NIKE, Inc. Reports Fiscal 2013 Second Quarter Results

For the second fiscal quarter of 2013, the Company’s Net Loss from Discontinued Operations was $137 million. This includes the loss recorded for the sale of the Umbro brand of $107 million, net of tax, in addition to net operating losses and divesture transaction costs for Umbro and Cole Haan during the period, net of tax.

Conference Call

NIKE management will host a conference call beginning at approximately 2:00 p.m. PT on December 20, 2012, to review second quarter results. The conference call will be broadcast live over the Internet and can be accessed at http://investors.nikeinc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location through 9:00 p.m. PT, December 27, 2012.

About NIKE, Inc.

NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes athletic footwear, apparel and accessories and Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories. For more information, NIKE’s earnings releases and other financial information are available on the Internet at http://investors.nikeinc.com and individuals can follow @Nike.

* The marked paragraphs contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed from time to time in reports filed by Nike with the S.E.C., including Forms 8-K, 10-Q, and 10-K. Some forward-looking statements in this release concern changes in futures orders that are not necessarily indicative of changes in total revenues for subsequent periods due to the mix of futures and “at once” orders, exchange rate fluctuations, order cancellations, discounts and returns, which may vary significantly from quarter to quarter, and because a significant portion of the business does not report futures orders.

NIKE, Inc. CONSOLIDATED STATEMENTS OF INCOMEFor the period ended November 30, 2012
		THREE MONTHS ENDED								%			SIX MONTHS ENDED								%
(Dollars in millions, except per share data)		11/30/2012				11/30/2011				Change			11/30/2012				11/30/2011				Change
Income from continuing operations:
Revenues		$	5,955			$	5,546			7	%		$	12,429			$	11,439			9	%
Cost of sales			3,425				3,170			8	%			7,071				6,445			10	%
Gross profit			2,530				2,376			6	%			5,358				4,994			7	%
Gross margin			42.5	%			42.8	%						43.1	%			43.7	%
Demand creation expense			613				616			0	%			1,484				1,280			16	%
Operating overhead expense			1,223				1,115			10	%			2,411				2,181			11	%
Total selling and administrative expense			1,836				1,731			6	%			3,895				3,461			13	%
% of revenue			30.8	%			31.2	%						31.3	%			30.3	%
Interest (income) expense, net			(1	)			3			-				(4	)			3			-
Other (income) expense, net			(17	)			10			-				(45	)			27			-
Income before income taxes			712				632			13	%			1,512				1,503			1	%
Income taxes			191				152			26	%			406				362			12	%
Effective tax rate			26.8	%			24.1	%						26.9	%			24.1	%
NET INCOME FROM CONTINUING OPERATIONS			521				480			9	%			1,106				1,141			-3	%
NET LOSS FROM DISCONTINUED OPERATIONS			(137	)			(11	)		-				(155	)			(27	)		-
NET INCOME		$	384			$	469			-18	%		$	951			$	1,114			-15	%
Earnings per share from continuing operations:
Basic earnings per common share		$	1.16			$	1.05			10	%		$	2.45			$	2.47			-1	%
Diluted earnings per common share		$	1.14			$	1.03			11	%		$	2.41			$	2.42			0	%
Earnings per share from discontinued operations:
Basic earnings per common share		$	(0.30	)		$	(0.03	)		-			$	(0.34	)		$	(0.06	)		-
Diluted earnings per common share		$	(0.30	)		$	(0.03	)		-			$	(0.34	)		$	(0.06	)		-
Weighted Average Common Shares Outstanding:
Basic			448.5				459.2							450.7				462.1
Diluted			456.6				468.5							459.2				471.5
Dividends declared per common share		$	0.42			$	0.36						$	0.78			$	0.67

