Good afternoon, everyone. Welcome to Nike’s Fiscal 2010 Fourth Quarter Conference Call. For those who need to reference today’s press release, you’ll find it at www.nikebiz.com. Leading today’s call is Kelley Hall, Senior Director of Investor Relations. Before I turn the call over to Ms. Hall, let me remind you that participants on this call will make forward-looking statements based on current expectations, and those statements are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the reports filed with the SEC, including Forms 8-K, 10-K and 10-Q. Some forward-looking statements concern future orders that are not necessarily indicative of changes in total revenues for subsequent periods due to mix of futures and at-once orders, exchange rate fluctuations, order cancellations, and discounts which may vary significantly from quarter-to-quarter. In addition, it is important to remember a significant portion of Nike, Inc.’s business, including equipment, NIKE Golf, Cole Haan, Converse, Hurley, and Umbro, are not included in these future numbers. Finally, participants may discuss non-GAAP financial measures. The presentation of comparable GAAP measures and quantitative reconciliations are found at Nike’s website. This call might also include discussion of non-public financial and statistical information, which is also publicly available on that site www.nikebiz.com. Now, I’d like to turn the call over to Ms. Kelley Hall, Senior Director of Investor Relations.

Thank you, operator. Hello, everyone. And thanks for joining us today to discuss Nike’s fiscal 2010 fourth quarter and full year results. As the operator indicated, participants on today’s call may discuss non-GAAP financial measures. You will find the appropriate reconciliations in our press release, which was issued about an hour ago or at our website nikebiz.com. Joining us on today’s call will be Nike, Inc. CEO, Mark Parker, followed by Charlie Denson, President of the NIKE Brand, and finally, you will hear from our Chief Financial Officer, Don Blair, who will give you an in-depth review of our financial results. Following their prepared remarks, we will take your questions. We would like to allow as many of you to ask questions as possible in our allotted time. So we would appreciate you limiting your initial questions to two. In the event you have additional questions that are not covered by others, please feel free to re-queue and we will do our best to come back to you. Thanks for your cooperation on this. I will now turn the call over to Nike, Inc. President and CEO, Mark Parker.

Thanks, Kelley. And by the way, welcome to your first earnings call. It’s great to have Kelley at the table in her new role as leader of the Investor Relations team. I want to start by saying how, first of all, very pleased and proud I am of our performance and our team over the past year and the most recent quarter. I’m also very happy by the way about today’s World Cup results, great wins by U.S.A and England, joining Brazil, Holland and South Korea as those already through to the next round. So it should be a very exciting weekend ahead. A year ago on our Q4 call, I said Nike was not a wait-and-see company. At the time, that would have been an easy strategy to adopt, in fact a lot of companies chose that path, but I had tremendous confidence in our strategy and the competitive fire of our management team. We weren’t about to let our core strengths sit idle because innovation and inspiration are not tactics at Nike, they are a way of life. And because we stayed on the offense, we were able to deliver a very strong year in a tough global economy and we did it while increasing momentum for the business throughout the year. So, how’d we do it? Building on the success of our category offense, we decided to reengineer the company to expand the influence of our brands and people, and to leverage our operational excellence across the portfolio. It was the right thing to do. We energized our key markets with the most innovative product that we’ve ever produced. We forged deeper and more productive relationships with our consumers. Our Retail and Apparel businesses are starting to deliver on their true potential as two of our biggest…

Thanks Mark. This time last year, we said we’d focus on three things. We said we’d continue to invest in the NIKE Brand to take advantage of opportunities in this tough global economy, balance costs, revenue and investments to remain financially strong and expand competitive separation by leveraging our innovative product, brand strength and premium distribution. So that’s exactly what we were able to do. On the year, reported revenue for the NIKE Brand was down 1% to $16.5 billion, but EBIT was up 1% to $3.1 billion. Revenue from Nike-owned retail increased 12%, driven by strong growth in stores and digital. We added 140 basis points to gross margin, driven by clean inventories and less discounted product. We optimized SG&A, leveraging our wholesale operations to drive investments in demand creation and owned retail. And we saw great progress in our apparel business. We saw 13% rise in revenue in the fourth quarter, a clear indicator that our long-term strategy has begun to pay off. As Mark said, the part of the story that the full-year numbers don’t show is the growing momentum we achieved in the second half. We enter the new fiscal year with clean inventories, accelerating category performance and tremendous energy in our key markets. I want to shine a light on our three core competencies for a minute, innovative product, brand strength and premium distribution. And I guess today it’s only appropriate that we do it through the category lens of soccer or football. Mark mentioned the incredible pop we’re getting with our boots on the pitch. What he didn’t mention is that nearly half of the players in the tournament are wearing them, almost 50% more than our nearest competitor. And like the boots, our team kits are the lightest and most sustainable we’ve ever…

