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 2011 we opened more than 100 premium category destinations, like the Field House with Dick’s Sporting Goods, House of Hoops with Foot Locker, and the Running Lab with Finish Line.

We’re creating similar momentum with our direct-to-consumer business. We opened nine NIKE Brand Experience and Category Experience stores in the U.S. and Europe. Converse opened stores in New York and Boston. And NIKE, Inc. e-commerce was up 25 percent on a currency-neutral basis compared to last year. That’s a big increase, but it pales in comparison to the opportunity we have to expand e-commerce across all NIKE, Inc. brands.

We also see tremendous opportunity in evolving our operational capabilities. We continually refine our operations – how we create product, how that product is manufactured, and how we get it into the hands of our retail partners and consumers. We’ve had some capacity and delivery challenges over the last year. That points to the tremendous demand for our product, and the need to be quicker in delivering it. And we’re doing that. We just opened our new China Logistics Center (CLC). At 120,000 square meters, it’s one of the largest distribution centers in Asia. And it’s on track to become the first in China to be LEED certified. The CLC will give us a huge advantage in how we handle all NIKE, Inc. products in China.

INNOVATE TO INSPIRE THE WORLD.

I think one of the great lessons of the 21st century is the need for collaboration. Nobody can solve the big challenges or reach the big opportunities of the future alone – not governments, not companies, not activists. We all have to work together. This is especially true in sustainability. I believe that any company doing business today has two simple options: embrace sustainability as a core part of your growth strategy, or eventually stop growing.

Last year we reclaimed 13 million plastic bottles from landfills in Japan and Taiwan and turned those bottles into our lightest high-performance football jerseys ever. We put those jerseys on nine national football teams at the World Cup, and that changed product creation in Football forever.

We’re also working with partners to create new ways for young people everywhere to access sports. That makes our youth healthier and the future brighter for all of us. We continue to create great energy and impact with The Girl Effect, the sole focus of the NIKE Foundation. I was in Kenya and Ethiopia earlier this year and saw firsthand the overwhelming impact of inter-generational poverty. I also saw the very real sense of hope and possibility in young girls who are breaking that cycle. It’s all part of NIKE’s commitment to help build a better world, while we build a better company, and I’m very proud of the progress we’re making.

As a CEO who came up through the product and design world, I know something about the nature of innovation. It’s incredibly valuable, and equally difficult. That’s where this company distinguishes itself from all others: innovation. You