school supplies, and electronic media devices.
+We also sell a line of dress and casual footwear and accessories for men,
+women and children under the brand name Cole Haan(R) through our wholly-owned
+subsidiary, Cole Haan Holdings Incorporated, headquartered in Maine. We also
+sell small amounts of various plastic products to other manufacturers through
+our wholly-owned subsidiary, NIKE IHM, Inc.
+Our wholly-owned subsidiary, Bauer NIKE Hockey Inc., headquartered in
+Greenland, New Hampshire, manufactures and distributes ice skates, skate blades,
+in-line roller skates, protective gear, hockey sticks, and hockey jerseys and
+accessories under the Bauer(R) and NIKE(R) brand names. Bauer also offers a full
+selection of products for street, roller and field hockey.
+1
+4
+SALES AND MARKETING
+The table below shows certain information regarding NIKE's United States
+and international (non-U.S.) revenues for the last three fiscal years.
+MAY 31, 2001 2000 % CHG 1999 % CHG
+------- -------- -------- ----- -------- -----
+(IN MILLIONS)
+USA Region
+Footwear................................ $3,208.9 $3,351.2 (4.2)% $3,244.6 3.3%
+Apparel................................. 1,260.3 1,154.4 9.2% 1,293.4 (10.7)%
+Equipment and other..................... 349.8 226.5 54.4% 212.7 6.5%
+-------- -------- ----- -------- -----
+Total USA....................... 4,819.0 4,732.1 1.8% 4,750.7 (0.4)%
+-------- -------- ----- -------- -----
+Europe, Middle East & Africa (EMEA) Region
+Footwear................................ 1,422.8 1,309.4 8.7% 1,207.3 8.5%
+Apparel................................. 976.3 933.9 4.5% 917.7 1.8%
+Equipment and other..................... 185.7 163.7 13.4% 168.8 (3.0)%
+-------- -------- ----- -------- -----
+Total Europe.................... 2,584.8 2,407.0 7.4% 2,293.8 4.9%
+-------- -------- ----- -------- -----
+Asia Pacific Region
+Footwear................................ 632.4 557.0 13.5% 455.3 22.3%
+Apparel................................. 374.8 321.0 16.8% 319.8 0.4%
+Equipment and other..................... 102.8 77.1 33.3% 69.4 11.1%
+-------- -------- ----- -------- -----
+Total Asia Pacific.............. 1,110.0 955.1 16.2% 844.5 13.1%
+-------- -------- ----- -------- -----
+Americas Region
+Footwear................................ 359.6 343.9 4.6% 311.2 10.5%
+Apparel................................. 152.2 137.7 10.5% 146.2 (5.8)%
+Equipment and other..................... 27.3 12.5 118.4% 11.7 6.8%
+-------- -------- ----- -------- -----
+Total Americas.................. 539.1 494.1 9.1% 469.1 5.3%
+-------- -------- ----- -------- -----
+Total NIKE brand.......................... 9,052.9 8,588.3 5.4% 8,358.1 2.8%
+-------- -------- ----- -------- -----
+Other brands.............................. 435.9 406.8 7.2% 418.8 (2.9)%
+-------- -------- ----- -------- -----
+Total Revenues............................ $9,488.8 $8,995.1 5.5% $8,776.9 2.5%
+======== ======== ===== ======== =====
+Financial information about geographic and segment operations appears in
+Note 16 of the consolidated financial statements on page 41.
+We experience moderate fluctuations in aggregate sales volume during the
+year. However, the mix of product sales may vary considerably from time to time
+as a result of changes in seasonal and geographic demand for particular types of
+footwear, apparel, and equipment.
+Because NIKE is a consumer products company, the relative popularity of
+various sports and fitness activities and changing design trends affect the
+demand for our products. We must therefore respond to trends and shifts in
+consumer preferences by adjusting the mix of existing product offerings,
+developing new products, styles and categories, and influencing sports and
+fitness preferences through aggressive marketing. This is a continuing risk.
+Failure to timely and adequately respond could have a material adverse affect on
+our sales and profitability.
+UNITED STATES MARKET
+During fiscal 2001, sales in the United States accounted for approximately
+54 percent of total revenues, compared to 56 percent in fiscal 2000 and 57
+percent in fiscal 1999. We sell to approximately 17,000 retail accounts in the
+United States. The NIKE brand domestic retail account base includes a mix of
+department stores, footwear stores, sporting goods stores, skating, tennis and
+golf shops, and other retail accounts. During fiscal year 2001, our three
+largest customers accounted for approximately 29 percent of NIKE brand sales in
+the United States, and 27 percent of total sales in the United States.
+2
+5
+We make substantial use of our "futures" ordering program, which allows
+retailers to order five to six months in advance of delivery with the guarantee
+that 90 percent of their orders will be delivered within a set time period at a
+fixed price. In fiscal year 2001, 86 percent of our U.S. footwear shipments
+(excluding Cole Haan and Bauer) were made under the futures program, compared to
+90 percent in fiscal 2000 and 91 percent in fiscal 1999. In fiscal 2001, 78
+percent of our U.S. apparel shipments were made under the futures program,
+compared to 82 percent in fiscal 2000, and 80 percent in 1999.
+We utilize 16 NIKE sales offices to solicit sales in the United States. We
+also utilize 30 independent sales representatives to sell specialty products for
+golf, cycling, water sports and outdoor activities. In addition, we operate the
+following retail outlets in the United States:
+RETAIL STORES NUMBER
+------------- ------
+NIKE factory stores (which carry primarily B-grade and
+close-out merchandise).................................... 81
+NIKE stores................................................. 2
+NIKETOWNs (designed to showcase NIKE products).............. 13
+Employee-only stores........................................ 4
+Cole Haan stores (including factory and employee stores).... 57
+---
+Total............................................. 157
+===
+NIKE's domestic distribution centers for footwear are located in Beaverton,
+Oregon, Wilsonville, Oregon, Memphis, Tennessee, and Greenland, New Hampshire.
+Apparel products are shipped from the Memphis distribution center. Cole Haan
+footwear and Bauer NIKE Hockey products are distributed primarily from
+Greenland, New Hampshire, and licensed team apparel is shipped from Foothill
+Ranch, California.
+INTERNATIONAL MARKETS
+We currently market our products in approximately 140 countries outside of
+the United States through independent distributors, licensees, subsidiaries and
+branch offices. Non-U.S. sales accounted for 46 percent of total revenues in
+fiscal 2001, compared to 44 percent in fiscal 2000 and 43 percent in fiscal
+1999. We operate 19 distribution centers in Europe, Asia, Australia, Latin
+America, and Canada, and also distribute through independent distributors and
+licensees. We estimate that our products are sold through more than 30,000
+retail accounts outside the United States. In many countries and regions,
+including Japan, Canada, Asia, Latin America, and Europe, we have a futures
+ordering program for retailers similar to the United States futures program
+described above. NIKE's three largest customers outside of the U.S. accounted
+for approximately 10 percent of non-U.S. sales.
+We operate 111 retail outlets outside the United States, which are
+comprised of NIKETOWNs, factory stores, employee stores, and Cole Haan stores.
+International branch offices and subsidiaries of NIKE are located in
+Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Croatia, Czech
+Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary, Indonesia,
+India, Ireland, Italy, Japan, Korea, Malaysia, Mexico, New Zealand, The
+Netherlands, Norway, Peoples Republic of China, The Philippines, Poland,
+Portugal, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan,
+Thailand, Turkey, the United Kingdom, and Vietnam.
+SIGNIFICANT CUSTOMERS
+Venator Group Inc., which operates a chain of retail stores specializing in
+athletic footwear and apparel, accounted for approximately 12 percent of global
+net sales of NIKE brand products during fiscal 2001. No other customer accounted
+for 10 percent or more of our net sales during fiscal 2001.
+ORDERS
+As of May 31, 2001, our worldwide futures orders for NIKE brand athletic
+footwear and apparel totaled $4.3 billion, compared to $4.2 billion as of May
+31, 2000. These orders are scheduled for delivery from June
+3
+6
+through November of 2001. Based upon historical data, we expect that
+approximately 95 percent of these orders will be filled in that time period,
+although the orders may be cancelable.
+PRODUCT RESEARCH AND DEVELOPMENT
+We believe that our research and development efforts are a key factor in
+our past and future success. Technical innovation in the design of footwear,
+apparel, and athletic equipment receive continued emphasis as NIKE strives to
+produce products that reduce or eliminate injury, aid athletic performance and
+maximize comfort.
+In addition to NIKE's own staff of specialists in the areas of
+biomechanics, exercise physiology, engineering, industrial design and related
+fields, we also utilize research committees and advisory boards made up of
+athletes, coaches, trainers, equipment managers, orthopedists, podiatrists and
+other experts who consult with us and review designs, materials and concepts for
+product improvement. Employee athletes wear-test and evaluate products during
+the design and development process.
+MANUFACTURING
+In fiscal 2001, approximately five percent of total NIKE brand apparel
+production for sale to the United States market was manufactured in the United
+States by independent contract manufacturers, most of which are located in the
+southern states. The remainder was manufactured by independent contractors
+located in 28 countries. Most of this apparel production occurred in Bangladesh,
+China, Hong Kong, India, Indonesia, Malaysia, Mexico, Pakistan, The Philippines,
+Sri Lanka, Taiwan, and Thailand. Substantially all of our apparel production for
+sale to the international market was manufactured outside the U.S. Our largest
+single apparel supplier accounted for approximately eight percent of total
+fiscal 2001 apparel production.
+Virtually all of our footwear is produced outside of the United States. In
+fiscal 2001, contract suppliers in the following countries manufactured the
+following percentages of total NIKE brand footwear:
+COUNTRY PERCENT
+------- -------
+People's Republic of China.................................. 40
+Indonesia................................................... 31
+Vietnam..................................................... 13
+Thailand.................................................... 13
+Italy....................................................... 1
+Taiwan...................................................... 1
+South Korea................................................. 1
+We also have manufacturing agreements with independent factories in Argentina,
+Brazil, Mexico, South Africa, and Zimbabwe, to manufacture footwear for sale
+within those countries. Our largest single footwear supplier accounted for
+approximately 6 percent of total fiscal 2001 footwear production.
+The principal materials used in our footwear products are natural and
+synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather,
+canvas, and polyurethane films used to make AIR-SOLE cushioning components. NIKE
+IHM, Inc., a wholly-owned subsidiary of NIKE, is our sole supplier of the
+AIR-SOLE cushioning components used in footwear. The principal materials used in
+our apparel products are natural and synthetic fabrics and threads, plastic and
+metal hardware, and specialized performance fabrics designed to repel rain,
+retain heat, or efficiently transport body moisture. NIKE and its contractors
+and suppliers buy raw materials in bulk. Most raw materials are available in the
+countries where manufacturing takes place. We have thus far experienced little
+difficulty in satisfying our raw material requirements.
+Our international operations are subject to the usual risks of doing
+business abroad, such as possible revaluation of currencies, export duties,
+quotas, restrictions on the transfer of funds and, in certain parts of the
+world, political instability. See "Trade Legislation" below. We have not, to
+date, been materially affected by any such risk, but cannot predict the
+likelihood of such developments occurring. We believe that we have the ability
+to develop, over a period of time, adequate alternative sources of supply for
+the products obtained from
+4
+7
+our present suppliers outside of the United States. If events prevented us from
+acquiring products from our suppliers in a particular country, our footwear
+operations could be temporarily disrupted and we could experience an adverse
+financial impact. However, we believe that we could eliminate any such
+disruption within a period of no more than 12 months, and that any adverse
+impact would, therefore, be of a short-term nature. We believe that our
+principal competitors are subject to similar risks.
+All of our products manufactured overseas and imported into the United
+States and other countries are subject to duties collected by customs
+authorities. Customs information submitted by us is routinely subject to review
+by customs authorities. We are unable to predict whether additional customs
+duties, quotas or other restrictions may be imposed on the importation of our
+products in the future. The enactment of any such duties, quotas or restrictions
+could result in increases in the cost of our products generally and might
+adversely affect the sales or profitability of NIKE and the imported footwear
+and apparel industry as a whole.
+Since 1972, Nissho Iwai American Corporation ("NIAC"), a subsidiary of
+Nissho Iwai Corporation, a large Japanese trading company, has performed
+significant import-export financing services for us. Currently, NIAC provides
+such financing services with respect to more than 80 percent of the NIKE
+products sold outside of the United States, Europe and Japan. Any failure of
+NIAC to provide these services could disrupt our ability to acquire products
+from our suppliers and to deliver products to our customers outside of the
+United States, Europe and Japan. If prolonged, such a disruption could result in
+cancelled orders that would adversely affect sales and profitability. We believe
+that any such disruption would be short term in duration due to the ready
+availability of alternative sources of financing at competitive rates. Our
+current agreements with NIAC expire on May 31, 2003.
+TRADE LEGISLATION
+Our non-U.S. operations are subject to the usual risks of doing business
+abroad, such as the imposition of import quotas or anti-dumping duties. In 1994,
+the European Union ("EU") Commission imposed quotas on certain types of footwear
+manufactured in China. These quotas replaced national quotas that had previously
+been in effect in several Member States. Footwear designed for use in sporting
+activities, meeting certain technical criteria and having a CIF (cost, insurance
+and freight) price above 9 euros ("Special Technology Athletic Footwear" or
+"STAF"), is excluded from the quotas. As a result of the STAF exclusion, and the
+amount of quota made available to us, the quotas have not, to date, had a
+material effect on our business.
+In 1995, the EU Commission, at the request of European footwear
+manufacturers, initiated two anti-dumping investigations covering footwear
+imported from the People's Republic of China, Indonesia and Thailand. As a
+result, in October 1997 the Commission imposed definitive anti-dumping duties on
+certain textile upper footwear imported from China and Indonesia. In February
+1998, the Commission imposed definitive anti-dumping duties on certain synthetic
+and leather upper footwear originating in China, Indonesia and Thailand. In the
+case of textile upper footwear, the anti-dumping duties do not cover sports
+footwear. In the case of synthetic and leather upper footwear, the anti-dumping
+duties do not cover footwear meeting the STAF technical criteria and with a CIF
+price above 5.7 euros. As a result, the anti-dumping duties for synthetic and
+leather upper footwear apply only to low cost footwear. In our case, these
+duties primarily affect children's shoes and low cost sandals. While the
+exclusions are subject to some interpretation by customs authorities, we believe
+that most of our footwear sourced in the target countries for sale in the EU
+fits within the exclusions. We have also shifted the production of these types
+of footwear to other countries. Accordingly, the anti-dumping duties have not
+had a material effect on our business.
+While we have no reason to believe that the sports footwear exclusions from
+the quotas (which will remain in place through 2004) and anti-dumping duties
+will be eliminated, the EU Commission in June 2000 issued an amendment to the
+explanatory notes to the EU's customs nomenclature ("CN"). The amendment, which
+is not legally binding, interprets some of the technical criteria for the STAF
+exclusion and the footwear types that can be classified as for use in sporting
+activity. The amendment could restrict the scope of the STAF exclusion from the
+quotas and also the sports footwear exclusions from the two EU anti-dumping
+measures. In addition, the Commission has altered its administration of the
+quota system in a manner that
+5
+8
+would preclude national customs authorities from opting to grant the exclusion
+to certain other footwear types, notably sandals.
+We cannot assess the full impact of the amendment to the CN explanatory
+notes until the national customs administrations clarify their national
+application of its non-binding provisions. In the meantime, we are assessing the
+legal issues relating to both the Commission's action in issuing the amendment
+and its related administrative action concerning other footwear originating in
+China. We will closely monitor further developments and will seek, by individual
+action and through relevant trade associations, to prevent interpretations and
+administrative measures that would subject a greater portion of our products to
+the quotas and anti-dumping duties.
+If the EU trade measures become substantially more restrictive as a result
+of the recent Commission measures, we would recommend that our European
+subsidiaries consider, in addition to possible legal remedies, shifting the
+production of such footwear to other countries in order to maintain competitive
+pricing. We believe that we are prepared to deal effectively with any such
+change of circumstances and that any adverse impact would be of a temporary
+nature. We continue to closely monitor international restrictions and maintain
+our multi-country sourcing strategy and contingency plans. We believe that our
+major competitors stand in much the same position regarding these trade
+measures.
+The People's Republic of China ("China") is a material source of footwear
+production for NIKE. As part of China's bid to join the World Trade Organization
+("WTO"), and after the United States and China reached a comprehensive trade
+agreement, former President Clinton submitted legislation to Congress which
+would grant permanent non-discriminatory "normal trade relations" ("NTR",
+formerly "most favored nation") trading status to China. In 2000, Congress
+approved the legislation, but because China had not finished its accession
+negotiations with the WTO, in June 2001 President Bush extended NTR to China on
+an annual basis. That decision was recently supported by Congress. Once China
+completes the terms of accession to the WTO, Congress has provided the President
+with the authority to grant China permanent NTR. Bringing China into the WTO and
+providing permanent NTR to China will eventually reduce barriers to producing
+products in, exporting products from, and marketing and selling products within
+China.
+We are also currently sourcing footwear and apparel products from factories
+in Vietnam. From 1995 to 1998, former President Clinton took several steps to
+normalize economic and diplomatic relations between the United States and
+Vietnam. The President's actions were steps toward restoration of full trade
+relations which includes the United States granting non-discriminatory NTR
+trading status to Vietnam which would result in lower tariffs between the two
+countries. In July 2000, the United States and Vietnam signed a comprehensive
+bilateral trade agreement, which would, among other things, provide reciprocal
+NTR between the two countries. In June 2001, that agreement was submitted to
+Congress for consideration. If approved by the U.S. Congress and the Vietnamese
+National Assembly, the United States will grant an annual extension of NTR to
+Vietnam. This grant must be renewed annually by the President and reviewed by
+the Congress. We currently believe that Congress will consider the trade
+agreement by the end of this calendar year. If Congress approves the trade
+agreement, the grant of NTR trading status for Vietnam could expand our
+production and marketing opportunities in Vietnam and allow for Vietnamese
+sourced product to enter the United States at NTR tariff rates.
+COMPETITION
+The athletic footwear, apparel and equipment industry is keenly competitive
+in the United States and on a worldwide basis. We compete internationally with
+an increasing number of athletic and leisure shoe companies, athletic and
+leisure apparel companies, sports equipment companies, and large companies
+having diversified lines of athletic and leisure shoes, apparel and equipment,
+including Reebok, Adidas and others. The intense competition and the rapid
+changes in technology and consumer preferences in the markets for athletic and
+leisure footwear and apparel, and athletic equipment, constitute significant
+risk factors in our operations.
+NIKE is the largest seller of athletic footwear and athletic apparel in the
+world. Performance and reliability of shoes, apparel, and equipment, new product
+development, price, product identity through
+6
+9
+marketing and promotion, and customer support and service are important aspects
+of competition in the athletic footwear, apparel and equipment industry. To help
+market our products, we contract with prominent and influential athletes,
+coaches, teams, colleges, and sports leagues to endorse our brands and use our
+products, and we actively sponsor sporting events and clinics. We believe that
+we are competitive in all of these areas.
+TRADEMARKS AND PATENTS
+We utilize trademarks on nearly all of our products and believe that having
+distinctive marks that are readily identifiable is an important factor in
+creating a market for our goods, in identifying the Company, and in
+distinguishing our goods from the goods of others. We consider our NIKE(R) and
+Swoosh Design(R) trademarks to be among our most valuable assets and we have
+registered these trademarks in over 100 countries. In addition, we own many
+other trademarks which we utilize in marketing our products. We continue to
+vigorously protect our trademarks against infringement.
+NIKE has an exclusive, worldwide license to make and sell footwear using
+patented "Air" technology. The process utilizes pressurized gas encapsulated in
+polyurethane. Some of the early NIKE AIR(R) patents have expired, which may
+enable competitors to use certain types of like technology. Subsequent NIKE AIR
+patents will not expire for several years. We also have a number of patents
+covering components and features used in various athletic and leisure shoes. We
+believe that our success depends primarily upon skills in design, research and
+development, production and marketing rather than upon our patent position.
+However, we have followed a policy of filing applications for United States and
+foreign patents on inventions, designs and improvements that we deem valuable.
+EMPLOYEES
+We had approximately 22,700 employees at May 31, 2001. Management considers
+its relationship with employees to be excellent. With the exception of Bauer
+NIKE Hockey Inc., our employees are not represented by a union. Of Bauer NIKE
+Hockey's North American employees, approximately 65 percent, or fewer than 450,
+are covered by three union collective bargaining agreements with three separate
+bargaining units, and of Bauer NIKE Hockey's approximately 170 employees in
+Italy, approximately 30 percent, or fewer than 50, are covered by three
+collective bargaining agreements. The collective bargaining agreements expire on
+various dates from 2001 through 2003. There has never been a material
+interruption of operations due to labor disagreements.
+EXECUTIVE OFFICERS OF THE REGISTRANT
+The executive officers of NIKE as of July 25, 2001 are as follows:
+Philip H. Knight, Chief Executive Officer, Chairman of the Board, and
+President -- Mr. Knight, 63, a director since 1968, is a co-founder of NIKE and,
+except for the period from June 1983 through September 1984, served as its
+President from 1968 to 1990, and from June 2000 to present. Prior to 1968, Mr.
+Knight was a certified public accountant with Price Waterhouse and Coopers &
+Lybrand and was an Assistant Professor of Business Administration at Portland
+State University.
+Donald W. Blair, Vice President and Chief Financial Officer -- Mr. Blair,
+43, joined NIKE in November 1999. Prior to joining NIKE, he held a number of
+financial management positions with Pepsico, Inc., including Vice President,
+Finance of Pepsi-Cola Asia, Vice President, Planning of PepsiCo's Pizza Hut
+Division, and Senior Vice President, Finance of The Pepsi Bottling Group, Inc.
+Prior to joining Pepsico, Mr. Blair was a certified public accountant with
+Deloitte, Haskins, and Sells.
+Thomas E. Clarke, President of New Ventures -- Dr. Clarke, 50, a director
+since 1994, joined the Company in 1980. He was appointed divisional Vice
+President in charge of marketing in 1987, elected corporate Vice President in
+1989, appointed General Manager in 1990, and served as President and Chief
+Operating Officer from 1994 to 1999. Dr. Clarke previously held various
+positions with the Company, primarily in research, design, development and
+marketing. Dr. Clarke holds a doctorate degree in biomechanics.
+7
+10
+Charles D. Denson, President of the NIKE Brand -- Mr. Denson, 45, has been
+employed by NIKE since February 1979. Mr. Denson held several positions within
+the Company, including his appointments as Director of USA Apparel Sales in
+1994, divisional Vice President, US Sales in 1994, divisional Vice President
+European Sales in 1997, divisional Vice President and General Manager, NIKE
+Europe in 1998, Vice President and General Manager of NIKE USA in June 2000, and
+President of the NIKE Brand in March 2001.
+Gary M. DeStefano, President of USA Operations -- Mr. DeStefano, 44, has
+been employed by NIKE since 1982, with primary responsibilities in sales and
+regional administration. Mr. DeStefano was appointed Director of Domestic Sales
+in 1990, divisional Vice President in charge of domestic sales in 1992, Vice
+President of Global Sales in 1996, Vice President and General Manager of Asia
+Pacific in March 1997, and President of USA Operations in March 2001.
+Mindy F. Grossman, Vice President of Global Apparel -- Ms. Grossman, 43,
+joined NIKE in October 2000. Prior to joining NIKE, she was President and Chief
+Executive Officer of Polo Jeans Company/Ralph Lauren, a division of Jones
+Apparel Group, from 1995 to 2000. Prior to that, Ms. Grossman was Vice President
+of New Business Development at Polo Ralph Lauren Corp. from 1994 to 1995,
+President of The Warnaco Group Inc. Chaps Ralph Lauren division, and Senior Vice
+President of The Warnaco Group Inc. Menswear division from 1991 to 1994.
+P. Eunan McLaughlin, Vice President, Asia Pacific -- Mr. McLaughlin, 43,
+joined NIKE as Vice President Sales, NIKE Europe in February 1999, was appointed
+Vice President Commercial Sales and Retail in February 2000. and became Vice
+President, Asia Pacific in June 2001. Prior to joining NIKE, he was Partner and
+Vice President of Consumer & Retail Practices Division, Korn/Ferry International
+from 1996 to 1999. From 1985 to 1996 Mr. McLaughlin held the following positions
+with Mars, Inc.: Finance Director, Sales Director, and Managing Director of
+Germany Drink Division; Operations Director of Pedigree Pet Foods; and European
+Sales & Marketing Director. Mr. McLaughlin also worked for Reynolds McCarron
+(formerly Ernst & Young) in Ireland.
+Mark G. Parker, President of the NIKE Brand -- Mr. Parker, 44, has been
+employed by NIKE since 1979 with primary responsibilities in product research,
+design and development. Mr. Parker was appointed divisional Vice President in
+charge of development in 1987, corporate Vice President in 1989, General Manager
+in 1993, Vice President of Global Footwear in 1998, and President of the NIKE
+Brand in March 2001.
+Eric D. Sprunk, Vice President, Global Footwear -- Mr. Sprunk, 37, joined
+the Company in 1993. He was appointed Finance Director and General Manager of
+the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General
+Manager, NIKE Europe Footwear in 1998, and Vice President & General Manager of
+the Americas in 2000. Mr. Sprunk was appointed Vice President, Global Footwear
+in June 2001.
+Lindsay D. Stewart, Vice President and Chief of Staff, and Assistant
+Secretary -- Mr. Stewart, 54, joined NIKE as Assistant Corporate Counsel in
+1981. Mr. Stewart became Corporate Counsel in 1983. He was appointed Vice
+President and General Counsel in 1991, and Chief of Staff in March 2001. Prior
+to joining NIKE, Mr. Stewart was in private practice and an attorney for
+Georgia-Pacific Corporation.
+Frits D. van Paasschen, Vice President and General Manager, NIKE
+Europe -- Mr. van Paasschen, 40, has been employed by NIKE since 1997. He served
+as Vice President, Strategic Planning, and was appointed Vice President and
+General Manager, The Americas and Africa in 1998, and corporate Vice President
+and General Manager, NIKE Europe in 2000. Mr. van Paasschen was formerly Vice
+President, Finance & Planning, Disney Consumer Products, The Walt Disney
+Company.
+8
+11

