Nike 2009 Annual Report Download - page 6

Mexico, New Zealand, the Netherlands, Norway, the People’s Republic of China, 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 net sales during fiscal 2009.
Orders
Worldwide futures and advance orders for NIKE brand athletic footwear and apparel, scheduled for delivery
from June through November 2009, were $7.8 billion compared to $8.8 billion for the same period last year. This
futures and advance order amount is calculated based upon our forecast of the actual exchange rates under which
our revenues will be translated during this period, which approximate current spot rates. Reported futures and
advance orders are not necessarily indicative of our expectation of revenues for this period. This is because the
mix of orders can shift between advance/futures and at-once orders and the fulfillment of certain of these
advance/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 order cancellations and discounts can cause differences in
the comparisons between futures and advance orders and actual revenues. Moreover, a significant portion of our
revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE footwear
and apparel, wholesale sales of equipment, Cole Haan, Converse, Hurley, Umbro, NIKE Golf, and retail sales
across all brands.
Product Research and Development
We believe our research and development efforts are a key factor in our past and future success. Technical
innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as NIKE strives
to produce products that help to reduce injury, enhance athletic performance and maximize comfort.
In addition to NIKE’s own staff of specialists in the areas of biomechanics, chemistry, exercise physiology,
engineering, industrial design 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 and concepts for product improvement. Employee athletes, athletes
engaged under sports marketing contracts and other athletes wear-test and evaluate products during the design
and development process.
Manufacturing
Virtually all of our footwear is produced outside of the United States. In fiscal 2009, contract suppliers in
China, Vietnam, Indonesia and Thailand manufactured 36%, 36%, 22% and 6% 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. Our largest single footwear factory
accounted for approximately 5% of total fiscal 2009 footwear production.
Almost all of NIKE brand apparel is manufactured outside of the United States by independent contract
manufacturers located in 34 countries. Most of this apparel production occurred in China, Thailand, Indonesia,
Malaysia, Vietnam, Turkey, Sri Lanka, Cambodia, Taiwan, El Salvador, Mexico, India and Israel. Our largest
single apparel factory accounted for approximately 5% of total fiscal 2009 apparel production.
The principal materials used in our footwear products are natural and synthetic rubber, plastic compounds,
foam cushioning materials, nylon, leather, canvas and polyurethane films used to make Air-Sole cushioning
components. During fiscal 2009, NIKE IHM, Inc. and NIKE (Suzhou) Sports Company, Ltd., both
4