point. 

Fiscal 2011 Compared to Fiscal 2010 

In fiscal 2011, the effect of changes in foreign currency exchange rates did not have a significant impact on selling and administrative expense. 

Demand creation expense increased 4% compared to the prior year, primarily driven by a higher level of brand event spending around the World Cup and World Basketball Festival in the first half of fiscal 2011, as well as increased spending around key product initiatives and investments in retail product presentation with wholesale customers. 

Operating overhead expense increased 7% compared to the prior year. This increase was primarily attributable to increased investments in our Direct to Consumer operations as well as growth in our wholesale operations, where we incurred higher personnel costs and travel expenses as compared to the prior year. 

Other Expense (Income), net 

Other expense (income), net is comprised of foreign currency conversion gains and losses from the re-measurement of monetary assets and liabilities denominated in non-functional currencies, the impact of certain foreign currency derivative instruments, as well as unusual or non-operating transactions that are outside the normal course of business. 

The combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in other expense (income), net did not have a significant impact on our income before income taxes for fiscal 2012. 

Fiscal 2012 Compared to Fiscal 2011 

For fiscal 2012, other expense, net increased $87 million compared to the prior year. This change was primarily driven by a $76 million change in foreign currency net gains in the prior year to net losses in the current year. These impacts, together with a $24 million charge recognized during the fourth quarter of fiscal 2012 for the restructuring of NIKE Brand’s Western Europe operations, were partially offset by certain net gains related to non-operating items. 

Fiscal 2011 Compared to Fiscal 2010 

For fiscal 2011, other expense (income), net was primarily comprised of net foreign currency gains. 

For fiscal 2011, we estimated that the combination of translation of foreign currency-denominated profits from our international businesses and the year- over-year change in foreign currency related net gains included in other expense (income), net had an unfavorable impact of approximately $33 million on our income before income taxes. 

Income Taxes 

Fiscal 2012 Compared to Fiscal 2011 

Our effective tax rate for fiscal 2012 was 50 basis points higher than the effective tax rate for fiscal 2011 primarily due to changes in estimates of uncertain tax position. This impact was partially offset by a reduction in the effective tax rate on operations outside of the United States as a result of changes in geographical mix of foreign earnings. 

Fiscal 2011 Compared to Fiscal 2010 

Our effective tax rate for fiscal 2011 was 80 basis points higher than the effective tax rate for fiscal 2010 primarily due to the change in geographic mix of earnings. A larger percentage of our earnings in fiscal 2011