raw/filings/0000320187/2000/0001095811-01-503828/item13.txt

@@ -0,0 +1,7 @@
+ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
+The information required by this Item is included under "Certain
+Transactions and Business Relationships" and "Indebtedness of Management" in the
+definitive Proxy Statement for our 2001 Annual Meeting of Shareholders and is
+incorporated herein by reference.
+44
+47

raw/filings/0000320187/2001/0000891020-02-001248/filing_metadata.csv

@@ -0,0 +1,2 @@
+cik,ticker,company_name,form,filing_date,report_date,acceptance_datetime,accession_number,primary_document,primary_doc_description,size,is_xbrl,is_inline_xbrl,document_url,filing_index_url,year,fiscal_year,is_primary_filing
+0000320187,NKE,"NIKE, Inc.",10-K,2002-08-14,2002-05-31,2002-08-14T23:37:26.000Z,0000891020-02-001248,v83383ore10vk.htm,"FORM 10-K YEAR ENDED MAY 31, 2002",1089565,0,0,https://www.sec.gov/Archives/edgar/data/320187/000089102002001248/v83383ore10vk.htm,https://www.sec.gov/Archives/edgar/data/320187/000089102002001248/,2001,2001,1

raw/filings/0000320187/2001/0000891020-02-001248/item1.txt

@@ -0,0 +1,774 @@
+Item 1. 
+Business 
+General 
+NIKE, Inc. was incorporated in 1968 under the
+laws of the state of Oregon. As used in this report, the terms
+“we”, “us”, “NIKE” and the
+“Company” refer to NIKE, Inc. and its predecessors,
+subsidiaries and affiliates, unless the context indicates
+otherwise.
+Our principal business activity involves the
+design, development and worldwide marketing of high quality
+footwear, apparel, equipment, and accessory products. NIKE is
+the largest seller of athletic footwear and athletic apparel in
+the world. We sell our products to approximately
+18,000 retail accounts in the United States and through a
+mix of independent distributors, licensees and subsidiaries in
+approximately 140 countries around the world. Virtually all
+of our products are manufactured by independent contractors.
+Virtually all footwear products are produced outside the United
+States, while apparel products are produced both in the United
+States and abroad.
+Products 
+NIKE’s athletic footwear products are
+designed primarily for specific athletic use, although a large
+percentage of the products are worn for casual or leisure
+purposes. We place considerable emphasis on high quality
+construction and innovative design. Running, basketball,
+children’s, cross-training and women’s shoes are
+currently our top-selling product categories and we expect them
+to continue to lead in product sales in the near future.
+However, we also market shoes designed for outdoor activities,
+tennis, golf, soccer, baseball, football, bicycling, volleyball,
+wrestling, cheerleading, aquatic activities, hiking, and other
+athletic and recreational uses.
+We sell active sports apparel covering most of
+the above categories, athletically inspired lifestyle apparel,
+as well as athletic bags and accessory items. NIKE apparel and
+accessories are designed to complement our athletic footwear
+products, feature the same trademarks and are sold through the
+same marketing and distribution channels. We often market
+footwear, apparel and accessories in “collections” of
+similar design or for specific purposes. We also market apparel
+with licensed college and professional team and league logos.
+We sell a line of performance equipment under the
+NIKE brand name, including sport balls, timepieces, eyewear,
+skates, bats, gloves, and other equipment designed for sports
+activities. We also have agreements for licensees to produce and
+sell NIKE brand swimwear, women’s sports bras, cycling
+apparel, children’s clothing, posters, school supplies,
+timepieces, and electronic media devices. We also sell small
+amounts of various plastic products to other manufacturers
+through our wholly-owned subsidiary, NIKE IHM, Inc.
+We sell a line of dress and casual footwear and
+accessories for men, women and children under the brand name
+Cole Haan® through our wholly-owned subsidiary, Cole Haan
+Holdings, Inc., headquartered in Yarmouth, Maine.
+Our wholly-owned subsidiary, Bauer NIKE Hockey
+Inc., headquartered in Greenland, New Hampshire, manufactures
+and distributes ice skates, skate blades, in-line roller skates,
+protective gear, hockey sticks, and hockey jerseys and
+accessories under the Bauer® and NIKE® brand names.
+Bauer also offers a full selection of products for street,
+roller and field hockey.
+In April 2002, we acquired Hurley International
+LLC, headquartered in Costa Mesa, California, which designs and
+distributes a line of action sports apparel (for surfing,
+skateboarding, and snowboarding) and youth lifestyle apparel
+under the Hurley brand name.
+2
+Table of Contents 
+Sales and Marketing 
+The table below shows certain information
+regarding NIKE’s United States and international (non-U.S.)
+revenues for the last three fiscal years.
+FY02 vs. 
+FY01 vs. 
+Fiscal 
+Fiscal 
+FY01 
+Fiscal 
+FY00 
+May 31, 
+2002 
+2001 
+% CHG 
+2000 
+% CHG 
+(In millions) 
+USA Region
+Footwear
+$ 
+3,185.0 
+$ 
+3,208.9 
+(0.7 
+)% 
+$ 
+3,351.2 
+(4.2 
+)% 
+Apparel
+1,305.3 
+1,260.3 
+3.6 
+% 
+1,154.4 
+9.2 
+% 
+Equipment and other
+425.7 
+349.8 
+21.7 
+% 
+226.5 
+54.4 
+% 
+Total USA
+4,916.0 
+4,819.0 
+2.0 
+% 
+4,732.1 
+1.8 
+% 
+Europe, Middle East and Africa (EMEA) Region
+Footwear
+1,551.8 
+1,422.8 
+9.1 
+% 
+1,309.4 
+8.7 
+% 
+Apparel
+989.5 
+976.3 
+1.4 
+% 
+933.9 
+4.5 
+% 
+Equipment and other
+190.2 
+185.7 
+2.4 
+% 
+163.7 
+13.4 
+% 
+Total EMEA
+2,731.5 
+2,584.8 
+5.7 
+% 
+2,407.0 
+7.4 
+% 
+Asia Pacific Region
+Footwear
+657.7 
+632.4 
+4.0 
+% 
+557.0 
+13.5 
+% 
+Apparel
+431.0 
+374.8 
+15.0 
+% 
+321.0 
+16.8 
+% 
+Equipment and other
+123.0 
+102.8 
+19.6 
+% 
+77.1 
+33.3 
+% 
+Total Asia Pacific
+1,211.7 
+1,110.0 
+9.2 
+% 
+955.1 
+16.2 
+% 
+Americas Region
+Footwear
+359.2 
+355.2 
+1.1 
+% 
+343.9 
+3.3 
+% 
+Apparel
+167.1 
+152.2 
+9.8 
+% 
+137.7 
+10.5 
+% 
+Equipment and other
+41.8 
+31.7 
+31.9 
+% 
+12.5 
+153.6 
+% 
+Total Americas
+568.1 
+539.1 
+5.4 
+% 
+494.1 
+9.1 
+% 
+Total NIKE brand
+9,427.3 
+9,052.9 
+4.1 
+% 
+8,588.3 
+5.4 
+% 
+Other brands
+465.7 
+435.9 
+6.8 
+% 
+406.8 
+7.2 
+% 
+Total Revenues
+$ 
+9,893.0 
+$ 
+9,488.8 
+4.3 
+% 
+$ 
+8,995.1 
+5.5 
+% 
+Financial information about geographic and
+segment operations appears in Note 16 of the consolidated
+financial statements on page 51.
+We experience moderate fluctuations in aggregate
+sales volume during the year. However, the mix of product sales
+may vary considerably from time to time as a result of changes
+in seasonal and geographic demand for particular types of
+footwear, apparel, and equipment.
+Because NIKE is a consumer products company, the
+relative popularity of various sports and fitness activities and
+changing design trends affect the demand for our products. We
+must therefore respond to trends and shifts in consumer
+preferences by adjusting the mix of existing product offerings,
+developing new products, styles and categories, and influencing
+sports and fitness preferences through aggressive marketing.
+This is a continuing risk. Failure to timely and adequately
+respond could have a material adverse affect on our sales and
+profitability.
+3
+Table of Contents 
+United States Market 
+During fiscal 2002, sales in the United States
+accounted for approximately 53 percent of total revenues,
+compared to 54 percent in fiscal 2001 and 56 percent in
+fiscal 2000. We sell to approximately 18,000 retail
+accounts in the United States. The NIKE brand domestic retail
+account base includes a mix of footwear stores, sporting goods
+stores, athletic specialty stores, department stores, skate,
+tennis and golf shops, and other retail accounts. During fiscal
+year 2002, our three largest customers accounted for
+approximately 28 percent of NIKE brand sales in the United
+States, and 26 percent of total sales in the United States.
+We make substantial use of our
+“futures” ordering program, which allows retailers to
+order five to six months in advance of delivery with the
+guarantee that 90 percent of their orders will be delivered
+within a set time period at a fixed price. In fiscal year 2002,
+92 percent of our U.S. footwear shipments (excluding Cole
+Haan, Bauer and Hurley) were made under the futures program,
+compared to 86 percent in fiscal 2001 and 90 percent
+in fiscal 2000. In fiscal 2002, 77 percent of our
+U.S. apparel shipments were made under the futures program,
+compared to 78 percent in fiscal 2001, and 82 percent
+in 2000.
+We utilize 18 NIKE sales offices to solicit sales
+in the United States. We also utilize 15 independent sales
+representatives to sell specialty products for golf, cycling,
+water sports and outdoor activities. In addition, we operate the
+following retail outlets in the United States:
+Retail Stores 
+Number 
+NIKE factory stores (which carry primarily
+B-grade and close-out merchandise)
+78 
+NIKE stores (including NIKE Goddess Stores)
+4 
+NIKETOWNs (designed to showcase NIKE products)
+13 
+Employee-only stores
+4 
+Cole Haan stores (including factory and employee
+stores)
+61 
+Total
+160 
+NIKE’s domestic distribution centers for
+footwear are located in Beaverton, Oregon, Wilsonville, Oregon,
+Memphis, Tennessee, and Greenland, New Hampshire. Apparel
+products are shipped from our Memphis distribution center. Cole
+Haan footwear and Bauer NIKE Hockey products are distributed
+primarily from Greenland, New Hampshire, and Hurley products are
+shipped from Costa Mesa, California.
+International Markets 
+We currently market our products in approximately
+140 countries outside of the United States through independent
+distributors, licensees, subsidiaries and branch offices.
+Non-U.S. sales accounted for 47 percent of total revenues
+in fiscal 2002, compared to 46 percent in fiscal 2001 and
+44 percent in fiscal 2000. We operate 19 distribution
+centers in Europe, Asia, Australia, Latin America, and Canada,
+and also distribute through independent distributors and
+licensees. We estimate that our products are sold through more
+than 30,000 retail accounts outside the United States. In many
+countries and regions, including Japan, Canada, Asia, Latin
+America, and Europe, we have a futures ordering program for
+retailers similar to the United States futures program described
+above. NIKE’s three largest customers outside of the U.S.
+accounted for approximately 9 percent of non-U.S. sales.
+We operate 162 retail outlets outside the United
+States, which are comprised of NIKETOWNs, factory stores,
+employee stores, and Cole Haan stores.
+International branch offices and subsidiaries of
+NIKE are located in Argentina, Australia, Austria, Belgium,
+Brazil, Canada, Chile, Croatia, Czech Republic, Denmark,
+Finland, France, Germany, Hong Kong, Hungary, Indonesia, India,
+Ireland, Israel, Italy, Japan, Korea, Malaysia, Mexico, New
+Zealand, The Netherlands, Norway, Peoples Republic of China, The
+Philippines, Poland, Portugal, Singapore, Slovakia, Slovenia,
+South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand,
+Turkey, the United Kingdom, and Vietnam.
+4
+Table of Contents 
+Significant Customers 
+Foot Locker, Inc., which operates a chain of
+retail stores specializing in athletic footwear and apparel,
+accounted for approximately 11 percent of global net sales of
+NIKE brand products during fiscal 2002. No other customer
+accounted for 10 percent or more of our net sales during fiscal
+2002.
+Orders 
+As of May 31, 2002, our worldwide futures
+orders for NIKE brand athletic footwear and apparel totaled
+$4.6 billion, compared to $4.4 billion as of
+May 31, 2001. These orders are scheduled for delivery from
+June through November of 2002. Based upon historical data, we
+expect that approximately 95 percent of these orders will be
+filled in that time period, although the orders may be
+cancelable.
+Product Research and Development 
+We believe that our research and development
+efforts are a key factor in our past and future success.
+Technical innovation in the design of footwear, apparel, and
+athletic equipment receive continued emphasis as NIKE strives to
+produce products that reduce or eliminate injury, aid athletic
+performance and maximize comfort.
+In addition to NIKE’s own staff of
+specialists in the areas of biomechanics, exercise physiology,
+engineering, industrial design and related fields, we also
+utilize research committees and advisory boards made up of
+athletes, coaches, trainers, equipment managers, orthopedists,
+podiatrists and other experts who consult with us and review
+designs, materials and concepts for product improvement.
+Employee athletes wear-test and evaluate products during the
+design and development process.
+Manufacturing 
+In fiscal 2002, approximately 5 percent of total
+NIKE brand apparel production for sale to the United States
+market was manufactured in the United States by independent
+contract manufacturers, most of which are located in the
+southern states. The remainder was manufactured by independent
+contractors located in 28 countries. Most of this apparel
+production occurred in Bangladesh, Bulgaria, China, Hong Kong,
+India, Indonesia, Malaysia, Mexico, Pakistan, The Philippines,
+Sri Lanka, Taiwan, Thailand, and Turkey. Substantially all of
+our apparel production for sale to the international market was
+manufactured outside the U.S. Our largest single apparel
+supplier accounted for approximately 8 percent of total fiscal
+2002 apparel production.
+Virtually all of our footwear is produced outside
+of the United States. In fiscal 2002, contract suppliers in the
+following countries manufactured the following percentages of
+total NIKE brand footwear:
+Country 
+Percent 
+People’s Republic of China
+38 
+Indonesia
+30 
+Vietnam
+15 
+Thailand
+14 
+Italy
+1 
+Taiwan
+1 
+South Korea
+1 
+We also have manufacturing agreements with
+independent factories in Argentina, Brazil, India, Mexico, South
+Africa, and Zimbabwe, to manufacture footwear for sale within
+those countries. Our largest single footwear supplier accounted
+for approximately 6 percent of total fiscal 2002 footwear
+production.
+The principal materials used in our footwear
+products are natural and synthetic rubber, plastic compounds,
+foam cushioning materials, nylon, leather, canvas, and
+polyurethane films used to make AIR-SOLE cushioning components.
+NIKE IHM, Inc., a wholly-owned subsidiary of NIKE, is our sole
+supplier of the AIR-SOLE cushioning components used in footwear.
+The principal materials used in our
+5
+Table of Contents 
+apparel products are natural and synthetic
+fabrics and threads, plastic and metal hardware, and specialized
+performance fabrics designed to repel rain, retain heat, or
+efficiently transport body moisture. NIKE and its contractors
+and suppliers buy raw materials in bulk. Most raw materials are
+available in the countries where manufacturing takes place. We
+have thus far experienced little difficulty in satisfying our
+raw material requirements.
+Our international operations are subject to the
+usual risks of doing business abroad, such as possible
+revaluation of currencies, export duties, quotas, restrictions
+on the transfer of funds and, in certain parts of the world,
+political instability. See “Trade Legislation” below.
+We have not, to date, been materially affected by any such risk,
+but cannot predict the likelihood of such developments
+occurring. We believe that we have the ability to develop, over
+a period of time, adequate alternative sources of supply for the
+products obtained from our present suppliers outside of the
+United States. If events prevented us from acquiring products
+from our suppliers in a particular country, our footwear
+operations could be temporarily disrupted and we could
+experience an adverse financial impact. However, we believe that
+we could eliminate any such disruption within a period of no
+more than 12 months, and that any adverse impact would,
+therefore, be of a short-term nature. We believe that our
+principal competitors are subject to similar risks.
+All of our products manufactured overseas and
+imported into the United States and other countries are subject
+to customs duties collected by customs authorities. Customs
+information submitted by us is routinely subject to review by
+customs authorities. We are unable to predict whether additional
+customs duties, quotas or other restrictions may be imposed on
+the importation of our products in the future. The enactment of
+any such duties, quotas or restrictions could result in
+increases in the cost of our products generally and might
+adversely affect the sales or profitability of NIKE and the
+imported footwear and apparel industry as a whole.
+Since 1972, Nissho Iwai American Corporation
+(“NIAC”), a subsidiary of Nissho Iwai Corporation, a
+large Japanese trading company, has performed significant
+import-export financing services for us. Currently, NIAC
+provides such financing services with respect to at least 80
+percent of the NIKE products sold outside of the United States,
+Europe and Japan. Any failure of NIAC to provide these services
+could disrupt our ability to acquire products from our suppliers
+and to deliver products to our customers outside of the United
+States, Europe and Japan. Such a disruption could result in
+cancelled orders that would adversely affect sales and
+profitability. However, we believe that any such disruption
+would be short term in duration due to the ready availability of
+alternative sources of financing at competitive rates. Our
+current agreements with NIAC expire on May 31, 2003.
+Trade Legislation 
+Our non-U.S. operations are subject to the usual
+risks of doing business abroad, such as the imposition of import
+quotas or anti-dumping duties. In 1994, the European Union
+(“EU”) Commission imposed quotas on certain types of
+footwear manufactured in China. These quotas replaced national
+quotas that had previously been in effect in several Member
+States. Footwear designed for use in sporting activities,
+meeting certain technical criteria and having a CIF (cost,
+insurance and freight) price above 9 euros (“Special
+Technology Athletic Footwear” or “STAF”), is
+excluded from the quotas. As a result of the STAF exclusion, and
+the amount of quota made available to us, the quotas have not,
+to date, had a material effect on our business.
+In 1995, the EU Commission, at the request of
+European footwear manufacturers, initiated two anti-dumping
+investigations covering footwear imported from the People’s
+Republic of China, Indonesia and Thailand. As a result, in 1997
+the Commission imposed definitive anti-dumping duties on certain
+textile upper footwear imported from China and Indonesia. In
+1998, the Commission imposed definitive anti-dumping duties on
+certain synthetic and leather upper footwear originating in
+China, Indonesia and Thailand. In the case of textile upper
+footwear, the anti-dumping duties do not cover sports footwear.
+In the case of synthetic and leather upper footwear, the
+anti-dumping duties do not cover footwear meeting the STAF
+technical criteria nor footwear with a CIF price above 5.7
+euros. As the anti-dumping duties for synthetic and leather
+uppers only affect some low cost footwear, these measures have
+no impact for us. While the exclusions are subject to some
+interpretation by customs authorities, we believe that most of
+our footwear sourced in the target countries for sale in the EU
+fits within the exclusions. We have also shifted the production
+of these types
+6
+Table of Contents 
+of footwear to other countries. Accordingly, the
+anti-dumping duties have not had a material effect on our
+business. The EU Commission has announced the impending
+expiration of these anti-dumping cases, subject to possible
+review requests by the European footwear manufacturers. Such
+reviews may result in the renewal of the anti-dumping
+regulations.
+The EU Commission in June 2000 issued an
+amendment to the explanatory notes to the EU’s customs
+nomenclature (“CN”). The amendment, which is not
+legally binding, interprets some of the technical criteria for
+the STAF exclusion and the footwear types that can be classified
+as for use in sporting activity. The amendment restricts
+somewhat the scope of the STAF exclusion from the quotas and
+also the sports footwear exclusions from the two EU anti-dumping
+measures. To date, the large majority of our footwear models
+fall within the exclusions provided for under the CN. Our
+innovative footwear designs may stretch the traditional concepts
+of athletic or sports footwear reflected in the technical
+criteria. We anticipate that the majority of these new designs
+will fall within the exclusions. NIKE is an active participant
+in discussions to revise the technical criteria to reflect
+technologically advanced designs.
+If the EU trade measures become substantially
+more restrictive we would consider shifting the production of
+such footwear to other countries in order to maintain
+competitive pricing. We believe that we are prepared to deal
+effectively with any such change of circumstances and that any
+adverse impact would be of a temporary nature. We continue to
+closely monitor international restrictions and maintain our
+multi-country sourcing strategy and contingency plans. We
+believe that our major competitors stand in much the same
+position regarding these trade measures.
+We currently source footwear and apparel products
+from factories in Vietnam. In July 2000, the United States and
+Vietnam signed an historic, comprehensive bilateral trade
+agreement, which, among other things, provides reciprocal,
+non-discriminatory Normal Trade Relations (“NTR”)
+between the two countries. In September 2001, that agreement was
+approved by Congress and then ratified by the Vietnamese
+National Assembly. Once approved, the United States granted an
+annual extension of NTR to Vietnam. Under current U.S. law, the
+President must renew this grant annually with the opportunity
+for review by the Congress. In June 2002, President Bush renewed
+NTR for Vietnam for an additional year and in July 2002, the
+Congress supported the President’s decision. We currently
+believe that, absent unforeseen circumstances, the President
+will continue his annual extensions of NTR to Vietnam and that
+Congress will support the President’s decisions. Ongoing
+NTR trading status for Vietnam will allow us to expand our
+production and marketing opportunities in Vietnam and allow for
+Vietnamese-sourced product to enter the United States at NTR
+tariff rates.
+Competition 
+The athletic footwear, apparel and equipment
+industry is keenly competitive in the United States and on a
+worldwide basis. We compete internationally with an increasing
+number of athletic and leisure shoe companies, athletic and
+leisure apparel companies, sports equipment companies, and large
+companies having diversified lines of athletic and leisure
+shoes, apparel and equipment, including Reebok, Adidas and
+others. The intense competition and the rapid changes in
+technology and consumer preferences in the markets for athletic
+and leisure footwear and apparel, and athletic equipment,
+constitute significant risk factors in our operations.
+NIKE is the largest seller of athletic footwear
+and athletic apparel in the world. Performance and reliability
+of shoes, apparel, and equipment, new product development,
+price, product identity through marketing and promotion, and
+customer support and service are important aspects of
+competition in the athletic footwear, apparel and equipment
+industry. To help market our products, we contract with
+prominent and influential athletes, coaches, teams, colleges,
+and sports leagues to endorse our brands and use our products,
+and we actively sponsor sporting events and clinics. We believe
+that we are competitive in all of these areas.
+7
+Table of Contents 
+Trademarks and Patents 
+We utilize trademarks on nearly all of our
+products and believe that having distinctive marks that are
+readily identifiable is an important factor in creating a market
+for our goods, in identifying the Company, and in distinguishing
+our goods from the goods of others. We consider our NIKE®
+and Swoosh Design® trademarks to be among our most valuable
+assets and we have registered these trademarks in over
+100 countries. In addition, we own many other trademarks
+which we utilize in marketing our products. We continue to
+vigorously protect our trademarks against infringement.
+NIKE has an exclusive, worldwide license to make
+and sell footwear using patented “Air” technology. The
+process utilizes pressurized gas encapsulated in polyurethane.
+Some of the early NIKE AIR® patents have expired,
+which may enable competitors to use certain types of like
+technology. Subsequent NIKE AIR patents will not expire for
+several years. We also have a number of patents covering
+components and features used in various athletic and leisure
+shoes. We believe that our success depends primarily upon skills
+in design, research and development, production and marketing
+rather than upon our patent position. However, we have followed
+a policy of filing applications for United States and foreign
+patents on inventions, designs and improvements that we deem
+valuable.
+Employees 
+We had approximately 22,700 employees at
+May 31, 2002. Management considers its relationship with
+employees to be excellent. With the exception of Bauer NIKE
+Hockey Inc., our employees are not represented by a union. Of
+Bauer NIKE Hockey’s North American employees, approximately
+65 percent, or fewer than 450, are covered by three union
+collective bargaining agreements with three separate bargaining
+units, and all of Bauer NIKE Hockey’s approximately 150
+non-immigrant employees in Italy are covered by three collective
+bargaining agreements. The collective bargaining agreements
+expire on various dates from 2002 through 2003. There has never
+been a material interruption of operations due to labor
+disagreements.
+Executive Officers of the Registrant 
+The executive officers of NIKE as of
+July 25, 2002 are as follows:
+Philip H. Knight,
+Chief Executive Officer, Chairman of
+the Board, and President — Mr. Knight, 64, a
+director since 1968, is a co-founder of NIKE and, except for the
+period from June 1983 through September 1984, served as its
+President from 1968 to 1990, and from June 2000 to present.
+Prior to 1968, Mr. Knight was a certified public accountant
+with Price Waterhouse and Coopers & Lybrand and was an
+Assistant Professor of Business Administration at Portland State
+University.
+Donald W. Blair,
+Vice President and Chief Financial
+Officer — Mr. Blair, 44, joined NIKE in November
+1999. Prior to joining NIKE, he held a number of financial
+management positions with Pepsico, Inc., including Vice
+President, Finance of Pepsi-Cola Asia, Vice President, Planning
+of PepsiCo’s Pizza Hut Division, and Senior Vice President,
+Finance of The Pepsi Bottling Group, Inc. Prior to joining
+Pepsico, Mr. Blair was a certified public accountant with
+Deloitte, Haskins, and Sells.
+Thomas E. Clarke,
+President of New Ventures —
+Dr. Clarke, 51, a director since 1994, joined the Company
+in 1980. He was appointed divisional Vice President in charge of
+marketing in 1987, elected corporate Vice President in 1989,
+appointed General Manager in 1990, and served as President and
+Chief Operating Officer from 1994 to 2000. Dr. Clarke
+previously held various positions with the Company, primarily in
+research, design, development and marketing. Dr. Clarke
+holds a doctorate degree in biomechanics.
+Charles D. Denson,
+President of the NIKE
+Brand — Mr. Denson, 46, has been employed by NIKE
+since February 1979. Mr. Denson held several positions
+within the Company, including his appointments as Director of
+USA Apparel Sales in 1994, divisional Vice President, US Sales
+in 1994, divisional Vice President European Sales in 1997,
+divisional Vice President and General Manager, NIKE Europe in
+1998, Vice President and General Manager of NIKE USA in June
+2000, and President of the NIKE Brand in March 2001.
+8
+Table of Contents 
+Gary M. DeStefano,
+President of USA
+Operations — Mr. DeStefano, 45, has been employed
+by NIKE since 1982, with primary responsibilities in sales and
+regional administration. Mr. DeStefano was appointed
+Director of Domestic Sales in 1990, divisional Vice President in
+charge of domestic sales in 1992, Vice President of Global Sales
+in 1996, Vice President and General Manager of Asia Pacific in
+March 1997, and President of USA Operations in March 2001.
+Mindy F. Grossman,
+Vice President of Global
+Apparel — Ms. Grossman, 44, joined NIKE in
+October 2000. Prior to joining NIKE, she was President and Chief
+Executive Officer of Polo Jeans Company/ Ralph Lauren, a
+division of Jones Apparel Group, Inc. from 1995 to 2000. Prior
+to that, Ms. Grossman was Vice President of New Business
+Development at Polo Ralph Lauren Corp. from 1994 to 1995,
+President of The Warnaco Group Inc. Chaps Ralph Lauren division,
+and Senior Vice President of The Warnaco Group Inc. Menswear
+division from 1991 to 1994.
+P. Eunan McLaughlin,
+Vice President, Asia
+Pacific — Mr. McLaughlin, 44, joined NIKE as Vice
+President, Sales, NIKE Europe in February 1999, was appointed
+Vice President Commercial Sales and Retail in February 2000, and
+became Vice President, Asia Pacific in June 2001. Prior to
+joining NIKE, he was Partner and Vice President of Consumer
+& Retail Practices Division, Korn/ Ferry International from
+1996 to 1999. From 1985 to 1996 Mr. McLaughlin held the
+following positions with Mars, Inc.: Finance Director, Sales
+Director, and Managing Director of Germany Drink Division;
+Operations Director of Pedigree Pet Foods; and European Sales
+& Marketing Director. Mr. McLaughlin also worked for
+Reynolds McCarron (formerly Ernst & Young) in Ireland.
+D. Scott Olivet,
+Vice President, NIKE Subsidiaries and
+New Business Development — Mr Olivet, 40, joined NIKE
+in August 2001. Prior to joining NIKE, he was a Senior Vice
+President of Gap Inc., responsible for real estate, store
+design, and construction across Gap, Banana Republic, and Old
+Navy brands from 1998 to 2001. Prior to that, Mr. Olivet
+was employed by Bain & Company, an international
+strategic consulting firm from 1984 to 1998 (a Partner from 1993
+to 1998). In addition to direct client work, Mr. Olivet was
+the leader of the firm’s worldwide practice in
+organizational effectiveness and change management.
+Mark G. Parker,
+President of the NIKE
+Brand — Mr. Parker, 45, has been employed by NIKE
+since 1979 with primary responsibilities in product research,
+design and development. Mr. Parker was appointed divisional
+Vice President in charge of development in 1987, corporate Vice
+President in 1989, General Manager in 1993, Vice President of
+Global Footwear in 1998, and President of the NIKE Brand in
+March 2001.
+Eric D. Sprunk, Vice
+President, Global Footwear — Mr. Sprunk, 38,
+joined the Company in 1993. He was appointed Finance Director
+and General Manager of the Americas in 1994, Finance Director,
+NIKE Europe in 1995, Regional General Manager, NIKE Europe
+Footwear in 1998, and Vice President & General Manager of
+the Americas in 2000. Mr. Sprunk was appointed corporate
+Vice President, Global Footwear in June 2001.
+Lindsay D. Stewart,
+Vice President and Chief of Staff, and
+Assistant Secretary — Mr. Stewart, 55, joined
+NIKE as Assistant Corporate Counsel in 1981. Mr. Stewart
+became Corporate Counsel in 1983. He was appointed Vice
+President and General Counsel in 1991, and Chief of Staff in
+March 2001. Prior to joining NIKE, Mr. Stewart was in
+private practice and an attorney for Georgia-Pacific Corporation.
+Frits D. van Paasschen,
+Vice President and General Manager,
+NIKE Europe — Mr. van Paasschen, 42, has been employed
+by NIKE since 1997. He served as Vice President, Strategic
+Planning, and was appointed Vice President and General Manager,
+The Americas and Africa in 1998, and corporate Vice President
+and General Manager, NIKE Europe in 2000. Mr. van Paasschen
+was formerly Vice President, Finance & Planning, Disney
+Consumer Products, The Walt Disney Company.
+Roland P. Wolfram,
+Vice President, Global
+Operations & Technology — Mr. Wolfram, 42,
+joined NIKE as Vice President, Strategic Planning in November
+1998, and was appointed Vice President, Global
+Operations & Technology in February 2002. Prior to
+NIKE, Mr. Wolfram was Vice President and General Manager of
+Pacific Bell Video Services. From 1992 to 1993 he was director
+of the desktop products group for Compression Labs, Inc.
+9
+Table of Contents

