Charts and Graphs

User Generated

Wbr979979

Business Finance

sbs 220

Suffolk University

Description

Information for this assignment will come from research for your Group Company(Nike) Report.

Each student should create two (2) different types of charts or graphs that were discussed in class (pie chart, line, column, table, etc.) Do not use the same data for each graph - use different information. You must create these charts yourself DO NOT submit any pre-existing charts.

Each chart/graph should be on a separate page. Make sure you cite sources where information was gathered from.

Charts should be formatted using criteria discussed in class and in Chapter 12 of your text. Pay attention to titles, labels, etc. Create your charts/graphs in color.

Unformatted Attachment Preview

Communicating Information in Charts, Graphs and Tables SBS220 – Business Writing Spring 2018 Instructor: Lori LaDuke Today’s Agenda • Quick review • Communicating with charts and tables – Create effective charts – Eliminate “chart junk” – Guidelines for pie, bar, line, column graphs • Practice your chart skills – Other types of charts Report Writing – Dos and Don’ts Writing Reports • As we have discussed throughout this semester, specificity is important to help you establish credibility with your reader • Providing not only the facts is important, but also the context to accurately communicate your information • The following slides are examples to who how to put financial information in context for your reader Don’t just tell reader this… The stock price was $17. Tell them… The $17 stock price was its highest in 5 years. Don’t just tell reader this… The company has the largest in market share. Or even this… Nike has a 23% market share. Instead tell them… Adidas 23% market share is significantly above it’s closest competitor, Under Armour, with a 3% market share. Don’t just tell reader this… Starbucks has the best coffee. Especially don’t tell them this… Our team likes Starbucks better. Tell them… Starbucks’ coffee was named the most favored cup of coffee by 41% of consumers in a recent poll conducted by Suffolk University business students. Communicate with Charts, Graphs and Tables Communicate with Charts and Tables • After conducting survey research typically there is data that you could include in reports to decision makers • Overloading your audience with data is a sure way to guarantee they’ll forget almost everything you say Communicate with Charts and Tables • Fundamental mistake that executives and managers make when communicating with numbers is: – Failing to focus on the main message, which tends to be non-numerical Create Effective Charts As you create charts, focus on the following criteria: – Title descriptiveness – Focal points – Information sufficiency – Ease of processing – Takeaway message Create Effective Charts Title descriptiveness – Title should explain the primary point of the chart – Must be short enough for the reader to process quickly Focal points – Should support one main idea – Can be visually generated in many interesting ways Titles Clarify Meaning of Charts Instead of this: Company sales trend Say this: Company sales have doubled Instead of this: Productivity by region Say this: Region C ranks fourth in productivity Instead of this: Distribution of employees by age Say this: Most employees are between 25 and 35 years old Instead of this: Relationship between compensation and profitability Say this: There is no relationship between compensation and profitability Create Effective Charts Information sufficiency – Should contain enough information for the reader to quickly and reasonably understand the ideas that are being displayed Create Effective Charts Ease of processing – Select only the necessary information and placing labels and data at appropriate places – Enable your reader to process the information quickly and efficiently Create Effective Charts Takeaway message – Essence of your chart – How the information, title, focal points, and other formatting combine to convey a lasting message Try to Eliminate “Chart Junk” • Legends –Slow down the viewer –Insert labels on bars, lines or wedges • “Fruit salad” effect –Eliminate unnecessary colors Source: Guide to Managerial Communication by Munter & Hamilton, page 125 Try to Eliminate “Chart Junk” • Complex labels – Use “thousands” or “millions” to eliminate extra zeros – Remove axis labels if they are unnecessary – Consider labeling 5 year intervals or every other value to decrease clutter • Double titles – Delete the extra title that imports from Excel Source: Guide to Managerial Communication by Munter & Hamilton, page 125 Try to Eliminate “Chart Junk” • Borders and extra lines – Eliminate the border of a background color when it appears around a graph – Cut unnecessary grid lines – Delete the “tick marks” on the axis lines Source: Guide to Managerial Communication by Munter & Hamilton, page 125 Other Guidelines • Use darker colors to represent your most important data series • Avoid unusual fonts or too many special effects • Ensure that all text is horizontal • Avoid white type on dark backgrounds in most cases Chart Types and Guidelines Tables • If your message requires the precision of numbers and text labels to identify what they are, you should use a Table Table 12.7 Formatting Guidelines for Tables Issue Formatting Guidelines Order • Order your entries appropriately (alphabetical or numerical order of categories, or ascending/descending order of values of comparison). Indentation • Indent or otherwise set apart items within a category. Data series • Present comparative data series vertically. Column/row labels • Label columns and rows effectively. Grid lines • Use grid lines for every three to five rows at natural breaks (new categories); this simple design technique allows readers to easily scan rows. • Avoid grid lines on all borders; these tend to clutter the table. • Avoid alternating background colors on rows in most cases; this is also distracting and unnecessary. Figure 12.6 Less Effective Table Survey Results During the three days of the conference you attended at the Prestigio, how many days did you purchase Internet service? Days of Internet Service 0 1 2 3 All Respondents 154 15 31 36 Male 82 8 15 22 Female 72 7 16 14 Under $30,000 15 0 1 2 $30,000–$39,999 41 4 3 7 $40,000–$49,999 48 3 11 12 $50,000–$74,999 33 6 7 8 $75,000–$100,000 12 2 4 4 Over $100,000 5 0 5 3 Gender Income Figure 12.6 More Effective Table Days of Internet Service Purchased (Number of Respondents in Parentheses) 0 Days All Respondents 1 Day 2 Days 3 Days Total (#) 65.5% (154) 6.4% (15) 13.2% (31) 15.3% (36) 236 Male 64.6% (82) 6.3% (8) 11.8% (15) 17.3% (22) 127 Female 66.1% (72) 6.4% (7) 14.7% (16) 12.8% (14) 109 Under $30,000 83.3% (15) 0.0% (0) 5.6% (1) 11.1% (6) 18 $30,000 - $39,999 74.5% (41) 7.3% (4) 5.5% (3) 12.7% (7) 55 $40,000 - $49,999 64.9% (48) 4.1% (3) 14.9% (11) 16.2% (12) 74 $50,000 - $74,999 61.1% (33) 11.1% (6) 13.0% (7) 14.8% (8) 54 $75,000 - $100,000 54.5% (12) 9.1% (2) 18.2% (4) 18.2% (4) 22 Over $100,000 0.0% (0) 38.5% (5) 23.1% (3) 13 Gender Income 38.5% (5) Charts and Graphs • When you want to show the relationship of your data, use a chart/graph • Most common chart/graph types – Pie Charts – Bar Charts – Line Charts – Column Charts Pie Chart • Pie charts – Use for illustrating the pieces within a whole – Should equal to 100% Pie Chart Guidelines • Largest slice should begin at 12 o’clock and go clockwise • Exploding slices should be used sparingly • Generally use not more than six components. – If you have more than six, select the five components most important to your message and group the remainder into an ‘others’ category • Use the most contrasting color, or the most intense shading pattern to show emphasis • If no one segment is more important than the others, consider arranging the components from largest to smallest • Always include a 100% = legend in the top left corner • If need to compare the components of more than one total, switch to either 100% columns or bars Which Pie Chart is More Effective? Why? Pie Chart - Practice Create a chart to display marketing spend by percentage for 2017 2017 marketing spend (in dollars) • Advertising $546,000 • Public Relations $252,000 • Branding $147,000 • Channel Support $105,000 ADVERTISING REPRESENTS OVER HALF OF 2017 MARKETING BUDGET 100% = 1,050,000 Channel Support 10% Branding 14% Advertising 52% Public Relations 24% Bar Chart Use in an item comparison when we want to compare how things rank • Are they about the same? • Is one more or less than the others? Bar Chart Guidelines • Bars should be in ascending or descending order (in most cases) • Baseline should always be zero • Space (“gap width”) separating the bars should be smaller than the width of the bars • Legend should only be used if the chart has two or more data series • Use contrasting color or shading to emphasize the important item, reinforcing the message title • To identify values, use a scale at the top or bottom, or numbers at the ends of the bars, not both – Using both scale and numbers would be redundant – Round your numbers Which Bar Chart is More Effective? Why? Bar Chart - Practice Profit margin versus industry competitors – how does Smoking Spokes rank? • Rad Rides 8.3% • Easy Riders 9.8% • Bykes for Tykes 15.9% • Single Riders 14.9% • Smoking Spokes 19.1% Smoking Spokes has Highest Profit Margin by 3% of Closest Competitor Smoking Spokes 19% Bikes for Tykes 16% Single Riders 15% Easy Riders Rad Riders 10% 8% Time Series Comparisons • Used to show change over time – Weeks, months, quarters, or years – Increasing, decreasing, fluctuating, or constant • Time series is best demonstrated with either: – Column chart – Line chart • If you have only a few points in time to plot (up to seven or eight) – Use the column chart • If you have to show a trend over a long period of time (for example over 20 years) – Use the line chart Column Chart • Emphasize levels or magnitudes • More suitable for data on activities that occur within a set period of time • Make the space between the columns smaller than the width of the columns • Use color or shading to emphasize one point in time more than others or to distinguish historical from projected data • Round data values to a consistent and appropriate scale Column Chart - Practice Company revenues over five year period 2009 2010 2011 2012 2013 3,443,000 4,625,000 5,811,250 9,633,500 10,225,750 Revenues have increased by almost 300% since 2009 Revenues in Millions $3.44 2009 $4.62 2010 $9.63 $10.23 2012 2013 $5.81 2011 Line Chart • • • • • • Longer trends show better on line charts Trend line is bolder than the baseline Scale should be about two-thirds of the range included in the chart Series names should be placed on or attached directly to lines Only four or fewer data series (lines) should be included Grouped line chart compares the performance of two or more items – Use the boldest line for your company and thinner or dashed lines for the others – Be careful about too many lines – it starts to look like spaghetti! – http://www.theatlantic.com/business/archive/2011/08/chart-of-theday-student-loans-have-grown-511-since-1999/243821/ Which Line Chart is More Effective? Why? Line Chart Example 43 Line Chart Example • https://www.google.com/search?q=pepsico+stock+price+hist ory&oq=pepsico+stock+price+history&gs_l=psyab.3..0j0i22i30k1l2.2872.7563.0.7795.29.28.1.0.0.0.181.2714. 5j18.23.0....0...1.1.64.psyab..5.24.2729...0i67k1j0i131k1j0i3k1.0.FAAQmjYzZe0 Identify Misleading Charts http://www.watchknowlearn.org/Video.aspx?Vi deoID=36312&CategoryID=722 What are the problems? Ten States with the Most Jobs related to Manufacturing Exports (2008) California 737.6 Texas 731.8 Ohio 362.2 Illinois 360.2 Michigan 269.9 Washington 258.3 Pennsylvania 258.2 Indiana 233.6 New York 228.1 North Carolina 208.6 0 100 200 300 400 Thousands of Jobs 500 600 700 800 Value of Manufacturing Exports by Size of Company (2008) Small Companies, 8% Medium-Sized Companies, 22% Large Companies, 70% Exports to Top Three Export Partners of the U.S. 300 250 Canada 200 Billions of U.S. Dollars 150 Mexico 100 China 50 0 2000 2001 2002 2003 2004 2005 Year 2006 2007 2008 2009 Other Types of Charts – Gantt Charts Gantt Charts • Useful for planning and scheduling projects • Help assess how long a project should take, determine the resources needed, and plan the order in which you'll complete tasks • Used to also manage the dependencies between tasks Other Types of Charts – Workflow Diagram Workflow Diagram (aka Workflow) • Provides a graphic overview of the business process. – Uses standardized symbols and shapes, shows step by step how your work is completed from start to finish. • Shows who is responsible for work at what point in the process • Uses also include to help employees understand their roles and the order in which work is completed, • Originated from the manufacturing industry – Now used by a variety of industries—from government to finance to commerce Source: https://www.lucidchart.com/pages/workflow-diagram Workflow Diagram – Org. Chart Example Workflow Diagram - Process Example Other Types of Charts - Infographics Infographics • Visual representation of a story, article, idea, and/or group of statistics • Used as platform for spreading messages, stories, and data • Always show, don’t tell • Audiences like infographics because they are: - Easy to digest, scan, and quickly absorb - Quick and efficient way to find what they are looking for - Simple and organized - Use quality data, facts, and statistics - Provide manageable amounts of information • There are websites where you can create your own infographic for free Infographic Example Source: http://www.bentley.edu/newsroom/l atest-headlines/mind-of-millennial Questions?
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Whats up buddy?😀 I completed the assignment and I used APA style for formatting and referencing.😎 I have also attached the document I used for information for the pie-chart just in case you may need it.Everything should be clear but if you have any questions..hit me up and I will explain..😇 Otherwise if the work is satisfactory, go ahead to complete and review the question below..👇

