Good afternoon everyone and welcome to NIKE’s fiscal 2008 fourth quarter and year end conference call. For those who need to reference today’s press release, you will find it at www.nikebiz.com. Leading today’s call will be Pamela Catlett, Vice President Investor Relations. Before I turn the call over to Ms. Catlett let me remind you that participants of this call we 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 8K, 10K and 10Q. Some forward-looking statements concern future orders that are not necessarily indicative of changes in total revenues for the subsequent periods due to the 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’s important to remember a significant portion of Nike, Inc. business including equipment, most of all NIKE retail; NIKE Golf, Converse, Cole Haan, Hurley and Umbro are not included in these futures numbers. Finally participants may discuss non-GAAP financial measures. The presentation of comparable GAAP measures and quantitative reconciliations can also be 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 Pam Catlett, Vice President Investor Relations.

Good afternoon everyone. Thank you for joining us today to discuss NIKE’s fiscal 2008 fourth quarter and year-end results. As the operator indicated participants on today’s call may discuss non-GAAP financial measures. At comparative presentation of reconciliations between GAAP and non-GAAP reported items can be found in our press release which was issued about an hour ago as well as on www.nikebiz.com. Additionally in the course of today’s call you may hear us refer to total wholesale equivalent sales for non-NIKE brand businesses that have licensed sales. Wholesale equivalent sales include both our reported wholesale revenue and a rough estimate of sales by our licensees based on the royalties they pay us on their net sales. It’s intended only to provide context as to the overall current market footprint where we own the rights to the brand and should not be relied upon as a financial measure of actual results. 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. Following each of their prepared remarks we will then take your questions. Now it’s my pleasure to introduce Mark Parker.

Thanks Pam and welcome everybody to our year-end call. When I stepped into the CEO role two-and-a-half years ago, the leadership team reaffirmed a simple concept that I knew was true from my 25 plus years of experience here at NIKE and that is that NIKE is a growth company. That drives both the long-term financial goals we outlined over seven years ago and a 2311 goal we set for ourselves about a year ago. And that commitment continues to guide our decision making today. Fiscal year 2008 showed the power of our model. Looking into the new fiscal year, we’re equally committed to reaching our goals. First a quick recap of our results. As reported, net revenue for the quarter was up 16% versus Q4 2007, marking 27 consecutive quarters of year-over-year revenue growth. For the year, we added $2.3 billion of incremental revenue to total $18.6 billion, up 14% year-over-year. Our gross margin in fiscal 2008 improved 110 basis points despite a rising cost environment. Reported global futures are up 11%, the 30th consecutive quarter that futures have increased. And EPS grew 14% for the quarter and 28% for the year. We continue to deliver growth in revenues and profits just as we continue to make disciplined and strategic investments in key long-term growth drivers for the company. Demand creation in sports marketing and events like the European Championships and the Beijing Olympics are critical investments as is building the infrastructure required to support controlled retail space. We feel very good about our new retail concepts [for] dialing in the resources and capabilities required to build and scale profitable new store concepts. We continue to operate with a strong capital structure and a relentless focus on leveraging resources to create returns for our shareholders. In fiscal 2008 our…

Thanks Mark, good afternoon everybody. Fiscal year 2008 showed that the NIKE brand is more powerful and more meaningful to consumers then ever before. Our ability to innovate on the product front combined with the flexibility we have in leveraging key categories and geographies, continues to help us navigate and deliver value, especially in uneven economic conditions. On the year, the NIKE brand generated record revenue of over $16 billion. We saw every region and product business achieve revenue increases. Five of our six key growth categories saw revenues increase, with basketball remaining flat but gaining market share in the US market. Both global footwear and global apparel were up 14% as footwear hit $9.7 billion and apparel approached the $5 billion mark. We hit all this while keeping inventory levels clean and well positioned as we go into fiscal year 2009. I think these numbers are a really good indication of our effectiveness in pursuing growth opportunities and yet still managing the brand. So let’s take a quick spin around the world. First let’s talk about the US. We’ve been able to successfully manage through some of the broader challenges impacting consumer spending and I have every confidence that we’ll continue to do so in the upcoming year. Looking at the US numbers for fiscal 2008 you’ll see that this is not just a commitment but it’s a fact. Revenue was up 4%. We hit a new overall record of $6.4 billion in revenue and footwear had its biggest year ever, hitting $4.3 billion in revenue which NIKE and the Jordan brand in the number one and number two market share positions across all of athletic footwear. Our performance apparel continues to connect well with consumers and we are seeing solid growth. The sportswear apparel side is not where…