raw/filings/0000320187/2001/0000891020-02-001248/item13.txt

@@ -0,0 +1,9 @@
+Item 13. Certain
+Relationships and Related Transactions 
+The information required by this Item is included
+under “Certain Transactions and Business
+Relationships” and “Indebtedness of Management”
+in the definitive Proxy Statement for our 2002 Annual Meeting of
+Shareholders and is incorporated herein by reference.
+54
+Table of Contents

raw/filings/0000320187/2002/0001193125-03-031022/filing_metadata.csv

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+0000320187,NKE,"NIKE, Inc.",10-K,2003-08-07,2003-05-31,2003-08-08T01:13:04.000Z,0001193125-03-031022,d10k.htm,FORM 10-K,1340808,0,0,https://www.sec.gov/Archives/edgar/data/320187/000119312503031022/d10k.htm,https://www.sec.gov/Archives/edgar/data/320187/000119312503031022/,2002,2002,1

raw/filings/0000320187/2002/0001193125-03-031022/item1.txt

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+Item 1. Business 
+General 
+NIKE, Inc. was
+incorporated in 1968 under the laws of the state of Oregon. As used in this report, the terms “we”, “us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless
+the context indicates otherwise. Our Internet address is www.nike.com . On our NIKE Corporate web site, located at www.nikebiz.com , we post the following filings as soon as reasonably practicable after they are electronically filed with
+or furnished to the Securities and Exchange Commission: our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or
+15(d) of the Securities and Exchange Act of 1934. All such filings on our NIKE Corporate web site are available free of charge. 
+Our principal business activity involves the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory
+products. NIKE is the largest seller of athletic footwear and athletic apparel in the world. We sell our products to approximately 18,000 retail accounts in the United States and through a mix of independent distributors, licensees and subsidiaries
+in nearly 200 countries around the world. Virtually all of our products are manufactured by independent contractors. Virtually all footwear products are produced outside the United States, while apparel and equipment products are produced both in
+the United States and abroad. 
+Products 
+NIKE’s athletic
+footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. We place considerable emphasis on high quality construction and innovative design for men, women
+and children. Running, basketball, children’s, cross-training and women’s shoes are currently our top-selling product categories and we expect them to continue to lead in product sales in the near future. However, we also market shoes
+designed for outdoor activities, tennis, golf, soccer, baseball, football, bicycling, volleyball, wrestling, cheerleading, aquatic activities, hiking, and other athletic and recreational uses. 
+We sell active sports apparel covering most of the above categories,
+athletically inspired lifestyle apparel, as well as athletic bags and accessory items. NIKE apparel and accessories are designed to complement our athletic footwear products, feature the same trademarks and are sold through the same marketing and
+distribution channels. We often market footwear, apparel and accessories in “collections” of similar design or for specific purposes. We also market apparel with licensed college and professional team and league logos. 
+We sell a line of performance equipment under the NIKE brand name, including
+sport balls, timepieces, eyewear, skates, bats, gloves, and other equipment designed for sports activities. We also have agreements for licensees to produce and sell NIKE brand swimwear, women’s sports bras, cycling apparel, maternity exercise
+wear, children’s clothing, school supplies, timepieces, and electronic media devices. We also sell small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary, NIKE IHM, Inc. and plastic injected and
+metal products to other manufacturers through our wholly-owned subsidiary , BAUER Italia S.p.A. 
+We sell a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan ® , CH, Gseries by Cole Haan, and Bragano through our wholly-owned subsidiary,
+Cole Haan Holdings, Inc., headquartered in Yarmouth, Maine. 
+Our wholly-owned subsidiary, Bauer NIKE Hockey Inc., headquartered in Greenland, New Hampshire, manufactures and distributes ice skates, skate blades, in-line roller skates, protective gear, hockey sticks, and hockey jerseys, licensed
+apparel and accessories under the Bauer ® and
+NIKE ® brand names. Bauer also offers a full
+selection of products for street and roller hockey. 
+2 
+Table of Contents 
+Our wholly-owned subsidiary Hurley International LLC, headquartered in Costa Mesa, California, designs
+and distributes a line of action sports apparel (for surfing, skateboarding, and snowboarding) and youth lifestyle apparel and footwear under the Hurley brand name. 
+On July 9, 2003, the Company entered into an agreement to purchase all of the equity shares of Converse Inc., a widely
+recognized footwear company based in Massachusetts. Closing of the transaction is subject to regulatory review, including U.S. government review under the Hart-Scott-Rodino Premerger Notification Act. 
+Sales and Marketing 
+The table
+below shows certain information regarding NIKE’s United States and international (non-U.S.) revenues for the three years ending May 31, 2003. 
+Fiscal 
+2003 
+Fiscal 
+2002 
+FY03 vs. 
+FY02 
+% CHG 
+Fiscal 
+2001 
+FY02 vs. 
+FY01 
+% CHG 
+(Dollars in millions) 
+USA Region 
+Footwear 
+$ 
+3,019.5 
+$ 
+3,135.5 
+(4 
+)% 
+$ 
+3,167.4 
+(1 
+)% 
+Apparel 
+1,351.0 
+1,255.7 
+8 
+% 
+1,207.9 
+4 
+% 
+Equipment 
+287.9 
+278.4 
+3 
+% 
+273.6 
+2 
+% 
+Total USA 
+4,658.4 
+4,669.6 
+— 
+4,648.9 
+— 
+Europe, Middle East and Africa (EMEA) Region 
+Footwear 
+1,896.0 
+1,543.8 
+23 
+% 
+1,415.7 
+9 
+% 
+Apparel 
+1,133.1 
+977.9 
+16 
+% 
+961.0 
+2 
+% 
+Equipment 
+212.6 
+174.8 
+22 
+% 
+176.3 
+(1 
+)% 
+Total EMEA 
+3,241.7 
+2,696.5 
+20 
+% 
+2,553.0 
+6 
+% 
+Asia Pacific Region 
+Footwear 
+732.4 
+640.2 
+14 
+% 
+617.5 
+4 
+% 
+Apparel 
+499.3 
+403.3 
+24 
+% 
+356.1 
+13 
+% 
+Equipment 
+127.1 
+98.7 
+29 
+% 
+91.5 
+8 
+% 
+Total Asia Pacific 
+1,358.8 
+1,142.2 
+19 
+% 
+1,065.1 
+7 
+% 
+Americas Region 
+Footwear 
+337.3 
+359.1 
+(6 
+)% 
+355.2 
+1 
+% 
+Apparel 
+148.1 
+167.1 
+(11 
+)% 
+152.1 
+10 
+% 
+Equipment 
+41.6 
+41.9 
+(1 
+)% 
+31.8 
+32 
+% 
+Total Americas 
+527.0 
+568.1 
+(7 
+)% 
+539.1 
+5 
+% 
+9,785.9 
+9,076.4 
+8 
+% 
+8,806.1 
+3 
+% 
+Other 
+911.1 
+816.6 
+12 
+% 
+682.7 
+20 
+% 
+Total Revenues 
+$ 
+10,697.0 
+$ 
+9,893.0 
+8 
+% 
+$ 
+9,488.8 
+4 
+% 
+Financial information
+about geographic and segment operations appears in Note 17 of the consolidated financial statements on page 59. 
+We experience moderate fluctuations in aggregate sales volume during the year. However, the mix of product sales may vary considerably from time to time
+as a result of changes in seasonal and geographic demand for particular types of footwear, apparel, and equipment. 
+Because NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing design trends affect the demand
+for our products. We must therefore respond to trends 
+3 
+Table of Contents 
+and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories, and influencing sports
+and fitness preferences through aggressive marketing. This is a continuing risk. Failure to timely and adequately respond could have a material adverse affect on our sales and profitability. 
+United States Market 
+During
+fiscal 2003, sales in the United States accounted for approximately 49 percent of total revenues, compared to 53 percent in fiscal 2002 and 54 percent in fiscal 2001. We sell to approximately 18,000 retail accounts in the United States. The
+NIKE brand domestic retail account base includes a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts. During fiscal year 2003, our three largest
+customers accounted for approximately 27 percent of NIKE brand sales in the United States excluding sales from NIKE Golf and Bauer NIKE Hockey, and 24 percent of total sales in the United States. 
+We make substantial use of our “futures” ordering program, which
+allows retailers to order five to six months in advance of delivery with the commitment that 90 percent of their orders will be delivered within a set time period at a fixed price. In fiscal year 2003, 91 percent of our U.S. footwear shipments
+(excluding Cole Haan, Bauer, Hurley and NIKE Golf) were made under the futures program, compared to 92 percent in fiscal 2002 and 86 percent in fiscal 2001. In fiscal 2003, 67 percent of our U.S. apparel shipments were made under the futures
+program, compared to 69 percent in fiscal 2002, and 67 percent in 2001. 
+We utilize 19 NIKE sales offices to solicit sales in the United States. We also utilize 11 independent sales representatives to sell specialty products for golf, cycling, water sports and outdoor activities. In addition, we operate the
+following retail outlets in the United States: 
+Retail Stores 
+Number 
+NIKE factory stores (which carry primarily B-grade and close-out merchandise) 
+75 
+NIKE stores (including NIKE Goddess Stores) 
+4 
+NIKETOWNs (designed to showcase NIKE products) 
+13 
+Employee-only stores 
+4 
+Cole Haan stores (including factory and employee stores) 
+65 
+Total 
+161 
+NIKE’s domestic
+distribution centers for footwear are located in Wilsonville, Oregon, Memphis, Tennessee, and Greenland, New Hampshire. Apparel products are shipped from our Memphis distribution center. Cole Haan and Bauer NIKE Hockey products are distributed
+primarily from Greenland, New Hampshire, and Hurley products are shipped from Costa Mesa, California. 
+International Markets 
+We
+currently market our products in nearly 200 countries outside of the United States through independent distributors, licensees, subsidiaries and branch offices. Non-U.S. sales accounted for 51 percent of total revenues in fiscal 2003, compared to 47
+percent in fiscal 2002 and 46 percent in fiscal 2001. We operate 24 distribution centers in Europe, Asia, Australia, Latin America, Africa and Canada, and also distribute through independent distributors and licensees. We estimate that our products
+are sold through more than 30,000 retail accounts outside the United States. In many countries and regions, including Japan, Canada, Asia, some Latin American countries, and Europe, we have a futures ordering program for retailers similar to the
+United States futures program described above. NIKE’s three largest customers outside of the U.S. accounted for approximately 14 percent of non-U.S. sales. 
+We operate 175 retail outlets outside the United States, which consist of NIKETOWNs, factory stores, employee stores, and
+Cole Haan stores. 
+4 
+Table of Contents 
+International branch offices and subsidiaries of NIKE are located in Argentina, Australia, Austria,
+Belgium, Brazil, Canada, Chile, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Malaysia, Mexico, New Zealand, The Netherlands, Norway, Peoples Republic of
+China, The Philippines, Poland, Portugal, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, and Vietnam. 
+Orders 
+Worldwide futures for NIKE
+brand athletic footwear and apparel, scheduled for delivery between June and November 2003, were $4.9 billion compared to $4.6 billion for the same period last year. Based upon historical data, we expect that approximately 95 percent of these orders
+will be filled in that time period, although the orders may be cancelled. 
+Product Research and Development 
+We believe that our research and development efforts are a key factor in our past and future success. Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as NIKE strives to produce
+products that reduce or eliminate injury, aid athletic performance and maximize comfort. 
+In addition to NIKE’s own staff of specialists in the areas of biomechanics, exercise physiology, engineering, industrial design and related fields, we also utilize research committees and advisory boards made up
+of athletes, coaches, trainers, equipment managers, orthopedists, podiatrists and other experts who consult with us and review designs, materials and concepts for product improvement. Employee athletes wear-test and evaluate products during the
+design and development process. 
+Manufacturing 
+In fiscal 2003,
+approximately 1 percent of total NIKE brand apparel production for sale to the United States market was manufactured in the United States by independent contract manufacturers, most of which are located in the southern states. The remainder was
+manufactured by independent contractors located in 35 countries. Most of this apparel production occurred in Bangladesh, Bulgaria, China, Hong Kong, India, Indonesia, Malaysia, Mexico, Pakistan, The Philippines, Sri Lanka, Taiwan, Thailand, and
+Turkey. Substantially all of our apparel production for sale to the international market was manufactured outside the U.S. Our largest single apparel supplier accounted for approximately 7 percent of total fiscal 2003 apparel production. 
+Virtually all of our footwear is produced outside of the United States. In
+fiscal 2003, contract suppliers in the following countries manufactured the following percentages of total NIKE brand footwear: 
+Country 
+Percent 
+People’s Republic of China 
+38 
+Indonesia 
+27 
+Vietnam 
+18 
+Thailand 
+16 
+Italy 
+Less than 1 
+Taiwan 
+Less than 1 
+South Korea 
+Less than 1 
+We also have manufacturing agreements
+with independent factories in Argentina, Brazil, India, Mexico, South Africa, and Zimbabwe, to manufacture footwear for sale primarily within those countries. Our largest single footwear supplier accounted for approximately 7 percent of total fiscal
+2003 footwear production. 
+The principal materials used in our
+footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas, and polyurethane films used to make AIR-SOLE cushioning 
+5 
+Table of Contents 
+components. NIKE IHM, Inc., a wholly-owned subsidiary of NIKE, is our sole supplier of the AIR-SOLE cushioning components used in footwear. The principal
+materials used in our apparel products are natural and synthetic fabrics and threads, plastic and metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body moisture. NIKE and its
+contractors and suppliers buy raw materials in bulk. Most raw materials are available in the countries where manufacturing takes place. We have thus far experienced little difficulty in satisfying our raw material requirements. 
+Our international operations are subject to the usual risks of doing business
+abroad, such as possible revaluation of currencies, export duties, quotas, restrictions on the transfer of funds and, in certain parts of the world, political instability. See “Trade Legislation” below. We have not, to date, been
+materially affected by any such risk, but cannot predict the likelihood of such developments occurring. We believe that we have the ability to develop, over a period of time, adequate alternative sources of supply for the products obtained from our
+present suppliers outside of the United States. If events prevented us from acquiring products from our suppliers in a particular country, our footwear operations could be temporarily disrupted and we could experience an adverse financial impact.
+However, we believe that we could eliminate any such disruption within a period of no more than 12 months, and that any adverse impact would, therefore, be of a short-term nature. We believe that our principal competitors are subject to similar
+risks. 
+All of our products manufactured overseas and imported
+into the United States and other countries are subject to customs duties collected by customs authorities. Customs information submitted by us is routinely subject to review by customs authorities. We are unable to predict whether additional customs
+duties, quotas or other restrictions may be imposed on the importation of our products in the future. The enactment of any such duties, quotas or restrictions could result in increases in the cost of our products generally and might adversely affect
+the sales or profitability of NIKE and the imported footwear and apparel industry as a whole. 
+Since 1972, Nissho Iwai American Corporation (“NIAC”), a subsidiary of Nissho Iwai Corporation, a large Japanese trading company, has performed significant import-export financing services for us. Currently,
+NIAC provides such financing services with respect to at least 80% of the NIKE products sold outside of the United States, Europe and Japan. Approximately 12% of NIKE products are sold outside of the United States, Europe and Japan. Any failure of
+NIAC to provide these services or any failure of NIAC’s banks could disrupt our ability to acquire products from our suppliers and to deliver products to our customers outside of the United States, Europe and Japan. Such a disruption could
+result in cancelled orders that would adversely affect sales and profitability. However, we believe that any such disruption would be short term in duration due to the ready availability of alternative sources of financing at competitive rates. Our
+current agreements with NIAC expire on May 31, 2005. 
+Trade Legislation 
+Our non-U.S.
+operations are subject to the usual risks of doing business abroad, such as the imposition of import quotas or anti-dumping duties. In 1994, the European Union (“EU”) Commission imposed quotas on certain types of footwear manufactured in
+China. These quotas replaced national quotas that had previously been in effect in several Member States. Footwear designed for use in sporting activities, meeting certain technical criteria and having a CIF (cost, insurance and freight) price above
+9 euros (“Special Technology Athletic Footwear” or “STAF”), is excluded from the quotas. As a result of the STAF exclusion, and the amount of quota made available to us, the quotas have not, to date, had a material effect on our
+business. In addition, the EU Commission has announced that footwear quotas will be eliminated globally beginning January 1, 2005. 
+In 1995, the EU Commission, at the request of European footwear manufacturers, initiated two anti-dumping investigations within the footwear industry
+covering footwear imported from the People’s Republic of China, Indonesia and Thailand. As a result, in 1997 the Commission imposed definitive anti-dumping duties on certain textile upper footwear imported from China and Indonesia. In 1998, the
+Commission imposed definitive anti-dumping duties on certain synthetic and leather upper footwear originating in China, Indonesia and Thailand. These anti-dumping duties were removed in 2003 and are no longer applicable for footwear imports into the
+EU. These measures had no impact on us. 
+6 
+Table of Contents 
+The EU Commission in June 2000 issued an amendment to the explanatory notes to the EU’s customs
+nomenclature (“CN”). The amendment, which is not legally binding, interprets some of the technical criteria for the STAF exclusion and the footwear types that can be classified as for use in sporting activity. The amendment restricts
+somewhat the scope of the STAF exclusion from the quotas and also the sports footwear exclusions from the two EU anti-dumping measures. To date, the large majority of our footwear models fall within the exclusions provided for under the CN. Our
+innovative footwear designs may stretch the traditional concepts of athletic or sports footwear reflected in the technical criteria. We anticipate that the majority of these new designs will fall within the exclusions. NIKE is an active participant
+in discussions to revise the technical criteria to reflect technologically advanced designs. 
+On May 1, 2004 10 new countries will join the EU. They will also join the EU single market and discussions are presently underway to increase the current EU quota system to account for the enlarged EU market. NIKE and
+other manufacturers do not expect this expansion of the EU single market to present any significant challenges to the importation into the EU of sports footwear produced in China as the EU has announced that it will increase the quotas to take
+account of the enlarged consumer and market demand. 
+If the EU
+trade measures become substantially more restrictive we would consider shifting the production of our sports footwear to other countries in order to maintain competitive pricing and access to these markets. We believe that we are prepared to deal
+effectively with any such change of circumstances and that any adverse impact would be of a temporary nature. We continue to closely monitor international restrictions and maintain our multi-country sourcing strategy and contingency plans. We
+believe that our major competitors stand in much the same position regarding these trade measures. 
+We currently source footwear and apparel products from factories in Vietnam. In July 2000, the United States and Vietnam signed a historic, comprehensive
+bilateral trade agreement, which, among other things, provides reciprocal, non-discriminatory Normal Trade Relations (“NTR”) between the two countries. In September 2001, that agreement was approved by Congress and then ratified by the
+Vietnamese National Assembly. Once approved, the United States granted an annual extension of NTR to Vietnam. Under current U.S. law, the President must renew this grant annually with the opportunity for review by Congress. In May 2003, President
+Bush renewed NTR for Vietnam for an additional year and we anticipate Congress will support this decision. We currently believe that, absent unforeseen circumstances, the President will continue his annual extensions of NTR to Vietnam and that
+Congress will support the President’s decisions. Ongoing NTR trading status for Vietnam will allow us to expand our production and marketing opportunities in Vietnam and allow for Vietnamese-sourced product to enter the United States at NTR
+tariff rates. 
+Competition 
+The athletic
+footwear, apparel and equipment industry is keenly competitive in the United States and on a worldwide basis. We compete internationally with an increasing number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports
+equipment companies, and large companies having diversified lines of athletic and leisure shoes, apparel and equipment, including Reebok, Adidas and others. The intense competition and the rapid changes in technology and consumer preferences in the
+markets for athletic and leisure footwear and apparel, and athletic equipment, constitute significant risk factors in our operations. 
+NIKE is the largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of shoes, apparel, and equipment, new
+product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel and equipment industry. To help market our products, we contract
+with prominent and influential athletes, coaches, teams, colleges, and sports leagues to endorse our brands and use our products, and we actively sponsor sporting events and clinics. We believe that we are competitive in all of these areas.
+Trademarks and Patents 
+We
+utilize trademarks on nearly all of our products and believe that having distinctive marks that are readily identifiable is an important factor in creating a market for our goods, in identifying the Company, and in 
+7 
+Table of Contents 
+distinguishing our goods from the goods of others. We consider our NIKE ® and Swoosh Design ® trademarks to be among our most valuable assets and we have registered these trademarks in over 100 countries. In addition, we own many other
+trademarks that we utilize in marketing our products. We continue to vigorously protect our trademarks against infringement. 
+NIKE has an exclusive, worldwide license to make and sell footwear using patented “Air” technology. The process utilizes pressurized gas
+encapsulated in polyurethane. Some of the early NIKE AIR ® patents have expired, which may enable competitors to use certain types of similar technology. Subsequent NIKE AIR patents will not expire for several years. We also have a number of patents covering components and
+features used in various athletic and leisure shoes. We believe that our success depends primarily upon skills in design, research and development, production and marketing rather than upon our patent position. However, we have followed a policy of
+filing applications for United States and foreign patents on inventions, designs and improvements that we deem valuable. 
+Employees 
+We had approximately
+23,300 employees at May 31, 2003. Management considers its relationship with employees to be excellent. None of our employees are represented by a union, with the exception of Bauer NIKE Hockey Inc. Of Bauer NIKE Hockey’s North American
+employees, approximately 74 percent, or approximately 550, are covered by three union collective bargaining agreements with three separate bargaining units, and all of Bauer NIKE Hockey’s approximately 210 non-immigrant employees in Italy are
+covered by three collective bargaining agreements. The collective bargaining agreements expire on various dates from 2003 through 2005. There has never been a material interruption of operations due to labor disagreements. 
+Executive Officers of the Registrant 
+The executive officers of NIKE as of July 25, 2003 are as follows: 
+Philip H. Knight, Chief Executive Officer, Chairman of the Board, and President — Mr. Knight, 65, a director since 1968, is a co-founder of NIKE and, except for the period from June 1983 through September
+1984, served as its President from 1968 to 1990, and from June 2000 to present. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at
+Portland State University. 
+Donald W. Blair, Vice
+President and Chief Financial Officer — Mr. Blair, 45, joined NIKE in November 1999. Prior to joining NIKE, he held a number of financial management positions with Pepsico, Inc., including Vice President, Finance of Pepsi-Cola Asia, Vice
+President, Planning of PepsiCo’s Pizza Hut Division, and Senior Vice President, Finance of The Pepsi Bottling Group, Inc. Prior to joining Pepsico, Mr. Blair was a certified public accountant with Deloitte, Haskins, and Sells. 
+Thomas E. Clarke, President of New Ventures — Dr. Clarke, 52, a
+director since 1994, joined the Company in 1980. He was appointed divisional Vice President in charge of marketing in 1987, elected corporate Vice President in 1989, appointed General Manager in 1990, and served as President and Chief Operating
+Officer from 1994 to 2000. Dr. Clarke previously held various positions with the Company, primarily in research, design, development and marketing. Dr. Clarke holds a doctorate degree in biomechanics. 
+Wesley A. Coleman , Vice President, Global Human Resources — Mr.
+Coleman, 53, has been employed by Nike since 2002 in his current role. Prior to joining Nike, he held a number of Human Resource positions over a 20-year period with S.C. Johnson and Sons, Inc., including Vice President HR, North America and Vice
+President HR, Asia/Pacific. 
+Charles D. Denson,
+President of the NIKE Brand — Mr. Denson, 47, has been employed by NIKE since February 1979. Mr. Denson held several positions within the Company, including his appointments as Director 
+8 
+Table of Contents 
+of USA Apparel Sales in 1994, divisional Vice President, US Sales in 1994, divisional Vice President European Sales in 1997, divisional Vice President and
+General Manager, NIKE Europe in 1998, Vice President and General Manager of NIKE USA in June 2000, and President of the NIKE Brand in March 2001. 
+Gary M. DeStefano, President of USA Operations — Mr. DeStefano, 46, has been employed by NIKE since 1982, with primary responsibilities in
+sales and regional administration. Mr. DeStefano was appointed Director of Domestic Sales in 1990, divisional Vice President in charge of domestic sales in 1992, Vice President of Global Sales in 1996, Vice President and General Manager of Asia
+Pacific in March 1997, and President of USA Operations in March 2001. 
+Trevor Edwards , Vice President, Global Brand Management — Mr. Edwards, 40, joined the Company in 1992. He was appointed Marketing Manager, Strategic Accounts, Foot Locker in 1993, Director of Marketing, the Americas in 1995,
+Director of Marketing, Europe in 1997, Vice President, Marketing for Europe, Middle East and Africa in 1999, and Vice President, US Brand Marketing in 2000. Mr. Edwards was appointed corporate Vice President, Global Brand Management in November
+2002. 
+Mindy F. Grossman, Vice President of Global
+Apparel — Ms. Grossman, 45, joined NIKE in October 2000. Prior to joining NIKE, she was President and Chief Executive Officer of Polo Jeans Company/Ralph Lauren, a division of Jones Apparel Group, Inc. from 1995 to 2000. Prior to that, Ms.
+Grossman was Vice President of New Business Development at Polo Ralph Lauren Corp. from 1994 to 1995, President of The Warnaco Group Inc. Chaps Ralph Lauren division, and Senior Vice President of The Warnaco Group Inc. Menswear division from 1991 to
+1994. 
+P. Eunan McLaughlin, Vice President, Asia Pacific
+— Mr. McLaughlin, 45, joined NIKE as Director of Sales, NIKE Europe in February 1999, was appointed Vice President Commercial Sales and Retail in February 2000, and became Vice President, Asia Pacific in June 2001. Prior to joining NIKE, he was
+Partner and Vice President of Consumer & Retail Practices Division, Korn/Ferry International from 1996 to 1999. From 1983 to 1996 Mr. McLaughlin held various positions with Mars, Inc. in Finance, Sales, Marketing and General Management.
+D. Scott Olivet, Vice President, NIKE Subsidiaries and
+New Business Development — Mr. Olivet, 41, joined NIKE in August 2001. Prior to joining NIKE, he was a Senior Vice President of Gap Inc., responsible for real estate, store design, and construction across Gap, Banana Republic, and Old Navy
+brands from 1998 to 2001. Prior to that, Mr. Olivet was employed by Bain & Company, an international strategic consulting firm from 1984 to 1998 (a Partner from 1993 to 1998). In addition to direct client work, Mr. Olivet was the leader of the
+firm’s worldwide practice in organizational effectiveness and change management. 
+Mark G. Parker, President of the NIKE Brand — Mr. Parker, 47, has been employed by NIKE since 1979 with primary responsibilities in product research, design and development. Mr. Parker was appointed
+divisional Vice President in charge of development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998, and President of the NIKE Brand in March 2001. 
+Eric D. Sprunk, Vice President, Global Footwear — Mr. Sprunk, 39,
+joined the Company in 1993. He was appointed Finance Director and General Manager of the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General Manager, NIKE Europe Footwear in 1998, and Vice President & General Manager of the
+Americas in 2000. Mr. Sprunk was appointed corporate Vice President, Global Footwear in June 2001. 
+Lindsay D. Stewart, Vice President and Chief of Staff, and Secretary — Mr. Stewart, 56, joined NIKE as Assistant Corporate Counsel in 1981.
+Mr. Stewart became Corporate Counsel in 1983. He was appointed Vice President and General Counsel in 1991, and Chief of Staff in March 2001. Prior to joining NIKE, Mr. Stewart was in private practice and an attorney for Georgia-Pacific Corporation.
+9 
+Table of Contents 
+Frits D. van Paasschen, Vice President and General Manager, NIKE Europe — Mr. van Paasschen,
+42, has been employed by NIKE since 1997. He served as Vice President, Strategic Planning, and was appointed Vice President and General Manager, The Americas and Africa in 1998, and corporate Vice President and General Manager, NIKE Europe in 2000.
+Mr. van Paasschen was formerly Vice President, Finance & Planning, Disney Consumer Products, The Walt Disney Company. 
+Roland P. Wolfram, Vice President, Global Operations & Technology — Mr. Wolfram, 43, joined NIKE as Vice President, Strategic Planning in
+November 1998, and was appointed Vice President, Global Operations & Technology in February 2002. Prior to NIKE, Mr. Wolfram was Vice President and General Manager of Pacific Bell Video Services. From 1992 to 1993 he was director of the desktop
+products group for Compression Labs, Inc.