NIKE, Inc. CONSOLIDATED BALANCE SHEETSAs of November 30, 2012
		November 30,			November 30,
(Dollars in millions)		2012			2011			% Change
ASSETS
Current assets:
Cash and equivalents		$	2,291		$	1,929		19	%
Short-term investments			1,234			1,436		-14	%
Accounts receivable, net			3,188			3,016		6	%
Inventories			3,318			3,035		9	%
Deferred income taxes			327			289		13	%
Prepaid expenses and other current assets			733			768		-5	%
Assets of discontinued operations			344			576		-40	%
Total current assets			11,435			11,049		3	%
Property, plant and equipment			5,310			4,883		9	%
Less accumulated depreciation			3,052			2,780		10	%
Property, plant and equipment, net			2,258			2,103		7	%
Identifiable intangible assets, net			374			364		3	%
Goodwill			131			131		0	%
Deferred income taxes and other assets			973			918		6	%
TOTAL ASSETS		$	15,171		$	14,565		4	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt		$	58		$	114		-49	%
Notes payable			100			123		-19	%
Accounts payable			1,519			1,370		11	%
Accrued liabilities			1,879			1,727		9	%
Income taxes payable			45			81		-44	%
Liabilities of discontinued operations			198			181		9	%
Total current liabilities			3,799			3,596		6	%
Long-term debt			170			234		-27	%
Deferred income taxes and other liabilities			1,188			892		33	%
Redeemable preferred stock			-			-		-
Shareholders' equity			10,014			9,843		2	%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	15,171		$	14,565		4	%

NIKE, Inc. DIVISIONAL REVENUES 1 For the period ended November 30, 2012
													% Change														% Change
													Excluding														Excluding
		THREE MONTHS ENDED								%			Currency			SIX MONTHS ENDED								%			Currency
(Dollars in millions)		11/30/2012				11/30/2011				Change			Changes 2			11/30/2012				11/30/2011				Change			Changes 2
North America
Footwear		$	1,471			$	1,305			13	%		13	%		$	3,203			$	2,749			17	%		17	%
Apparel			788				661			19	%		19	%			1,583				1,293			22	%		23	%
Equipment			162				100			62	%		61	%			341				224			52	%		52	%
Total			2,421				2,066			17	%		17	%			5,127				4,266			20	%		20	%
Western Europe
Footwear			545				538			1	%		8	%			1,259				1,269			-1	%		9	%
Apparel			301				324			-7	%		-1	%			683				740			-8	%		1	%
Equipment			51				53			-4	%		4	%			122				134			-9	%		-1	%
Total			897				915			-2	%		4	%			2,064				2,143			-4	%		6	%
Central & Eastern Europe
Footwear			134				135			-1	%		4	%			312				315			-1	%		9	%
Apparel			117				111			5	%		10	%			251				234			7	%		17	%
Equipment			15				15			0	%		5	%			45				46			-2	%		9	%
Total			266				261			2	%		7	%			608				595			2	%		12	%
Greater China
Footwear			324				353			-8	%		-9	%			680				667			2	%		1	%
Apparel			224				268			-16	%		-17	%			402				445			-10	%		-11	%
Equipment			29				29			0	%		-2	%			67				66			2	%		-1	%
Total			577				650			-11	%		-12	%			1,149				1,178			-2	%		-4	%
Japan
Footwear			107				100			7	%		10	%			213				203			5	%		6	%
Apparel			98				83			18	%		19	%			159				155			3	%		3	%
Equipment			14				15			-7	%		-6	%			30				34			-12	%		-12	%
Total			219				198			11	%		13	%			402				392			3	%		3	%
Emerging Markets
Footwear			718				660			9	%		16	%			1,322				1,227			8	%		18	%
Apparel			273				233			17	%		24	%			484				415			17	%		27	%
Equipment			61				55			11	%		16	%			113				106			7	%		16	%
Total			1,052				948			11	%		18	%			1,919				1,748			10	%		20	%
Global Brand Divisions 3			27				25			8	%		15	%			54				57			-5	%		2	%
Total NIKE Brand			5,459				5,063			8	%		11	%			11,323				10,379			9	%		13	%
Other Businesses 4			518				488			6	%		6	%			1,153				1,073			7	%		8	%
Corporate 5			(22	)			(5	)		-			-				(47	)			(13	)		-			-
Total NIKE, Inc. Revenues From Continuing Operations		$	5,955			$	5,546			7	%		10	%		$	12,429			$	11,439			9	%		13	%
Total NIKE Brand
Footwear		$	3,299			$	3,091			7	%		10	%		$	6,989			$	6,430			9	%		13	%
Apparel			1,801				1,680			7	%		10	%			3,562				3,282			9	%		12	%
Equipment			332				267			24	%		27	%			718				610			18	%		22	%
Global Brand Divisions 3			27				25			8	%		15	%			54				57			-5	%		2	%
1 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
2 Fiscal 2013 results have been restated using fiscal 2012 exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.
3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment.
4 Other businesses represent activities of Converse, Hurley, and NIKE Golf.
5 Corporate revenues primarily consist of intercompany revenue eliminations and foreign currency revenue-related hedge gains and losses generated by entities within the NIKE Brand geographic operating segments and certain Other Businesses through our centrally managed foreign exchange risk management program.

