NIKE, INC. ANNUAL REPORT on FORM 10-K Table of Contents Page PART I 49
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NIKE, INC. ANNUAL REPORT ON FORM 10-K Table of Contents Page PART I 49 ITEM 1. Business ............................................................................................................................ 49 General .............................................................................................................................. 49 Products ............................................................................................................................ 49 Sales and Marketing ........................................................................................................... 50 United States Market .......................................................................................................... 50 International Markets .......................................................................................................... 50 Significant Customer .......................................................................................................... 51 Orders ............................................................................................................................... 51 Product Research and Development ................................................................................... 51 Manufacturing .................................................................................................................... 51 International Operations and Trade ..................................................................................... 52 Competition ....................................................................................................................... 52 Trademarks and Patents ..................................................................................................... 52 Employees ......................................................................................................................... 53 Executive Officers of the Registrant ..................................................................................... 53 ITEM 1A. Risk Factors ....................................................................................................................... 54 ITEM 1B. Unresolved Staff Comments ............................................................................................... 60 ITEM 2. Properties .......................................................................................................................... 60 ITEM 3. Legal Proceedings .............................................................................................................. 60 ITEM 4. Mine Safety Disclosures ..................................................................................................... 60 PART II 61 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ............................................................................................................. 61 ITEM 6. Selected Financial Data ...................................................................................................... 63 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ..... 65 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk .................................................. 85 ITEM 8. Financial Statements and Supplemental Data ...................................................................... 86 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...114 ITEM 9A. Controls and Procedures ....................................................................................................114 ITEM 9B. Other Information ...............................................................................................................114 PART III 115 (Except for the information set forth under “Executive Officers of the Registrant” in Item 1 above, Part III is incorporated by reference from the Proxy Statement for the NIKE, Inc. 2013 Annual Meeting of Shareholders.) ........................................................................................ ITEM 10. Directors, Executive Officers and Corporate Governance .....................................................115 ITEM 11. Executive Compensation ....................................................................................................115 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...........................................................................................................115 ITEM 13. Certain Relationships and Related Transactions, and Director Independence ........................115 ITEM 14. Principal Accountant Fees and Services ..............................................................................115 PART IV 116 ITEM 15. Exhibits and Financial Statement Schedules ........................................................................116 Signatures .........................................................................................................................121 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MAY 31, 2013 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . Commission File No. 1-10635 NIKE, INC. (Exact name of Registrant as specified in its charter) OREGON 93-0584541 (State or other jurisdiction of incorporation) (IRS Employer Identification No.) One Bowerman Drive Beaverton, Oregon 97005-6453 (Address of principal executive offices) (Zip Code) (503) 671-6453 (Registrant’s Telephone Number, Including Area Code) SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: Class B Common Stock New York Stock Exchange (Title of Each Class) (Name of Each Exchange on Which Registered) SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE Indicate by check mark YES NO • if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Í‘ • if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ‘Í • whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Í‘ • whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Í‘ • if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘Í • whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Í Accelerated filer ‘ Non-accelerated file ‘ Smaller Reporting Company ‘ • whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ‘Í As of November 30, 2012, the aggregate market values of the Registrant’s Common Stock held by non-affiliates were: Class A $ 2,206,464,966 Class B $34,773,165,371 $36,979,630,337 As of July 19, 2013, the number of shares of the Registrant’s Common Stock outstanding were: Class A 177,957,876 Class B 712,394,590 890,352,466 DOCUMENTS INCORPORATED BY REFERENCE: Parts of Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on September 19, 2013 are incorporated by reference into Part III of this Report. 47 PART I PART I ITEM 1. Business General NIKE, Inc. was incorporated in 1968 under the laws of the state of Oregon. As will be provided in print to any shareholder who submits a request in writing to used in this report, the terms “we,” “us,” “NIKE” and the “Company” refer to NIKE Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005- NIKE, Inc. and its predecessors, subsidiaries and affiliates, collectively, unless 6453. the context indicates otherwise. Our internet address is www.nike.com. On our NIKE Corporate website, located at www.nikeinc.com, we post the Our principal business activity is the design, development and worldwide following filings as soon as reasonably practicable after they are electronically marketing and selling of athletic footwear, apparel, equipment, accessories filed with or furnished to the Securities and Exchange Commission: our annual and services. NIKE is the largest seller of athletic footwear and athletic apparel report on Form 10-K, our quarterly reports on Form 10-Q, our current reports in the world. We sell our products to retail accounts, through NIKE-owned on Form 8-K and any amendments to those reports filed or furnished retail stores and internet websites (which we refer