Thanks Charlie. You know we often begin our discussion of financial results with a reference to the long-term financial model that we introduced in the second quarter of fiscal 2001. We set out to create value for our shareholders by delivering high single-digit revenue growth, mid-teen earnings per share growth and improving returns on invested capital. Over the past seven years, we’ve reported 10% compound revenue growth, 19% compound EPS growth and we’ve increased our return on investment capital from 14% to over 24%. Although we know the math is important we think the key principals underlying our financial model are even more so. Let’s talk about those principals and how we see them reflected in our FY08 results and our fiscal 2009 expectations. Our over arching goal is to deliver sustainable, profitable growth in a rapidly evolving global marketplace. To deliver sustainable profitable growth, we must invest for the future and deliver value for our shareholders. To do so in a rapidly evolving global marketplace we must take a dynamic approach to our business, leveraging all of the operational and financial elements of our global business portfolio. We have achieved consistent results, not by following a rigid financial model but by using those guardrails to make good business decisions in the environment in which we operate. We believe we made a number of good decisions in fiscal 2008 investing in our future and delivering value for our shareholders. We drove strong results with the NIKE brand growing the business and gaining share in developed markets, while building infrastructure and delivering results in emerging markets. We invested in growth drivers such as sports marketing, global brand events, category go-to-market capabilities and retail infrastructure. We continued to fuel scalable growth businesses such as Converse, NIKE Golf, Cole Haan and Hurley. And…

With that, we’d like to take questions.

(Operator Instructions) Your first question comes from the line of Robert Drbul - Lehman Brothers

The questions that I have are on the SG&A line, around this quarter and I guess just looking forward, if anyone could address just the magnitude of the increase versus the expectation going into the fourth quarter in terms of the basis point increase or the dollar number in terms of really what you experienced. If you could maybe elaborate on the breakdown of that increase a little bit more and looking forward into the first quarter into next year, can you just also maybe elaborate a little bit more in terms of you gave overhead demand creation, but just I guess the level of the SG&A spend is a bit surprising. I’m wondering if you could address that a little bit more in depth.

Well first of all when you look at the fourth quarter of the demand creation spend was something that we certainly anticipated from the very beginning of the year and we were talking about that at the very beginning of the year and I think Charlie actually said on the last conference call that we felt really good about the innovation platforms in Beijing Olympics and where we stood with our football business and so we actually made some conscious decisions to [heavy out] some of our demand creation in the fourth quarter largely by moving some money out of earlier quarters. So we certainly had lots of visibility into the impact of some of the big events we did make some conscious decisions to move money from earlier quarters into the fourth quarter on the demand creation front. You also need to recognize that with the acquisition of Umbro we picked up some demand creation as part of their P&L so that’s been part of the growth. As far as the operating overhead numbers, that number is a little easier to look at on a full-year basis. There’s always a lot of things that tend to move around from quarter to quarter but as we talked about the real driver of what’s been going on in operating overhead is that we’ve invested pretty heavily in retail in excess of the pace of growth of revenue and we believe that’s a great investment. As Charlie said, its driving great excitement in the marketplace and we’re seeing terrific results. We just haven’t yet caught up for our infrastructure on the retail side. We’re also putting a lot more money into our emerging markets. Balancing that, if you look at our core wholesale spending, we actually have leveraged it particularly in the more developed markets like EMEA and the US. So bottom line fourth quarter there was a little more in there on the demand creation side then we would have planned at the very beginning of the year but this was not a big shock or a big surprise. As far as the first quarter of next year, I think I’ve given you pretty good guidance on how that’s likely to flow particularly on the demand creation front, you are going to see some front loading of spending again as we finish out the Beijing Olympics and the European Championship campaigns.

On the US business, could you just maybe give us an updated thought around with the futures number being flat, do you think we’re near a bottom for the US business and when you look at the order book versus your expectations over the next several months, can you just maybe discuss that a little bit?

