Good afternoon, everyone, and welcome to Nike's fiscal 2013 fourth quarter conference call. For those who need to reference today's press release, you will find it at https://investors.nikeinc.com. Leading today's call is Kelley Hall, Vice President, Treasury and Investors 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 within 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 the mix of futures and at-once orders, exchange rate fluctuations, order cancellations, discounts and returns, which may vary significantly from quarter-to-quarter. In addition, it is important to remember a significant portion of Nike, Inc.'s continuing operations, including equipment, Nike Golf, Converse, and Hurley are not included in these futures numbers. Finally, participants may discuss non-GAAP financial measures, including references to wholesale equivalent sales. References to total wholesale equivalent sales are only intended to provide context as to the overall current market footprints of the brands owned by Nike, Inc. and should not be relied upon as the financial measure of actual results. Participants may also reference other non-public financial and statistical information and non-GAAP financial measures. Discussion of non-public financial and statistical information and presentations of comparable GAAP measures and quantitative reconciliations can be found at Nike's website, https://investors.nikeinc.com. I would now like to turn the call over to Kelley Hall, Vice President, Treasury and Investor Relations.

Thank you, operator. Hello everyone and thank you for joining us today to discuss Nike's fourth quarter and fiscal year '13 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 and at our website investors.nikeinc.com. Joining us on today's call will be Nike, Inc. President and 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 prepare 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. Thank you for your help with this. I would now like to turn the call over to Nike, Inc. President and CEO, Mark Parker.

Thanks, Kelley. As you know, last week we announced strategic management changes for our organization. Chief among them is the decision by Charlie Denson to move on from his role with Nike. Yes, he leaves some huge shoes to fill but luckily that's the business we are in, filling shoes. More on that in a minute. First, a bit of context on our leadership team going forward. I won't go through all the names here, but many of them are people you already know. Even more important, they know Nike, and they know each other. They bring tremendous passion, energy and chemistry to our future, and some people will be providing leverage and continuity from their existing positions while others will be assuming new roles. These changes reflect our successes and our biggest opportunities and they represent five very specific and ongoing commitments. Number one, to accelerate our innovation agenda. Two, to elevate design. Three, optimize our category and go-to-market strategies. Four, to integrate product creation and merchandising to create greater continuity from design all the way through the retail, and five to sharpen our focus on supply chain and manufacturing improvements. We spend a lot of time developing our leadership talent and that's something that never stops. It allows us to adapt and evolve our competitive offence and that's what you can expect as this team takes Nike into the future. Now, the fiscal year 2013, which was an important year for Nike and our industry. New innovations in technologies continue to accelerate the pace of change in the industry and our business, and we are focused on leading on changes. In fiscal year '13, that created greater differentiation and separation for Nike, and that's key to expanding our leadership position. In fiscal '13, Nike, Inc, revenues grew 8%…

Thanks, Mark. That was nice. That was greatly appreciated. Okay. Well, Q4 marked a strong finish to a record year for the Nike Brand. A lot of it has to do with the power of our category offence, but there are multiple dimensions in addition to category. We are able to push and pull levers across the business and around the world to capture growth. Today, I want to focus on two of the most powerful levers in our portfolio, geographies and key categories. In the end, it's all about choices. Focusing on the biggest, most promising opportunities for the Nike brand and our choices helped deliver very good fiscal '13. On a constant dollar basis, the Nike brand revenue was up 8% for the quarter and 11% for the year. For fiscal year 2013, we grew in every geography except Greater China, and across all of our key categories. Nike brand DTC revenue increased 24% for the year. With online sales, up over 30%, and global futures grew 8%. The MVP for the quarter and the year really had to be North America. Fiscal year '13 was our first $10 billion year for North America, $10.4 billion to be exact. That brings incremental revenue over the last three years to $3.7 billion. North America EBIT grew 25%. Their revenue grew 18% and their inventory grew only 13%. At Nike when profits grow faster than revenue and revenue grows faster than inventory, we call that the financial Triple Crown. And for fiscal 2013, most key categories grew at a double-digit rate as did footwear apparel and equipment. So, clearly, we are up to our game in products, distribution and how we connect with consumers. North America DTC delivered a record year for factory stores, in-line stores and online. Revenue increased…

Thanks, Charlie. You know I've followed Charlie on these conference calls for well over a decade and worked with him for nearly 14 years. As CFO of Nike, I could not have had a better partner. Charlie understands how all of the dimensions and aspects of our business fit together and he knows how to work the levers. And, while he claims he is not an expert on financial management, he has the most important skill of all. He knows how to create value for our shareholders and has done so year-after-year. That's a great legacy, but probably not the most important one. I think Charlie's greatest legacy will be the people he's developed and inspired over the years and I count myself among them. Charlie, thank you for 14 years of partnership and the great team you will be leaving behind. Here at Nike, we have a list of 11 guiding principles we call our maxims. The maxims define our approach to the business as we strive to reach Nike's full potential. I think there are three maxims that characterize our FY'13 performance and speak to our ability to create shareholder value into the future. The first is, Nike is a company. More specifically, Nike is a growth company made up of a broad portfolio of businesses. The diversity and flexibility of the Nike, Inc. portfolio helps us manage risk and allows us to leverage our strengths at scale, driving the kind of growth in revenues, earnings and cash flow we are announcing today. The second maxim states, we are on the offense, always. This Maxim describes how we drive to create the future rather than simply respond to it. We know that succeeding today isn't enough. We need to continue to raise our game if we are to…

(Operator Instructions) Your first question comes from Bob Drbul with Barclays. Your line is now open.