Thanks, Charlie. Since the beginning of the financial crisis, our intention has been to deliver appropriate financial performance while extending our market leadership and positioning ourselves for sustainable, profitable growth over the long-term. By leveraging the strength of our brands and maintaining financial discipline, we believe we can emerge from the downturn a stronger, more profitable company. Despite the high level of macroeconomic uncertainty, we assured you we’d remain agile to minimize downside risk while aggressively pursuing upside opportunities as they arose. In fiscal 2010, we did what we promised. By leveraging the strength of our brands and maintaining marketplace discipline, we held our revenue essentially flat year-on-year. We delivered record gross margins, EPS and cash flow, and built the strongest balance sheet we’ve ever had. At the same time, we created greater competitive separation in the marketplace and positioned ourselves for sustainable, profitable growth. With few exceptions, our businesses returned to growth in recent quarters and are now accelerating into fiscal 2011. That isn’t to say the macroeconomic uncertainty is over. We’re certainly aware of the risks presented by high unemployment and extreme volatility in the commodity, currency and equity markets. But we’re also confident in our ability to deliver consistent results by staying focused on our business strategies and remaining nimble as we implement them. Our results for fiscal 2010 reinforce that confidence. Q4 revenues were $5.1 billion, up 8% versus the prior year. On a currency neutral basis, revenues grew 4%. Excluding currency changes, revenues grew 3% for the NIKE Brand and 6% for our other businesses, which include Cole Haan, Converse, Hurley, NIKE Golf and Umbro. For the year, Nike, Inc. revenues were $19 billion, 1% below last year on a reported basis and down 2% on a constant dollar basis. Revenues for the NIKE Brand…

Hey, Don, maybe I’ll just step in real quick and correct, make a quick correction. I believe I misstated the China futures number when I said 6%, when it’s actually 16%, which is what it is in the press release. So I apologize for that.

Thank you, Charlie. Operator, we’re ready to take questions now.

(Operator Instructions) Our first question is from the line of Chi Lee with Morgan Stanley. Please go ahead. Chi Lee – Morgan Stanley: Hi. Good afternoon, everybody. Don, I guess, a question on the gross margin guidance, down a point. Can you help us better understand what your assumptions are for the puts and takes for that guidance?

Sure. Well, first thing I want to emphasize is, as we’ve said before, we still have confidence in the long-term that there’s opportunities to expand gross margin. And one of the things I talked about that helped us in FY10 and we also believe we’re going to continue to generate some positive impact in ‘11, are the gross margin initiatives that we’ve talked about a lot, things like lean manufacturing, style productivity. Those are things that we’ve invested quite a bit in the last few years and we saw a benefit in FY10, and we are assuming continued benefit in FY11. The major change year-on-year is that, we had a fairly benign macroeconomic environment at least from a gross margin standpoint in FY10. We had fairly low input costs, oil prices, labor, those were things that were fairly favorable for us in FY10, and also, the foreign currency environment really reflected about a 12-month lag as it usually does. So it was a fairly favorable foreign exchange environment as well. Those macro factors are really swinging more to a headwind in fiscal ‘11. So we do expect to see some increases in raw materials that are chemical or petroleum based. We certainly see some labor cost inflation in Asia and there are some knock-on effects to oil prices in the form of freight. So we expect that’s a bit of a drag. We do think FX will go to headwind. And then finally, as I mentioned earlier, we’ve got some good news, bad news with the strength of the running line for fall and holiday that’s creating the need to do some additional air freighting. So a combination of those factors, we really think that we’re going to see some margin pressure through fiscal 2011. Hello?

