Nike 2006 Annual Report Download - page 3

PART I
Item 1. Business
General
NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As used in this report, the terms
“we”, “us”, “NIKE” and the “Company” refer to NIKE, Inc. and its predecessors, subsidiaries and affiliates,
unless the context indicates otherwise. Our Internet address is www.nike.com. On our NIKE Corporate web site,
located at www.nikebiz.com, we post the following filings as soon as reasonably practicable after they are
electronically filed with or furnished to the Securities and Exchange Commission: our annual report on Form
10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934. All such filings
on our NIKE Corporate web site are available free of charge. Also available on the NIKE Corporate web site are
the charters of the committees of our board of directors, as well as our corporate governance guidelines and code
of ethics; copies of any of these documents will be provided in print to any shareholder who submits a request in
writing to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453.
Our principal business activity is the design, development and worldwide marketing of high quality
footwear, apparel, equipment, and accessory products. NIKE is the largest seller of athletic footwear and athletic
apparel in the world. We sell our products to retail accounts, through NIKE-owned retail stores, and through a
mix of independent distributors and licensees, in over 160 countries around the world. Virtually all of our
products are manufactured by independent contractors. Virtually all footwear and apparel products are produced
outside the United States, while equipment products are produced both in the United States and abroad.
Products
NIKE’s athletic footwear products are designed primarily for specific athletic use, although a large
percentage of the products are worn for casual or leisure purposes. We place considerable emphasis on high
quality construction and innovation in products designed for men, women and children. Running, cross-training,
basketball, soccer, sport-inspired urban shoes, and children’s shoes are currently our top-selling product
categories and we expect them to continue to lead in product sales in the near future. We also market shoes
designed for tennis, golf, baseball, football, walking, hiking, outdoor activities, skateboarding, bicycling,
volleyball, wrestling, cheerleading, aquatic activities and other athletic and recreational uses.
We sell sports apparel and accessories covering most of the above categories, sports inspired lifestyle
apparel, as well as athletic bags and accessory items. NIKE apparel and accessories are designed to complement
our athletic footwear products, feature the same trademarks and are sold through the same marketing and
distribution channels. We often market footwear, apparel and accessories in “collections” of similar design or for
specific purposes. We also market apparel with licensed college and professional team and league logos.
We sell a line of performance equipment under the NIKE brand name, including golf clubs and balls, sport
balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, and other equipment designed
for sports activities. We also have agreements for licensees to produce and sell NIKE brand swimwear, cycling
apparel, children’s clothing, school supplies, electronic devices, eyewear, golf accessories, and belts. We also sell
small amounts of various plastic products to other manufacturers through our wholly-owned subsidiary, NIKE
IHM, Inc.
Our wholly-owned subsidiary Converse Inc. (“Converse”), headquartered in North Andover, Massachusetts,
designs and distributes athletic and casual footwear, apparel and accessories under the Converse®, Chuck
Taylor®, All Star®, One Star®and Jack Purcell®trademarks, and footwear under the Hurley®trademark.
We sell a line of dress and casual footwear, apparel and accessories for men and women under the brand
names Cole Haan®, G Series®and Bragano®through our wholly-owned subsidiary, Cole Haan Holdings
Incorporated (“Cole Haan”), headquartered in Yarmouth, Maine.
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