2009



CEO Letter to Shareholders



To Our Shareholders,



Fiscal year 2009 is in the books. Over the last 12 months we had some big wins and equally big challenges. It’s tempting to offer a long list, but instead I’ll focus on three things that capture the scope and variety of what we do around here. Let’s start with the biggest win of all – Beijing.



For three years we worked with athletes all over the world to design new products for nearly every competitive event. We created new technologies like Flywire and LunarFoam that continue to drive product innovation. We turned the Hyperdunk basketball shoe into one of the highest profile and most dramatic shoes in Olympic history. For two weeks in August we watched our products and athletes from all over the world compete and win on the biggest stage in sports. It was a great moment for Nike and for sports.



If there were any lingering doubts that China should be considered an emerging market, the Olympics responded with a thunderous, “No!” China is not an emerging market. It is an emerged market that combines power and potential critical to the future of any global company.



We sold our first shoes in China in 1984 when we placed 200 pairs in a 50-square-foot shop called The Friendship Store in Beijing. They sold out in 11 days. Today, nearly a year after the closing ceremony in the Bird’s Nest, the appetite for Nike products and athletes continues to grow. The brand is known and, more importantly, understood among many of the 500 million Chinese consumers under 25 years old. That’s a billion feet that we’re going after just as fast as we can.



Another big win came in October when the Nike Foundation launched the Girl Effect. In simple terms, it leverages the power that adolescent girls have to bring financial and social stability to the developing world. The response has been tremendous, not only with global leaders but more importantly on the ground in Liberia and other developing countries. I think it’s the most innovative solution yet to help break the cycle of intergenerational poverty around the world. And it’s just one example of the leadership Nike continues to show in corporate responsibility.



We’re equally committed to leading our industry in climate change and sustainability. We’re entering a new era of open-source collaboration that commits to sharing intellectual and patent property. It’s the kind of behavioral change that can help lower carbon emissions, reduce waste, and close the loop on the resources required by product manufacturing.



We also undertook the most ambitious reorganization in the history of our company, which resulted in a significant charge associated with a reduction in force of more than 1,750 of our friends and teammates. We did it for all the right reasons – to build a leaner and stronger company, reduce costs and better leverage our resources against the greatest growth opportunities. It was a tough decision but the right decision. I wish I could say that made the layoffs easier for everybody. It didn’t.



As for challenges, the biggest one was the global economy, and we’ll continue to manage through it during fiscal year 2010. I