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 it’s worldwide net sales.

Product Research and Development

• The company operates an R&D division that focuses on innovating through collaboration.

• In addition to it’s 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 company’s products are manufactured outside the United States.

42%

30%

26%

2%

% of products manufactured

VietnamChinaIndonesiaOther

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 company’s most valuable trademark and is registered in almost 170 jurisdictions.

• The company’s 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 company’s 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

it’s part will disrupt the company’s 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 company’s 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

Footw

ear

Apparel

Equipment

Global Bran

d Divisio

ns$0

$4,000 $8,000

$12,000 $16,000

Sales ($ millions)

Sales ($ millions)

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

EBIT by region

North Americ

a

Western Europe

Central a

nd Eastern Europe

Greater C

hinaJap

an

Emerging M

arkets

Global Bran

d Divisio

ns

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

($500)$0

$500 $1,000 $1,500 $2,000 $2,500 $3,000

Sales ($ millions)

Axis Title

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.