Hello?

Thank you. Our next question is from the line of Bob Drbul with Barclays Capital. Please go ahead. Bob Drbul – Barclays Capital: Hi. Good afternoon.

Hi, Bob.

Hi, Bob. Bob Drbul – Barclays Capital: Kelley, welcome and good luck.

Thank you. Bob Drbul – Barclays Capital: I guess, the first question I have is related to sort of more on the macro side. When you guys look at the order book and the futures in the quarter that you just finished and reported. Are you seeing any sort of use the word queasiness amongst your retail partners when you look at the futures orders being so strong? Are there any change in cancellations or anything that we should be concerned about or is the strength of that futures number as good as it looks?

Hi. Bob, this is Charlie. No, I think it’s as good as it looks. We’re seeing a very strong brand presence around the world. And I think the innovation that we’re introducing into the marketplace through the product lines that are coming in are being very well received. I think a lot of the things that are going on in both footwear and especially in apparel. I think one of the numbers I’m most proud of right now is the continued acceleration we’re seeing in apparel. But in both footwear and apparel, coming out of the World Cup, we’ve got the best Basketball Festival coming on and we’ve got very strong sell-throughs in the marketplace, gives us a lot of confidence as we look out to the future. Bob Drbul – Barclays Capital: Great. And then, Don, on the currency, I guess, can you talk a little bit about sort of the hedging program that you have in place and sort of how that is expected to sort of minimize the downside or protect you as you look at some of the movements that we’ve seen in currency over the last several weeks and months?

Yeah. That’s a great question, Bob. And as you know, we usually say to people, a good rule of thumb is about a 12-month lag in exchange rates. We’ve seen the euro and the pound weaken over a fairly significant amount of time. That’s really accelerated in the last six to 12 months. So we’re definitely going to get some short-term insulation from this, but as you know, you can delay the impact of the exchange rates, you can’t actually eliminate it. So what we expect to see here is the fact that last year, fiscal ‘10, we actually had some pretty favorable exchange rates because we actually put those on prior to the crisis. So we had some euro exchange rates that were in the mid $1.40 space last year. We’re going to start to see numbers that are more in the $1.30 and change as we go into fiscal ‘11. So it’s really the lag effect of the long-term strengthening of the dollar and the erosion of the European currencies that’s going to affect the foreign exchange in fiscal ‘11. Bob Drbul – Barclays Capital: Great. Thank you very much.

Thanks. Next question.

Our next question is from the line of Michelle Tan with Goldman Sachs. Michelle Tan – Goldman Sachs: Hi. Thanks. I guess, I was a little surprised to see the revenue a bit light of your futures number from last quarter. And I was wondering, how -- is that really about walking some of the closeout sales that would be in that at-once business? And how much did the less closeout sales as a whole contribute to the gross margin upside this quarter?

Well, just to hit it from a numbers standpoint, Michelle, the North America commentary about footwear and apparel, we had significant drop in closeout revenues for both footwear and apparel in North America, and that was the most pronounced. You know, as I said in my gross margin commentary that was a piece of the fourth quarter margin upside. We had a lot less in terms of volume of closeouts and the closeouts we did do were a lot more profitable just because we were managing the marketplace very proactively. Michelle Tan – Goldman Sachs: Sure. Is there any kind of magnitude you can give us in terms of how much that contributed to the gross margin relative…

Well, at this point, I wouldn’t want to put a number on that one, but it did have an impact. That was one of the items I mentioned. Michelle Tan – Goldman Sachs: Okay. Great. And then just on Europe, it was interesting to hear that that region, I think you said it accelerated even beyond the World Cup window. And I was wondering if you could give us some color on traction by category that you’re seeing there beyond World Cup. Is it the lifestyle or express piece of football that’s driving it or any kind of big standouts there?