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+Item 13. Certain Relationships and Related Transactions 
+The information required by this Item is included under “Certain Transactions and Business Relationships” and “Indebtedness of
+Management” in the definitive Proxy Statement for our 2003 Annual Meeting of Shareholders and is incorporated herein by reference.

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+Item 9A. Controls and Procedures 
+The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s
+Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to the Company’s
+management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes
+that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit
+relationship of possible controls and procedures. 
+The Company
+carries out a variety of on-going procedures, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Company’s Chief Financial Officer, to evaluate the effectiveness of
+the design and operation of the Company’s disclosure controls and procedures. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures
+were effective at the reasonable assurance level as of May 31, 2003. 
+There has been no change in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the Company’s
+internal controls over financial reporting. 
+63 
+Table of Contents 
+PART III

raw/filings/0000320187/2006/0001193125-07-164166/filing_metadata.csv

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+0000320187,NKE,"NIKE, Inc.",10-K,2007-07-27,2007-05-31,2007-07-28T00:16:21.000Z,0001193125-07-164166,d10k.htm,FORM 10-K,1370510,0,0,https://www.sec.gov/Archives/edgar/data/320187/000119312507164166/d10k.htm,https://www.sec.gov/Archives/edgar/data/320187/000119312507164166/,2006,2006,1

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+Item 1. Business 
+General 
+NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As used in this report, the
+terms “we”, “us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless the context indicates otherwise. Our Internet address is www.nike.com. On our
+NIKE Corporate web site, located at www.nikebiz.com, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission: our annual report on
+Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended. All such
+filings on our NIKE Corporate web site are available free of charge. Also available on the NIKE Corporate web site are the charters of the committees of our board of directors, as well as our corporate governance guidelines and code of ethics;
+copies of any of these documents will be provided in print to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453. 
+Our principal business activity is the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory products.
+NIKE is the largest seller of athletic footwear and athletic apparel in the world. We sell our products to retail accounts, through NIKE-owned retail stores, and through a mix of independent distributors and licensees, in over 180 countries around
+the world. Virtually all of our products are manufactured by independent contractors. Virtually all footwear and apparel products are produced outside the United States, while equipment products are produced both in the United States and abroad.
+Products 
+NIKE’s athletic footwear products are designed primarily for specific athletic use, although a
+large percentage of the products are worn for casual or leisure purposes. We place considerable emphasis on high quality construction and innovation in products designed for men, women and children. Running, training, basketball, soccer,
+sport-inspired urban shoes, and children’s shoes are currently our top-selling product categories and we expect them to continue to lead in product sales in the near future. We also market shoes designed for tennis, golf, baseball, football,
+lacrosse, walking, outdoor activities, skateboarding, bicycling, volleyball, wrestling, cheerleading, aquatic activities and other athletic and recreational uses. 
+We sell sports apparel and accessories covering most of the above categories, sports-inspired lifestyle apparel, as well as athletic bags and accessory items. NIKE apparel and accessories are designed to complement
+our athletic footwear products, feature the same trademarks and are sold through the same marketing and distribution channels. We often market footwear, apparel and accessories in “collections” of similar design or for specific purposes.
+We also market apparel with licensed college and professional team and league logos. 
+We sell a line of performance equipment under the
+NIKE brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, and other equipment designed for sports activities. We also have agreements for licensees to produce and sell NIKE
+brand swimwear, cycling apparel, children’s clothing, school supplies, electronic devices, eyewear, golf accessories, and belts. We also sell small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary,
+NIKE IHM, Inc. 
+We sell a line of dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan ® , G Series ® and Bragano ® through our wholly-owned subsidiary, Cole Haan Holdings Incorporated (“Cole Haan”), headquartered in
+Yarmouth, Maine. 
+Our wholly-owned subsidiary Converse Inc. (“Converse”), headquartered in North Andover, Massachusetts, designs
+and distributes athletic and casual footwear, apparel and accessories under the Converse ® , Chuck Taylor ® , All Star ® , One
+Star ® and Jack Purcell ® trademarks, and footwear under the Hurley ® trademark. 
+2 
+Table of Contents 
+Our wholly-owned subsidiary Hurley International LLC (“Hurley”), headquartered in Costa Mesa,
+California, designs and distributes a line of action sports apparel for surfing, skateboarding, and snowboarding, youth lifestyle apparel, and accessories under the Hurley ® trademark. 
+Our wholly-owned subsidiaries NIKE Bauer Hockey Corp. and NIKE Bauer Hockey U.S.A., Inc. (collectively, “NIKE Bauer Hockey”), headquartered in Toronto, Ontario and Greenland, New Hampshire, respectively, manufactures and
+distributes ice skates, skate blades, protective gear, hockey sticks, licensed and team apparel and accessories under the NIKE Bauer ® , and NIKE ® trademarks. NIKE Bauer ® also offers a full selection of products for street and roller hockey. 
+Our wholly-owned subsidiary
+Exeter Brands Group LLC (“Exeter Brands Group”), headquartered in Beaverton, Oregon, sells athletic footwear and apparel in retail channels for value-conscious consumers, and markets licensed athletic footwear and apparel under the Starter
+brand name and “S” logo. 
+Sales and Marketing 
+Financial information about geographic and segment operations appears in Note 17 of the
+consolidated financial statements on page 73. 
+We experience moderate fluctuations in aggregate sales volume during the year. Historically,
+revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third quarters. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for
+particular types of footwear, apparel and equipment. 
+Because NIKE is a consumer products company, the relative popularity of various
+sports and fitness activities and changing design trends affect the demand for our products. We must therefore respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles
+and categories, and influencing sports and fitness preferences through aggressive marketing. This is a continuing risk. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability.
+United States Market 
+In fiscal 2007, sales in the United States (including U.S. sales of Cole Haan, Converse,
+Exeter Brands Group, Hurley, NIKE Bauer Hockey and NIKE Golf) accounted for approximately 47 percent of total revenues, compared to 47 percent in fiscal 2006 and 46 percent in fiscal 2005. We sell to approximately 21,000 retail accounts in the
+United States. The NIKE brand domestic retail account base includes a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts. During fiscal year 2007, our
+three largest customers accounted for approximately 29 percent of NIKE brand sales in the United States excluding sales from NIKE Bauer Hockey and NIKE Golf, and 24 percent of total sales in the United States. 
+We make substantial use of our “futures” ordering program, which allows retailers to order five to six months in advance of delivery with
+the commitment that 90 percent of their orders will be delivered within a set time period at a fixed price. In fiscal year 2007, 94 percent of our U.S. wholesale footwear shipments (excluding Cole Haan, Converse, Exeter Brands Group, Hurley, NIKE
+Bauer Hockey and NIKE Golf) were made under the futures program, compared to 90 percent in fiscal 2006 and 91 percent in fiscal 2005. In fiscal 2007, 81 percent of our U.S. wholesale apparel shipments (excluding Cole Haan, Converse, Exeter Brands
+Group, Hurley, NIKE Bauer Hockey and NIKE Golf) were made under the futures program, compared to 69 percent in fiscal 2006, and 71 percent in fiscal 2005. 
+3 
+Table of Contents 
+We utilize 18 NIKE sales offices to solicit sales in the United States. We also utilize 14 independent
+sales representatives to sell specialty products for golf. In addition, we sell NIKE brand products through our internet website, www.nikestore.com , and we operate the following retail outlets in the United States: 
+U.S. Retail Stores 
+Number 
+NIKE factory stores (which carry primarily overstock and closeout merchandise) 
+102 
+NIKE stores (including NIKE Women stores) 
+14 
+NIKETOWNs (designed to showcase NIKE products) 
+12 
+NIKE employee-only stores 
+4 
+Cole Haan stores (including factory and employee stores) 
+95 
+Converse stores (including factory and employee stores) 
+20 
+Hurley stores 
+7 
+Total 
+254 
+NIKE’s domestic distribution centers for footwear are located in Wilsonville, Oregon, and
+Memphis, Tennessee. Apparel and equipment products are shipped from our Memphis, Tennessee, Tigard, Oregon, and Foothill Ranch, California distribution centers. Cole Haan and NIKE Bauer Hockey products are distributed primarily from Greenland, New
+Hampshire, and Converse products are shipped from Ontario and Fontana, California. 
+International Markets 
+In fiscal 2007, non-U.S. sales (including non-U.S. sales of Cole Haan, Converse, Exeter
+Brands Group, Hurley, NIKE Bauer Hockey and NIKE Golf) accounted for 53 percent of total revenues in fiscal 2007, compared to 53 percent in fiscal 2006 and 54 percent in fiscal 2005. We sell our products to retail accounts, through NIKE-owned retail
+stores, and through a mix of independent distributors and licensees around the world. We estimate that we sell to more than 25,000 retail accounts outside the United States, excluding sales by independent distributors and licensees. We operate 11
+distribution centers in Europe, Asia, Australia, Africa and Canada. In many countries and regions, including Canada, Asia, some Latin American countries, and Europe, we have a futures ordering program for retailers similar to the United States
+futures program described above. NIKE’s three largest customers outside of the U.S. accounted for approximately 9 percent of NIKE brand sales outside the United States excluding sales from NIKE Bauer Hockey and NIKE Golf, and approximately
+9 percent of total non-U.S. sales. 
+We operate the following retail outlets outside the United States: 
+Non-U.S. Retail Stores 
+Number 
+NIKE factory stores 
+126 
+NIKE stores 
+33 
+NIKETOWNs 
+3 
+NIKE employee-only stores 
+9 
+Cole Haan stores 
+61 
+Total 
+232 
+International branch offices and subsidiaries of NIKE are located in Argentina, Australia,
+Austria, Belgium, Brazil, Bulgaria, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Lebanon, Malaysia, Mexico, New Zealand,
+the Netherlands, Norway, People’s Republic of China, the Philippines, Poland, Portugal, Russia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, Uruguay and
+Vietnam. 
+4 
+Table of Contents 
+Significant Customer 
+Foot Locker, Inc., which operates a chain of retail stores specializing in athletic
+footwear and apparel, accounted for approximately 10 percent of global net sales of NIKE, Inc. during fiscal 2007. No other customer accounted for 10 percent or more of our net sales during fiscal 2007. 
+Orders 
+Worldwide futures and advance orders for NIKE brand athletic footwear and apparel, scheduled for
+delivery from June through November 2007, were $7.7 billion compared to $6.6 billion for the same period last year. This futures and advance order amount is calculated based upon our forecast of the actual exchange rates under which our revenues
+will be translated during this period, which approximate current spot rates. Based upon historical data, we expect that approximately 95 percent of these orders will be filled in that time period, although some orders may be cancelled. Reported
+futures and advance orders are not necessarily indicative of our expectation of revenues for this period. This is because the mix of orders can shift between advance/futures and at-once orders. In addition, foreign currency exchange rate
+fluctuations as well as differing levels of order cancellations and discounts can cause differences in the comparisons between futures and advance orders and actual revenues. Moreover, a significant portion of our revenue is not derived from futures
+and advance orders, including at-once and closeout sales of NIKE footwear and apparel, wholesale sales of equipment, Cole Haan, Converse, Exeter Brands Group, Hurley, NIKE Bauer Hockey, NIKE Golf, and retail sales across all brands. 
+Product Research and Development 
+We believe that our research and development efforts are a key factor in our
+past and future success. Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as NIKE strives to produce products that help to reduce injury, enhance athletic performance and maximize comfort.
+In addition to NIKE’s own staff of specialists in the areas of biomechanics, exercise physiology, engineering, industrial design and
+related fields, we also utilize research committees and advisory boards made up of athletes, coaches, trainers, equipment managers, orthopedists, podiatrists and other experts who consult with us and review designs, materials and concepts for
+product improvement. Employee athletes and other athletes wear-test and evaluate products during the design and development process. 
+Manufacturing 
+Virtually all of our footwear is produced outside of the United States. In fiscal 2007, contract
+suppliers in China, Vietnam, Indonesia and Thailand manufactured 35 percent, 31 percent, 21 percent and 12 percent of total NIKE brand footwear, respectively. We also have manufacturing agreements with independent factories in Argentina, Brazil,
+India, Italy, and South Africa to manufacture footwear for sale primarily within those countries. Our largest single footwear factory accounted for approximately 6 percent of total fiscal 2007 footwear production. 
+Almost all of NIKE brand apparel production for sale to the United States market, and all of our apparel production for sale to the international market,
+was manufactured outside of the United States by independent contract manufacturers located in 36 countries. Most of this apparel production occurred in China, Thailand, Indonesia, Malaysia, Turkey, Honduras, Vietnam, Sri Lanka, Mexico, Taiwan,
+Cambodia, India and Bangladesh. Our largest single apparel factory accounted for approximately 6 percent of total fiscal 2007 apparel production. 
+The principal materials used in our footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas and polyurethane films used to make Air-Sole cushioning components. NIKE IHM, Inc.,
+NIKE (Suzhou) Sports Company, Ltd., wholly-owned subsidiaries of NIKE, and independent contractors in China and Taiwan, are our largest suppliers of the Air-Sole cushioning components used in footwear. The principal materials used in our apparel
+products are natural and synthetic fabrics and 
+5 
+Table of Contents 
+threads, plastic and metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body moisture. NIKE
+and its contractors and suppliers buy raw materials in bulk. Most raw materials are available in the countries where manufacturing takes place. We have thus far experienced little difficulty in satisfying our raw material requirements. 
+Since 1972, Sojitz Corporation of America (“Sojitz America”), a large Japanese trading company, has performed significant import-export
+financing services for us. During fiscal 2007, Sojitz America provided such financing services for NIKE Brand products sold in Argentina, Uruguay, Canada, Chile, Mexico, Brazil, India, Panama, The Philippines, Malaysia, South Africa, China, Korea,
+and Thailand excluding products produced and sold in the same country. Approximately 13 percent of NIKE brand sales occurred in those countries. Any failure of Sojitz America to provide these services or any failure of Sojitz America’s banks
+could disrupt our ability to acquire products from our suppliers and to deliver products to our customers outside of the United States, Europe, Middle East, Africa and Japan. Such a disruption could result in cancelled orders that would adversely
+affect sales and profitability. However, we believe that any such disruption would be short term in duration due to the ready availability of alternative sources of financing at competitive rates. Our current agreements with Sojitz America expire on
+May 31, 2008. 
+International Operations and Trade 
+Our international operations and sources of supply are subject to the usual
+risks of doing business abroad, such as possible revaluation of currencies, export duties, anti-dumping duties, quotas, safeguard measures, trade restrictions, restrictions on the transfer of funds and, in certain parts of the world, political
+instability and terrorism. We have not, to date, been materially affected by any such risk, but cannot predict the likelihood of such developments occurring. We believe that we have the ability to develop, over a period of time, adequate alternative
+sources of supply for the products obtained from our present suppliers outside of the United States. If events prevented us from acquiring products from our suppliers in a particular country, our operations could be temporarily disrupted and we
+could experience an adverse financial impact. However, we believe that we could abate any such disruption within a period of no more than 12 months, and that much of the adverse impact on supply would, therefore, be of a short-term nature. We
+believe that our principal competitors are subject to similar risks. 
+As a result of the Trade Act of 2003, the United States implemented
+significant new Federal requirements for cargo security, focused on imports of containerized cargo. We are a significant importer of containerized cargo. Accordingly, we participate actively in appropriate governmental programs, such as the Customs
+Trade Partnership Against Terrorism, to reduce risks of possible supply disruptions caused by U.S. and international cargo security mandates and terrorism. We and a broad coalition of businesses have been actively working with the United States
+Congress as it considers legislation to make U.S. ports more secure. We are actively following this proposed legislation and believe that any legislation, if passed, will not have a significant impact on our supply chain. We believe that our major
+competitors stand in much the same position of risk regarding this potential legislation. 
+All of our products manufactured overseas and
+imported into the United States, the European Union (“EU”) and other countries are subject to customs duties collected by customs authorities. Customs information submitted by us is routinely subject to review by customs authorities. We
+are unable to predict whether additional customs duties, anti-dumping duties, quotas, safeguard measures, or other trade restrictions may be imposed on the importation of our products in the future. Such actions could result in increases in the cost
+of our products generally which might adversely affect the sales or profitability of NIKE and the imported footwear and apparel industry as a whole. Accordingly, we are actively monitoring the developments described below. 
+6 
+Table of Contents 
+Footwear Imports into the European Union 
+From 1994 through January 1, 2005, the EU imposed limits (or “quotas”) on the import of certain types of footwear manufactured in China.
+Footwear designed for use in sporting activities, meeting certain technical criteria and having a CIF (cost, insurance and freight) price above nine euros (“Special Technology Athletic Footwear” or “STAF”), was excluded from the
+quotas. As a result of the STAF exclusion, and the amount of quota made available to us, the quotas did not have a material effect on our business. However, as part of China’s 2001 accession to the World Trade Organization (“WTO”),
+China entered into an agreement with the EU and other WTO members to abide by a special safeguard arrangement whereby quotas could be imposed on any product sourced in China, including footwear, if there was a surge in imports from China into
+another WTO country, and after a legal proceeding it was determined that such imports were injuring a domestic producer. Additionally, under longstanding WTO rules, all WTO member countries reserved the right to impose (1) safeguard measures
+(temporary quotas) if it can be demonstrated in a legal proceeding that increased imports are injuring another WTO member’s domestic industry; and (2) anti-dumping measures if it can be demonstrated in a legal proceeding that imports are
+being sold at an unfair low price in another WTO member’s home market, and those imports were causing or threatening to cause material injury to the domestic industry. 
+Accordingly, with the phase-out of the quotas at the beginning of 2005, and the expiration of a separate EU anti-dumping case in 2003 against footwear
+made in China, Indonesia, and Thailand, there has been renewed pressure from some parts of the EU footwear manufacturing sector to re-impose some level of trade protection on imported footwear from China, India, Vietnam, and other exporting
+countries. In July 2005, the European Commission, at the request of the European domestic footwear industry, initiated investigations into leather footwear imported from China and Vietnam. NIKE and all other major athletic footwear manufacturers
+participated actively as respondents in this investigation and took the position that athletic footwear (i) should not be within the product scope of the investigation, and (ii) does not meet the legal requirements of injury and price in
+an anti-dumping investigation. Our arguments were successful and the EU agreed in October 2006 on definitive duties of 16.5% for China and 10% for Vietnam, but excluded STAF from the measures, and also agreed to implement the duties for two rather
+than the normal five-year period. As a result, these measures did not significantly impact our business and we believe that our major competitors stand in much the same position regarding these trade measures. 
+Vietnam Imports into the United States 
+We currently source a portion of our footwear and apparel products from factories in Vietnam. In 2001, the United States Congress and the Vietnamese National Assembly approved a comprehensive bilateral trade agreement, which, among other
+things, provides reciprocal, non-discriminatory Normal Trade Relations (“NTR”) between the U.S. and Vietnam. Following Congressional approval of granting Vietnam Permanent Normal Trade Relations in 2006, Vietnam is now a full member of the
+WTO. Vietnam’s entry into the WTO will provide us greater certainty about our business within Vietnam. It will likewise enable us to further expand our production and marketing opportunities in Vietnam and allow for Vietnamese-sourced products
+to continue to enter the United States at NTR tariff rates. 
+Trade Relations with China 
+China represents a critically important sourcing and marketing country for us. Many governments around the world are concerned about China’s growing
+and fast-paced economy, compliance with WTO rules, and high trade deficits. As a result there is a wide range of legislative proposals that have been introduced to address these concerns. While some of these concerns are justified, we are working
+with broad coalitions of global businesses and trade associations who represent a wide variety of sectors (e.g. services, manufacturing, agriculture) to help ensure that any legislation enacted and implemented (i) addresses legitimate and core
+concerns, (ii) is consistent with international trade rules, and (iii) is reflective and considerate of China’s domestic economy and important role in the global economic community. We believe that our major competitors as well as
+most other multi-national companies stand in much the same position regarding these trade measures. 
+7 
+Table of Contents 
+Competition 
+The athletic footwear, apparel and equipment industry is keenly competitive in the United States
+and on a worldwide basis. We compete internationally with an increasing number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies, and large companies having diversified lines of athletic and
+leisure shoes, apparel and equipment, including Adidas, Puma, and others. The intense competition and the rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic equipment,
+constitute significant risk factors in our operations. 
+NIKE is the largest seller of athletic footwear and athletic apparel in the world.
+Performance and reliability of shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel
+and equipment industry. To help market our products, we contract with prominent and influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and use our products, and we actively sponsor sporting events and clinics. We
+believe that we are competitive in all of these areas. 
+Trademarks and Patents 
+We utilize trademarks on nearly all of our products and believe that having distinctive
+marks that are readily identifiable is an important factor in creating a market for our goods, in identifying the Company, and in distinguishing our goods from the goods of others. We consider our NIKE ® and Swoosh Design ® trademarks to be among our most valuable assets and we have registered these trademarks in over 100 countries. In
+addition, we own many other trademarks that we utilize in marketing our products. We continue to vigorously protect our trademarks against infringement. 
+NIKE has an exclusive, worldwide license to make and sell footwear using patented “Air” technology. The process utilizes pressurized gas encapsulated in polyurethane. Some of the early NIKE AIR ® patents have expired, which may enable competitors to
+use certain types of similar technology. Subsequent NIKE AIR ® patents will not expire for several years. We also have hundreds of U.S. and foreign utility patents, and thousands of U.S. and foreign design patents covering components and features used in various athletic and
+leisure shoes, apparel, and equipment. These patents expire at various times, and have a remaining duration of from now to at least 2021 for design patents, and from now to at least 2027 for utility patents. We believe that our success depends
+primarily upon skills in design, research and development, production and marketing rather than upon our patent position. However, we have followed a policy of filing applications for United States and foreign patents on inventions, designs and
+improvements that we deem valuable. 
+Employees 
+We had approximately 30,200 employees at May 31, 2007. Management considers its relationship
+with employees to be excellent. None of our employees is represented by a union, with the exception of NIKE Bauer Hockey. Of NIKE Bauer Hockey’s employees, approximately 39 percent, or approximately 157, are covered by two union collective
+bargaining agreements with two separate bargaining units. The collective bargaining agreements expire on various dates from 2007 through 2008. There has never been a material interruption of operations due to labor disagreements. 
+Executive Officers of the Registrant 
+The executive officers of NIKE as of July 25, 2007 are as follows:
+Philip H. Knight, Chairman of the Board — Mr. Knight, 69, a director since 1968, is a co-founder of NIKE and, except for
+the period from June 1983 through September 1984, served as its President from 1968 to 1990, and from June 2000 to December 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand
+and was an Assistant Professor of Business Administration at Portland State University. 
+8 
+Table of Contents 
+Mark G. Parker, Chief Executive Officer and President — Mr. Parker, 51, was appointed
+CEO and President in January 2006. He has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing, and brand management. Mr. Parker was appointed divisional Vice President in
+charge of development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998, and President of the NIKE Brand in 2001. 
+David J. Ayre, Vice President, Global Human Resources — Mr. Ayre, 47, joined NIKE as Vice President, Global Human Resources in July
+2007. Prior to joining NIKE, he held a number of senior human resource positions with Pepsico, Inc. since 1990, most recently as head of Talent and Performance Rewards. 
+Lewis L. Bird III, President, Subsidiaries — Mr. Bird, 43, joined NIKE as President, Subsidiaries in July 2006. Prior to joining NIKE, he held a number of management positions within multinational
+companies with diverse brand portfolios. He was Executive Vice President of New Business Development for Gap Inc. from September 2005 to March 2006. Prior to that, Mr. Bird served as Chief Operating Officer of Gap Inc.’s
+North American division from March 2003 to September 2005, Chief Financial Officer of Gap Inc.’s Old Navy division from 2001 to 2003, Vice President Finance & Operations of Gateway, Inc. from 1999 to 2001, Director of Business
+Analysis & Planning at AlliedSignal Inc. from 1998 to 1999, and prior to that held financial management positions with AlliedSignal, Ford Motor Company and BayBanks, Inc. 
+Donald W. Blair, Vice President and Chief Financial Officer — Mr. Blair, 49, joined NIKE in November 1999. Prior to joining NIKE, he
+held a number of financial management positions with Pepsico, Inc., including Vice President, Finance of Pepsi-Cola Asia, Vice President, Planning of PepsiCo’s Pizza Hut Division, and Senior Vice President, Finance of The Pepsi Bottling Group,
+Inc. Prior to joining Pepsico, Mr. Blair was a certified public accountant with Deloitte, Haskins, and Sells. 
+Mary Kate Buckley,
+Vice President/General Manager, Americas — Ms. Buckley, 47, has been employed by NIKE since 1998. She was appointed Director of New Business Development in 1998, Director of nike.com in 1998, divisional Vice President of nike.com in
+1999, and divisional Vice President and General Manger, Americas Region in 2001. Ms. Buckley was appointed corporate Vice President and General Manager, Americas in July 2006. Prior to joining NIKE, Ms. Buckley worked in several positions
+in finance, marketing and strategic planning for The Walt Disney Company. 
+Craig Cheek, Vice President and General Manager, USA
+Region, Mr. Cheek, 45, has been employed by NIKE since 1990. Mr. Cheek held several sales management positions in the USA Region of the Company, and was appointed General Manager, USA Footwear in 2003, and divisional Vice President, USA
+Footwear from 2004 to 2006. Mr. Cheek was appointed corporate Vice President and General Manager, USA Region in July 2006. Prior to joining NIKE, Mr. Cheek held management positions at Nordstrom and Hilton Hotels. 
+Thomas E. Clarke, President of New Ventures — Dr. Clarke, 56, a director from 1994 to 2004, joined NIKE in 1980. He was appointed
+divisional Vice President in charge of marketing in 1987, elected corporate Vice President in 1989, appointed General Manager in 1990, and served as President and Chief Operating Officer from 1994 to 2000. Dr. Clarke previously held
+various positions with the Company, primarily in research, design, development and marketing. Dr. Clarke holds a doctorate degree in biomechanics. 
+Charles D. Denson, President of the NIKE Brand — Mr. Denson, 51, has been employed by NIKE since 1979. Mr. Denson held several management positions within the Company, including his appointments
+as Director of USA Apparel Sales in 1994, divisional Vice President, U.S. Sales in 1994, divisional Vice President European Sales in 1997, divisional Vice President and General Manager, NIKE Europe in 1998, Vice President and General Manager of NIKE
+USA in 2000, and President of the NIKE Brand in 2001. 
+Gary M. DeStefano, President of Global Operations — Mr. DeStefano,
+50, has been employed by NIKE since 1982, with primary responsibilities in sales and regional administration. Mr. DeStefano was appointed Director of Domestic Sales in 1990, divisional Vice President in charge of domestic sales in 1992, Vice
+President 
+9 
+Table of Contents 
+of Global Sales in 1996, Vice President and General Manager of Asia Pacific in 1997, President of USA Operations in 2001 and President of Global Operations
+in 2006. 
+Trevor Edwards, Vice President, Global Brand and Category Management — Mr. Edwards, 44, joined NIKE in 1992. He
+was appointed Marketing Manager, Strategic Accounts, Foot Locker in 1993, Director of Marketing, the Americas in 1995, Director of Marketing, Europe in 1997, Vice President, Marketing for Europe, Middle East and Africa in 1999, and Vice President,
+U.S. Brand Marketing in 2000. Mr. Edwards was appointed corporate Vice President, Global Brand Management in 2002 and Vice President, Global Brand and Category Management in 2006. 
+Adam S. Helfant, Vice President, Global Sports Marketing — Mr. Helfant, 42, joined NIKE in 1995 in the Company’s legal department,
+and was appointed Director of Business Affairs for Global Sports Marketing in 1997, Director of Global Sports Marketing in 1998, Director of U.S. Sports Marketing in 2001, Vice President of U.S. Sports Marketing in 2003, and corporate Vice
+President, Global Sports Marketing in August 2004. Prior to joining NIKE, he was in private practice and an attorney for NHL Enterprises, Inc. 
+Joaquin Hidalgo, Vice President, Global Marketing and Soccer — Mr. Hidalgo, 46, joined NIKE in 1990. Mr. Hidalgo held various sales and marketing management positions in the Company’s USA and Americas Regions. He
+was appointed Director, CBF Business Unit, NIKE Football in 1997, Vice President and Global Brand Director, NIKE Football in 1998, Vice President, USA Marketing and Brand Management in 2002, and corporate Vice President, Global Marketing and Soccer
+in July 2006. Prior to joining NIKE, he was a marketing representative and product line manager at IBM. 
+Elliott Hill, Vice
+President, Global Retail — Mr. Hill, 43, has been employed by NIKE since 1988, with primary responsibilities in sales and retail operations. Mr. Hill was appointed divisional Vice President, EMEA Sales and Retail in 2000, Vice
+President and General Manager, NIKE USA Retail in 2003, Vice President, USA Commerce in 2004, and corporate Vice President, Global Retail in August 2006. Prior to joining NIKE, Mr. Hill worked as an assistant athletic trainer for the Dallas
+Cowboys. Mr. Hill is a member of the Board of Directors of Big Brothers Big Sisters Northwest. 
+P. Eunan McLaughlin, Vice
+President, Europe, Middle East & Africa — Mr. McLaughlin, 49, joined NIKE as Director of Sales, NIKE Europe in 1999, and was appointed Vice President Commercial Sales and Retail in 2000, Vice President, Asia Pacific in 2001, and
+Vice President, Europe, Middle East & Africa in May 2004. Prior to joining NIKE, he was Partner and Vice President of Consumer & Retail Practices Division, Korn/Ferry International from 1996 to 1999. From 1983 to 1996
+Mr. McLaughlin held various positions with Mars, Inc. in finance, sales, marketing and general management. 
+Eric D. Sprunk,
+Vice President, Global Footwear — Mr. Sprunk, 43, joined NIKE in 1993. He was appointed Finance Director and General Manager of the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General Manager, NIKE Europe Footwear
+in 1998, and Vice President & General Manager of the Americas in 2000. Mr. Sprunk was appointed corporate Vice President, Global Footwear in 2001. Prior to joining NIKE, Mr. Sprunk was a certified public accountant with Price
+Waterhouse from 1987 to 1993. 
+Lindsay D. Stewart, Vice President and Chief of Staff — Mr. Stewart, 60, joined NIKE as
+Assistant Corporate Counsel in 1981. Mr. Stewart became Corporate Counsel in 1983. He was appointed Vice President and General Counsel in 1991, and Chief of Staff in 2001. Prior to joining NIKE, Mr. Stewart was in private practice and an
+attorney for Georgia-Pacific Corporation. 
+Hans van Alebeek, Vice President, Global Operations & Technology —
+Mr. van Alebeek, 41, joined NIKE as Director of Operations of Europe in 1999, and was appointed Vice President, Operations & Administration in EMEA in 2001, Vice President, Global Operations in 2003, Vice President, Global
+Operations & Technology in 2004, and Corporate Vice President in November 2005. Prior to joining NIKE, Mr. van Alebeek worked for McKinsey & Company as a management consultant, and at N.V. Indivers in business development.
+10 
+Table of Contents 
+Roland P. Wolfram, Vice President and General Manager, Asia Pacific — Mr. Wolfram, 47,
+joined NIKE as Vice President, Strategic Planning in 1998, and was appointed Vice President, Global Operations & Technology in 2002, and Corporate Vice President, Asia Pacific in April 2004. Prior to NIKE, Mr. Wolfram was
+Vice President and General Manager at Pacific Bell Video Services. 
+Roger S. Wyett, Vice President, Global Apparel —
+Mr. Wyett, 50, returned to NIKE in April 2005 as President and Chief Operating Officer of the Company’s Hurley brand and was appointed Vice President, Global Apparel in 2006. Mr. Wyett first joined NIKE in 1994, holding a number of
+management positions in soccer and NIKE Team Sports. In 2000, Mr. Wyett joined The Walt Disney Company where he was Senior Vice President for Global Apparel, Accessories and Footwear, and later promoted to Executive Vice President for Global
+Sales and Marketing for Consumer Products.

