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This summary is based on the second quarter fiscal 2009 earnings call conducted by NIKE Inc. (NKE) on December 17, 2008.

Management:

- Chief Executive Officer: Mark Parker
- President - Nike Brand: Charlie Denson
- Chief Financial Officer, Vice President: Don Blair
- President of Investor Relations: Pamela Catlett

Key Investors Issues

- Revenues rose 6% to $4.6 billion from $4.3 billion in the prior year.
- Net income increased 9% to $391.0 million or 80 cents a share.
- The firm repurchased 3.5 million shares for $209.3 million.

Half Year Highlights:

- Revenues increased 11% to $10 billion.
- Net income was down 3.1% to $902 million or $1.83 a share, from $929 million or $1.83 a share in the prior year.

Second Quarter Highlights

Revenues grew 6% to $4.6 billion from $4.3 billion in the prior year with currency changes contributing about one point of that growth.]

- Excluding currency changes, Nike brand revenues grew 6% while revenues for continuing other businesses, which include Converse, Cole Haan, Hurley, and Nike Golf grew 3%.
- The net result of the divestiture of Bauer and Starter and the acquisition of Umbro was to reduce NIKE Inc. currency neutral revenue growth by about one percentage point.
- Gross margin improved 40 basis points to 44.7% primarily due to foreign exchange hedge gains, product pricing, and mix changes, partially offset by higher apparel closeouts, as well as the lag effect of higher input costs.

SG&A growth slowed to 8%, with only a minimal impact from currency as Nike took actions to reduce spending.

- Demand creation grew 5% while operating overhead grew 10%, due largely to infrastructure investment supporting owned retail, emerging markets, and the fast-growing non-Nike businesses.
- Net interest income was $5 million, $18 million below last year, due primarily to lower interest rates.
- The net impact of hedge gains and losses and the impact of currency changes on the translation of foreign currency denominated profits from international businesses increased year-over-year pretax income by $25 million.

Net income increased 9% to $391.0 million or 80 cents a share, compared to $359.4 million or 71 cents in the prior year on revenue growth.

- The Company reported worldwide futures orders for athletic footwear and apparel, scheduled for delivery from December 2008 through April 2009, totaling $6.7 billion, 1% lower than the same period last year.
- Cash and short-term investments totaled $2.7 billion, or about $5.57 a share.

Accounts receivable balance increased 5% versus the prior year, slightly slower than revenue growth for the quarter.

- Inventories were 9% above the prior year level, healthy in general but overall higher than preferred.
- Three-quarters of the increase was in Nike Brand footwear, which has continued to perform very well over the last two quarters and is supported by strong futures bookings. - Accelerated deliveries by factories seeking to maximize capacity utilization and cash flow, as well as shipping delays related to the transition to the new U.S. footwear distribution center, were key drivers of the increase.
- Nike brand apparel inventories grew more slowly and overall accounted for about 16% of the increase as the transition to direct distribution of apparel in Brazil and higher inventories in Asia and Gulf were the largest components of the increase.
- The firm repurchased 3.5 million shares for $209.3 million and announced a new, four-year $5 billion share repurchase program to commence upon the completion of its current $3 billion program.

Regional Highlights:

- U.S. region revenues decreased 1% to $1.51 billion versus $1.53 billion for same period last year.
- U.S. footwear revenues increased 1% to $993.5 million, while apparel revenues decreased 3% to $449.8 million and equipment revenues decreased 17% to $70.1 million. - Pre-tax income decreased 18% to $253.3 million due to lower gross margins and higher selling and administrative expenses, primarily related to Nikeowned retail expansion.

- European revenues grew 6% to $1.3 billion from $1.2 billion in the prior year, including two points of growth from currency.
- On a currency-neutral basis, both footwear and apparel revenues grew while equipment sales eased slightly.
- On a country basis, the emerging markets in the region drove the majority of the growth, partially offset by lower sales in southern Europe.
- Pretax income for Europe grew 19%, reflecting revenue growth, gross margin improvement, and stronger European currencies.

- Asia-Pacific reported revenue growth of 22%, including five points of growth from currency.
- China continued to deliver strong growth as revenues grew 27% and futures advanced 25%.
- In Japan, currency neutral revenues advanced 7% and the firm continues to see progress realizing the enormous potential of that market.
- Pretax income for the Asia region grew 25% due to strong growth in revenues and gross margins, and stronger Asian currencies.