NIKE, INC.
ANNUAL REPORT ON FORM 10-K
Table of Contents
Page

PART I
ITEM 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Significant Customer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product Research, Design and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Operations and Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trademarks and Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 4.
Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

65
65
65
65
66
66
66
67
67
67
67
68
68
68
69
69
70
77
77
77
77

PART II

78

ITEM 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ITEM 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ITEM 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
ITEM 8.
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134
ITEM 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134
ITEM 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134
PART III

135

ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.

(Except for the information set forth under “Executive Officers of the Registrant” in Item 1
above, Part III is incorporated by reference from the Proxy Statement for the NIKE, Inc. 2015
Annual Meeting of Shareholders.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . . . . . . . .135
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135

PART IV

136

ITEM 15.

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED MAY 31, 2015
OR

‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM

.

TO

Commission File No. 1-10635

NIKE, Inc.
(Exact name of Registrant as specified in its charter)
OREGON
(State or other jurisdiction of incorporation)
One Bowerman Drive, Beaverton, Oregon
(Address of principal executive offices)

93-0584541
(IRS Employer Identification No.)
97005-6453
(Zip Code)
(503) 671-6453

(Registrant’s Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Class B Common Stock
New York Stock Exchange
(Title of Each Class)
(Name of Each Exchange on Which Registered)
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE

Indicate by check mark:

YES

NO

• if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.

Í



• if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act.



Í

• whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Í



• whether the registrant has submitted electronically and posted on its corporate
Website, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and
post such files).

Í



• if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this
chapter) is not contained herein, and will not be contained, to the best of Registrant’s
knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.

Í

• whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer

Í

Accelerated filer



Non-accelerated filer



Smaller reporting company



• whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).



Í

As of November 30, 2014, the aggregate market values of the Registrant’s Common Stock held by non-affiliates were:
Class A
Class B

$ 4,394,312,083
67,997,995,244
$72,392,307,327

As of July 17, 2015, the number of shares of the Registrant’s Common Stock outstanding were:
Class A
Class B

177,457,876
677,893,713
855,351,589

DOCUMENTS INCORPORATED BY REFERENCE:
Parts of Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on September 17, 2015 are incorporated by
reference into Part III of this Report.
63

PART I

PART I
ITEM 1.

Business

General
statements and other information regarding issuers that file electronically. Also
available on our corporate website 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.

