Nike 2015 Annual Report Download - page 4

PART I
PART I
ITEM 1. Business
General
NIKE, Inc. was incorporated in 1967 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 news.nike.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 on our corporate website. All such filings
on our 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 current, quarterly and annual reports, proxy and information
statements and other information regarding issuers that file electronically. Also
available on our 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 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 Jordan Brand product offerings and Men’s Training
includes our baseball and American 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 footwear sales.
We sell sports apparel 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. Our sports
apparel, similar to our athletic footwear products, is designed primarily for
athletic use and exemplifies our commitment to innovation and high-quality
construction. Sportswear, Men’s Training, Running and Football (Soccer) are
currently our top-selling apparel categories and we expect them to continue
to lead in apparel sales. 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 and accessories 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.
Our Jordan Brand designs, distributes and licenses athletic and casual
footwear, apparel and accessories predominantly focused on Basketball
using the Jumpman trademark. Sales and operating results for the Jordan
Brand are included within the NIKE Brand Basketball category and within the
respective NIKE Brand geographic operating segments.
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 and
operating results for Hurley are included within the NIKE Brand Action Sports
category and within the NIKE Brand’s North America geographic operating
segment, respectively.
Another of our wholly owned subsidiary brands, Converse, headquartered in
Boston, 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. Operating results
of the Converse brand are reported on a stand-alone basis.
In addition to the products we sell to our wholesale customers and directly to
consumers through our DTC 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, Hurley
and Converse brands.
NIKE, INC. 2015 Annual Report and Notice of Annual Meeting 65
FORM 10-K