I think the US business right now, we feel actually very good about it with the exception of one thing and that’s the sportswear apparel piece. When you think about where our futures are, our footwear futures are still in good shape. Our performance apparel futures are in good shape. Where we’ve seen the biggest hit is around some of our sportswear area and we have taken a conscious decision when we look at the overall apparel portfolio around the world very much in the same way that we’ve looked at the business in general over the years, that we’re going to take a hard look at that piece of the business in the US and we’ve made some decisions to make a conscious effort to reset that business; more premium product, better brand position, taking a look at distribution and differentiation and so that’s really where the issue stands in that US business. The rest of the business is in pretty good shape.

Your next question comes from the line of John Shanley - Susquehanna Financial Group

I wonder if you could give us a little bit more insight in terms of the EMEA region, futures seem to be trending in the wrong direction. There were up 14% at the end of first quarter, 13% at the end of the second, 9% at the end of the third and just concluded fourth quarter they’re up only 4%. Is this trend likely to continue and can you tell us whether it’s across the board in terms of both Western and Eastern Europe or is there some region of EMEA region that’s causing more difficulty for the brand then for the continent as a whole.

When you look at the overall futures numbers they have trended down a little bit, there’s no mistake about that. In reference to both the Eastern region and the Western region, the East continues to be a solid growth platform for us and we feel great about both the brand position and the continued successes over the next certainly the near-term, the next year to year-and-a-half there as those economies continue to emerge and we continue to build out our brand footprint in those central European countries. When you get into the Western Europe it’s a little bit of a mixed bag. We had a pretty decent year in the UK. This last year, we had to reset that marketplace and we made some decisions a couple of years ago that have benefited us there. I think some of the major retailers there are continuing to work through and reset their position. We’ve seen a great new [JJB] format in the marketplace and we’ve seen some of the other players, Sports Direct and [JDs] continue to reposition themselves and so we feel good about that. One of the best performing countries right now for us is Germany and we feel great about the progress that we’re making there and which has always been a market in which we are under penetrated in. France has been a challenge for us and certainly signing the French National Team is a major investment into that country and into that business that we look forward to enjoying over the longer term as we take that over in the backside of 2010. So its still, we still believe Europe is a great growth market for us. Certainly it is long-term. We’re just, we’re looking at a little bit of weakness on the futures numbers and I would say that footwear is still a little bit stronger then apparel and certainly the most important sport, football was our largest growth category for the year.

Just turning to the US for a minute US futures obviously flat but the big concern I have is the profitability in the US market down 10% quarter-over-quarter, is that due to the promotional environment in the overall athletic retail marketplace or is it somewhat isolated in terms of certain channels being more difficult to gain traction on for the NIKE brand then perhaps other channels.

That doesn’t have anything to do with promotional activity in the marketplace. Our margins were actually reasonably good in the US and so it’s really the timing of spending. As you know we had a training launch in the fourth quarter and we certainly as you look at how the dollar is phased in, it’s really timing of expenses. We’re not seeing an erosion of margins in the US. In fact, as you know we’ve taken some pretty targeted price increases. We see no resistance to that coming from the consumer side and so we feel really good about the profitability in the US business at this point. It’s really just a timing issue.

What’s the plan for the number of outlet stores the company is envisioning for fiscal 2009; can you share that with us?

I wouldn’t want to get into that level of granularity at this point. I mean, we are continuing to build outlet stores. We have a game plan in terms of a percentage of our outlet capacity or our clothes out capacity that we want to go through our own outlet stores; 70% 80% by market. And we think that’s appropriate from a brand and a profitability standpoint. But I wouldn’t get into any more granularity then that.

Is it a fair assessment for us to model for an increase in the outlet stores just based on the track record over the last couple of years?

Well I think it has to do with the growth of the business. We’re not in the business to sell product through outlet stores and make that the business model. What we’re doing here is putting our clothes out through our own stores and we think that’s the right profit equation.

Your next question comes from the line of Jim Duffy –Thomas Weisel Partners Jim Duffy –Thomas Weisel Partners: So looking out to 2009, you mentioned the dilutive contribution of Umbro, you have to anniversary the tax benefit in the first quarter, inclusive of these factors do you expect to be able to deliver to your mid-teens earnings growth objective, that long-term plan? Or are we in somewhat of a unique year here.