FORM 10-K

NIKE, Inc. was incorporated in 1967 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, collectively, unless
the context indicates otherwise. Our NIKE e-commerce website is located at
www.nike.com. On our NIKE corporate website, located at news.nike.com,
we post the following filings as soon as reasonably practicable after they are
electronically filed with or furnished to the United States Securities and
Exchange Commission (the “SEC”): 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. Our definitive
Proxy Statements are also posted on our corporate website. All such filings
on our corporate website are available free of charge. Copies of these filings
may also be obtained by visiting the Public Reference Room of the SEC at
100 F Street, NE, Washington, D.C. 20549, or by calling the SEC at 1-800SEC-0330. In addition, the SEC maintains a website (www.sec.gov) that
contains current, quarterly and annual reports, proxy and information

Our principal business activity is the design, development and worldwide
marketing and selling of athletic footwear, apparel, equipment, accessories
and services. NIKE is the largest seller of athletic footwear and apparel in the
world. We sell our products to retail accounts, through NIKE-owned retail
stores and internet websites (which we refer to as our “Direct to Consumer” or
“DTC” operations), and through a mix of independent distributors and
licensees throughout the world. Virtually all of our products are manufactured
by independent contractors. Practically all footwear and apparel products are
produced outside the United States, while equipment products are produced
both in the United States and abroad.

Products
We focus our NIKE Brand product offerings in eight key categories: Running,
Basketball, Football (Soccer), Men’s Training, Women’s Training, Action
Sports, Sportswear (our sports-inspired lifestyle products) and Golf.
Basketball includes our Jordan Brand product offerings and Men’s Training
includes our baseball and American football product offerings. We also
market products designed for kids, as well as for other athletic and
recreational uses such as cricket, lacrosse, tennis, volleyball, wrestling,
walking and outdoor activities.
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 our products. Sportswear, Running, Basketball and Football
(Soccer) are currently our top-selling footwear categories and we expect them
to continue to lead in footwear sales.
We sell sports apparel covering most of the above-mentioned categories,
which feature the same trademarks and are sold predominantly through the
same marketing and distribution channels as athletic footwear. Our sports
apparel, similar to our athletic footwear products, is designed primarily for
athletic use and exemplifies our commitment to innovation and high-quality
construction. Sportswear, Men’s Training, Running and Football (Soccer) are
currently our top-selling apparel categories and we expect them to continue
to lead in apparel sales. We often market footwear, apparel and accessories
in “collections” of similar use or by category. We also market apparel with
licensed college and professional team and league logos.
We sell a line of performance equipment and accessories under the NIKE Brand
name, including bags, socks, sport balls, eyewear, timepieces, digital 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.

Our Jordan Brand designs, distributes and licenses athletic and casual
footwear, apparel and accessories predominantly focused on Basketball
using the Jumpman trademark. Sales and operating results for the Jordan
Brand are included within the NIKE Brand Basketball category and within the
respective NIKE Brand geographic operating segments.
One of our wholly owned subsidiary brands, Hurley, headquartered in Costa
Mesa, California (“Hurley”), designs and distributes a line of action sports and
youth lifestyle apparel and accessories under the Hurley trademark. Sales and
operating results for Hurley are included within the NIKE Brand Action Sports
category and within the NIKE Brand’s North America geographic operating
segment, respectively.
Another of our wholly owned subsidiary brands, Converse, headquartered in
Boston, Massachusetts (“Converse”), designs, distributes and licenses casual
sneakers, apparel and accessories under the Converse, Chuck Taylor, All
Star, One Star, Star Chevron and Jack Purcell trademarks. Operating results
of the Converse brand are reported on a stand-alone basis.
In addition to the products we sell to our wholesale customers and directly to
consumers through our DTC operations, we have also entered into license
agreements that permit unaffiliated parties to manufacture and sell, using
NIKE-owned trademarks, certain apparel, digital devices and applications
and other equipment designed for sports activities.
On February 1, 2013, and November 30, 2012, we completed the
divestitures of the Cole Haan and Umbro businesses, respectively, allowing
us to better focus our resources on driving growth in the NIKE, Jordan, Hurley
and Converse brands.

NIKE, INC.

2015 Annual Report and Notice of Annual Meeting

65

PART I

Sales and Marketing
Financial information about geographic and segment operations appears in
Note 18 — Operating Segments and Related Information of the
accompanying Notes to the Consolidated Financial Statements.
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,
as well as other macroeconomic, operating and logistics-related factors.
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 extensive 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, equipment, accessories and
services. Our reportable operating segments for the NIKE Brand are: North
America, Western Europe, Central & Eastern Europe, Greater China, Japan
and Emerging Markets. Our NIKE Brand Direct to Consumer operations are
managed within each geographic operating segment.
Converse is also a reportable segment, and operates in one industry: the
design, marketing, licensing and selling of casual sneakers, apparel and
accessories.

United States Market
For both fiscal 2015 and fiscal 2014, NIKE Brand and Converse sales in the
United States accounted for approximately 46% of total revenues, compared
to 45% for fiscal 2013. We sell our NIKE Brand, Jordan Brand, Hurley and
Converse products to thousands of retail accounts in the United States,
including a mix of footwear stores, sporting goods stores, athletic specialty
stores, department stores, skate, tennis and golf shops and other retail
accounts. In the United States, we utilize NIKE sales offices to solicit sales as
well as independent sales representatives to sell specialty products for golf
and skateboarding. During fiscal 2015, our three largest customers
accounted for approximately 26% 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
U.S. Retail Stores
NIKE Brand factory stores
NIKE Brand in-line stores, including employee-only stores
Converse stores (including factory stores)
Hurley stores (including factory and employee stores)
TOTAL

NIKE owns a full product line distribution center located in Memphis,
Tennessee. In addition, NIKE has four other distribution centers, three of
which are leased, also located in Memphis. NIKE Brand apparel and

fiscal 2015, 87% of our U.S. wholesale footwear shipments (excluding NIKE
Golf, Hurley and Converse) were made under the futures program, compared
to 86% in fiscal 2014 and 87% in fiscal 2013. In fiscal 2015, 67% of our U.S.
wholesale apparel shipments (excluding NIKE Golf, Hurley and Converse)
were made under the futures program, compared to 71% in fiscal 2014 and
67% in fiscal 2013.
Our Direct to Consumer operations sell NIKE Brand products, including
Jordan Brand and Hurley, to consumers through our e-commerce website,
www.nike.com. We also sell Converse products to consumers through a
Converse owned e-commerce website, www.converse.com. In addition, our
Direct to Consumer operations sell through the following number of retail
stores in the United States:

Number
185
33
92
29
339

equipment products are also shipped from our leased Foothill Ranch,
California distribution center. Converse and Hurley products are shipped
primarily from leased facilities in Ontario, California.

International Markets
For both fiscal 2015 and fiscal 2014, non-U.S. NIKE Brand and Converse
sales accounted for 54% of total revenues, compared with 55% for fiscal
2013. We sell our products to retail accounts, through our own Direct to
Consumer operations and through a mix of independent distributors,
licensees and sales representatives around the world. We sell to thousands of
retail accounts and ship products from 45 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 ordering program described
above. During fiscal 2015, NIKE’s three largest customers outside of the
United States accounted for approximately 12% of total non-U.S. sales.

Our Direct to Consumer business operates the following number of retail stores outside the United States, in addition to NIKE and Converse owned e-commerce
websites in over 25 countries:
Non-U.S. Retail Stores
NIKE Brand factory stores
NIKE Brand in-line stores, including employee-only stores
Converse stores (including factory stores)
TOTAL

66

Number
512
73
7
592

PART I

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, India, Indonesia, Ireland, Israel, Italy, Japan, Korea,

Malaysia, Mexico, New Zealand, the Netherlands, Norway, Panama, 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 worldwide net sales during fiscal 2015.