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+Item 13. Certain Relationships and Related Transactions , and Director Independence 
+The information required by this Item is included under “Transactions with Related Persons” and “Board of directors and Committees” in
+the definitive Proxy Statement for our 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

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+Item 9A. Controls and Procedures 
+We maintain disclosure controls and
+procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and
+forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and
+evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is
+required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 
+We carry out a variety of
+on-going procedures, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and
+procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of May 31, 2007. 
+“Management’s Annual Report on Internal Control Over Financial Reporting” and the related attestation report of PricewaterhouseCoopers LLP
+are included in Item 8 on pages 46-49 of this Report. 
+There has been no change in our internal control over financial reporting
+during our most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

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+Transactions with Related Persons 
+Mr. Knight makes his airplane available for business use by the Company for no charge. NIKE operates and maintains the aircraft. Mr. Knight has reimbursed the Company $578,158 for NIKE’s operating costs related to his
+personal use of this aircraft during fiscal 2009, determined based on the cost of fuel and other variable costs associated with the flights under FAR 91-501(d). 
+Pursuant to the terms of a past consulting agreement with the Company, the Company agreed to pay for health insurance and for life insurance policies for Howard Slusher, the father of John Slusher, Vice President of
+Sports Marketing, following expiration of the agreement. During fiscal 2009 the Company paid Howard Slusher $134,392 for health and life insurance premiums. 
+Three of Mr. Parker’s siblings are employed by the Company in non-executive roles. Bob Parker is a Strategic Account Manager, and has been employed by the Company for over 25 years; Stephen Parker is the
+General Manager, China-Converse, and has been employed by the Company for over 21 years; and Ann Parker is a Senior Design Recruiter, and has been employed by the Company for over 20 years. During fiscal year 2009, the Company paid aggregate
+compensation to Bob Parker, Stephen Parker and Ann Parker in the amounts of $321,636, $440,396, and $200,270, respectively. The compensation was consistent with compensation paid to other employees holding similar positions, and was composed of
+14 
+salary, performance bonus, the grant date fair value of stock options granted during the fiscal year estimated using the Black-Scholes pricing model, and
+profit sharing and matching contributions to Company-sponsored retirement plans. 
+Compensation Committee Interlocks and Insider Participation
+The members of the Compensation Committee of the Board of Directors during the fiscal year ended May 31, 2009 were Ralph D.
+DeNunzio, Timothy D. Cook, Jeanne P. Jackson, and Johnathan A. Rodgers. Ms. Jackson resigned from the Compensation Committee and the board of directors on March 4, 2009, when she was appointed an officer of the Company. On June 18,
+2009, the Board of Directors appointed John C. Lechleiter to the Board of Directors, and also to the Compensation Committee. The Committee is composed solely of independent, non-employee directors. 
+15

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+0000320187,NKE,"NIKE, Inc.",10-K,2009-07-27,2009-05-31,2009-07-28T01:27:24.000Z,0001193125-09-155951,d10k.htm,FORM 10-K,1790943,0,0,https://www.sec.gov/Archives/edgar/data/320187/000119312509155951/d10k.htm,https://www.sec.gov/Archives/edgar/data/320187/000119312509155951/,2008,2008,1

