Nike 2014 Annual Report Download - page 4

PART I
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, collectively, unless
the context indicates otherwise. Our NIKE e-commerce website is located at
www.nike.com. On our NIKE corporate website, located at
www.nikeinc.com, we post the following filings as soon as reasonably
practicable after they are electronically filed with or furnished to the United
States Securities and Exchange Commission (the “SEC”): 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, as
amended. Our definitive Proxy Statements are also posted. All such filings on
our NIKE corporate website are available free of charge. Copies of these
filings may also be obtained by visiting the Public Reference Room of the SEC
at 100 F Street, NE, Washington, D.C. 20549 or by calling the SEC at 1-800-
SEC-0330. In addition, the SEC maintains a website (www.sec.gov) that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically. Also available on the NIKE corporate
website 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 and selling of athletic footwear, apparel, equipment, accessories,
and services. 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 internet websites (which we refer to as our “Direct to
Consumer” or “DTC” operations), and through a mix of independent
distributors and licensees throughout the world. Virtually all of our products
are manufactured by independent contractors. Practically all footwear and
apparel products are produced outside the United States, while equipment
products are produced both in the United States and abroad.
Products
We focus our NIKE Brand product offerings in eight key categories: Running,
Basketball, Football (Soccer), Men’s Training, Women’s Training, Action
Sports, Sportswear (our sports-inspired lifestyle products), and Golf.
Basketball includes our Brand Jordan product offerings and Men’s Training
includes our baseball and U.S. football product offerings. We also market
products designed for kids, as well as for other athletic and recreational uses
such as cricket, lacrosse, tennis, volleyball, wrestling, walking, and outdoor
activities.
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 our products. Sportswear, Running, Basketball, and Football
(Soccer) are currently our top-selling footwear categories and we expect them
to continue to lead in product sales.
We sell sports apparel and accessories covering most of the above-
mentioned categories, which feature the same trademarks and are sold
predominantly through the same marketing and distribution channels as
athletic footwear. We often market footwear, apparel, and accessories in
“collections” of similar use or by category. 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 bags, socks, sport balls, eyewear, timepieces, digital devices, bats,
gloves, protective equipment, golf clubs, and other equipment designed for
sports activities. We also sell small amounts of various plastic products to
other manufacturers through our wholly-owned subsidiary, NIKE IHM, Inc.
One of our wholly-owned subsidiary brands, Hurley, headquartered in Costa
Mesa, California (“Hurley”), designs and distributes a line of action sports and
youth lifestyle apparel and accessories under the Hurley trademark. Sales of
Hurley brand products are included within the NIKE Brand Action Sports
category.
Our Brand Jordan division designs, distributes and licenses athletic and
casual footwear, apparel and accessories predominantly focused on
Basketball using the Jumpman trademark. Sales of Brand Jordan products
are included within the NIKE Brand Basketball category.
Another of our wholly-owned subsidiary brands, Converse, headquartered in
North Andover, Massachusetts (“Converse”), designs, distributes, and
licenses casual sneakers, apparel, and accessories under the Converse,
Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks.
Converse results are reported on a stand-alone basis.
In addition to the products we sell to our wholesale customers and directly to
consumers through our Direct to Consumer operations, we have also entered
into license agreements that permit unaffiliated parties to manufacture and sell
using NIKE-owned trademarks, certain apparel, digital devices and
applications, and other equipment designed for sports activities.
On February 1, 2013, and November 30, 2012, we completed the
divestitures of the Cole Haan and Umbro businesses, respectively, allowing
us to better focus our resources on driving growth in the NIKE, Jordan,
Converse, and Hurley brands.
NIKE, INC. 2014 Annual Report and Notice of Annual Meeting 47
FORM 10-K