Orders
Worldwide futures orders for NIKE Brand athletic footwear and apparel,
scheduled for delivery from June through November 2015, were $13.5 billion
compared with $13.3 billion for the same period last year. This futures orders
amount is calculated based upon our forecast of the actual currency
exchange rates under which our revenues will be translated during this period.
Reported futures orders are not necessarily indicative of our expectation of
revenues for this period. This is because the mix of orders can shift between
futures and at-once orders and the fulfillment of certain of these 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 discounts,
order cancellations and returns can cause differences in the comparisons
between futures orders and actual revenues. Moreover, a portion of our
revenue is not derived from futures orders, including at-once and closeout
sales of NIKE Brand footwear and apparel, sales of NIKE Brand equipment,
sales from our Direct to Consumer operations and sales from our Converse,
Hurley and NIKE Golf businesses.

We believe our research, design and development efforts are key factors in
our success. Technical innovation in the design and manufacturing process of
footwear, apparel and athletic equipment receive continued emphasis as
NIKE strives to produce products that help to enhance athletic performance,
reduce injury and maximize comfort while reducing waste.
In addition to NIKE’s own staff of specialists in the areas of biomechanics,
chemistry, exercise physiology, engineering, industrial design, sustainability
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 and manufacturing process improvements
and compliance with product safety regulations around the world. Employee

FORM 10-K

Product Research, Design and Development
athletes, athletes engaged under sports marketing contracts and other
athletes wear-test and evaluate products during the design and development
process.
As we continue to develop new technologies, NIKE is simultaneously focused
on the design of innovative products incorporating such technologies
throughout our product categories. Using market intelligence and research,
the various NIKE design teams identify opportunities to leverage new
technologies in existing categories responding to consumer preferences. The
proliferation of NIKE Air, Lunar, Zoom, Free, Flywire, Dri-Fit, Flyknit, Flyweave
and NIKE+ technologies through Running, Basketball, Men’s Training,
Women’s Training and Sportswear, among others, typifies our dedication to
designing innovative products.

Manufacturing
We are supplied by approximately 146 footwear factories located in 14
countries. The largest single footwear factory accounted for approximately
7% of total fiscal 2015 NIKE Brand footwear production. Virtually all of our
footwear is manufactured outside of the United States by independent
contract manufacturers who often operate multiple factories. In fiscal 2015,
contract factories in Vietnam, China and Indonesia manufactured
approximately 43%, 32% and 20% 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. In fiscal 2015, five footwear contract
manufacturers each accounted for greater than 10% of footwear production,
and in aggregate accounted for approximately 69% of NIKE Brand footwear
production.
We are supplied by approximately 408 apparel factories located in 39
countries. The largest single apparel factory accounted for approximately
11% of total fiscal 2015 NIKE Brand apparel production. Virtually all of our
apparel is manufactured outside of the United States by independent contract
manufacturers which often operate multiple factories. In fiscal 2015, most of
this apparel production occurred in China, Vietnam, Sri Lanka, Thailand,
Indonesia, Malaysia and Cambodia. In fiscal 2015, one apparel contract
manufacturer accounted for more than 10% of apparel production, and the

top five contract manufacturers in aggregate accounted for approximately
36% of NIKE Brand apparel production.
The principal materials used in our footwear products are natural and
synthetic rubber, plastic compounds, foam cushioning materials, natural and
synthetic leather, nylon, polyester and canvas, as well as polyurethane films
used to make NIKE Air-Sole cushioning components. During fiscal 2015,
NIKE IHM, Inc., a wholly-owned subsidiary of NIKE, Inc., with facilities near
Beaverton, Oregon and in St. Louis, Missouri, and independent contractors in
China and Vietnam, 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 (both virgin and
recycled); specialized performance fabrics designed to efficiently wick
moisture away from the body, retain heat and repel rain and/or snow; and
plastic and metal hardware. NIKE’s independent contractors and suppliers
buy raw materials for the manufacturing of our footwear, apparel and
equipment products. Most raw materials are available and purchased by
those independent contractors and suppliers in the countries where
manufacturing takes place. NIKE’s independent contract manufacturers and
suppliers have thus far experienced little difficulty in satisfying raw material
requirements for the production of our products.

NIKE, INC.

2015 Annual Report and Notice of Annual Meeting

67

PART I

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 2015, Sojitz America provided financing and purchasing services
for NIKE Brand products sold in certain NIKE markets including Argentina,
Uruguay, Canada, Brazil, India, Indonesia, the Philippines, South Africa and
Thailand, excluding products produced and sold in the same country.
Approximately 8% 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 markets. Such
a disruption could result in canceled 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, 2018, and contain a provision allowing us to extend the
agreements to May 31, 2019.

International Operations and Trade
Our international operations and sources of supply are subject to the usual
risks of doing business abroad, such as possible increases in 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 material effects occurring
in the future.

respect to trade restrictions targeting China, which represents an important
sourcing country and consumer market for us, we are working with a broad
coalition of global businesses and trade associations representing a wide
variety of sectors to help ensure that 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.

In recent years, uncertain global and regional economic conditions have
affected international trade and caused a 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 protectionism in many different
regions, and in nearly all cases we are working together with industry groups
to address trade issues and reduce the impact to the industry, while
observing applicable competition laws. Notwithstanding our efforts,
protectionist measures have resulted in increases in the cost of our products,
and additional measures, if implemented, could adversely affect sales and/or
profitability for NIKE as well as the imported footwear and apparel industry as
a whole.

Where 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, although alternate sources of supply
might not be as cost-effective and could have an ongoing adverse impact on
profitability.

We monitor protectionist trends and developments throughout the world that
may materially impact our industry, and we engage in administrative and
judicial processes to mitigate trade restrictions. In Brazil and Argentina, we are
actively participating in dumping investigations against footwear from China
and actively monitoring actions in other countries that may result in additional
anti-dumping measures and could affect our industry. We are also monitoring
for and advocating against other impediments that may limit or delay customs
clearance for imports of footwear, apparel and equipment. Moreover, with

NIKE advocates for trade liberalization for footwear and apparel in a number
of regional and bilateral free trade agreements. The passage of Trade
Promotion Authority in the United States will enable the conclusion of the
Trans-Pacific Partnership (TPP). If ultimately passed, the TPP has the
potential to reduce or eliminate high rates of customs duties for imports into
the United States of NIKE products sourced from TPP countries (primarily
footwear and apparel from Vietnam and apparel from Malaysia). Similarly, the
European Union is close to concluding a free trade agreement with Vietnam
that could lead to duty reduction or elimination for footwear and apparel.

Competition
The athletic footwear, apparel and equipment industry is highly competitive on
a worldwide basis. We compete internationally with a significant number of
athletic and leisure footwear companies, athletic and leisure apparel
companies, sports equipment companies and large companies having
diversified lines of athletic and leisure footwear, apparel and equipment,
including adidas, Li Ning, lululemon athletica, Puma, V.F. Corp., Under
Armour and UNIQLO, among 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.

• Consumer connection and affinity for brands and products, developed
through marketing and promotion; social media interaction; customer
support and service; identification with prominent and influential athletes,
coaches, teams, colleges and sports leagues who endorse our brands and
use our products and active engagement through sponsored sporting
events and clinics.
• Effective sourcing and distribution of products, with attractive
merchandising and presentation at retail, both in-store and online.
We believe that we are competitive in all of these areas.