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+Item 1. 
+Business 
+General 
+NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As used in this report, the terms “we”,
+“us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless the context indicates otherwise. Our Internet address is www.nike.com. On our NIKE Corporate web site,
+located at www.nikebiz.com, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission: our annual report on Form 10-K, our quarterly
+reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended. All such filings on our NIKE Corporate web
+site are available free of charge. Also available on the NIKE Corporate web site are the charters of the committees of our board of directors, as well as our corporate governance guidelines and code of ethics; copies of any of these documents will
+be provided in print to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453. 
+Our principal business activity is the design, development and worldwide marketing of high quality footwear, apparel, equipment, and accessory products. NIKE is the largest seller of athletic footwear and athletic
+apparel in the world. We sell our products to retail accounts, through NIKE-owned retail including stores and internet sales, and through a mix of independent distributors and licensees, in over 170 countries around the world. Virtually all of our
+products are manufactured by independent contractors. Virtually all footwear and apparel products are produced outside the United States, while equipment products are produced both in the United States and abroad. 
+Products 
+NIKE’s
+athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. We place considerable emphasis on high quality construction and innovation in products
+designed for men, women and children. Running, training, basketball, soccer, sport-inspired casual shoes, and kids’ shoes are currently our top-selling footwear categories and we expect them to continue to lead in product sales in the near
+future. We also market footwear designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. 
+We sell sports apparel and accessories covering most of the above categories, sports-inspired lifestyle apparel, as well as athletic bags and accessory
+items. NIKE apparel and accessories are designed to complement our athletic footwear products, feature the same trademarks and are sold through the same marketing and distribution channels. We often market footwear, apparel and accessories in
+“collections” of similar design or for specific purposes. We also market apparel with licensed college and professional team and league logos. 
+We sell a line of performance equipment under the NIKE brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, golf clubs, and other equipment
+designed for sports activities. We also sell small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary, NIKE IHM, Inc. 
+In addition to the products we sell directly to customers, we have entered into license agreements that permit unaffiliated parties to manufacture and sell various apparel, equipment and accessory items, such as
+swimwear, children’s apparel, training equipment, eyewear, electronic devices and golf accessories. 
+Our
+wholly-owned subsidiary, Cole Haan (“Cole Haan”), headquartered in Yarmouth, Maine, designs and distributes dress and casual footwear, apparel and accessories for men and women under the brand names Cole Haan ® and Bragano ® . 
+1 
+Table of Contents 
+Our wholly-owned subsidiary, Converse Inc. (“Converse”), headquartered in
+North Andover, Massachusetts, designs, distributes, and licenses athletic and casual footwear, apparel and accessories under the Converse ® , Chuck Taylor ® , All Star ® , One Star ® 
+, and Jack Purcell ® trademarks. 
+Our wholly-owned subsidiary, Hurley International LLC (“Hurley”), headquartered in Costa Mesa, California, designs and
+distributes a line of action sports apparel for surfing, skateboarding, and snowboarding, youth lifestyle apparel, and accessories under the Hurley ® trademark. 
+Our wholly-owned
+subsidiary, Umbro Ltd. (“Umbro”), headquartered in Manchester, England, designs, distributes and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of soccer, under the Umbro ® trademarks. 
+Sales and
+Marketing 
+Financial information about geographic and segment operations appears in Note 19 of the accompanying consolidated financial
+statements on page 85. 
+We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first
+and fourth fiscal quarters have slightly exceeded those in the second and third quarters. However, the mix of product sales may vary considerably as a result of changes in seasonal and geographic demand for particular types of footwear, apparel and
+equipment. 
+Because NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing
+design trends affect the demand for our products. We must therefore respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories, and influencing sports and
+fitness preferences through aggressive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability. This is a continuing risk. 
+We report our NIKE brand operations based on our internal geographic organization. Each NIKE brand geography operates predominantly in one industry:
+the design, production, marketing and selling of sports and fitness footwear, apparel, and equipment. The geographic organization consists of the following four regions: U.S., Europe, Middle East and Africa (collectively,
+“EMEA”), Asia Pacific, and Americas. As previously announced, in the fourth quarter of fiscal 2009, we initiated a reorganization of the NIKE brand into a new model consisting of six geographies. As a result of the
+reorganization, beginning in the first quarter of fiscal 2010, our new organizational structure will consist of the following geographies: North America, Western Europe, Central/Eastern Europe, Greater China, Japan, and Emerging Markets. 
+United States Market 
+In
+fiscal 2009, sales in the United States including U.S. sales of our Other businesses accounted for approximately 42% of total revenues, compared to 43% in fiscal 2008 and 47% in fiscal 2007. For fiscal 2009, our Other businesses were
+primarily comprised of Cole Haan, Converse, Hurley, NIKE Golf and Umbro (which was acquired on March 3, 2008). For fiscal 2008 and 2007, our Other businesses were primarily comprised of Cole Haan, Converse, Exeter (whose primary
+business was the Starter brand business which was sold on December 17, 2007), Hurley, NIKE Bauer Hockey (which was sold on April 17, 2008), NIKE Golf and Umbro. We estimate that we sell to more than 23,000 retail accounts in the United
+States. The NIKE brand domestic retail account base includes a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts. During fiscal 2009, our three
+largest customers accounted for approximately 25% of sales in the United States. 
+We make substantial use of our “futures”
+ordering program, which allows retailers to order five to six months in advance of delivery with the commitment that their orders will be delivered within a set time 
+2 
+Table of Contents 
+period at a fixed price. In fiscal 2009, 89% of our U.S. wholesale footwear shipments (excluding our Other businesses) were made under the futures program,
+compared to 90% in fiscal 2008 and fiscal 2007. In fiscal 2009, 60% of our U.S. wholesale apparel shipments (excluding our Other businesses) were made under the futures program, compared to 62% in fiscal 2008 and 65% in fiscal 2007. 
+We utilize 20 NIKE sales offices to solicit sales in the United States. We also utilize 5 independent sales representatives to sell specialty products
+for golf, and 3 for skateboarding and outdoor products. In addition, we sell NIKE brand products through our internet website, www.nikestore.com , and we operate the following retail outlets in the United States: 
+U.S. Retail Stores 
+Number 
+NIKE factory stores (which carry primarily overstock and close-out merchandise) 
+140 
+NIKE stores (including one NIKE Women store) 
+16 
+NIKETOWNs (designed to showcase NIKE products) 
+11 
+NIKE employee-only stores 
+3 
+Cole Haan stores (including factory stores) 
+111 
+Converse factory stores 
+43 
+Hurley stores (including factory and employee stores) 
+14 
+Total 
+338 
+NIKE’s three United States distribution centers for footwear are located in Memphis,
+Tennessee. Apparel and equipment products are shipped from our Memphis, Tennessee, and Foothill Ranch, California distribution centers. Cole Haan products are distributed primarily from Greenland, New Hampshire, Converse products are shipped
+primarily from Ontario, California, and Hurley products are distributed from Irvine, California. 
+International Markets 
+In fiscal 2009, non-U.S. sales (including non-U.S. sales of our Other businesses) accounted for 58% of total revenues, compared to 57% in
+fiscal 2008 and 53% in fiscal 2007. We sell our products to retail accounts, through NIKE-owned retail stores, and through a mix of independent distributors and licensees around the world. We estimate that we sell to more than 28,000 retail accounts
+outside the United States, excluding sales by independent distributors and licensees. We operate 14 distribution centers outside of the United States. In many countries and regions, including Canada, Asia, some Latin American countries, and Europe,
+we have a futures ordering program for retailers similar to the United States futures program described above. NIKE’s three largest customers outside of the U.S. accounted for approximately 11% of total non-U.S. sales. 
+We operate the following retail outlets outside the United States: 
+Non-U.S. Retail Stores 
+Number 
+NIKE factory stores 
+184 
+NIKE stores 
+61 
+NIKETOWNs 
+4 
+NIKE employee-only stores 
+12 
+Cole Haan stores 
+74 
+Hurley stores 
+1 
+Total 
+336 
+International branch offices and subsidiaries of NIKE are located in Argentina, Australia,
+Austria, Belgium, Bermuda, Brazil, Canada, Chile, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Lebanon, Macau, Malaysia, 
+3 
+Table of Contents 
+Mexico, New Zealand, the Netherlands, Norway, the People’s Republic of China, the Philippines, Poland, Portugal, Russia, Singapore, Slovakia,
+Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, Uruguay and Vietnam. 
+Significant Customer 
+No customer accounted for 10% or more of our net sales during fiscal 2009.
+Orders 
+Worldwide futures and advance orders for NIKE brand athletic footwear and apparel, scheduled for delivery from June through November 2009, were $7.8 billion compared to $8.8 billion for the same period last year. This futures and advance
+order amount is calculated based upon our forecast of the actual exchange rates under which our revenues will be translated during this period, which approximate current spot rates. Reported futures and advance orders are not necessarily indicative
+of our expectation of revenues for this period. This is because the mix of orders can shift between advance/futures and at-once orders and the fulfillment of certain of these advance/futures orders may fall outside of the scheduled time period noted
+above. In addition, foreign currency exchange rate fluctuations as well as differing levels of order cancellations and discounts can cause differences in the comparisons between futures and advance orders and actual revenues. Moreover, a significant
+portion of our revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE footwear and apparel, wholesale sales of equipment, Cole Haan, Converse, Hurley, Umbro, NIKE Golf, and retail sales across all
+brands. 
+Product Research and Development 
+We believe our research and development efforts are a key factor in our past and future success. Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as NIKE
+strives to produce products that help to reduce injury, enhance athletic performance and maximize comfort. 
+In addition to NIKE’s own
+staff of specialists in the areas of biomechanics, chemistry, exercise physiology, engineering, industrial design and related fields, we also utilize research committees and advisory boards made up of athletes, coaches, trainers, equipment managers,
+orthopedists, podiatrists and other experts who consult with us and review designs, materials and concepts for product improvement. Employee athletes, athletes engaged under sports marketing contracts and other athletes wear-test and evaluate
+products during the design and development process. 
+Manufacturing 
+Virtually all of our footwear is produced outside of the United States. In fiscal 2009, contract suppliers in China, Vietnam, Indonesia and Thailand
+manufactured 36%, 36%, 22% and 6% of total NIKE brand footwear, respectively. We also have manufacturing agreements with independent factories in Argentina, Brazil, India, and Mexico to manufacture footwear for sale primarily within those countries.
+Our largest single footwear factory accounted for approximately 5% of total fiscal 2009 footwear production. 
+Almost all of NIKE brand
+apparel is manufactured outside of the United States by independent contract manufacturers located in 34 countries. Most of this apparel production occurred in China, Thailand, Indonesia, Malaysia, Vietnam, Turkey, Sri Lanka, Cambodia, Taiwan, El
+Salvador, Mexico, India and Israel. Our largest single apparel factory accounted for approximately 5% of total fiscal 2009 apparel production. 
+The principal materials used in our footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas and polyurethane films used to make Air-Sole cushioning components. During fiscal
+2009, NIKE IHM, Inc. and NIKE (Suzhou) Sports Company, Ltd., both 
+4 
+Table of Contents 
+wholly-owned subsidiaries of NIKE, and independent contractors in China and Taiwan, were our largest suppliers of the Air-Sole cushioning components used in
+footwear. The principal materials used in our apparel products are natural and synthetic fabrics and threads, plastic and metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body
+moisture. NIKE’s contractors and suppliers buy raw materials in bulk. Most raw materials are available in the countries where manufacturing takes place. We have thus far experienced little difficulty in satisfying our raw material requirements.
+Since 1972, Sojitz Corporation of America (“Sojitz America”), a large Japanese trading company, has performed significant
+import-export financing services for us. During fiscal 2009, Sojitz America provided financing and purchasing services for NIKE brand products sold in Argentina, Uruguay, Canada, Chile, Brazil, India, Indonesia, the Philippines, Malaysia, South
+Africa, China, Korea, and Thailand, excluding products produced and sold in the same country. Approximately 16% of NIKE brand sales occurred in those countries. Any failure of Sojitz America to provide these services or any failure of Sojitz
+America’s banks could disrupt our ability to acquire products from our suppliers and to deliver products to our customers outside of the United States, EMEA and Japan. Such a disruption could result in cancelled orders that would adversely
+affect sales and profitability. However, we believe that any such disruption would be short-term in duration due to the ready availability of alternative sources of financing at competitive rates. Our current agreements with Sojitz America expire in
+2011. 
+International Operations and Trade 
+Our international operations and sources of supply are subject to the usual risks of doing business abroad, such as possible revaluation of currencies, export and import duties, anti-dumping measures, quotas,
+safeguard measures, trade restrictions, restrictions on the transfer of funds and, in certain parts of the world, political instability and terrorism. We have not, to date, been materially affected by any such risk, but cannot predict the likelihood
+of such developments occurring. 
+The global economic crisis has resulted in a significant slow down in international trade and a sharp rise
+in protectionist actions around the world. These trends are affecting many global manufacturing and service sectors, and the footwear and apparel industries, as a whole, are not immune. Companies in our industry are facing trade protectionist
+challenges in many different regions, and in nearly all cases we are working together to address trade issues to reduce the impact to the industry, while observing applicable competition laws. Notwithstanding our efforts, such actions, if
+implemented, could result in increases in the cost of our products, which could adversely affect our sales or profitability and the imported footwear and apparel industry as a whole. Accordingly, we are actively monitoring the developments described
+below. 
+Footwear Imports into the European Union 
+In 2005, at the request of the European domestic footwear industry, the European Commission (“EC”) initiated investigations into leather footwear imported from China and Vietnam. Together with other
+companies in our industry, we took the position that Special Technology Athletic Footwear (STAF) (i) should not be within the scope of the investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping
+investigation. Our arguments were successful and the EU agreed in October 2006 on definitive duties of 16.5% for China and 10% for Vietnam for non-STAF leather footwear, but excluded STAF from the final measures. Prior to the scheduled expiration in
+October 2008 of the measures imposed on the non-STAF footwear, the domestic industry requested and the EC agreed to review a petition to extend these restrictions on non-STAF leather footwear. We are working in broad coalition with other companies
+in our industry to challenge this request for extension, and we expect a decision by the end of calendar year 2009 or early 2010. 
+Footwear Imports into Brazil and Argentina 
+At the request of certain domestic footwear industries, both Brazil and
+Argentina have initiated independent anti-dumping investigations against footwear made in China. We are working in broad coalition with other companies in our industry to challenge these cases on the basis that the athletic footwear being imported
+from 
+5 
+Table of Contents 
+China (i) should not be within the scope of the investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping
+investigation. We anticipate final decisions in both cases will be made in late 2009. 
+Footwear Imports into Turkey 
+In 2006, Turkey introduced a safeguard measure on all imported footwear into Turkey with the goal of protecting its local shoe manufacturing industry
+until August 2009. In June 2009, Turkish shoe-manufacturers submitted, and the Turkish Government agreed to review, a request for extension of the safeguard measures claiming that the rehabilitation process of the local Turkish industry was
+interrupted due to the continuing increase of footwear imports. We are working in broad coalition with other companies in our industry to oppose the continuation of these safeguard measures. We anticipate a final decision in this review will be made
+in early fall 2009. 
+Trade Relations with China 
+China represents an important sourcing and marketing country for us. Many governments around the world are concerned about China’s growing and fast-paced economy, compliance with World Trade Organization rules,
+currency valuation, and high trade surpluses. As a result, a wide range of legislative proposals have been introduced to address these concerns. While some of these concerns may be justified, we are working with broad coalitions of global businesses
+and trade associations representing a wide variety of sectors (e.g., services, manufacturing, and agriculture) to help ensure any legislation enacted and implemented (i) addresses legitimate and core concerns, (ii) is consistent with
+international trade rules, and (iii) reflects and considers China’s domestic economy and the important role it has in the global economic community. We believe other companies in our industry as well as most other multi-national companies
+are in a similar position regarding these trade measures. 
+In the event any of these trade protection measures were implemented, we believe
+that we have the ability to develop, over a period of time, adequate alternative sources of supply for the products obtained from our present suppliers. If events prevented us from acquiring products from our suppliers in a particular country,
+our operations could be temporarily disrupted and we could experience an adverse financial impact. However, we believe that we could abate any such disruption, and that much of the adverse impact on supply would, therefore, be of a short-term
+nature. We believe our principal competitors are subject to similar risks. 
+Competition 
+The athletic footwear, apparel and equipment industry is keenly competitive in the United States and on a worldwide basis. We compete internationally with
+a significant number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies, and large companies having diversified lines of athletic and leisure shoes, apparel and equipment, including Adidas,
+Puma, and others. The intense competition and the rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic equipment, constitute significant risk factors in our operations.
+NIKE is the largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of shoes, apparel, and
+equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel and equipment industry. To help market our products,
+we contract with prominent and influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and use our products, and we actively sponsor sporting events and clinics. We believe that we are competitive in all of these
+areas. 
+6 
+Table of Contents 
+Trademarks and Patents 
+We utilize trademarks on nearly all of our products and believe that having distinctive marks that are readily identifiable is an
+important factor in creating a market for our goods, in identifying the Company, and in distinguishing our goods from the goods of others. We consider our NIKE ® and Swoosh Design ® trademarks to be among
+our most valuable assets and we have registered these trademarks in over 150 countries. In addition, we own many other trademarks that we utilize in marketing our products. We continue to vigorously protect our trademarks against infringement.
+NIKE has an exclusive, worldwide license to make and sell footwear using patented “Air” technology. The
+process utilizes pressurized gas encapsulated in polyurethane. Some of the early NIKE AIR ® patents have expired, which may
+enable competitors to use certain types of similar technology. Subsequent NIKE AIR ® patents will not expire for several
+years. We also have hundreds of U.S. and foreign utility patents, and thousands of U.S. and foreign design patents covering components and features used in various athletic and leisure shoes, apparel, and equipment. These patents expire at various
+times, and patents issued for applications filed this year will have a remaining duration of from now to 2023 for design patents, and from now to 2029 for utility patents. We believe that our success depends primarily upon skills in design, research
+and development, production and marketing rather than upon our patent position. However, we have followed a policy of filing applications for United States and foreign patents on inventions, designs and improvements that we deem valuable.
+Employees 
+We had approximately 34,300 employees at May 31, 2009. Management considers its relationship with employees to be excellent. None of our employees is represented by a union, except for certain employees in the Americas Region, where
+local law requires those employees to be represented by a trade union. Also, in some countries outside of the United States, local laws require representation for employees by works councils (such as in the European Union, in which they are entitled
+to information and consultation on certain Company decisions) or other representation by an organization similar to a union, although collective bargaining agreements are not involved. There has never been a material interruption of operations due
+to labor disagreements. 
+Executive Officers of the Registrant 
+The executive officers of NIKE as of July 24, 2009 are as follows: 
+Philip H. Knight, Chairman of the Board — Mr. Knight, 71, a director since 1968, is a co-founder of NIKE and, except for the period from June 1983 through September 1984, served as its President from
+1968 to 1990, and from June 2000 to December 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State
+University. 
+Mark G. Parker, Chief Executive Officer and President — Mr. Parker, 53, was appointed CEO and President in
+January 2006. He has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing, and brand management. Mr. Parker was appointed divisional Vice President in charge of development
+in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998, and President of the NIKE Brand in 2001. 
+David J. Ayre, Vice President, Global Human Resources — Mr. Ayre, 49, joined NIKE as Vice President, Global Human Resources in July 2007. Prior to joining NIKE, he held a number of senior human
+resource positions with PepsiCo, Inc. since 1990, most recently as head of Talent and Performance Rewards. 
+Donald W. Blair, Vice
+President and Chief Financial Officer — Mr. Blair, 51, joined NIKE in November 1999. Prior to joining NIKE, he held a number of financial management positions with PepsiCo, Inc., including Vice President, Finance of Pepsi-Cola Asia, Vice
+President, Planning of PepsiCo’s Pizza Hut Division, and 
+7 
+Table of Contents 
+Senior Vice President, Finance of The Pepsi Bottling Group, Inc. Prior to joining PepsiCo, Mr. Blair was a certified public accountant with Deloitte,
+Haskins, and Sells. 
+Charles D. Denson, President of the NIKE Brand — Mr. Denson, 53, has been employed by NIKE since
+1979. Mr. Denson held several management positions within the Company, including his appointments as Director of USA Apparel Sales in 1994, divisional Vice President, U.S. Sales in 1994, divisional Vice President European Sales in 1997,
+divisional Vice President and General Manager, NIKE Europe in 1998, Vice President and General Manager of NIKE USA in 2000, and President of the NIKE Brand in 2001. 
+Gary M. DeStefano, President, Global Operations — Mr. DeStefano, 52, has been employed by NIKE since 1982, with primary responsibilities in sales and regional administration. Mr. DeStefano was
+appointed Director of Domestic Sales in 1990, divisional Vice President in charge of domestic sales in 1992, Vice President of Global Sales in 1996, Vice President and General Manager of Asia Pacific in 1997, President of USA Operations in 2001,
+President of Global Operations in 2006. 
+Trevor Edwards, Vice President, Global Brand and Category Management —
+Mr. Edwards, 46, joined NIKE in 1992. He was appointed Marketing Manager, Strategic Accounts, Foot Locker in 1993, Director of Marketing, the Americas in 1995, Director of Marketing, Europe in 1997, Vice President, Marketing for Europe, Middle
+East and Africa in 1999, and Vice President, U.S. Brand Marketing in 2000. Mr. Edwards was appointed corporate Vice President, Global Brand Management in 2002 and Vice President, Global Brand and Category Management in 2006. Prior to NIKE,
+Mr. Edwards was with the Colgate-Palmolive Company. 
+Jeanne P. Jackson, President, Direct to Consumer
+— Ms. Jackson, 57, served as a member of the NIKE, Inc. Board of Directors from 2001 through March 2009, when she resigned from our Board and was appointed President, Direct to Consumer. She is founder and CEO of MSP
+Capital, a private investment company. Ms. Jackson was CEO of Walmart.com from March 2000 to January 2002. She was with Gap, Inc., as President and CEO of Banana Republic from 1995-2000, also serving as CEO of Gap, Inc. Direct from
+1998-2000. Since 1978, she has held various retail management positions with Victoria’s Secret, The Walt Disney Company, Saks Fifth Avenue, and Federated Department Stores. Ms. Jackson is the President of the United States Ski and
+Snowboard Foundation Board of Trustees, and serves on the Board of Advisors of the University of California, Irvine. She is also a director of McDonald’s Corporation, Nordstrom, Inc., and Harrah’s Entertainment, Inc. 
+P. Eunan McLaughlin, President, Affiliates — Mr. McLaughlin, 51, joined NIKE as Director of Sales, NIKE Europe in 1999, and was
+appointed Vice President Commercial Sales and Retail in 2000, Vice President, Asia Pacific in 2001, Vice President, Europe, Middle East & Africa in May 2004, and President of Affiliates in April 2009. Prior to joining NIKE, he was
+Partner and Vice President of Consumer & Retail Practices Division, Korn/Ferry International from 1996 to 1999. From 1983 to 1996, Mr. McLaughlin held various positions with Mars, Inc. in finance, sales, marketing and general
+management. 
+Bernard F. Pliska, Vice President, Corporate Controller — Mr. Pliska, 47, joined NIKE as Corporate Controller
+in 1995. He was appointed Vice President, Corporate Controller in 2003. Prior to NIKE, Mr. Pliska was with Price Waterhouse from 1984 to 1995. Mr. Pliska is a certified public accountant. 
+John F. Slusher, Vice President, Global Sports Marketing — Mr. Slusher, 40, has been employed by NIKE since 1998 with primary
+responsibilities in global sports marketing. Mr. Slusher was appointed Director of Sports Marketing for the Asia Pacific and Americas Regions in 2006, divisional Vice President, Asia Pacific & Americas Sports Marketing in September
+2007 and Vice President, Global Sports Marketing in November 2007. Prior to joining NIKE, Mr. Slusher was an attorney at the law firm of O’Melveny & Myers from 1995 to 1998. 
+Eric D. Sprunk, Vice President, Merchandising and Product — Mr. Sprunk, 45, joined NIKE in 1993. He was appointed Finance Director and
+General Manager of the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General Manager, NIKE Europe Footwear in 1998, and Vice President & General Manager of 
+8 
+Table of Contents 
+the Americas in 2000. Mr. Sprunk was appointed corporate Vice President, Global Footwear in 2001 and Vice President, Merchandising and Product in 2009.
+Prior to joining NIKE, Mr. Sprunk was a certified public accountant with Price Waterhouse from 1987 to 1993. 
+Hans van Alebeek,
+Vice President, Global Operations and Technology — Mr. van Alebeek, 43, joined NIKE as Director of Operations of Europe in 1999, and was appointed Vice President, Operations & Administration in EMEA in 2001, Vice
+President, Global Operations in 2003, Vice President, Global Operations & Technology in 2004, and Corporate Vice President in November 2005. Prior to joining NIKE, Mr. van Alebeek worked for McKinsey & Company as a management
+consultant, and at N.V. Indivers in business development.

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+Item 13. Certain Relationships and Related Transactions, and Director Independence 
+The information required by Items 404 and 407(a) of Regulation S-K is included under “Transactions with Related Persons” and “Board of Directors and Committees” in the definitive Proxy Statement for our 2009 Annual
+Meeting of Shareholders and is incorporated herein by reference.

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+Item 9A. Controls and Procedures 
+We maintain
+disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange
+Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required
+disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control
+objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 
+We carry out a variety of on-going procedures, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation
+of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of May 31,
+2009. 
+“Management’s Annual Report on Internal Control Over Financial Reporting” is included in Item 8 on page 51 of
+this Report. 
+There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has
+materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

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+Transactions with Related Persons 
+Mr. Knight makes his airplane available for business use by the Company for no charge. NIKE operates and maintains the aircraft.
+Mr. Knight has reimbursed the Company $720,633 for NIKE’s operating costs related to his personal use of this aircraft during fiscal 2010, determined based on the cost of fuel and other variable costs associated with the flights under FAR
+91-501(d). 
+Pursuant to the terms of a past consulting agreement with the Company, the Company agreed to pay for health
+insurance and for life insurance policies for Howard Slusher, the father of John Slusher, Vice President of Sports Marketing, following expiration of the agreement. During fiscal 2010 the Company paid Howard Slusher $129,568 for health and life
+insurance premiums. 
+Three of Mr. Parker’s siblings are employed by the Company in non-executive roles. Bob Parker
+is a Strategic Sales Director, and has been employed by the Company for over 26 years; Stephen Parker is the General Manager, China-Converse, and has been employed by the Company for over 22 years; and Ann
+19 
+Parker is a Talent Development and Community Relations Director at Hurley LLC, and has been employed by the Company for over 20 years. During fiscal year 2010, the Company paid aggregate
+compensation to Bob Parker, Stephen Parker and Ann Parker in the amounts of $378,898, $487,789, $253,874, respectively. The compensation was consistent with compensation paid to other employees holding similar positions, and was composed of salary,
+performance bonus, the grant date fair value of stock options granted during the fiscal year estimated using the Black-Scholes pricing model, and profit sharing and matching contributions to Company-sponsored retirement plans. 
+Mr. Thompson’s son, John Thompson III, is the head basketball coach at Georgetown University, and the Company has a contract
+with him to provide endorsement and consulting services to the Company through August 2014, with base compensation over the 5-year term of the contract of $500,000, and up to $80,000 per year of product and other performance incentives. 
+Compensation Committee Interlocks and Insider Participation 
+The members of the Compensation Committee of the Board of Directors during the fiscal year ended May 31, 2010 were Ralph D.
+DeNunzio, Timothy D. Cook, John C. Lechleiter, and Johnathan A. Rodgers. The Committee is composed solely of independent, non-employee directors. 
+20

raw/filings/0000320187/2009/0001193125-10-161874/filing_metadata.csv

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+0000320187,NKE,"NIKE, Inc.",10-K,2010-07-20,2010-05-31,2010-07-21T01:18:30.000Z,0001193125-10-161874,d10k.htm,FORM 10-K,6047070,1,0,https://www.sec.gov/Archives/edgar/data/320187/000119312510161874/d10k.htm,https://www.sec.gov/Archives/edgar/data/320187/000119312510161874/,2009,2009,1