NIKE, Inc. EARNINGS BEFORE INTEREST AND TAXES 1,2 For the period ended November 30, 2012
		THREE MONTHS ENDED				%		SIX MONTHS ENDED				%
(Dollars in millions)		11/30/2012		11/30/2011		Change		11/30/2012		11/30/2011		Change
North America		$ 556		$ 426		31%		$ 1,186		$ 965		23%
Western Europe		113		92		23%		327		315		4%
Central & Eastern Europe		43		33		30%		104		103		1%
Greater China		185		220		-16%		349		391		-11%
Japan		43		35		23%		67		69		-3%
Emerging Markets		305		247		23%		528		437		21%
Global Brand Divisions 3		(324)		(281)		-15%		(699)		(547)		-28%
TOTAL NIKE BRAND		921		772		19%		1,862		1,733		7%
Other Businesses 4		80		71		13%		201		176		14%
Corporate 5		(290)		(208)		-39%		(555)		(403)		-38%
TOTAL EARNINGS BEFORE INTEREST AND TAXES		$ 711		$ 635		12%		$ 1,508		$ 1,506		0%
1 The Company evaluates performance of individual operating segments based on earnings before interest and taxes (also commonly referred to as “EBIT”), which represents net income before interest expense, net, and income taxes.
2 Certain prior year amounts have been reclassified to conform to fiscal year 2013 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
3 Global Brand Divisions primarily represent NIKE Brand licensing businesses that are not part of a geographic operating segment and general and administrative expenses that are centrally managed for the Nike Brand.
4 Other Businesses represent activities of Converse, Hurley, and NIKE Golf.
5 Corporate consists of unallocated general and administrative expenses, which includes expenses associated with centrally managed departments, depreciation and amortization related to the Company’s corporate headquarters, unallocated insurance and benefit programs, certain foreign currency gains and losses, including certain hedge gains and losses, corporate eliminations and other items.

NIKE, Inc. NIKE BRAND REPORTED FUTURES GROWTH BY GEOGRAPHY 1 As of November 30, 2012
		Reported Futures Orders		Excluding Currency Changes 2
North America		14%		14%
Western Europe		-1%		0%
Central & Eastern Europe		10%		11%
Greater China		-6%		-7%
Japan		-3%		4%
Emerging Markets		7%		11%
Total NIKE Brand Reported Futures		6%		7%
1 Futures orders by geography and in total for NIKE Brand athletic footwear and apparel scheduled for delivery from December 2012 through April 2013.
The reported futures and advance orders growth is not necessarily indicative of our expectation of revenue growth during this period. This is due to year-over-year changes in shipment timing and because the mix of orders can shift between advance/futures and at-once orders and the fulfillment of certain orders may fall outside of the schedule noted above. In addition, exchange rate fluctuations as well as differing levels of order cancellations and discounts can cause differences in the comparisons between advance/futures orders and actual revenues. Moreover, a significant portion of our revenue is not derived from futures and advance orders, including at-once and close-out sales of NIKE Brand footwear and apparel, sales of NIKE Brand equipment, sales from certain of our Direct to Consumer operations, and sales from our Other Businesses.
2 Reported futures restated using prior year exchange rates to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

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