Nike 2009 Annual Report Download - page 27

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(2) In the fourth quarter of fiscal 2009, we took necessary steps to streamline our management structure,
enhance consumer focus, drive innovation more quickly to market, and establish a more scalable, long-term
cost structure. As a result, we incurred a $195 million pre-tax restructuring charge primarily consisting of
severance costs related to the workforce reduction.
(3) We recorded a non-cash impairment charge during the third quarter of fiscal 2009 to reduce the carrying
value of Umbro’s goodwill, indefinite-lived trademark and other assets. The impairment charge is a result of
both the deteriorating global consumer markets, particularly in Umbro’s primary market, the United
Kingdom, and management’s decision to adjust planned investment in the brand. In addition, the
deterioration of the financial markets has reduced both the present value of future cash flows and the market
value of comparable businesses.
(4) The tax benefit realized during fiscal 2008 relates to steps taken to realize losses generated by several
international entities for which we had not previously recognized the offsetting tax benefit because the
realization of those benefits had been uncertain. The necessary steps to realize those tax benefits were taken
during fiscal 2008 resulting in a one-time reduction of the effective tax rate.
Consolidated Operating Results
Revenues
Fiscal 2009 Fiscal 2008
FY09 vs.
FY08
% Change Fiscal 2007
FY08 vs.
FY07
% Change
(In millions)
Revenues ..................... $19,176.1 $18,627.0 3% $16,325.9 14%
Fiscal 2009 Compared to Fiscal 2008
During fiscal 2009, changes in foreign currency exchange rates decreased revenues by 1 percentage point.
The U.S. Region contributed nearly 1 percentage point of the consolidated revenue growth for fiscal 2009.
Excluding the effects of changes in currency exchange rates, our international regions contributed over 3
percentage points of the consolidated revenue growth for fiscal 2009, as all of our international regions posted
higher revenues on a currency neutral basis. By product group, our worldwide NIKE brand footwear business
reported revenue growth of 6% and contributed $575 million of incremental revenue for fiscal 2009. Worldwide
NIKE branded apparel revenues were in line with the prior year, while equipment revenues declined 2% or $20
million.
Our Other businesses, comprised primarily of results from Cole Haan, Converse Inc., Hurley International
LLC, NIKE Golf, and Umbro in fiscal 2009, constituted the remaining revenue. In fiscal 2008, our Other
businesses also included Exeter Brands Group (whose primary business was the Starter brand business which
was sold on December 17, 2007) and NIKE Bauer Hockey (which was sold on April 17, 2008). Umbro was
acquired on March 3, 2008. Revenues for these businesses declined 1% or $17 million.
Fiscal 2008 Compared to Fiscal 2007
During fiscal 2008, changes in foreign currency exchange rates contributed 5 percentage points of
consolidated revenue growth. Strong demand for NIKE brand products continued to drive revenue growth, as all
four of our geographic regions and, on a consolidated basis, all three of our product business units delivered
revenue growth. The U.S. Region contributed nearly 2 percentage points of the consolidated revenue growth for
fiscal 2008. Excluding the effects of changes in currency exchange rates, our international regions contributed
nearly 7 percentage points of the consolidated revenue growth for fiscal 2008, as all of our international regions
posted higher revenues. Our Other businesses contributed the remaining consolidated constant-currency revenue
growth, as Cole Haan, Converse, Hurley and NIKE Golf posted higher year-over-year revenues.
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