Well first of all you know I don’t give that level of guidance and so I don’t really intend to start doing that right now, but what I did articulate both in my prepared remarks and I think if you go and you look on our website and look at the non-recurring items there are framework for how we manage the investment in the business and delivering for the shareholders is pretty consistent. We do have a lot of unusual activity and that’s why we’re giving you as much transparency as we possibly can on the website. No, I wouldn’t say anything beyond what I would say in the normal year here. You just need to make sure and we’re trying to put as much of that out there for people, all of the noise that’s going to be in the system based on 2008’s non-recurring items.

We have tremendous confidence in our financial model going forward and we feel like we are again well positioned to hit our 2311 target that we talked to you about, about a year ago. Jim Duffy –Thomas Weisel Partners: With regards to aligning the product development processes for footwear and apparel, where are you in that and what do you see as kind of the keys to jump starting the sportswear side of the apparel business?

Well I think, actually it’s been a major part of the efforts internally to get these lined up so that we can actually come to market in a category fashion. We’re able to do that now but obviously the product creation cycle hadn’t messed up, so the teams have made great progress on that and I think the other thing that with regards to the sportswear thing, we still believe that is one of our biggest single growth opportunities as you look out over the future landscape and I think making sure that we get these aligned with this category offence is something that we’re working hard at doing and that will enable us to come to market with a very much differentiated point of view and something that really only the NIKE brand can do. So but in the meantime, footwear continues to lead this effort and we’ll continue to lean on that footwear team for doing that while we get the apparel piece fixed.

Your next question comes from the line of Kate McShane – Citigroup Kate McShane – Citigroup: We’ve heard that footwear manufacturers in general are taking prices up on their spring 2009 lines about 10% and I know you mentioned that NIKE was taking some selective pricing, but can we expect to see this across the board and if so, what are the expectations for these higher prices sticking if the environment continues to be difficult in spring 2009?

Well I think the way we’ve approached these in the past and we’re going to continue to do this is we look at this on a model by model basis, market by market, and we’re making these judgments on the basis of what we believe the consumer and retail impact of those price changes is going to be. We have not seen resistance to the price increases we’ve taken in the US. We’ve done some selective work in Europe and so what I would say to you is we are very encouraged by the way we’ve approached this in the past and the way the economic equations work and we don’t see that necessarily changing going forward.

We’ll continue to see a surgical approach not across the board approach to that. And I want to add too that we’re also working the other side of the equation here again with the leading manufacturing material consolidation efforts to try to keep our margins in line in this environment. So we’re very bullish on what we’ve done. We mentioned 110 basis point improvement this past year and we are very confident that we can continue to see that positive trend continue through this next year. Kate McShane – Citigroup: I did hear you mention that Japan was up low single-digits, which I think is the first time that we’ve heard of the positive growth trend in that region, what’s finally got that business to start trending positively and do you think a low single-digit growth rate is sustainable?

First of all let me clarify the numbers, the number for the year was low single-digit. We’ve actually been posting positive numbers on a quarterly basis in Japan for some time. And actually in the fourth quarter our revenues were up 6% so the year was up low single but fourth quarter was up 6%. We’ve actually seen positive numbers in Japan just not to the full level of potential we think is in that marketplace.

Japan as a marketplace is still one that we believe has a great amount of long-term growth. But it has been a slow burn so to speak with respect to the last year, year-and-a-half. We feel very good about the work that we have done both from a brand standpoint and from managing the marketplace. We continue to see improvement and better positioning both from product at retail as well as growth at retail. One of the other things that we’re excited about is looking at Japan as far as our own retail footprint and one of our biggest retail successes has been the retail store that we have down in Osaka where we’ve seen some great progress as well. So it’s going to be a very viable marketplace for us, certainly long-term and we would expect to see it continue to grow. Kate McShane – Citigroup: And I know the market had been being challenged by some price competition from some of your competitors, is the margin differential between Japan and the rest of your business still higher as it was or has that margin equation changed a little bit because of changes in the marketplace?

Japan is a very profitable market for us. I think our fundamental belief is you have to build the market from the bottom up, you don’t build long-term sustainable profitable growth by discounting and so what we’ve done is got to get the product right, the distribution right and its been very profitable for us along the way.

I think Japan is a great example of the category focus really showing some, getting some traction. We’ve focused on running for example and football and some of those core sports so the product has gotten sharper. I think the consumers are voting in a positive way and as Charlie said, we’re working much more disciplined way I think with the retailers to try to better manage the marketplace. So it’s a good response to, frankly what I would call the basics.