Yeah. This is Charlie. It’s, well, football is the leader of the pack, which we are very, very pleased to see the leverage that we are getting off of both the World Cup event itself and obviously the spend that we’ve put into it. So but I think it does have a halo effect over some of the other categories. When you talk about football and the sportswear side of it, that is one of the bigger opportunities I think we talked about when we were in New York on a longer-term basis, because we really feel like that particular area is underdeveloped and we believe we have a great position and a great story to bring to that. Action sports continues to grow in Europe, as does running and training. So, again, the European business, I don’t want to get too far out ahead here. It’s still -- we’re not seeing as much acceleration as we are seeing in places like China or the emerging markets but we do feel like it is a stable market and has a pretty decent long-term growth position to be in. Michelle Tan – Goldman Sachs: Great. Thanks so much.

Next question?

Our next question is from the line of Eric Tracy with FBR Capital Markets. Please go ahead. Eric Tracy – FBR Capital Markets: Good afternoon. Maybe if I could focus on SG&A and sort of the spend as we think about next year, you said sort of the low where revenues should come in but from a demand creation, maybe the cadence for the year. And then I know you are investing behind direct-to-consumer, how should we think about that sort of playing out as well?

Well, we split the SG&A into two components, demand creation, which we expect to grow slightly slower than revenue. So for revenue we said high single digits, so demand creation would be slightly below that. And as you pointed out, that will be front-loaded. We do expect that we’ll not only see the completion of our World Cup campaign but also the Basketball Festival in New York City. So we should see a front-loading into the first quarter. On the operating overhead side, mid single-digit is where we expect that to be for the year and as I said, the two components of that, we are continuing to drive efficiency in our core functions and continuing to invest in direct-to-consumer. So on balance, mid single-digit growth, but again, really focusing our investment where we’re driving profitable growth in direct-to-consumer. Eric Tracy – FBR Capital Markets: Okay. And then maybe just turning to from a category perspective, obviously, getting a lot of momentum on the running side of the business, particularly in men’s, obviously women’s training sort of the big strength out there right now around toning, I understand your position on that specific product. But maybe just talk about, again, the strategy and sort of come to market around, be it Nike Free or other women’s training product that we can maybe look to for perhaps in the back half of this year?

Yeah. So, I think, I mentioned this in the prepared remarks. Our women’s training numbers for holiday we were very pleased with based on the results and being received with some of the new product in response to what’s going on in women’s training. As we’ve stated, we really do believe in our free concept and we believe it is a great solution and provides great benefits to the consumer. And then you will see an accelerated introduction into spring and summer as we continue to capture more and more of that female consumer. Eric Tracy – FBR Capital Markets: Okay. Great. Thank you.

Thank you. Next question?

Our next question is from the line of Kate McShane with Citigroup. Please go ahead. Kate McShane – Citigroup: Hi. Thank you. Don, I was wondering how we should think about pricing in Europe, with Nike buying its product in U.S. dollars and then selling it through at euros. Is hedging taking care of that or will it result in price increases and have you seen any competitors increase prices in Europe as a result?

Well, first of all, just to give you a sense of how we think about pricing. I mean, we don’t look at this as an across the board exercise and every season when we set prices, we’re thinking about the economic environment. We’re also thinking about the competitive set, what’s the competition doing, what kind of value proposition are we putting in front of the consumer? So those decisions are very surgical. They are season-by-season, market-by-market. And certainly with the innovation pipeline and product and the strength of the brand, we have a lot more leverage around pricing than our competition does. But we’re going to make those decisions on a case-by-case basis. The hedging program basically gives you time to make those adjustments. You know, we can’t push back the macroeconomics forever. What the hedging program does is give us time to adjust the business structure. And certainly in Europe, I think the future is yet to play out. We are looking at that one very carefully. We’re making those surgical pricing decisions and we’re going to work the margin equation as we always do on a case-by-case basis. Kate McShane – Citigroup: Okay. Great. Thank you. And on another topic in China, as you start to expand into the lower-tier cities, are you planning at all to come out with a lower-priced shoe in order to better cater to that consumer and how aggressive have some of your local competitors been in those lower-tier cities as you increase your penetration?

Well, as we’ve stated, we’re starting to move more aggressively into that -- into the second, third and fourth-tier cities. We are still finding considerable demand and interest around the NIKE Brand as it is today. We continue as Don just talked about, looking at pricing options and product introductions that may be on the lower end of the Nike product range, as well as, looking at different opportunities that we may have with some of the other brands in the portfolio. So we’re still very bullish, certainly from a Nike brand standpoint, but also the opportunities that exist for some of the other brands in the portfolio are something that we’re taking into consideration as we look at it over the next couple of years.