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+Item 1. 
+Business 
+General 
+NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As used in this report, the terms
+“we”, “us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless the context indicates otherwise. Our Internet address is www.nike.com. On our NIKE
+Corporate web site, located at www.nikebiz.com, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission: our annual report on
+Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended. All such
+filings on our NIKE Corporate web site are available free of charge. Also available on the NIKE Corporate web site are the charters of the committees of our board of directors, as well as our corporate governance guidelines and code of ethics;
+copies of any of these documents will be provided in print to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453. 
+Our principal business activity is the design, development and worldwide marketing of high quality footwear, apparel, equipment, and
+accessory products. NIKE is the largest seller of athletic footwear and athletic apparel in the world. We sell our products to retail accounts, through NIKE-owned retail including stores and internet sales, and through a mix of independent
+distributors and licensees, in over 170 countries around the world. Virtually all of our products are manufactured by independent contractors. Virtually all footwear and apparel products are produced outside the United States, while equipment
+products are produced both in the United States and abroad. 
+Products 
+NIKE’s athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are
+worn for casual or leisure purposes. We place considerable emphasis on high quality construction and innovation in products designed for men, women and children. Running, training, basketball, soccer, sport-inspired casual shoes, and kids’
+shoes are currently our top-selling footwear categories and we expect them to continue to lead in product sales in the near future. We also market footwear designed for aquatic activities, baseball, cheerleading, football, golf, lacrosse, outdoor
+activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses. 
+We sell sports
+apparel and accessories covering most of the above categories, sports-inspired lifestyle apparel, as well as athletic bags and accessory items. NIKE apparel and accessories feature the same trademarks and are sold through the same marketing and
+distribution channels. We often market footwear, apparel and accessories in “collections” of similar design or for specific purposes. We also market apparel with licensed college and professional team and league logos. 
+We sell a line of performance equipment under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, electronic
+devices, bats, gloves, protective equipment, golf clubs, and other equipment designed for sports activities. We also sell small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary, NIKE IHM, Inc.
+In addition to the products we sell directly to customers, we have entered into license agreements that permit unaffiliated
+parties to manufacture and sell certain apparel, electronic devices and other equipment designed for sports activities. 
+Our wholly-owned subsidiary, Cole Haan (“Cole Haan”), headquartered in Yarmouth, Maine, designs and
+distributes dress and casual footwear, apparel and accessories for men and women under the Cole Haan ® trademark.
+1 
+Table of Contents 
+Our wholly-owned subsidiary, Converse Inc. (“Converse”),
+headquartered in North Andover, Massachusetts, designs, distributes and licenses athletic and casual footwear, apparel and accessories under the
+Converse ® , Chuck
+Taylor ® , All
+Star ® , One
+Star ® , Star Chevron and Jack
+Purcell ® trademarks. 
+Our wholly-owned subsidiary, Hurley International LLC (“Hurley”), headquartered in Costa Mesa, California,
+designs and distributes a line of action sports and youth lifestyle apparel and accessories under the Hurley ® 
+trademark. 
+Our wholly-owned subsidiary, Umbro Ltd. (“Umbro”), headquartered in Cheadle,
+England, designs, distributes and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of football (soccer), under the
+Umbro ® trademark. 
+Sales and Marketing 
+Financial information about geographic and segment operations appears in Note 19 of the accompanying Notes to the Consolidated Financial
+Statements on page 88. 
+We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues
+in the first and fourth fiscal quarters have slightly exceeded those in the second and third quarters. However, the mix of product sales may vary considerably as a result of changes in seasonal and geographic demand for particular types of footwear,
+apparel and equipment. 
+Because NIKE is a consumer products company, the relative popularity of various sports and fitness
+activities and changing design trends affect the demand for our products. We must therefore respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, styles and categories, and
+influencing sports and fitness preferences through aggressive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability. This is a continuing risk. 
+We report our NIKE Brand operations based on our internal geographic organization. Each NIKE Brand geography operates predominantly
+in one industry: the design, production, marketing and selling of sports and fitness footwear, apparel, and equipment. In the third quarter of fiscal 2009, we initiated a reorganization of the NIKE Brand into a new model consisting of six
+geographies. Effective June 1, 2009, we began operating under our new organizational structure for the NIKE Brand, which consists of the following geographies: North America, Western Europe, Central and Eastern Europe, Greater China,
+Japan, and Emerging Markets. Previously, NIKE Brand operations were organized into the following four geographic regions: U.S.; Europe; Middle East and Africa (collectively, “EMEA”); Asia Pacific; and Americas. 
+United States Market 
+In fiscal 2010 and 2009, sales in the United States including U.S. sales of our Other Businesses accounted for approximately 42% of total
+revenues, compared to 43% in fiscal 2008. For fiscal 2010 and 2009, our Other Businesses were primarily comprised of Cole Haan, Converse, Hurley, NIKE Golf and Umbro (which was acquired on March 3, 2008). For fiscal 2008, our Other
+Businesses were primarily comprised of Cole Haan, Converse, Exeter (whose primary business was the Starter brand business which was sold on December 17, 2007), Hurley, NIKE Bauer Hockey (which was sold on April 17, 2008), NIKE Golf
+and Umbro. We estimate that we sell to more than 23,000 retail accounts in the United States. The NIKE Brand domestic retail account base includes a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate,
+tennis and golf shops, and other retail accounts. During fiscal 2010, our three largest customers accounted for approximately 24% of sales in the United States. 
+We make substantial use of our “futures” ordering program, which allows retailers to order five to six months in advance
+of delivery with the commitment that their orders will be delivered within a set time 
+2 
+Table of Contents 
+period at a fixed price. In fiscal 2010 and 2009, 89% of our U.S. wholesale footwear shipments (excluding our Other Businesses) were made under the futures program, compared to 90% in fiscal
+2008. In fiscal 2010, 62% of our U.S. wholesale apparel shipments (excluding our Other Businesses) were made under the futures program, compared to 60% in fiscal 2009 and 62% in fiscal 2008. 
+We utilize 19 NIKE sales offices to solicit sales in the United States. We also utilize 4 independent sales representatives to sell
+specialty products for golf and 5 for skateboarding and outdoor products. In addition, we sell NIKE Brand products through our internet website, www.nikestore.com , and we operate the following retail outlets in the United States: 
+U.S. Retail Stores 
+Number 
+NIKE factory stores (which carry primarily overstock and close-out merchandise) 
+145 
+NIKE stores (including one NIKE Women store) 
+12 
+NIKETOWNs (designed to showcase NIKE products) 
+11 
+NIKE employee-only stores 
+3 
+Cole Haan stores (including factory stores) 
+106 
+Converse factory stores 
+51 
+Hurley stores (including factory and employee stores) 
+18 
+Total 
+346 
+NIKE’s three United States distribution centers
+for NIKE Brand footwear are located in Memphis, Tennessee. NIKE Brand apparel and equipment products are shipped from our Memphis, Tennessee and Foothill Ranch, California distribution centers. Cole Haan products are distributed primarily from
+Greenland, New Hampshire, Converse products are shipped primarily from Ontario, California, and Hurley products are distributed from Irvine, California. 
+International Markets 
+In fiscal 2010 and 2009, non-U.S. sales (including non-U.S. sales of our Other Businesses) accounted for 58% of total revenues, compared
+to 57% in fiscal 2008. We sell our products to retail accounts, through NIKE-owned retail stores, and through a mix of independent distributors and licensees around the world. We estimate that we sell to more than 24,000 retail accounts outside the
+United States, excluding sales by independent distributors and licensees. We operate 14 distribution centers outside of the United States. In many countries and regions, including Canada, Asia, some Latin American countries, and Europe, we have a
+futures ordering program for retailers similar to the United States futures program described above. During fiscal 2010, NIKE’s three largest customers outside of the U.S. accounted for approximately 8% of total non-U.S. sales. 
+We operate the following retail outlets outside the United States: 
+Non-U.S. Retail Stores 
+Number 
+NIKE factory stores 
+205 
+NIKE stores 
+55 
+NIKETOWNs 
+2 
+NIKE employee-only stores 
+12 
+Cole Haan stores 
+68 
+Hurley stores 
+1 
+Total 
+343 
+International branch offices and subsidiaries of NIKE
+are located in Argentina, Australia, Austria, Belgium, Bermuda, Brazil, Canada, Chile, China, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, 
+3 
+Table of Contents 
+Germany, Greece, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Lebanon, Macau, Malaysia, Mexico, New Zealand, the Netherlands, Norway, the Philippines, Poland,
+Portugal, Russia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, Uruguay and Vietnam. 
+Significant Customer 
+No customer accounted for 10% or more of our net sales during fiscal 2010. 
+Orders 
+Worldwide futures and advance orders for NIKE Brand athletic footwear and apparel, scheduled for delivery from June through November 2010,
+were $8.8 billion compared to $7.8 billion for the same period last year. This futures and advance order amount is calculated based upon our forecast of the actual exchange rates under which our revenues will be translated during this period, which
+approximate current spot rates. Reported futures and advance orders are not necessarily indicative of our expectation of revenues for this period. This is because the mix of orders can shift between advance/futures and at-once orders and the
+fulfillment of certain of these advance/futures orders may fall outside of the scheduled time period noted above. In addition, foreign currency exchange rate fluctuations as well as differing levels of order cancellations and discounts can cause
+differences in the comparisons between futures and advance orders and actual revenues. Moreover, a significant portion of our revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE footwear and apparel,
+wholesale sales of equipment, Cole Haan, Converse, Hurley, Umbro, NIKE Golf, and certain retail sales across all brands. 
+Product Research and Development 
+We believe our research and development efforts are a key factor in our past and
+future success. Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as NIKE strives to produce products that help to reduce injury, enhance athletic performance and maximize comfort. 
+In addition to NIKE’s own staff of specialists in the areas of biomechanics, chemistry, exercise physiology, engineering, industrial
+design, and related fields, we also utilize research committees and advisory boards made up of athletes, coaches, trainers, equipment managers, orthopedists, podiatrists, and other experts who consult with us and review designs, materials, and
+concepts for product improvement. Employee athletes, athletes engaged under sports marketing contracts and other athletes wear-test and evaluate products during the design and development process. 
+Manufacturing 
+Virtually all of our footwear is produced by factories we contract with outside of the United States. In fiscal 2010, contract factories
+in Vietnam, China, Indonesia, Thailand, and India manufactured approximately 37%, 34%, 23%, 2% and 1% of total NIKE Brand footwear, respectively. We also have manufacturing agreements with independent factories in Argentina, Brazil, India, and
+Mexico to manufacture footwear for sale primarily within those countries. The largest single footwear factory that we have contracted with accounted for approximately 5% of total fiscal 2010 footwear production. 
+Almost all of NIKE Brand apparel is manufactured outside of the United States by independent contract manufacturers located in 33
+countries. Most of this apparel production occurred in China, Thailand, Indonesia, Malaysia, Vietnam, Sri Lanka, Turkey, Cambodia, El Salvador, Mexico, and Taiwan. The largest single apparel factory that we have contracted with accounted for
+approximately 7% of total fiscal 2010 apparel production. The principal materials used in our footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas, and polyurethane films used to
+make Air-Sole cushioning 
+4 
+Table of Contents 
+components. During fiscal 2010, NIKE IHM, Inc., a wholly-owned subsidiary of NIKE, and independent contractors in China and Taiwan, were our largest suppliers of the Air-Sole cushioning
+components used in footwear. The principal materials used in our apparel products are natural and synthetic fabrics and threads, plastic and metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently
+transport body moisture. NIKE’s contractors and suppliers buy raw materials in bulk. Most raw materials are available in the countries where manufacturing takes place. We have thus far experienced little difficulty in satisfying our raw
+material requirements. 
+Since 1972, Sojitz Corporation of America (“Sojitz America”), a large Japanese trading
+company, has performed significant import-export financing services for us. During fiscal 2010, Sojitz America provided financing and purchasing services for NIKE Brand products sold in Argentina, Uruguay, Canada, Brazil, India, Indonesia, the
+Philippines, Malaysia, South Africa, China, Korea, and Thailand, excluding products produced and sold in the same country. Approximately 17% of NIKE Brand sales occurred in those countries. Any failure of Sojitz America to provide these services or
+any failure of Sojitz America’s banks could disrupt our ability to acquire products from our suppliers and to deliver products to our customers outside of the United States, Europe, Middle East, Africa and Japan. Such a disruption could result
+in cancelled orders that would adversely affect sales and profitability. However, we believe that any such disruption would be short-term in duration due to the ready availability of alternative sources of financing at competitive rates. Our current
+agreements with Sojitz America expire on May 31, 2011. 
+International Operations and Trade 
+Our international operations and sources of supply are subject to the usual risks of doing business abroad, such as possible revaluation
+of currencies, export and import duties, anti-dumping measures, quotas, safeguard measures, trade restrictions, restrictions on the transfer of funds and, in certain parts of the world, political instability and terrorism. We have not, to date, been
+materially affected by any such risk, but cannot predict the likelihood of such developments occurring. 
+The current global
+economic recession has resulted in a significant slow down in international trade and a sharp rise in protectionist actions around the world. These trends are affecting many global manufacturing and service sectors, and the footwear and apparel
+industries, as a whole, are not immune. Companies in our industry are facing trade protectionist challenges in many different regions, and in nearly all cases we are working together to address trade issues to reduce the impact to the industry,
+while observing applicable competition laws. Notwithstanding our efforts, such actions, if implemented, could result in increases in the cost of our products, which could adversely affect our sales or profitability and the imported footwear and
+apparel industry as a whole. Accordingly, we are actively monitoring the developments described below. 
+Footwear Imports
+into the European Union 
+In 2005, at the request of the European domestic footwear industry, the European Commission
+(“EC”) initiated investigations into leather footwear imported from China and Vietnam. Together with other companies in our industry, we took the position that Special Technology Athletic Footwear (STAF) (i) should not be within the
+scope of the investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping investigation. Our arguments were successful and the EU agreed in October 2006 on definitive duties of 16.5% for China and 10% for
+Vietnam for non-STAF leather footwear, but excluded STAF from the final measures. Prior to the scheduled expiration in October 2008 of the measures imposed on the non-STAF footwear, the domestic industry requested and the EC agreed to review a
+petition to extend these restrictions on non-STAF leather footwear. In December 2009, following a review of the ongoing restrictions, EU member states voted to extend the measures for an additional 15 months, until March 31, 2011. We expect
+that a decision by the EC on whether to initiate a review on these measures for a second time will take place before the end of calendar 2010. 
+5 
+Table of Contents 
+On February 3, 2010, the Chinese government announced it would be seeking to refer the
+EU decision (both on the original measures and subsequent review decision) to the World Trade Organization (“WTO”), and on May 18, 2010, the Dispute Settlement Body of the WTO agreed to establish a panel to rule on China’s claims
+against the EU with respect to current anti-dumping measures in force for leather footwear exports. 
+Footwear Imports into
+Brazil and Argentina 
+At the request of certain domestic footwear industry participants, both Brazil and Argentina have
+initiated independent anti-dumping investigations against footwear made in China. Over the last two years, we have been working in broad coalition with other companies in our industry to challenge these cases on the basis that the athletic footwear
+being imported from China (i) should not be within the scope of the investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping investigation. In the case of Argentina, in 2010, the final
+determination made by the administering authorities was favorable to us. In the case of Brazil, the administering authorities agreed to impose an anti-dumping duty against nearly all footwear from China, which we believe will impact all brands in
+the footwear industry. Although we do not currently expect that this decision will materially affect us, we are working with the same broad coalition of footwear companies to challenge this decision in domestic Brazilian courts as well as
+international forums such as the WTO. 
+Footwear Imports into Turkey 
+In 2006, Turkey introduced safeguard measures in the form of additional duties on all imported footwear into Turkey with the goal of
+protecting its local shoe manufacturing industry until August 2009. In June 2009, Turkish shoe-manufacturers submitted, and the Turkish Government agreed to review, a request for extension of the safeguard measures claiming that the rehabilitation
+process of the local Turkish industry was interrupted due to the continuing increase of footwear imports. Despite the importers opposition to the continuation of the safeguard measures, the Turkish authorities extended these safeguard measures until
+August 2012, but reduced the duty from $3 per pair of footwear to $1.60 per pair of footwear. As a result of this decision, Vietnam and Indonesia each initiated discussions with Turkey and each is seeking compensation from Turkey, which is possible
+under current WTO rules. These bilateral discussions are currently ongoing, and one potential outcome could involve Turkey awarding trade concessions on other products — or the exclusion from the safeguard measure of certain categories of
+footwear. A conclusion of the first round of talks between the exporting countries is expected in September 2010. 
+Trade
+Relations with China 
+China represents an important sourcing and marketing country for us. Many governments around the
+world are concerned about China’s growing and fast-paced economy, compliance with WTO rules, currency valuation, and high trade surpluses. As a result, a wide range of legislative proposals have been introduced to address these concerns. While
+some of these concerns may be justified, we are working with broad coalitions of global businesses and trade associations representing a wide variety of sectors (e.g., services, manufacturing, and agriculture) to help ensure any legislation enacted
+and implemented (i) addresses legitimate and core concerns, (ii) is consistent with international trade rules, and (iii) reflects and considers China’s domestic economy and the important role it has in the global economic
+community. We believe other companies in our industry as well as most other multi-national companies are in a similar position regarding these trade measures. 
+In the event any of these trade protection measures are implemented, we believe that we have the ability to develop, over a period of
+time, adequate alternative sources of supply for the products obtained from our present suppliers. If events prevented us from acquiring products from our suppliers in a particular country, our operations could be temporarily disrupted and we
+could experience an adverse financial impact. However, we believe we could abate any such disruption, and that much of the adverse impact on supply would, therefore, be of a short-term nature. We believe our principal competitors are subject to
+similar risks. 
+6 
+Table of Contents 
+Competition 
+The athletic footwear, apparel, and equipment industry is keenly competitive in the United States and on a worldwide basis. We compete
+internationally with a significant number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies, and large companies having diversified lines of athletic and leisure shoes, apparel, and equipment,
+including Adidas, Puma, and others. The intense competition and the rapid changes in technology and consumer preferences in the markets for athletic and leisure footwear and apparel, and athletic equipment, constitute significant risk factors in our
+operations. 
+NIKE is the largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of
+shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service are important aspects of competition in the athletic footwear, apparel, and equipment industry. To help
+market our products, we contract with prominent and influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and use our products, and we actively sponsor sporting events and clinics. We believe that we are competitive
+in all of these areas. 
+Trademarks and Patents 
+We utilize trademarks on nearly all of our products and believe having distinctive marks that are readily identifiable
+is an important factor in creating a market for our goods, in identifying the Company, and in distinguishing our goods from the goods of others. We consider our
+NIKE ® and Swoosh
+Design ® trademarks to be among our most valuable assets and we have registered these trademarks in over 150
+countries. In addition, we own many other trademarks that we utilize in marketing our products. We continue to vigorously protect our trademarks against infringement. 
+NIKE has an exclusive, worldwide license to make and sell footwear using patented “Air” technology. The
+process utilizes pressurized gas encapsulated in polyurethane. Some of the early NIKE AIR ® patents have expired,
+which may enable competitors to use certain types of similar technology. Subsequent NIKE AIR ® patents will not
+expire for several years. We also have hundreds of U.S. and foreign utility patents, and thousands of U.S. and foreign design patents covering components and features used in various athletic and leisure shoes, apparel, and equipment. These patents
+expire at various times, and patents issued for applications filed this year will last from now to 2024 for design patents, and from now to 2030 for utility patents. We believe our success depends primarily upon skills in design, research and
+development, production, and marketing rather than upon our patent position. However, we have followed a policy of filing applications for United States and foreign patents on inventions, designs, and improvements that we deem valuable. 
+Employees 
+We had approximately 34,400 employees at May 31, 2010. Management considers its relationship with employees to be excellent. None of
+our employees is represented by a union, except for certain employees in the Emerging Markets geography, where local law requires those employees to be represented by a trade union, and in the United States, where certain employees of Cole Haan are
+represented by a union. Also, in some countries outside of the United States, local laws require representation for employees by works councils (such as in certain countries in the European Union, in which they are entitled to information and
+consultation on certain Company decisions) or other employee representation by an organization similar to a union, and in certain European countries, we are required by local law to enter into and/or comply with (industry wide or national)
+collective bargaining agreements. There has never been a material interruption of operations due to labor disagreements. 
+7 
+Table of Contents 
+Executive Officers of the Registrant 
+The executive officers of NIKE as of July 16, 2010 are as follows: 
+Philip H. Knight, Chairman of the Board — Mr. Knight, 72, a director since 1968, is a co-founder of NIKE and, except for
+the period from June 1983 through September 1984, served as its President from 1968 to 1990 and from June 2000 to December 2004. Prior to 1968, Mr. Knight was a certified public accountant with Price Waterhouse and Coopers & Lybrand
+and was an Assistant Professor of Business Administration at Portland State University. 
+Mark G. Parker, Chief
+Executive Officer and President — Mr. Parker, 54, was appointed CEO and President in January 2006. He has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing, and brand
+management. Mr. Parker was appointed divisional Vice President in charge of development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998, and President of the NIKE Brand in 2001.
+David J. Ayre, Vice President, Global Human Resources — Mr. Ayre, 50, joined NIKE as Vice President, Global
+Human Resources in July 2007. Prior to joining NIKE, he held a number of senior human resource positions with PepsiCo, Inc. since 1990, most recently as head of Talent and Performance Rewards. 
+Donald W. Blair, Vice President and Chief Financial Officer — Mr. Blair, 52, joined NIKE in November 1999. Prior to
+joining NIKE, he held a number of financial management positions with PepsiCo, Inc., including Vice President, Finance of Pepsi-Cola Asia, Vice President, Planning of PepsiCo’s Pizza Hut Division, and Senior Vice President, Finance of The Pepsi
+Bottling Group, Inc. Prior to joining PepsiCo, Mr. Blair was a certified public accountant with Deloitte, Haskins, and Sells. 
+Charles D. Denson, President of the NIKE Brand — Mr. Denson, 54, has been employed by NIKE since 1979. Mr. Denson
+held several management positions within the Company, including his appointments as Director of USA Apparel Sales in 1994, divisional Vice President, U.S. Sales in 1994, divisional Vice President European Sales in 1997, divisional Vice President and
+General Manager, NIKE Europe in 1998, Vice President and General Manager of NIKE USA in 2000, and President of the NIKE Brand in 2001. 
+Gary M. DeStefano, President, Global Operations — Mr. DeStefano, 53, has been employed by NIKE since 1982, with primary
+responsibilities in sales and regional administration. Mr. DeStefano was appointed Director of Domestic Sales in 1990, divisional Vice President in charge of domestic sales in 1992, Vice President of Global Sales in 1996, Vice President and
+General Manager of Asia Pacific in 1997, President of USA Operations in 2001, and President of Global Operations in 2006. 
+Trevor Edwards, Vice President, Global Brand and Category Management — Mr. Edwards, 47, joined NIKE in 1992. He was
+appointed Marketing Manager, Strategic Accounts, Foot Locker in 1993, Director of Marketing, the Americas in 1995, Director of Marketing, Europe in 1997, Vice President, Marketing for Europe, Middle East and Africa in 1999, and Vice President, U.S.
+Brand Marketing in 2000. Mr. Edwards was appointed corporate Vice President, Global Brand Management in 2002 and Vice President, Global Brand and Category Management in 2006. Prior to NIKE, Mr. Edwards was with the Colgate-Palmolive
+Company. 
+Jeanne P. Jackson, President, Direct to Consumer — Ms. Jackson, 58, served as a
+member of the NIKE, Inc. Board of Directors from 2001 through March 2009, when she resigned from our Board and was appointed President, Direct to Consumer. She is founder and CEO of MSP Capital, a private investment company. Ms. Jackson
+was CEO of Walmart.com from March 2000 to January 2002. She was with Gap, Inc., as President and CEO of Banana Republic from 1995 to 2000, also serving as CEO of Gap, Inc. Direct from 1998 to 2000. Since 1978, she has held various retail
+management positions with Victoria’s Secret, The Walt Disney Company, Saks Fifth Avenue, and Federated Department Stores. Ms. Jackson is the past President of the United States Ski and Snowboard Foundation Board of Trustees, and is a
+director of McDonald’s Corporation. She is a former director of Nordstrom, Inc., and Harrah’s Entertainment, Inc. 
+8 
+Table of Contents 
+Hilary K. Krane, Vice President and General Counsel — Ms. Krane, 46, joined
+NIKE as Vice President and General Counsel in April 2010. Prior to joining NIKE, Ms. Krane was General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. where she was responsible for legal affairs and
+overseeing the global brand protection department. From 1996 to 2006, she was a partner and assistant general counsel at PricewaterhouseCoopers LLP. 
+P. Eunan McLaughlin, President, Affiliates — Mr. McLaughlin, 52, joined NIKE as Director of Sales, NIKE Europe in 1999,
+and was appointed Vice President Commercial Sales and Retail in 2000, Vice President, Asia Pacific in 2001, Vice President, Europe, Middle East & Africa in May 2004, and President of Affiliates in April 2009. Prior to joining NIKE, he
+was Partner and Vice President of Consumer & Retail Practices Division, Korn/Ferry International from 1996 to 1999. From 1983 to 1996, Mr. McLaughlin held various positions with Mars, Inc. in finance, sales, marketing and general
+management. 
+Bernard F. Pliska, Vice President, Corporate Controller — Mr. Pliska, 48, joined NIKE as
+Corporate Controller in 1995. He was appointed Vice President, Corporate Controller in 2003. Prior to NIKE, Mr. Pliska was with Price Waterhouse from 1984 to 1995. Mr. Pliska is a certified public accountant. 
+John F. Slusher, Vice President, Global Sports Marketing — Mr. Slusher, 41, has been employed by NIKE since 1998 with
+primary responsibilities in global sports marketing. Mr. Slusher was appointed Director of Sports Marketing for the Asia Pacific and Americas Regions in 2006, divisional Vice President, Asia Pacific & Americas Sports Marketing in
+September 2007 and Vice President, Global Sports Marketing in November 2007. Prior to joining NIKE, Mr. Slusher was an attorney at the law firm of O’Melveny & Myers from 1995 to 1998. 
+Eric D. Sprunk, Vice President, Merchandising and Product — Mr. Sprunk, 46, joined NIKE in 1993. He was appointed
+Finance Director and General Manager of the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General Manager, NIKE Europe Footwear in 1998, and Vice President & General Manager of the Americas in 2000. Mr. Sprunk was
+appointed corporate Vice President, Global Footwear in 2001 and Vice President, Merchandising and Product in 2009. Prior to joining NIKE, Mr. Sprunk was a certified public accountant with Price Waterhouse from 1987 to 1993. 
+Hans van Alebeek, Vice President, Global Operations and Technology — Mr. van Alebeek, 44, joined NIKE as Director
+of Operations of Europe in 1999, and was appointed Vice President, Operations & Administration in EMEA in 2001, Vice President, Global Operations in 2003, Vice President, Global Operations & Technology in 2004, and Corporate Vice
+President in November 2005. Prior to joining NIKE, Mr. van Alebeek worked for McKinsey & Company as a management consultant and at N.V. Indivers in business development.

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+Item 13. 
+Certain Relationships and Related Transactions, and Director Independence 
+The information required by Items 404 and 407(a) of Regulation S-K is included under “Transactions with Related Persons” and
+“Director Independence” in the definitive Proxy Statement for our 2010 Annual Meeting of Shareholders and is incorporated herein by reference.

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+Item 9A. 
+Controls and Procedures 
+We maintain disclosure controls and procedures that are designed to ensure information required to be disclosed in our Exchange Act
+reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our
+Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and
+procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible
+controls and procedures. 
+We carry out a variety of on-going procedures, under the supervision and with the participation of
+our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief
+Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of May 31, 2010. 
+“Management’s Annual Report on Internal Control Over Financial Reporting” is included in Item 8 on page 54 of this
+Report. 
+There has been no change in our internal control over financial reporting during our most recent fiscal quarter that
+has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

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+Transactions with Related Persons 
+Mr. Knight makes his airplane available for business use by the Company for no charge. NIKE operates and maintains the aircraft.
+Mr. Knight has reimbursed the Company $729,433 for NIKE’s operating costs related to his personal use of this aircraft during fiscal 2011, determined based on the cost of fuel and other variable costs associated with the flights under FAR
+91-501(d). 
+Pursuant to the terms of a past consulting agreement with the Company, the Company agreed to pay for health
+insurance and for life insurance policies for Howard Slusher, the father of John Slusher, Vice President of Sports Marketing, following expiration of the agreement. During fiscal 2011, the Company paid Howard Slusher $129,870 for health and life
+insurance premiums. 
+Three of Mr. Parker’s siblings are employed by the Company in non-executive roles. Bob Parker
+is a Strategic Sales Director, and has been employed by the Company for over 27 years; Stephen Parker is the General Manager, China-Converse, and has been employed by the Company for over 23 years; and Ann Parker is a Talent Development and
+Community Relations Director at Hurley LLC, and has been employed by the Company for over 21 years. During fiscal year 2011, the Company paid aggregate compensation to Bob Parker, Stephen Parker and Ann Parker in the amounts of $409,833, $476,330,
+$206,201, respectively. The compensation was consistent with compensation paid to other employees holding similar positions, and was composed of salary, performance bonus, the grant date fair value of stock options granted during the fiscal year
+estimated using the Black-Scholes pricing model, and profit sharing and matching contributions to Company-sponsored retirement plans. 
+Mr. Thompson’s son, John Thompson III, is the head basketball coach at Georgetown University, and the Company has a contract with him to provide endorsement and consulting services to the
+Company through August 2014, with base compensation over the 5-year term of the contract of $500,000, and up to $80,000 per year of product and other performance incentives. 
+Compensation Committee Interlocks and Insider Participation 
+The members
+of the Compensation Committee of the Board of Directors during the fiscal year ended May 31, 2011 were Ralph D. DeNunzio, Timothy D. Cook, John C. Lechleiter, and Johnathan A. Rodgers. The Committee is composed solely of independent,
+non-employee directors. No member of the Compensation Committee has been an executive officer of the Company, and no member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC’s rules requiring
+disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a director or member of a compensation committee (or other committee serving an equivalent function) of any other entity, the
+executive officers of which served as a director or member of the Compensation Committee of the Company during the fiscal year ended May 31, 2011. 
+11

