us the insights we need to create amazing products and experiences. That’s the fundamental cycle that continually drives growth. And while each brand has enormous potential in its own right, the real power of NIKE, Inc. comes from making the overall value of our portfolio greater than the sum of the parts. We define our portfolio as the NIKE, Inc. brands and everything that drives them: our products, retail partners and executions, supply chain, strong balance sheet and a very focused management team.

We use the power of our portfolio to manage risk and attack our biggest growth opportunities. It’s the source of our financial capital. It gives us the scale necessary to drive down costs. It enables us to leverage our resources across multiple brands and categories. And it all revolves around one thing: innovation. We innovate to serve the athlete. We innovate to grow the company. And we innovate to inspire the world.

INNOVATE TO SERVE THE ATHLETE.

We deliver amazing products and experiences. This is easy in theory, but tougher in execution. When we launched NIKE Free technology, it changed the look, feel and role that footwear plays in the life of the athlete. Today, NIKE Free is one of our most successful innovations. When we launched NIKE Lunar technology, we knew it would change the industry. But we didn’t know that it would be a $1.5 billion business at retail just three years later.

Within our apparel business, we saw significant growth over the last year. For example, NIKE Pro is now the leading Women’s Base Layer brand in the U.S., and on the Men’s side we’ve taken significant market share and are within 5 points of the lead as of May 2011.

Our Running category is a great example of how we drive growth through the category offense. Last year alone we held 132 runs in 28 countries, increased membership in NIKE+ by 40 percent and launched the hottest digital product with the GPS Sport Watch. The result was a currency-neutral revenue increase of 30 percent in our Running category.

We also saw some amazing sport moments and experiences this past year: World Cup, U.S. Open of Surfing, World Basketball Festival and Champions League to name just a few. Millions of athletes used NIKE digital apps to train, and billions of fans watched our athletes compete around the world.

The appetite for sports is strong and growing, and NIKE is leading the way. We consistently create and commercialize innovative products and experiences that extend our leadership position. In fact, NIKE, Inc. holds more than twice the number of invention patents than our top five competitors combined, and I believe we’re just getting warmed up. The opportunities to deliver meaningful product innovation have never been greater, and we've never been more excited and better prepared to take advantage of those opportunities.

INNOVATE TO GROW THE COMPANY.

We see huge opportunity to drive growth by executing on our strategy to transform the marketplace. We’re on the ground around the world – identifying key markets, connecting with consumers and assessing retail opportunities. We use this knowledge to apply our resources where they make the most difference. In fiscal