Yeah. I’ll just add, this is -- I think that’s one of the things you’ll see not only in China but other markets around the world is, that we’ll leverage the portfolio, the other brands in the portfolio to have a more integrated attack on specific market opportunities and China is a great example of that. So it’s not a question so much of dropping the Nike-branded product pricing at the opening levels down as much as, well, making sure that we are strong and competitive at our opening price points, as we always will be, but also looking at the portfolio to help supplement some of those opportunities that are definitely there, particularly in the tier 3, 4 cities. Kate McShane – Citigroup: Thank you.

Thanks, Kate. Next question?

Our next question is from the line of Chris Svezia with Susquehanna Financial Group. Please go ahead. Chris Svezia – Susquehanna Financial Group: Good afternoon, everyone. I guess my first question is, just focus on the North American business for one second. Your revenue is up 4% and I think, Don, you made the reference that the wholesale business was up 2% and your direct-to-consumer business was up 19% and apparel was up double digits, and I believe that was on the wholesale end. I was wondering if maybe you could just talk a little bit more about what’s going on with footwear, specifically at wholesale in the U.S. market. You talked a lot about running, obviously that continues to do well. But maybe you can just talk about the other pockets of your business in footwear in the U.S. market and how that might play out for the balance of the year at wholesale?

Well, I think one of the things that we’ve talked a little bit about recently and it continues to play itself out, is transition back to the performance product. I think that’s being led by several things. I think technology and innovation. I think are big factors in that. We have pulled back on some of our sportswear product a little bit in the marketplace as far as the distribution and allocation of product. So we felt it was time to reset some of that. We have a lot of momentum going on in the performance side of the business and we felt it was an opportune time to take advantage of some of those resets. So when you look at it over the next nine to 12 months, we’re very bullish not only in running but in basketball, in soccer and now that the training product is really starting to come forward, both in men’s and women’s, we really like the overall portfolio of performance. And then when you throw action sports in on top of it, we feel pretty good about things on the performance side of the footwear business. Chris Svezia – Susquehanna Financial Group: So on that, Charlie, just, so on the futures number, when you look at the domestic piece, obviously apparel is growing pretty quickly there but it’s fair to say that the footwear business is positive on that futures number?

Yeah. Chris Svezia – Susquehanna Financial Group: Okay. When you talk about sportswear, just so I’m clear, when you’re talking about more Air Force 1 and that type of product distribution and…

Correct. Chris Svezia – Susquehanna Financial Group: Okay. So you’ve pulled back some of the distribution on that product?

Yeah. We’ve actually -- we’ve reset the Air Force 1 quantities fairly considerably. Chris Svezia – Susquehanna Financial Group: Okay. And then my last question is, just on apparel real quick, obviously U.S., you’re doing nicely there, but any color internationally, ex-World Cup? Maybe if you can just talk to that, what you’re doing would be helpful. I know that’s been somewhat of a drag particularly in Europe, but any strength or opportunities you see there in terms of what’s going on?

With regards to the World Cup? Chris Svezia – Susquehanna Financial Group: No. Excluding World Cup products…

… just so apparel, internationally, excluding kits and things of that nature?

Sure, sure. No, again, pretty consistent story outside the United States as well. Performance is the driving force, apparel and footwear. The apparel numbers internationally are doing very well, led by performance. Running is the leading category with regards to what’s driving it outside and beyond football. And then, as we look at basketball globally, it is something we’re very excited about, not only the growth in China, but the growth overall internationally coming out of the Americas, as well as, starting to become a significant impact in some of the European markets as well. Chris Svezia – Susquehanna Financial Group: Okay. Well, thank you very much. Good luck.

Great.

Thank you.

Operator, we have time for one more call.

Certainly, our last question is from…

… or question.

