Charlie Denson: The futures number is weighted towards the third quarter. The growth is faster in the third and the fourth, but not a huge amount.

Bob Drbul (Lehman Brothers): Can you talk about the US inventory position as it relates to total NIKE both, on your books?

Charlie Denson: The inventory levels both out at retail and in our system are good. We feel good and confident about where we are. The US team has learned and done a nice job at managing inventory over the last four or five years. They continue to get more and more scientific and specific down to the every even, the very specific door level and we feel still good and confident. Our outlet business is good. The outlet business overall in the US is a struggle and we would mire some of that, but we feel good about the performance of the outlet business. The investments that we have made in the supply chain over the last four or five years are paying dividends even as we speak today. I would say that inventory levels still are comfortable here in the US.

Bob Drbul (Lehman Brothers): How do you think about the dollar investment on the advertising and marketing plans around the Olympics in total?

Don Blair: Beijing is going to be the biggest single sporting event in years and is a great opportunity for next brand. It is a big event, a big opportunity, and we will be rising to the occasion. That being said, also the European Championships are important and as I look at our soccer business now, the second half of number coming out of the categories, specifically soccer, are strong and we feel good about our ability to continue to grow that business on a global basis and the focal point of that will be in Europe. Between those two events, we are bullish.

Virginia Genereux (Merrill Lynch): Could you talk longer term about the respected impact on gross margin of the currency benefit and any input cost pressures you might be seeing heading into the next year?

Don Blair: There is lots of input costs, our supply chains are lot more efficient than they were four years ago. We manage the levers that we can control and our goal is to keep margins moving ahead and grow those margins over time. What you are seeing right now for this year and this quarter is that we are getting some benefit for selling currencies like the strength of the Euro. We hedge anywhere from 12 to 18 months in advance of the transaction date, so we are going to see that benefit come into our numbers over this fiscal year and next. We are seeing pressure from Asian currency appreciation the Thai Baht, the Renminbi. At the same time those are the macro factors. The things that we are working on Lean manufacturing, we continue to get benefits from that. We get benefits from a tighter supply chain. We have got lower air freight numbers this year and that we have taken some surgical price increases. What we are trying to do is manage our financial model. We look at model by model pricing. We look at trading terms of all of our accounts and what we are trying to do is make the right decision in the circumstances.

Mark Parker: We are better prepared than ever before to manage the margin side of our business between the inventory management tools we have with the supply chain investments we have made. We are completely expanding the Lean manufacturing and realizing the benefits of that across footwear and now into apparel, materials consolidation efforts, the SKU management, SKU and style management.

Virginia Genereux (Merrill Lynch): You said SG&A, with demand creation was going to be up ahead of revenue, Could you comment on that?

Don Blair: I would expect to see more growth in the fourth quarter than in the third. It is driven by demand creation investments around Beijing and Euro Champs.

Omar Saad (Credit Suisse): How do you think strategically about your marketing plan for next year and long term?

Mark Parker: The brand is the most valuable thing we own, and it does not show up on the balance sheet. What we are doing is trying to reorganize the company along the lines of the categories to deepen the focus and the connection we have on specific consumers. The category alignment is showing us how much more we can grow in those pieces of the business. The challenge/opportunity is: knowing what leverage the pool wear around the world to optimize that potential. We continue to look at the broader portfolio and looking at that leverage to pool. We are not putting all the pressure to grow on the NIKE brand itself. We feel good about where we are and the move we are making to make ourselves even more competitive.

Omar Saad (Credit Suisse): Do you think long term you still are going to pursue the same marketing approach?

Don Blair: On longer-term, the consumer and brand loyalty is going to be built on the foundation of a relationship. Customer experience piece is going to become more and more important. We have introduced the Nike+, which is that digital community, that virtual community, that consumers are participating in or some of the things we have learnt around our Joga.com experience. Those are going to be as important. When we talk about marketing in the future, I think that will encompass a lot of those types of things as well.

Omar Saad (Credit Suisse): Is it a possibility that you could pull back on some of the more traditional areas of marketing and re-focus some of the dollars to put it in some of those new areas?

Mark Parker: It is not only a possibility, it is a current reality. We are shifting some dollars out of, may be more conventional mediums in demand creation and marketing traditional TV advertising for example, and shifting to more surgical and more relevant areas of communications and connecting points to consumers. That would include retail as well. In our industry, we need to lead the transformation of the industry to a venue that is or venues that are much relevant to consumers from an experiential standpoint.

Omar Saad (Credit Suisse): Corporate expenses are up. The segment P&L looks like they are up year-over-year, $335 million versus $232 million last year. What is driving that?

Don Blair: There is a whole variety of different things that land at the corporate center, but some of them that we are investing in would be retail infrastructure, some of the category go-to-market processes and how we developed product and innovation.

Brad Cragen (Goldman Sachs): Where you are in terms of the door opportunity in China and how many stores are you opening at the run rate right now?

Mark Parker: The run rate is flattening out at about the rate that we have been on over the last year and half which is in the 500 to 600 door range per year. We feel confident around that number. It has not shown any signs of slowing down as we start to get into the tier-2 cities. Most of our time and efforts have been spent around the big three over the first couple of years and we are in some of the tier-2 cities, but now we have started to expand there and I would see that level maintaining itself through the Olympics.