Your next question comes from the line of Robert Samuels - JP Morgan

You continue to gain market share here in the US and my question is how much bigger do you think this business can be and how much additional share do you think you can gain?

Well until we get to 100 we won’t stop trying so I think for the US marketplace I believe that it still has growth opportunities. When you look at what we’ve talked about a lot before, this idea around going after both sides of the closet and the access to the sports style, the sportswear lifestyle consumer which we’ve always had a very large presence with, but it continues to expand and we continue to feel very confident about our ability to continue to expand with it. So I’m still a very bullish perspective on the US market over the long haul and sports is still a centerpiece of the youth culture of America and I think it will continue to be in both the near and long-term future. And then you continue to see some of the emerging new sports, the action sports footprint is something we’re very excited about and we’ve seen some great growth and early successes in and if you think about our success that we currently are enjoying in the sportswear footwear side of the business and you translate that into apparel, it starts to add up into some very significant dollars and opportunities. So I’m still a very bullish long-term perspective on the US marketplace.

We’re very bullish again on our category offence. We think that’s going to actually give us some more traction in the US market and put us in a position I think eventually to really make a more significant impact in growing the market US, not just getting share and that’s critical for us. So we actually are quite bullish about the opportunity here despite some of the economic challenges.

On China, with respect to the Olympics, would you expect to see any sort of slowdown or letdown post the Olympics over there?

No we talked about this several times, one of the things that we’ve really consciously thought about as we’ve done our Beijing preparation is really making sure that we stay focused post Olympic the calendar and I’m very excited about some of the things that we have coming into both from a product and a communication standpoint as well as continued added distribution in China post Olympics. So I don’t, we don’t plan on backing off at all. As we said, when everybody else leaves Beijing to go home after the Olympics, we’re staying.

Your final question comes from the line of Omar Saad - Credit Suisse - North America

A quick follow-up on the last question on the US market and how it fits into the grand scheme if you will for the global brand growth, do you look, I think clearly to the extent there is growth opportunity in the US but do you look, it seems to me there are certain markets which have, I guess what I would call much easier tailwinds and where the markets are much more immature relative to the US, do you think about resource allocation along those lines, that you’re going to spend less to support the US business and kind of maybe overinvest in some of the growth markets and if so, is that something that we should think about going forward as we look at the profitability line of the US versus some of the more emerging newer markets?

Well the US continues to be one of our most profitable entities so I wouldn’t discount the profitability of the US business and we don’t see it having to be compromised that as far as continuing to grow it, expand it and compete within it. That being said, we are overinvesting in some of the other areas as well and so when you think about what’s going on in China, Central Europe and even some of the South American countries we continue to be very aggressive in our positioning both from a brand and a business standpoint. So I don’t see a drastic change from the working model that we’re presently working off of today.

And I think I’d add to that the US region actually does a lot of this prioritization and sells so as I mentioned earlier we saw pretty good leverage on the core wholesale functions in the US region because they’re shifting resources to some of the growth opportunities that Charlie talked about, whether it be action sports or retail or development sportswear, so the US region is making a lot of those resource allocation decisions under the covers if you will, and so we’re going to continue to invest in growth and we’re going to continue to leverage the things that we do every day.

We’ve seen some average selling price increase in the US which is a good thing obviously. Performance is, the response to the performance product is quite strong. But I would be the first one to say that we are being as a company, a lot more disciplined about where we invest versus the return. And we have a saying here that all 1% are created equal. A 1% increase in the US is a big number. But that said, we’re being very conscious about where we spend versus the return. So as Don said, we’re being much more surgical within the US region and we think we can optimize what growth potential there is through that approach.

You talk a lot about the currency benefit and given the weak dollar in a lot of your other markets, can you talk about the currency impact on the cost structure and if part of the SG&A increase is coming from a weaker dollar as you spend in other countries?

That’s definitely true, as I talked about in my prepared remarks I think the number was four percentage points, our SG&A growth, yes came from currency changes so certainly as we build infrastructure outside the United States in places like China, that translated into more dollars when you translate it back with an appreciating currency. But one thing also to bear in mind is the revenues that are coming back from those markets are more valuable as well and increasingly in markets like China we actually, we’re getting pretty close to having a natural hedge given the size of the growth in our Chinese business.

Thanks everyone for joining us and we’ll look forward to speaking to you soon.