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+Item 1. 
+Business 
+General 
+NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As used in this report, the terms
+“we”, “us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates, unless the context indicates otherwise. Our Internet address is www.nike.com. On our NIKE
+Corporate web site, located at www.nikebiz.com, we post the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission: our annual report on
+Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended. All such
+filings on our NIKE Corporate web site are available free of charge. Also available on the NIKE Corporate web site are the charters of the committees of our board of directors, as well as our corporate governance guidelines and code of ethics;
+copies of any of these documents will be provided in print to any shareholder who submits a request in writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453. 
+Our principal business activity is the design, development and worldwide marketing and selling of high quality footwear, apparel,
+equipment, and accessory products. NIKE is the largest seller of athletic footwear and athletic apparel in the world. We sell our products to retail accounts, through NIKE-owned retail stores and internet sales, which we refer to as our “Direct
+to Consumer” operations, and through a mix of independent distributors and licensees, in over 170 countries around the world. Virtually all of our products are manufactured by independent contractors. Virtually all footwear and apparel products
+are produced outside the United States, while equipment products are produced both in the United States and abroad. 
+Products 
+NIKE’s athletic footwear products are designed primarily for specific athletic use, although a large percentage of the products are worn for casual or leisure purposes. We place considerable emphasis
+on high quality construction and innovation in products designed for men, women and children. Running, training, basketball, soccer, sport-inspired casual shoes, and kids’ shoes are currently our top-selling footwear categories and we expect
+them to continue to lead in product sales in the near future. We also market footwear designed for baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and
+recreational uses. 
+We sell sports apparel and accessories covering most of the above categories, sports-inspired lifestyle
+apparel, as well as athletic bags and accessory items. NIKE apparel and accessories feature the same trademarks and are sold through the same marketing and distribution channels. We often market footwear, apparel and accessories in
+“collections” of similar design or for specific purposes. We also market apparel with licensed college and professional team and league logos. 
+We sell a line of performance equipment under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, golf clubs, and other
+equipment designed for sports activities. We also sell small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary, NIKE IHM, Inc. 
+In addition to the products we sell directly to customers through our Direct to Consumer operations, we have entered into license agreements that permit unaffiliated parties to manufacture and sell
+certain apparel, electronic devices and other equipment designed for sports activities. 
+Our wholly-owned
+subsidiary, Cole Haan (“Cole Haan”), headquartered in New York, New York, designs and distributes dress and casual footwear, apparel and accessories for men and women under the Cole Haan ® trademark. 
+1 
+Table of Contents 
+Our wholly-owned subsidiary, Converse Inc. (“Converse”),
+headquartered in North Andover, Massachusetts, designs, distributes and licenses athletic and casual footwear, apparel and accessories under the Converse ® , Chuck Taylor ® , All Star ® , One Star ® , Star Chevron and Jack
+Purcell ® trademarks. 
+Our wholly-owned subsidiary, Hurley International LLC (“Hurley”), headquartered in Costa Mesa, California,
+designs and distributes a line of action sports and youth lifestyle apparel and accessories under the Hurley ® 
+trademark. 
+Our wholly-owned subsidiary, Umbro International Limited (“Umbro”), headquartered in
+Cheadle, United Kingdom, designs, distributes and licenses athletic and casual footwear, apparel and equipment, primarily for the sport of football (soccer), under the Umbro ® trademark. 
+Sales and
+Marketing 
+Financial information about geographic and segment operations appears in Note 18 of the accompanying Notes to
+the Consolidated Financial Statements on page 83. 
+We experience moderate fluctuations in aggregate sales volume during the
+year. Historically, revenues in the first and fourth fiscal quarters have slightly exceeded those in the second and third quarters. However, the mix of product sales may vary considerably as a result of changes in seasonal and geographic demand for
+particular types of footwear, apparel and equipment. 
+Because NIKE is a consumer products company, the relative popularity of
+various sports and fitness activities and changing design trends affect the demand for our products. We must therefore respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products,
+styles and categories, and influencing sports and fitness preferences through aggressive marketing. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability. This is a continuing risk.
+We report our NIKE Brand operations based on our internal geographic organization. Each NIKE Brand geography operates
+predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel, and equipment. Effective June 1, 2009, we began operating under our new organizational structure for the NIKE Brand, which
+consists of the following six geographies: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. Previously, NIKE Brand operations were organized into the following four geographic regions: U.S.,
+Europe, Middle East and Africa (collectively, “EMEA”), Asia Pacific, and Americas. Our NIKE Brand Direct to Consumer operations are managed within each geographic segment. 
+United States Market 
+In fiscal 2011, sales in
+the United States including U.S. sales of our Other Businesses accounted for approximately 43% of total revenues, compared to 42% in fiscal 2010 and 2009. Our Other Businesses were primarily comprised of our affiliate brands; Cole Haan,
+Converse, Hurley and Umbro (which was acquired on March 3, 2008); and NIKE Golf. We estimate that we sell to more than 20,000 retail accounts in the United States. The NIKE Brand domestic retail account base includes a mix of footwear stores,
+sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts. During fiscal 2011, our three largest customers accounted for approximately 23% of sales in the United States. 
+We make substantial use of our “futures” ordering program, which allows retailers to order five to six months in advance
+of delivery with the commitment that their orders will be delivered within a set time period at a fixed price. In fiscal 2011, 87% of our U.S. wholesale footwear shipments (excluding our Other Businesses) were made under the futures program,
+compared to 89% in fiscal 2010 and 2009. In fiscal 2011, 60% of our U.S. wholesale apparel shipments (excluding our Other Businesses) were made under the futures program, compared to 62% in fiscal 2010 and 60% in fiscal 2009. 
+2 
+Table of Contents 
+We utilize 18 NIKE sales offices to solicit sales in the United States. We also utilize 4
+independent sales representatives to sell specialty products for golf and 5 for skateboarding and snowboarding products. In addition, our Direct to Consumer operations sell NIKE Brand products through our internet website, www.nikestore.com ,
+and the following retail outlets in the United States: 
+U.S. Retail Stores 
+Number 
+NIKE factory stores 
+150 
+NIKE stores 
+16 
+NIKETOWNs 
+9 
+NIKE employee-only stores 
+3 
+Cole Haan stores (including factory stores) 
+107 
+Converse stores (including factory stores) 
+58 
+Hurley stores (including factory and employee stores) 
+20 
+Total 
+363 
+NIKE’s three significant distribution centers in the United States for NIKE Brand products,
+including NIKE Golf, are located in Memphis, Tennessee. NIKE also operates and leases one facility in Memphis, Tennessee for NIKE Brand product returns. NIKE Brand apparel and equipment products are also shipped from our Foothill Ranch, California
+distribution center. Cole Haan products are distributed primarily from Greenland, New Hampshire, and Converse and Hurley products are shipped primarily from Ontario, California. 
+International Markets 
+In fiscal 2011, non-U.S.
+sales (including non-U.S. sales of our Other Businesses) accounted for 57% of total revenues, compared to 58% in fiscal 2010 and 2009. We sell our products to retail accounts, through our own Direct to Consumer operations, and through a mix of
+independent distributors and licensees around the world. We estimate that we sell to more than 20,000 retail accounts outside the United States, excluding sales by independent distributors and licensees. We operate 16 distribution centers outside of
+the United States. In many countries and regions, including Canada, Asia, some Latin American countries, and Europe, we have a futures ordering program for retailers similar to the United States futures program described above. During fiscal 2011,
+NIKE’s three largest customers outside of the U.S. accounted for approximately 9% of total non-U.S. sales. 
+Our
+Direct to Consumer business operates the following retail outlets outside the United States: 
+Non-U.S. Retail Stores 
+Number 
+NIKE factory stores 
+243 
+NIKE stores 
+50 
+NIKETOWNs 
+3 
+NIKE employee-only stores 
+13 
+Cole Haan stores 
+83 
+Hurley stores 
+1 
+Total 
+393 
+International branch offices and subsidiaries of NIKE are located in Argentina, Australia, Austria,
+Belgium, Bermuda, Brazil, Canada, Chile, China, Croatia, Cyprus, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Lebanon, Macau, Malaysia, Mexico,
+New Zealand, the Netherlands, Norway, the Philippines, Poland, Portugal, Russia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, the United Kingdom, Uruguay
+and Vietnam. 
+3 
+Table of Contents 
+Significant Customer 
+No customer accounted for 10% or more of our net sales during fiscal 2011. 
+Orders 
+Worldwide futures and advance orders for
+NIKE Brand athletic footwear and apparel, scheduled for delivery from June through November 2011, were $10.3 billion compared to $8.8 billion for the same period last year. This futures and advance order amount is calculated based upon our forecast
+of the actual exchange rates under which our revenues will be translated during this period, which approximate current spot rates. Reported futures and advance orders are not necessarily indicative of our expectation of revenues for this period.
+This is because the mix of orders can shift between futures/advance and at-once orders and the fulfillment of certain of these futures/advance orders may fall outside of the scheduled time period noted above. In addition, foreign currency exchange
+rate fluctuations as well as differing levels of order cancellations and discounts can cause differences in the comparisons between futures and advance orders and actual revenues. Moreover, a significant portion of our revenue is not derived from
+futures and advance orders, including at-once and close-out sales of NIKE Brand footwear and apparel, sales of NIKE Brand equipment, sales from our Direct to Consumer operations, and sales from our Other Businesses. 
+Product Research and Development 
+We believe our research and development efforts are a key factor in our past and future success. Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis
+as NIKE strives to produce products that help to reduce injury, enhance athletic performance and maximize comfort. 
+In
+addition to NIKE’s own staff of specialists in the areas of biomechanics, chemistry, exercise physiology, engineering, industrial design, and related fields, we also utilize research committees and advisory boards made up of athletes, coaches,
+trainers, equipment managers, orthopedists, podiatrists, and other experts who consult with us and review designs, materials, concepts for product improvements and compliance with product safety regulations around the world. Employee athletes,
+athletes engaged under sports marketing contracts and other athletes wear-test and evaluate products during the design and development process. 
+Manufacturing 
+Virtually all of our footwear is produced by factories we contract with outside of the United States. In fiscal 2011, contract factories in Vietnam, China, Indonesia, and India manufactured approximately
+39%, 33%, 24% and 2% of total NIKE Brand footwear, respectively. We also have manufacturing agreements with independent factories in Argentina, Brazil, India, and Mexico to manufacture footwear for sale primarily within those countries. The largest
+single footwear factory that we have contracted with accounted for approximately 6% of total fiscal 2011 NIKE Brand footwear production. Almost all of NIKE Brand apparel is manufactured outside of the United States by independent contract
+manufacturers located in 33 countries. Most of this apparel production occurred in China, Thailand, Vietnam, Malaysia, Sri Lanka, Indonesia, Turkey, Cambodia, El Salvador, and Mexico. The largest single apparel factory that we have contracted with
+accounted for approximately 7% of total fiscal 2011 apparel production. 
+The principal materials used in our footwear products
+are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas, and polyurethane films used to make Air-Sole cushioning components. During fiscal 2011, NIKE IHM, Inc., a wholly-owned subsidiary of NIKE, as
+well as independent contractors in China and Taiwan, were our largest suppliers of the Air-Sole cushioning components used in footwear. The principal materials used in our apparel products are natural and synthetic fabrics and threads, plastic and
+metal hardware, and specialized performance fabrics designed to repel rain, retain heat, or efficiently transport body moisture. NIKE’s independent contractors and suppliers buy raw materials in bulk for the manufacturing of our footwear,
+apparel and equipment products. Most raw materials are available and purchased 
+4 
+Table of Contents 
+by those independent contractors and suppliers in the countries where manufacturing takes place. We have thus far experienced little difficulty in satisfying our raw material requirements.
+Since 1972, Sojitz Corporation of America (“Sojitz America”), a large Japanese trading company and the sole owner
+of our redeemable preferred stock, has performed significant import-export financing services for us. During fiscal 2011, Sojitz America provided financing and purchasing services for NIKE Brand products sold in Argentina, Uruguay, Canada, Brazil,
+India, Indonesia, the Philippines, Malaysia, South Africa, China, Korea, and Thailand, excluding products produced and sold in the same country. Approximately 19% of NIKE Brand sales occurred in those countries. Any failure of Sojitz America to
+provide these services or any failure of Sojitz America’s banks could disrupt our ability to acquire products from our suppliers and to deliver products to our customers in those jurisdictions. Such a disruption could result in cancelled orders
+that would adversely affect sales and profitability. However, we believe that any such disruption would be short-term in duration due to the ready availability of alternative sources of financing at competitive rates. Our current agreements with
+Sojitz America expire on May 31, 2014. 
+International Operations and Trade 
+Our international operations and sources of supply are subject to the usual risks of doing business abroad, such as possible revaluation
+of currencies, export and import duties, anti-dumping measures, quotas, safeguard measures, trade restrictions, restrictions on the transfer of funds and, in certain parts of the world, political instability and terrorism. We have not, to date, been
+materially affected by any such risk, but cannot predict the likelihood of such developments occurring. 
+The global economic
+recession resulted in a significant slow-down in international trade and a sharp rise in protectionist actions around the world. These trends are affecting many global manufacturing and service sectors, and the footwear and apparel industries,
+as a whole, are not immune. Companies in our industry are facing trade protectionist challenges in many different regions, and in nearly all cases we are working together to address trade issues to reduce the impact to the industry, while observing
+applicable competition laws. Notwithstanding our efforts, such actions, if implemented, could result in increases in the cost of our products, which could adversely affect our sales or profitability and the imported footwear and apparel industry as
+a whole. Accordingly, we are actively monitoring the developments described below. 
+Footwear Imports into the European
+Union 
+In 2005, at the request of the European domestic footwear industry, the European Commission (“EC”)
+initiated investigations into leather footwear imported from China and Vietnam. Together with other companies in our industry, we took the position that Special Technology Athletic Footwear (STAF) (i) should not be within the scope of the
+investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping investigation. Our arguments were successful and the EU agreed in October 2006 on definitive duties of 16.5% for China and 10% for Vietnam for
+non-STAF leather footwear, but excluded STAF from the final measures. Prior to the scheduled expiration in October 2008 of the measures imposed on the non-STAF footwear, the domestic industry requested and the EC agreed to review a petition to
+extend these restrictions on non-STAF leather footwear. In December 2009, following a review of the ongoing restrictions, EU member states voted to extend the measures for an additional 15 months, until March 31, 2011. In early 2011, the EC
+declined to further extend the measures and since April 1, 2011 these restrictions have been terminated. The EC noted that it will be monitoring leather footwear imports from Vietnam and China over the next 12 months and it is hoped that any
+increases will not result in renewed trade defense actions by the EC. 
+On February 3, 2010, the Chinese government
+announced it would seek to refer the EU decision (both on the original measures and subsequent review decision) to the World Trade Organization (“WTO”) for its further review and decision. On May 18, 2010, the Dispute Settlement Body
+of the WTO agreed to establish a panel to rule on China’s claims against the EU with respect to the above anti-dumping measures. The ruling from the WTO panel is expected in late July or August 2011, after which either party may accept or
+appeal the findings. 
+5 
+Table of Contents 
+Footwear, Apparel and Equipment Imports into Brazil and Argentina 
+At the request of certain domestic footwear industry participants, both Brazil and Argentina have initiated independent anti-dumping
+investigations against footwear made in China. Over the last two years, we have been working with a broad coalition of other companies in our industry to challenge these cases on the basis that the athletic footwear being imported from China
+(i) should not be within the scope of the investigation, and (ii) does not meet the legal requirements of injury and price in an anti-dumping investigation. In the case of Argentina, in 2010, the final determination made by the
+administering authorities was favorable to us. In the case of Brazil, the administering authorities agreed to impose an anti-dumping duty against nearly all footwear from China, which we believe will impact all brands in the footwear industry.
+Although we do not currently expect that this decision will materially affect us, we are working with the same broad coalition of footwear companies to challenge this decision in domestic Brazilian courts as well as international forums such as the
+WTO. 
+Many products, including footwear, apparel and equipment products, that we and others in our industry import into
+Argentina and Brazil are subject to the WTO non-automatic licensing requirements, which means that it may take up to 60 days for those products to clear customs and enter into those jurisdictions. From time to time, in addition to these WTO
+licensing requirements, these jurisdictions impose further importation restrictions or limitations. As a result, we have experienced delays in our ability to import our products or it has taken longer than the time allowed under the WTO for us to
+import our products. To date, our business has not been materially affected by these restrictions or delays. In the future, however, if we are unable to import our products into these jurisdictions due to these or other restrictions or if we
+experience increasing or more frequent delays beyond the WTO-permitted 60 days to import our products, our business could be materially affected. 
+Footwear, Apparel and Equipment Imports into Turkey 
+In 2006, Turkey
+introduced safeguard measures in the form of additional duties on all imported footwear into Turkey with the goal of protecting its local shoe manufacturing industry until August 2009. In June 2009, Turkish shoe-manufacturers submitted, and the
+Turkish Government agreed to review, a request for extension of the safeguard measures claiming that the rehabilitation process of the local Turkish industry was interrupted due to the continuing increase of footwear imports. Despite the importers
+opposition to the continuation of the safeguard measures, the Turkish authorities extended these safeguard measures until August 2012, but reduced the duty from $3 per pair of footwear to $1.60 per pair of footwear. 
+In 2011, two new safeguard measures and reviews were initiated by the Turkish Undersecretariat of Foreign Trade (“UFT”) on
+apparel and equipment imports. In January 2011, the UFT began an investigation on apparel imports that could result in a 20-30% increase in import duties applied to imported apparel products, regardless of country of origin and with only a few
+exceptions for countries that currently have a Free Trade Agreement with Turkey. A decision is expected in late July 2011 and if approved, these higher import duties will be in place through July 2014. Together with other companies in our industry,
+we are advocating for exclusion of certain apparel products used for sporting activities that cannot be manufactured in Turkey and therefore should not be subject to a higher import duty. In February 2011, the UFT began a review of existing
+safeguard measure on travel goods, handbags and similar accessories and containers listed under applicable regulations. One Turkish bag manufacturers association has requested the continuation of the safeguard measures through April 2014, with the
+application of an additional import duty of 2.70 USD/kg (max. 4.25 USD/unit), regardless of country of origin. Together with other companies in our industry, we are advocating for the exclusion of non-leather bags from the scope of the continued
+safeguards. 
+Trade Relations with China 
+China represents an important sourcing country and consumer marketing country for us. Many governments around the world are concerned about China’s growing and fast-paced economy, compliance with WTO
+rules, currency valuation, and high trade surpluses. As a result, a wide range of legislative proposals have been introduced to address these concerns. While some of these concerns may be justified, we are working with broad
+6 
+Table of Contents 
+coalitions of global businesses and trade associations representing a wide variety of sectors (e.g., services, manufacturing, and agriculture) to help ensure any legislation enacted and
+implemented (i) addresses legitimate and core concerns, (ii) is consistent with international trade rules, and (iii) reflects and considers China’s domestic economy and the important role it has in the global economic community.
+We believe other companies in our industry as well as most other multi-national companies are in a similar position regarding these trade measures. 
+In the event any of these trade protection measures are implemented, we believe that we have the ability to develop, over a period of time, adequate alternative sources of supply for the products obtained
+from our present suppliers. If events prevented us from acquiring products from our suppliers in a particular country, our operations could be temporarily disrupted and we could experience an adverse financial impact. However, we believe we
+could abate any such disruption, and that much of the adverse impact on supply would, therefore, be of a short-term nature. We believe our principal competitors are subject to similar risks. 
+Competition 
+The athletic footwear, apparel, and
+equipment industry is keenly competitive in the United States and on a worldwide basis. We compete internationally with a significant number of athletic and leisure shoe companies, athletic and leisure apparel companies, sports equipment companies,
+and large companies having diversified lines of athletic and leisure shoes, apparel, and equipment, including Adidas, Puma, and others. The intense competition and the rapid changes in technology and consumer preferences in the markets for athletic
+and leisure footwear and apparel, and athletic equipment, constitute significant risk factors in our operations. 
+NIKE is the
+largest seller of athletic footwear and athletic apparel in the world. Performance and reliability of shoes, apparel, and equipment, new product development, price, product identity through marketing and promotion, and customer support and service
+are important aspects of competition in the athletic footwear, apparel, and equipment industry. To help market our products, we contract with prominent and influential athletes, coaches, teams, colleges and sports leagues to endorse our brands and
+use our products, and we actively sponsor sporting events and clinics. We believe that we are competitive in all of these areas. 
+Trademarks and Patents 
+We utilize trademarks on nearly all of our products and believe having
+distinctive marks that are readily identifiable is an important factor in creating a market for our goods, in identifying our brands and the Company, and in distinguishing our goods from the goods of others. We consider our NIKE ® and Swoosh Design ® trademarks to be among our most valuable assets and we have registered these trademarks in over 150 countries. In addition, we own many other trademarks that we
+utilize in marketing our products. We continue to vigorously protect our trademarks against infringement. 
+NIKE has an exclusive, worldwide license to make and sell footwear using patented “Air” technology. The
+process utilizes pressurized gas encapsulated in polyurethane. Some of the early NIKE AIR ® patents have expired,
+which may enable competitors to use certain types of similar technology. Subsequent NIKE AIR ® patents will not
+expire for several years. We also have hundreds of U.S. and foreign utility patents, and thousands of U.S. and foreign design patents covering components and features used in various athletic and leisure shoes, apparel, and equipment. These patents
+expire at various times, and patents issued for applications filed this year will last from now to 2025 for design patents, and from now to 2031 for utility patents. We believe our success depends primarily upon skills in design, research and
+development, production, and marketing rather than upon our patent position. However, we have followed a policy of filing applications for United States and foreign patents on inventions, designs, and improvements that we deem valuable. 
+Employees 
+As of May 31, 2011, we had approximately 38,000 employees worldwide, which includes retail and part-time employees. Management considers its relationship with employees to be excellent. None of our
+employees 
+7 
+Table of Contents 
+is represented by a union, except for certain employees in the Emerging Markets geography, where local law requires those employees to be represented by a trade union, and in the United States,
+where certain employees of Cole Haan are represented by a union. Also, in some countries outside of the United States, local laws require representation for employees by works councils (such as in certain countries in the European Union, in which
+they are entitled to information and consultation on certain Company decisions) or other employee representation by an organization similar to a union, and in certain European countries, we are required by local law to enter into and/or comply with
+(industry wide or national) collective bargaining agreements. There has never been a material interruption of operations due to labor disagreements. 
+Executive Officers of the Registrant 
+The
+executive officers of NIKE as of July 14, 2011 are as follows: 
+Philip H. Knight, Chairman of the Board —
+Mr. Knight, 73, a director since 1968, is a co-founder of NIKE and, except for the period from June 1983 through September 1984, served as its President from 1968 to 1990 and from June 2000 to December 2004. Prior to 1968, Mr. Knight was a
+certified public accountant with Price Waterhouse and Coopers & Lybrand and was an Assistant Professor of Business Administration at Portland State University. 
+Mark G. Parker, Chief Executive Officer and President — Mr. Parker, 55, was appointed CEO and President in January 2006. He has been employed by NIKE since 1979 with primary
+responsibilities in product research, design and development, marketing, and brand management. Mr. Parker was appointed divisional Vice President in charge of development in 1987, corporate Vice President in 1989, General Manager in 1993,
+Vice President of Global Footwear in 1998, and President of the NIKE Brand in 2001. 
+David J. Ayre, Vice President,
+Global Human Resources — Mr. Ayre, 51, joined NIKE as Vice President, Global Human Resources in 2007. Prior to joining NIKE, he held a number of senior human resource positions with PepsiCo, Inc. since 1990, most recently as head of Talent
+and Performance Rewards. 
+Donald W. Blair, Vice President and Chief Financial Officer — Mr. Blair, 53, joined
+NIKE in November 1999. Prior to joining NIKE, he held a number of financial management positions with PepsiCo, Inc., including Vice President, Finance of Pepsi-Cola Asia, Vice President, Planning of PepsiCo’s Pizza Hut Division, and Senior Vice
+President, Finance of The Pepsi Bottling Group, Inc. Prior to joining PepsiCo, Mr. Blair was a certified public accountant with Deloitte, Haskins, and Sells. 
+Charles D. Denson, President of the NIKE Brand — Mr. Denson, 55, has been employed by NIKE since 1979. Mr. Denson held several management positions within the Company, including his
+appointments as Director of USA Apparel Sales in 1994, divisional Vice President, U.S. Sales in 1994, divisional Vice President European Sales in 1997, divisional Vice President and General Manager, NIKE Europe in 1998, Vice President and General
+Manager of NIKE USA in 2000, and President of the NIKE Brand in 2001. 
+Gary M. DeStefano, President, Global Operations
+— Mr. DeStefano, 54, has been employed by NIKE since 1982, with primary responsibilities in sales and regional administration. Mr. DeStefano was appointed Director of Domestic Sales in 1990, divisional Vice President in charge of
+domestic sales in 1992, Vice President of Global Sales in 1996, Vice President and General Manager of Asia Pacific in 1997, President of USA Operations in 2001, and President of Global Operations in 2006. 
+Trevor Edwards, Vice President, Global Brand and Category Management — Mr. Edwards, 48, joined NIKE in 1992. He was
+appointed Marketing Manager, Strategic Accounts, Foot Locker in 1993, Director of Marketing, the Americas in 1995, Director of Marketing, Europe in 1997, Vice President, Marketing for Europe, Middle East and Africa in 1999, and Vice President, U.S.
+Brand Marketing in 2000. Mr. Edwards was appointed corporate Vice President, Global Brand Management in 2002 and Vice President, Global Brand and Category Management in 2006. Prior to NIKE, Mr. Edwards was with the Colgate-Palmolive
+Company. 
+8 
+Table of Contents 
+Jeanne P. Jackson, President, Direct to Consumer — Ms. Jackson,
+59, served as a member of the NIKE, Inc. Board of Directors from 2001 through 2009, when she resigned from our Board and was appointed President, Direct to Consumer. She is founder and CEO of MSP Capital, a private investment company.
+Ms. Jackson was CEO of Walmart.com from March 2000 to January 2002. She was with Gap, Inc., as President and CEO of Banana Republic from 1995 to 2000, also serving as CEO of Gap, Inc. Direct from 1998 to 2000. Since 1978, she has held
+various retail management positions with Victoria’s Secret, The Walt Disney Company, Saks Fifth Avenue, and Federated Department Stores. Ms. Jackson is the past President of the United States Ski and Snowboard Foundation Board of Trustees,
+and is a director of McDonald’s Corporation. She is a former director of Nordstrom, Inc., and Harrah’s Entertainment, Inc. 
+Hilary K. Krane, Vice President and General Counsel — Ms. Krane, 47, joined NIKE as Vice President and General Counsel in April 2010. Prior to joining NIKE, Ms. Krane was
+General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. where she was responsible for legal affairs and overseeing the global brand protection department from 2006 to 2010. From 1996 to 2006, she was a
+partner and assistant general counsel at PricewaterhouseCoopers LLP. 
+Bernard F. Pliska, Vice President, Corporate
+Controller — Mr. Pliska, 49, joined NIKE as Corporate Controller in 1995. He was appointed Vice President, Corporate Controller in 2003. Prior to NIKE, Mr. Pliska was with Price Waterhouse from 1984 to 1995. Mr. Pliska is a
+certified public accountant. 
+John F. Slusher, Vice President, Global Sports Marketing — Mr. Slusher, 42, has
+been employed by NIKE since 1998 with primary responsibilities in global sports marketing. Mr. Slusher was appointed Director of Sports Marketing for the Asia Pacific and Americas Regions in 2006, divisional Vice President, Asia
+Pacific & Americas Sports Marketing in September 2007 and Vice President, Global Sports Marketing in November 2007. Prior to joining NIKE, Mr. Slusher was an attorney at the law firm of O’Melveny & Myers from 1995 to
+1998. 
+Eric D. Sprunk, Vice President, Merchandising and Product — Mr. Sprunk, 47, joined NIKE in 1993. He
+was appointed Finance Director and General Manager of the Americas in 1994, Finance Director, NIKE Europe in 1995, Regional General Manager, NIKE Europe Footwear in 1998, and Vice President & General Manager of the Americas in 2000.
+Mr. Sprunk was appointed corporate Vice President, Global Footwear in 2001 and Vice President, Merchandising and Product in 2009. Prior to joining NIKE, Mr. Sprunk was a certified public accountant with Price Waterhouse from 1987 to 1993.
+Hans van Alebeek, Vice President, Global Operations and Technology — Mr. van Alebeek, 45, joined NIKE
+as Director of Operations of Europe in 1999, and was appointed Vice President, Operations & Administration in EMEA in 2001, Vice President, Global Operations in 2003, Vice President, Global Operations & Technology in 2004, and
+Corporate Vice President in November 2005. Prior to joining NIKE, Mr. van Alebeek worked for McKinsey & Company as a management consultant and at N.V. Indivers in business development. 
+Roger S. Wyett, President, Affiliates — Mr. Wyett, 54, joined NIKE in April 2005 as President and Chief Operating
+Officer of the Company’s Hurley brand and was appointed Vice President, Global Apparel in 2006. In October 2007, Mr. Wyett returned to the Company’s Hurley brand as President and Chief Executive Officer, and then in February 2011 was
+appointed President of Affiliates. Mr. Wyett first joined NIKE in 1994, holding a number of management positions in soccer and NIKE Team Sports. From 2000 to 2005, Mr. Wyett was employed by The Walt Disney Company where he was Senior Vice
+President for Global Apparel, Accessories and Footwear, and later promoted to Executive Vice President for Global Sales and Marketing for Consumer Products.

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+Item 13. 
+Certain Relationships and Related Transactions, and Director Independence 
+The information required by Items 404 and 407(a) of Regulation S-K is included under “Election of Directors — Transactions with
+Related Persons” and “Corporate Governance — Director Independence” in the definitive Proxy Statement for our 2011 Annual Meeting of Shareholders and is incorporated herein by reference.

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+Item 9A. 
+Controls and Procedures 
+We maintain disclosure controls and procedures that are designed to ensure information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time
+periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to
+allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only
+reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. 
+We carry out a variety of on-going procedures, under the supervision and with the participation of our management, including our Chief
+Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our
+disclosure controls and procedures were effective at the reasonable assurance level as of May 31, 2011. 
+“Management’s Annual Report on Internal Control Over Financial Reporting” is included in Item 8 on page 54 of this
+Report. 
+There has been no change in our internal control over financial reporting during our most recent fiscal quarter that
+has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.