NIKE is the largest seller of athletic footwear, apparel and equipment in the
world. Important aspects of competition in this industry are:
• Product attributes such as quality; performance and reliability; new product
innovation and development and consumer price/value.

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
68

Swoosh Design trademarks to be among our most valuable assets and we
have registered these trademarks in almost 170 jurisdictions worldwide. In
addition, we own many other trademarks that we utilize in marketing our
products. We own common law rights in the trade dress of several significant

PART I

shoe designs and elements. For certain trade dress, we have sought and
obtained trademark registrations.
NIKE has copyright protection in its design, graphics and other original works.
When appropriate, we have sought registrations for this content.
NIKE owns patents, and has a patent license, facilitating its use of “Air”
technologies. The “Air” process utilizes pressurized gas encapsulated in
polyurethane. Some of the early patents directed to the “Air” technologies
have expired, which may enable competitors to use certain types of similar
technology. Subsequent NIKE patents directed to the “Air” technologies will
not expire for several years.
We also file and maintain many U.S. and foreign utility patents, as well as
many U.S. and foreign design patents protecting components,

manufacturing techniques, features and industrial design used in various
athletic and leisure footwear, apparel, athletic equipment, digital devices and
golf products. These patents expire at various times; and patents issued for
original applications filed this calendar year in the United States may last until
2030 for design patents and until 2035 for utility patents.
We believe our success depends primarily upon our capabilities in areas such
as design, research and development, production and marketing rather than
exclusively upon our patent and trade secret positions. However, we have
followed a policy of filing patent applications for the United States and select
foreign countries on inventions, designs and improvements that we deem
valuable. We also continue to vigorously protect our trademarks and patents
against third-party infringement.

Employees
As of May 31, 2015, we had approximately 62,600 employees worldwide,
including retail and part-time employees. Management considers its
relationship with employees to be excellent. None of our employees are
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. Also, in some countries outside of the United

States, local laws require employee representation by works councils (which
may be entitled to information and consultation on certain Company
decisions) or by organizations similar to a union. In certain European
countries, we are required by local law to enter into and/or comply with
industry-wide or national collective bargaining agreements. NIKE has never
experienced a material interruption of operations due to labor disagreements.

The executive officers of NIKE, Inc. as of July 17, 2015 are as follows:
Philip H. Knight, Chairman of the Board of Directors — Mr. Knight, 77, 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, President and Chief Executive Officer — Mr. Parker, 59,
was appointed President and Chief Executive Officer 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 product
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, Executive Vice President, Global Human Resources —
Mr. Ayre, 55, 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.

FORM 10-K

Executive Officers of the Registrant
Jeanne P. Jackson, President, Product and Merchandising —
Ms. Jackson, 63, joined NIKE in 2009. She was appointed President, Direct
to Consumer in 2009 and President, Product and Merchandising in 2013.
Ms. Jackson also served as a member of the NIKE, Inc. Board of Directors
from 2001 through 2009. She founded and served as Chief Executive Officer
of MSP Capital, a private investment company, from 2002 to 2009.
Ms. Jackson was Chief Executive Officer of Walmart.com from March 2000 to
January 2002. She was with Gap, Inc., as President and Chief Executive
Officer of Banana Republic from 1995 to 2000, also serving as Chief
Executive Officer 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.
Hilary K. Krane, Executive Vice President, Chief Administrative Officer and
General Counsel — Ms. Krane, 51, joined NIKE as Vice President and
General Counsel in April 2010. In 2011, her responsibilities expanded and she
became Vice President, General Counsel and Corporate Affairs. Ms. Krane
was appointed to Executive Vice President, Chief Administrative Officer and
General Counsel in 2013. Prior to joining NIKE, Ms. Krane was General
Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co.
from 2006 to 2010. From 1996 to 2006, she was a partner and assistant
general counsel at PricewaterhouseCoopers LLP.

Donald W. Blair, Executive Vice President and Chief Financial Officer —
Mr. Blair, 57, 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 & Sells.

John F. Slusher, Executive Vice President, Global Sports Marketing —
Mr. Slusher, 46, 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 in 2006, divisional Vice
President of 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.

Trevor A. Edwards, President, NIKE Brand — Mr. Edwards, 52, joined
NIKE in 1992. He was appointed Marketing Manager, Strategic Accounts for
Foot Locker in 1993, Director of Marketing for the Americas in 1995, Director
of Marketing for 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, Vice President, Global Brand and Category
Management in 2006 and President, NIKE Brand in 2013. Prior to NIKE,
Mr. Edwards was with the Colgate-Palmolive Company.

Eric D. Sprunk, Chief Operating Officer — Mr. Sprunk, 51, joined NIKE in
1993. He was appointed Finance Director and General Manager of the
Americas in 1994, Finance Director for NIKE Europe in 1995, Regional
General Manager of NIKE Europe Footwear in 1998 and Vice President &
General Manager of the Americas in 2000. Mr. Sprunk was appointed Vice
President of Global Footwear in 2001, Vice President of Merchandising and
Product in 2009 and Chief Operating Officer in 2013. Prior to joining NIKE,
Mr. Sprunk was a certified public accountant with Price Waterhouse from
1987 to 1993.

NIKE, INC.

2015 Annual Report and Notice of Annual Meeting

69

PART I

ITEM 1A. Risk Factors
Special Note Regarding Forward-Looking Statements and
Analyst Reports
Certain written and oral statements, other than purely historic information,
including estimates, projections, statements relating to NIKE’s business
plans, objectives and expected operating results and the assumptions upon
which those statements are based, made or incorporated by reference from
time to time by NIKE or its representatives in this report, other reports, filings
with the SEC, press releases, conferences or otherwise, are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act
of 1995 and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate or imply future results,
performance or achievements, and may contain the words “believe,”
“anticipate,” “expect,” “estimate,” “project,” “will be,” “will continue,” “will likely
result” or words or phrases of similar meaning. Forward-looking statements
involve risks and uncertainties which may cause actual results to differ
materially from the forward-looking statements. The risks and uncertainties
are detailed from time to time in reports filed by NIKE with the SEC, including
reports filed on Forms 8-K, 10-Q and 10-K, and include, among others, the
following: international, national and local general economic and market
conditions; the size and growth of the overall athletic footwear, apparel and
equipment markets; intense competition among designers, marketers,
distributors and sellers of athletic footwear, apparel and equipment for
consumers and endorsers; demographic changes; changes in consumer
preferences; popularity of particular designs, categories of products and
sports; seasonal and geographic demand for NIKE products; difficulties in
anticipating or forecasting changes in consumer preferences, consumer
demand for NIKE products and the various market factors described above;
difficulties in implementing, operating and maintaining NIKE’s increasingly
complex information systems and controls, including, without limitation, the
systems related to demand and supply planning and inventory control;
interruptions in data and information technology systems; consumer data
security; fluctuations and difficulty in forecasting operating results, including,
without limitation, the fact that advance futures orders may not be indicative of
future revenues due to changes in shipment timing, the changing mix of
futures and at-once orders, and discounts, order cancellations and returns;
the ability of NIKE to sustain, manage or forecast its growth and inventories;
the size, timing and mix of purchases of NIKE’s products; increases in the
cost of materials, labor and energy used to manufacture products; new
product development and introduction; the ability to secure and protect
trademarks, patents and other intellectual property; product performance and
quality; customer service; adverse publicity; the loss of significant customers
or suppliers; dependence on distributors and licensees; business disruptions;
increased costs of freight and transportation to meet delivery deadlines;
increases in borrowing costs due to any decline in NIKE’s debt ratings;
changes in business strategy or development plans; general risks associated
with doing business outside the United States, including, without limitation,
exchange rate fluctuations, import duties, tariffs, quotas, political and
economic instability and terrorism; changes in government regulations; the
impact of, including business and legal developments relating to, climate
change; natural disasters; liability and other claims asserted against NIKE; the
ability to attract and retain qualified personnel; the effects of NIKE’s decision
to invest in or divest of businesses and other factors referenced or
incorporated by reference in this report and other reports.
The risks included here are not exhaustive. Other sections of this report may
include additional factors which could adversely affect NIKE’s business and
financial performance. Moreover, NIKE operates in a very competitive and
rapidly changing environment. New risks emerge from time to time and it is
not possible for management to predict all such risks, nor can it assess the
impact of all such risks on NIKE’s business or the extent to which any risk, or
combination of risks, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.

