Nike 2010 Annual Report Download - page 7

Table of Contents
Germany, Greece, Hong Kong, Hungary, Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Lebanon, Macau, Malaysia, Mexico, New Zealand, the
Netherlands, Norway, 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 2010.
Orders
Worldwide futures and advance orders for NIKE Brand athletic footwear and apparel, scheduled for delivery from June through November 2010,
were $8.8 billion compared to $7.8 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 certain 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 by factories we contract with outside of the United States. In fiscal 2010, contract factories in Vietnam,
China, Indonesia, Thailand, and India manufactured approximately 37%, 34%, 23%, 2% and 1% 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. The largest single footwear factory that we have contracted with accounted for approximately 5% of total fiscal 2010 footwear production.
Almost all of NIKE Brand apparel is manufactured outside of the United States by independent contract manufacturers located in 33 countries. Most
of this apparel production occurred in China, Thailand, Indonesia, Malaysia, Vietnam, Sri Lanka, Turkey, Cambodia, El Salvador, Mexico, and Taiwan. The
largest single apparel factory that we have contracted with accounted for approximately 7% of total fiscal 2010 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
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