Nike Inc.

Key information gained from the 10-K form submitted in 2013

Business Overview
NIKE has two core product lines: NIKE and Brand Jordan. The company has two wholly owned subsidiaries, namely Converse Inc. and Hurley International LLC. During the year,the company divested the Cole Haan and Umbro business units.

Sales and Marketing

Revenue tends to spike in the first and fourth fiscal quarters due to the cyclical nature of the business. The company operates 303 retail outlets in the US alone. Merchandise is distributed from 5 primary merchandise centers. The company has a total of 450 outlets outside the United States.

Orders
Worldwide futures orders,scheduled for delivery from June through November 2013, were $12.1 billion compared to $11.2 billion for the same period last year. The company does not have any customers who account for more than 10% of its worldwide net sales.

Product Research and Development

The company operates an R&D division that focuses on innovating through collaboration. In addition to its own staff,the company utilizes advisory committees made up of athletes,coaches,orthopedists and other experts. Employee athletes and athletes engaged under sports marketing contracts are called upon to wear-test and evaluate the products that are in the pipe line.

Manufacturing
All of the companys products are manufactured outside the United States.

% of products manufactured
2%
26%

Vietnam
42% China Indonesia Other

30%

International Operations and Trade

The company is exposed to the usual risks of doing business abroad such as currency revaluations, quotas, import and export duties etc. The rise in protectionism and anti-dumping legislation in recent years are expected to materially impact the industry. The company is confident that it can develop alternative sources of supply over a period of time. However, it warns that the new solutions may not be as cost effective and may adversely impact profitability.

Competition
The company has to compete internationally with players of all sizes ranging from niche companies to large diversified companies and vertical retailers. Significant competitors include: Adidas V.F. Corp Puma Li Ning Under Armour Lululemon Uniqlo

Trademarks and Patents

The NIKE and Swoosh Design is considered to be the companys most valuable trademark and is registered in almost 170 jurisdictions. The companys design patents that were filed during 2013 in the US will last until 2027 while utility patents filed during the same year will last until 2033. However, some of the companys early NIKE Air patents have expired and this has allowed some competitors to duplicate the technology.

Employees
The company employs a approximately 48,000 employees globally. According to NIKE, it has never experienced a material interruption of operations due to labour disagreements.

Risk Factors
According to the company, the following can adversely impact the company. Failure to maintain the brand image and reputation Inability to anticipate consumer products and develop new products Inability to come up with new technological innovations and high quality products Failure to obtain high quality endorses of the business Failure to adequately protect or enforce intellectual property rights. Import-Export financing depends mostly on one firm, Sojitz America. Any failure on its part will disrupt the companys ability to acquire products from suppliers and deliver them to customers. 75.6% of Class A Common Stock is beneficially owned by Philip H. Knight,the companys cofounder and chairman. A sale of a large number of shares by this individual will depress the share price.

Performance Graph

Quarterly Financial Data

Results of Operations

Brand revenues by segment

Sales ($ millions)
$16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Footwear Apparel Equipment Global Brand Divisions

Sales ($ millions)

*Global Brand Divisions refers to the licensing deals for merchandise and other products

EBIT by region
Sales ($ millions)
$3,000 $2,500 $2,000 $1,500 Axis Title $1,000 $500 $0 ($500)

($1,000) ($1,500)
($2,000)

Other Businesses

Supplementary Information
The following information has been extracted from other external sources and not from NIKE Inc.s Form 10 -K

The End.