70

Investors should also be aware that while NIKE does, from time to time,
communicate with securities analysts, it is against NIKE’s policy to disclose to
them any material non-public information or other confidential commercial
information. Accordingly, shareholders should not assume that NIKE agrees
with any statement or report issued by any analyst irrespective of the content
of the statement or report. Furthermore, NIKE has a policy against issuing or
confirming financial forecasts or projections issued by others. Thus, to the
extent that reports issued by securities analysts contain any projections,
forecasts or opinions, such reports are not the responsibility of NIKE.

Our products face intense competition.
NIKE is a consumer products company and the relative popularity of various
sports and fitness activities and changing design trends affect the demand for
our products. The athletic footwear, apparel and equipment industry is highly
competitive in the United States and on a worldwide basis. We compete
internationally with a significant number of athletic and leisure footwear
companies, athletic and leisure apparel companies, sports equipment
companies and large companies having diversified lines of athletic and leisure
footwear, apparel and equipment. We also compete with other companies for
the production capacity of independent manufacturers that produce our
products.
Product offerings, technologies, marketing expenditures (including
expenditures for advertising and endorsements), pricing, costs of production,
customer service and social media presence are areas of intense competition.
This, in addition to 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. If we do not
adequately and timely anticipate and respond to our competitors, our costs
may increase or the consumer demand for our products may decline
significantly.

Failure to maintain our reputation and brand image could
negatively impact our business.
Our iconic brands have worldwide recognition, and our success depends on
our ability to maintain and enhance our brand image and reputation.
Maintaining, promoting and growing our brands will depend on our design
and marketing efforts, including advertising and consumer campaigns,
product innovation and product quality. Our commitment to product
innovation and quality and our continuing investment in design (including
materials) and marketing may not have the desired impact on our brand
image and reputation. We could be adversely impacted if we fail to achieve
any of these objectives or if the reputation or image of any of our brands is
tarnished or receives negative publicity. In addition, adverse publicity about
regulatory or legal action against us could damage our reputation and brand
image, undermine consumer confidence in us and reduce long-term demand
for our products, even if the regulatory or legal action is unfounded or not
material to our operations.
In addition, our success in maintaining, extending and expanding our brand
image depends on our ability to adapt to a rapidly changing media
environment, including our increasing reliance on social media and online
dissemination of advertising campaigns. Negative posts or comments about
us on social networking websites could seriously damage our reputation and
brand image. If we do not maintain, extend and expand our brand image,
then our product sales, financial condition and results of operations could be
materially and adversely affected.

If we are unable to anticipate consumer preferences and
develop new products, we may not be able to maintain or
increase our revenues and profits.
Our success depends on our ability to identify, originate and define product
trends as well as to anticipate, gauge and react to changing consumer
demands in a timely manner. However, lead times for many of our products
may make it more difficult for us to respond rapidly to new or changing

PART I

product trends or consumer preferences. All of our products are subject to
changing consumer preferences that cannot be predicted with certainty. Our
new products may not receive consumer acceptance as consumer
preferences could shift rapidly to different types of performance products or
away from these types of products altogether, and our future success
depends in part on our ability to anticipate and respond to these changes. If
we fail to anticipate accurately and respond to trends and shifts in consumer
preferences by adjusting the mix of existing product offerings, developing new
products, designs, styles and categories, and influencing sports and fitness
preferences through aggressive marketing, we could experience lower sales,
excess inventories or lower profit margins, any of which could have an
adverse effect on our results of operations and financial condition. In addition,
we market our products globally through a diverse spectrum of advertising
and promotional programs and campaigns, including social media and online
advertising. If we do not successfully market our products or if advertising and
promotional costs increase, these factors could have an adverse effect on our
business, financial condition and results of operations.

the U.S. Dollar adversely affects the U.S. Dollar value of the Company’s
foreign currency-denominated sales and earnings. Currency exchange rate
fluctuations could also disrupt the business of the independent manufacturers
that produce our products by making their purchases of raw materials more
expensive and more difficult to finance. Foreign currency fluctuations have
adversely affected, and could continue to have an adverse effect on our
results of operations and financial condition.

We rely on technical innovation and high-quality products
to compete in the market for our products.

Global economic conditions could have a material adverse
effect on our business, operating results and financial
condition.

Failure to continue to obtain or maintain high-quality
endorsers of our products could harm our business.
We establish relationships with professional athletes, sports teams and
leagues to develop, evaluate and promote our products, as well as establish
product authenticity with consumers. However, as competition in our industry
has increased, the costs associated with establishing and retaining such
sponsorships and other relationships have increased. If we are unable to
maintain our current associations with professional athletes, sports teams and
leagues, or to do so at a reasonable cost, we could lose the on-field
authenticity associated with our products, and we may be required to modify
and substantially increase our marketing investments. As a result, our brands,
net revenues, expenses and profitability could be harmed.
Furthermore, if certain endorsers were to stop using our products contrary to
their endorsement agreements, our business could be adversely affected. In
addition, actions taken by athletes, teams or leagues associated with our
products that harm the reputations of those athletes, teams or leagues, could
also seriously harm our brand image with consumers and, as a result, could
have an adverse effect on our sales and financial condition. In addition, poor
performance by our endorsers, a failure to continue to correctly identify
promising athletes to use and endorse our products, or a failure to enter into
cost-effective endorsement arrangements with prominent athletes and sports
organizations could adversely affect our brand, sales and profitability.

Currency exchange rate fluctuations could result in lower
revenues, higher costs and decreased margins and
earnings.
A majority of our products are manufactured and sold outside of the United
States. As a result, we conduct purchase and sale transactions in various
currencies, which increases our exposure to fluctuations in foreign currency
exchange rates globally. Our international revenues and expenses generally
are derived from sales and operations in foreign currencies, and these
revenues and expenses could be affected by currency fluctuations, including
amounts recorded in foreign currencies and translated into U.S. Dollars for
consolidated financial reporting, as weakening of foreign currencies relative to

The uncertain state of the global economy continues to impact businesses
around the world, and most acutely in emerging markets and developing
economies. If global economic and financial market conditions do not
improve or deteriorate, the following factors could have a material adverse
effect on our business, operating results and financial condition:

FORM 10-K

Technical innovation and quality control in the design and manufacturing
process of footwear, apparel and athletic equipment is essential to the
commercial success of our products. Research and development plays a key
role in technical innovation. We rely upon specialists in the fields of
biomechanics, chemistry, exercise physiology, engineering, industrial design,
sustainability and related fields, as well as research committees and advisory
boards made up of athletes, coaches, trainers, equipment managers,
orthopedists, podiatrists and other experts to develop and test cutting edge
performance products. While we strive to produce products that help to
enhance athletic performance, reduce injury and maximize comfort, if we fail
to introduce technical innovation in our products, consumer demand for our
products could decline, and if we experience problems with the quality of our
products, we may incur substantial expense to remedy the problems.