Our last question is from the line of Sam Poser with Sterne, Agee. Please go ahead. Sam Poser – Sterne, Agee: Thank you for getting me in. I’ve got just, I’m going to read them all to you at one time, if you don’t mind. Could you give us some more detail on your cost reduction initiatives? Could you talk about what the FX impact on gross margin was in the fourth quarter? And can you give us some color on how you’re viewing demand creation overhead, how that’s -- where you’re spending that money next year and how we should view your planned repurchase activity for 2011? And with all that cash, are you looking for any acquisitions or anything like that beyond the repurchase activity? And I know that’s a lot more than two questions, but I figured, I would ask it all at once? Thank you.

Actually, we’ll ask Kelley, next. I’ll just jump in on the first and last thing you said, the cost reductions, which obviously continue to be really important, particularly as we try to strengthen our gross margin performance in the midst of some headwinds coming up. And Don talked about some of this already, but we’re streamlining our product lines around solid productivity, so seeing some dramatic results there, fewer styles, more productivity. Lean manufacturing, we continue to scale that and leverage that. Obviously raw materials consolidation continues to be an opportunity. We’re making some good headway there. We’re seeing some leverage on the factory consolidation that we have completed for footwear over the past year, have a bit more to do on apparel. All of these things have actually helped us achieve some strong gross margin performance and will help us going into the next year. We’re managing the supply chain a lot tighter, reducing discounts and closeouts, increasing our closeout margins at the same time managing inventory as well as we ever have. We’re expanding margins from some of the other businesses, as we talked about, some record performance there, cleaner inventories. So all in all, very, very proud of what we’re doing to sort of manage that topline going down to the bottom line. We haven’t done any price increases but that’s another lever in the kit that we may look at. But at this point, we don’t have any specific plans to do that. And as far as acquisitions go, nothing specific on the horizon, but I’ll just say what I’ve always said, we’ll continue to be opportunistic and look for the appropriate opportunities to grow from an acquisition standpoint as well. I think that’s only the responsible thing to do.

So, Sam, let me just direct traffic here a little bit. Mark just covered number one and four. Sam Poser – Sterne, Agee: Correct.

You know, I’m going to take the foreign exchange impact on margins in the fourth quarter was really minimal. It was about 10 basis points up, so not much. And then with respect to SG&A, I think you asked it in terms of both demand creation and operating overhead. Operating overhead, as I said, is really direct-to-consumer investment, which is two things, it’s new stores and we talked about that at our Analyst Day in New York City, and it’s also infrastructure building, new systems, new tools and so on, offset by efficiency in our core functions. And then, as I -- I think you also wanted to talk about demand creation, so let me hand that one off to Charlie.

Yeah, Sam. Then just one other thing on the operating piece, where we’re leveraging the direct-to-consumer piece into some of the partnership formats that we’re expanding on with some of the key partners whether it’s Dick’s, Foot Locker and Finish Line here in the United States or some of the other partners, Bell in China and some people in South America. So, and then with regards to demand creation, I think we talked quite a bit about where we are. It’s front-loaded for the year, World Cup, the basketball initiative and then a running initiative going into holiday, again, kind of lining up against where we feel our biggest opportunities and our most profitable returns will come. And then it sets us up for the second half of the year, where we’ve got some new product coming in. We’ll see how that goes in and hopefully we can exceed expectations, but at this point in time we’re not ready to commit to it. Sam Poser – Sterne, Agee: Just real quick on the SG&A, on the demand creation, you’ve spent 25% more this Q4 than you did a year ago. Can we expect to see that kind of growth on a Q1-over-Q1 basis or will it not be quite as much?

You know, Sam, I wouldn’t want to get into the model building. I mean, one of the things we talked about a lot is that when we see something working, we need to be nimble and we did that in the fourth quarter. We had a great campaign around Write the Future. We had tremendous product on the pitch. We felt terrific about it and we invested in it. And the results are coming in. So, I wouldn’t want to get into that level of detail but you understand the framework for how we think about it. Sam Poser – Sterne, Agee: And then the last question I had was about some more specificity on your repurchase thoughts in 2011?

We’ll be buying our stock and, I think as we said at the analyst meeting in New York, our plan at this point is that we believe we can continue to increase cash returns to shareholders, that means increases in dividends and increases in share repurchases. Sam Poser – Sterne, Agee: Thank you very much. Good luck. Thanks.

Thanks.

Thank you.

Thanks, everybody. We will talk to you next quarter.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.