We may hedge certain foreign currency exposures to lessen and delay, but
not to completely eliminate, the effects of foreign currency fluctuations on our
financial results. Since the hedging activities are designed to lessen volatility,
they not only reduce the negative impact of a stronger U.S. Dollar or other
trading currency, but they also reduce the positive impact of a weaker
U.S. Dollar or other trading currency. Our future financial results could be
significantly affected by the value of the U.S. Dollar in relation to the foreign
currencies in which we conduct business. The degree to which our financial
results are affected for any given time period will depend in part upon our
hedging activities.

• Slower consumer spending may result in reduced demand for our
products, reduced orders from retailers for our products, order
cancellations, lower revenues, higher discounts, increased inventories and
lower gross margins.
• In the future, we may be unable to access financing in the credit and capital
markets at reasonable rates in the event we find it desirable to do so.
• We conduct transactions in various currencies, which increases our
exposure to fluctuations in foreign currency exchange rates relative to the
U.S. Dollar. Continued volatility in the markets and exchange rates for
foreign currencies and contracts in foreign currencies could have a
significant impact on our reported operating results and financial condition.
• Continued volatility in the availability and prices for commodities and raw
materials we use in our products and in our supply chain (such as cotton or
petroleum derivatives) could have a material adverse effect on our costs,
gross margins and profitability.
• If retailers of our products experience declining revenues, or experience
difficulty obtaining financing in the capital and credit markets to purchase
our products, this could result in reduced orders for our products, order
cancellations, late retailer payments, extended payment terms, higher
accounts receivable, reduced cash flows, greater expense associated with
collection efforts and increased bad debt expense.
• If retailers of our products experience severe financial difficulty, some may
become insolvent and cease business operations, which could negatively
impact the sale of our products to consumers.
• If contract manufacturers of our products or other participants in our supply
chain experience difficulty obtaining financing in the capital and credit
markets to purchase raw materials or to finance capital equipment and
other general working capital needs, it may result in delays or non-delivery of
shipments of our products.

Our business is affected by seasonality, which could result
in fluctuations in our operating results.
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 fiscal 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 and in connection with the timing of global sporting events,
NIKE, INC.

2015 Annual Report and Notice of Annual Meeting

71

PART I

including without limitation the Olympics and the World Cup. In addition, our
customers may cancel orders, change delivery schedules or change the mix
of products ordered with minimal notice. As a result, we may not be able to
accurately predict our quarterly sales. Accordingly, our results of operations
are likely to fluctuate significantly from period to period. This seasonality, along
with other factors that are beyond our control, including general economic
conditions, changes in consumer preferences, weather conditions, availability
of import quotas, transportation disruptions and currency exchange rate
fluctuations, could adversely affect our business and cause our results of
operations to fluctuate. Our operating margins are also sensitive to a number
of additional factors that are beyond our control, including manufacturing and
transportation costs, shifts in product sales mix and geographic sales trends,
all of which we expect to continue. Results of operations in any period should
not be considered indicative of the results to be expected for any future
period.

Futures orders may not be an accurate indication of our
future revenues.
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 period of time at a fixed price.
Our futures ordering program allows us to minimize the amount of products
we hold in inventory, purchasing costs, the time necessary to fill customer
orders and the risk of non-delivery. We report changes in futures orders in our
periodic financial reports. Although we believe futures orders are an important
indicator of our future revenues, reported futures orders are not necessarily
indicative of our expectation of revenues for any future period. This is because
the mix of orders can shift between futures and at-once orders. In addition,
foreign currency exchange rate fluctuations, order cancellations, shipping
timing, returns and discounts can cause differences in the comparisons
between futures orders and actual revenues. Moreover, a significant portion
of our revenue is not derived from futures orders, including at-once and
closeout sales of NIKE Brand footwear and apparel, sales of NIKE Brand
equipment, sales from our Direct to Consumer operations and sales from our
Converse, Hurley and NIKE Golf businesses.

Our futures ordering program does not prevent excess
inventories or inventory shortages, which could result in
decreased operating margins, cash flows and harm to our
business.
We purchase products from manufacturers outside of our futures ordering
program and in advance of customer orders, which we hold in inventory and
resell to customers. There is a risk we may be unable to sell excess products
ordered from manufacturers. Inventory levels in excess of customer demand
may result in inventory write-downs, and the sale of excess inventory at
discounted prices could significantly impair our brand image and have an
adverse effect on our operating results and financial condition. Conversely, if
we underestimate consumer demand for our products or if our manufacturers
fail to supply products we require at the time we need them, we may
experience inventory shortages. Inventory shortages might delay shipments
to customers, negatively impact retailer and distributor relationships and
diminish brand loyalty.
The difficulty in forecasting demand also makes it difficult to estimate our future
results of operations and financial condition from period to period. A failure to
accurately predict the level of demand for our products could adversely affect
our net revenues and net income, and we are unlikely to forecast such effects
with any certainty in advance.

We may be adversely affected by the financial health of our
retailers.
We extend credit to our customers based on an assessment of a customer’s
financial condition, generally without requiring collateral. To assist in the
scheduling of production and the shipping of seasonal products, we offer
customers the ability to place orders five to six months ahead of delivery
under our futures ordering program. These advance orders may be canceled,
and the risk of cancellation may increase when dealing with financially ailing
retailers or retailers struggling with economic uncertainty. In the past, some
customers have experienced financial difficulties, which have had an adverse
effect on our sales, our ability to collect on receivables and our financial
condition. When the retail economy weakens, retailers may be more cautious
with orders. A slowing economy in our key markets could adversely affect the

72

financial health of our customers, which in turn could have an adverse effect
on our results of operations and financial condition. In addition, product sales
are dependent in part on high quality merchandising and an appealing store
environment to attract consumers, which requires continuing investments by
retailers. Retailers that experience financial difficulties may fail to make such
investments or delay them, resulting in lower sales and orders for our
products.

Consolidation of retailers or concentration of retail market
share among a few retailers may increase and concentrate
our credit risk, and impair our ability to sell products.
The athletic footwear, apparel and equipment retail markets in some countries
are dominated by a few large athletic footwear, apparel and equipment
retailers with many stores. These retailers have in the past increased their
market share and may continue to do so in the future by expanding through
acquisitions and construction of additional stores. These situations
concentrate our credit risk with a relatively small number of retailers, and, if
any of these retailers were to experience a shortage of liquidity, it would
increase the risk that their outstanding payables to us may not be paid. In
addition, increasing market share concentration among one or a few retailers
in a particular country or region increases the risk that if any one of them
substantially reduces their purchases of our products, we may be unable to
find a sufficient number of other retail outlets for our products to sustain the
same level of sales and revenues.

Our Direct to Consumer operations have required and will
continue to require a substantial investment and
commitment of resources, and are subject to numerous
risks and uncertainties.
Our Direct to Consumer stores have required substantial fixed investment in
equipment and leasehold improvements, information systems, inventory and
personnel. We have entered into substantial operating lease commitments for
retail space. Certain stores have been designed and built to serve as highprofile venues to promote brand awareness and marketing activities.
Because of their unique design elements, locations and size, these stores
require substantially more investment than other stores. Due to the high fixedcost structure associated with our Direct to Consumer operations, a decline in
sales or the closure or poor performance of individual or multiple stores could
result in significant lease termination costs, write-offs of equipment and
leasehold improvements and employee-related costs.
Many factors unique to retail operations, some of which are beyond the
Company’s control, pose risks and uncertainties. Risks include, but are not
limited to: credit card fraud; mismanagement of existing retail channel
partners; and inability to manage costs associated with store construction
and operation. In addition, extreme weather conditions in the areas in which
our stores are located could adversely affect our business.

If the technology-based systems that give our customers
the ability to shop with us online do not function effectively,
our operating results, as well as our ability to grow our ecommerce business globally, could be materially adversely
affected.
Many of our customers shop with us through our e-commerce website and
mobile commerce applications. Increasingly, customers are using tablets and
smart phones to shop online with us and with our competitors and to do
comparison shopping. We are increasingly using social media and proprietary
mobile applications to interact with our customers and as a means to
enhance their shopping experience. Any failure on our part to provide
attractive, effective, reliable, user-friendly e-commerce platforms that offer a
wide assortment of merchandise with rapid delivery options and that
continually meet the changing expectations of online shoppers could place us
at a competitive disadvantage, result in the loss of e-commerce and other
sales, harm our reputation with customers, have a material adverse impact on
the growth of our e-commerce business globally and could have a material
adverse impact on our business and results of operations.
Risks specific to our e-commerce business also include diversion of sales
from our and our retailers’ brick and mortar stores, difficulty in recreating the
in-store experience through direct channels and liability for online content. Our

PART I

failure to successfully respond to these risks might adversely affect sales in
our e-commerce business, as well as damage our reputation and brands.

give rise to unwanted media attention, materially damage our customer
relationships and reputation and result in lost sales, fines or lawsuits.

Failure to adequately protect or enforce our intellectual
property rights could adversely affect our business.

In addition, we must comply with increasingly complex and rigorous
regulatory standards enacted to protect business and personal data. Any
failure to comply with these regulatory standards could subject us to legal and
reputational risks. Misuse of or failure to secure personal information could
also result in violation of data privacy laws and regulations, proceedings
against the Company by governmental entities or others, damage to our
reputation and credibility and could have a negative impact on revenues and
profits.

The actions we take to establish and protect our intellectual property rights
may not be adequate to prevent imitation of our products by others or to
prevent others from seeking to block sales of our products as violations of
proprietary rights.
We may be subject to liability if third parties successfully claim that we infringe
on their intellectual property rights. Defending infringement claims could be
expensive and time-consuming and might result in our entering into costly
license agreements. We also may be subject to significant damages or
injunctions against development, use, importation and/or sale of certain
products.
We take various actions to prevent the unauthorized use and/or disclosure of
confidential information. Such actions include contractual measures such as
entering into non-disclosure and non-compete agreements and providing
confidential information awareness training. Our controls and efforts to
prevent unauthorized use and/or disclosure of confidential information might
not always be effective. Confidential information that is related to business
strategy, new technologies, mergers and acquisitions, unpublished financial
results or personal data could be prematurely or inadvertently used and/or
disclosed, resulting in a loss of reputation, a decline in our stock price and/or a
negative impact on our market position, and could lead to damages, fines,
penalties or injunctions.
In addition, the laws of certain countries may not protect or allow enforcement
of intellectual property rights to the same extent as the laws of the United
States. We may face significant expenses and liability in connection with the
protection of our intellectual property rights, including outside the United
States, and if we are unable to successfully protect our rights or resolve
intellectual property conflicts with others, our business or financial condition
may be adversely affected.

We are subject to the risk that our licensees may not
generate expected sales or maintain the value of our
brands.
We currently license, and expect to continue licensing, certain of our
proprietary rights, such as trademarks or copyrighted material, to third parties.
If our licensees fail to successfully market and sell licensed products, or fail to
obtain sufficient capital or effectively manage their business operations,
customer relationships, labor relationships, supplier relationships or credit
risks, it could adversely affect our revenues, both directly from reduced
royalties received and indirectly from reduced sales of our other products.
We also rely on our licensees to help preserve the value of our brands.
Although we attempt to protect our brands through approval rights over the
design, production processes, quality, packaging, merchandising,
distribution, advertising and promotion of our licensed products, we cannot
completely control the use of our licensed brands by our licensees. The
misuse of a brand by a licensee could have a material adverse effect on that
brand and on us.

We are subject to data security and privacy risks that could
negatively affect our results, operations or reputation.
Hackers and data thieves are increasingly sophisticated and operate largescale and complex automated attacks. Any breach of our network may result
in the loss of valuable business data, misappropriation of our consumers’ or
employees’ personal information or a disruption of our business, which could

Failure of our contractors or our licensees’ contractors to
comply with our code of conduct, local laws and other
standards could harm our business.
We work with hundreds of contractors outside of the United States to
manufacture our products, and we also have license agreements that permit
unaffiliated parties to manufacture or contract for the manufacture of products
using our intellectual property. We require the contractors that directly
manufacture our products and our licensees that make products using our
intellectual property (including, indirectly, their contract manufacturers) to
comply with a code of conduct and other environmental, health and safety
standards for the benefit of workers. We also require these contractors to
comply with applicable standards for product safety. Notwithstanding their
contractual obligations, from time to time contractors may not comply with
such standards or applicable local law or our licensees may fail to enforce
such standards or applicable local law on their contractors. Significant or
continuing noncompliance with such standards and laws by one or more
contractors could harm our reputation or result in a product recall and, as a
result, could have an adverse effect on our sales and financial condition.

FORM 10-K

We believe that our intellectual property rights are important to our brand, our
success and our competitive position. We periodically discover products that
are counterfeit reproductions of our products or that otherwise infringe on our
intellectual property rights. If we are unsuccessful in enforcing our intellectual
property, continued sales of these products could adversely affect our sales
and our brand and could result in a shift of consumer preference away from
our products.

Our international operations involve inherent risks which
could result in harm to our business.
Virtually all of our athletic footwear and apparel is manufactured outside of the
United States, and the majority of our products are sold outside of the United
States. Accordingly, we are subject to the risks generally associated with
global trade and doing business abroad, which include foreign laws and
regulations, varying consumer preferences across geographic regions,
political unrest, disruptions or delays in cross-border shipments and changes
in economic conditions in countries in which our products are manufactured
or where we sell products. In addition, disease outbreaks, terrorist acts and
military conflict have increased the risks of doing business abroad. These
factors, among others, could affect our ability to manufacture products or
procure materials, our ability to import products, our ability to sell products in
international markets and our cost of doing business. If any of these or other
factors make the conduct of business in a particular country undesirable or
impractical, our business could be adversely affected. In addition, many of our
imported products are subject to duties, tariffs or quotas that affect the cost
and quantity of various types of goods imported into the United States and
other countries. Any country in which our products are produced or sold may
eliminate, adjust or impose new quotas, duties, tariffs, safeguard measures,
anti-dumping duties, cargo restrictions to prevent terrorism, restrictions on
the transfer of currency, climate change legislation, product safety regulations
or other charges or restrictions, any of which could have an adverse effect on
our results of operations and financial condition.

Changes in tax laws and unanticipated tax liabilities could
adversely affect our effective income tax rate and
profitability.
We earn a substantial portion of our income in foreign countries, and are
subject to the tax laws of those jurisdictions. The Company’s most significant
tax liabilities are incurred in the United States, China and the Netherlands. If
our capital or financing needs in the U.S. require us to repatriate earnings from
foreign jurisdictions above our current levels, our effective income tax rates for
the affected periods could be negatively impacted. Current economic and
political conditions make tax rules in any jurisdiction, including the U.S.,
subject to significant change. There have been proposals to reform U.S. and
foreign tax laws that could significantly impact how U.S. multinational

NIKE, INC.

2015 Annual Report and Notice of Annual Meeting

73

PART I

corporations are taxed on foreign earnings. Although we cannot predict
whether or in what form these proposals will pass, several of the proposals
considered, if enacted into law, could have an adverse impact on our income
tax expense and cash flows.
Our effec...


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