Charlie, first of all, congratulations and best of luck and thanks for everything over the last 15 years.

Thank you. I appreciate it.

I am a little busy here. Sorry. So I guess the first question I have for you, Charlie, just as this is your last call is, can you give us any, like Trevor taking over as President of Nike brand, any advice that you have given Trevor that you would share with us and what you should be most concerned about as he takes over at this point in his career?

Well, no, Trevor and the entire team are in great shape. Everybody knows Trevor. He has been around here a long time. He is great shape. He is well positioned to take the baton and keep going. I think there is no specific areas of advice that I can give him that I don't think he already knows. He is pretty well positioned and has got a great experience and he is a well recognized person, certainly around here and I think extremely as well. So I think I look forward to helping him make the transition and we will be in good shape.

Okay and then, I guess as a bigger picture, and I don't know if this will be for Mark or for Don. Can you just talk about the outlook or the macro that has impacted the outlook over the last 90 days or last 60 days in the business and as you look at sort of the expectations on the earning side of it going forward? What have been the biggest factors to sort of alter the view a little bit here?

Yes. I am glad you asked the question, Bob, because our perspective on the business really hasn't changed. We are absolutely as confident in the business as were 90 days ago. In fact, when we look at our constant currency operating profits, they have actually gone up a little bit in terms of our expectations, but a couple of things have happened. Number one is, the FX environments changed a bit and that's been a little bit of a drag on the numbers. Secondly, we finished FY'13 with a few more shares than we had expected 90 days ago. Finally, if you look at our tax lines, our FY'14 perspective has not changed, but FY'13 came in a little better than what we had expected as we talked about in the prepared remarks. So, from an operating standpoint, we are just as confident as we have been and very confident going into FY'14. There's just been a few things that have pulled our growth rate down a touch.

I would jump in and add that our ability to sort of work the operational and financial levers to make the adjustments that we need to in light of some of the, or macroeconomic challenges. I mean that's never been better. We still feel like we have room for improvement in areas, but we have never had the ability to kind of surgically manage from an operational and financial standpoint as we do today. Very proud of that, and I think it's served us well, particularly over the last couple of years.

And your next question comes from Robby Ohmes with Bank of America/Merrill Lynch. Your line is now open. Robby Ohmes - Bank of America/Merrill Lynch: Thanks. Hi, guys. And, Charlie, congratulations. Luck with what you do next.

I appreciate it. (Inaudible). Robby Ohmes - Bank of America/Merrill Lynch: Two questions. The first question is the double-digit North American futures orders. You guys put up today another great number. Can you just give us some color on what channels might be driving that more than others as well as the average selling price component to that? Then if there's any changes in the categories driving that? Then the second question is just Brazil. Some of the unrest that's gone on there, I was just curious if you guys had any color or thought on that? Thanks.

When we talk about and we look at North America and both the results and the futures order going forward, they are still pretty broad based, running, continues to still grow at double-digits. Basketball is accelerating and you saw the Q4 basketball results. They were extremely strong. And certainly the NBA Playoff run didn't slow that down at all, and so we are very excited about that going into next year. We talked about women's. We're pretty excited about the women's piece and then we are moving into our second year with the NFL here in North America, so it's really broad-based portfolio of progress I guess. When you look at the way that the business is being made up from a channel standpoint, we are doing it across all the channels. It's not one specific channel that stands out good or better than the others and I think that that speaks to North America management team and points of differentiation that we have been able to create in the marketplace.

We talk a lot about complete offense and that means across the product platforms, technologies, categories, geos and wholesale and direct retail, and the U.S. or North America is a tremendous example of really operating a complete offense. And, the exciting thing is as we see that kind of success in the U.S. and kind of turn around all cylinders there, we see the opportunity to really take a lot of that and apply that to other parts of the world. So, leveraging that complete offense and those successes across the other geographies is really our plan. Very exciting. The other point is as it relates to the organizational shift, Elliot Hill coming on board to lead the geographies. He is incredibly experienced. He has done a fantastic job in North America. Tremendous experience in both wholesale and retail. Great energy, lots of passion. Again, part of what I think is going to be a leadership team and has some tremendous chemistry. So, Elliot and his team, to Charlie's point, deserve a lot of credit.

And just on the ASPs in Brazil?

So on the ASPs, Robby, we usually don't get into that level of granularity by geography. But across all the futures, as we talked about, we were up five points on units and three points on ASP and that trend line is pretty consistent. So, we don't usually get into that level of granularity on a geography basis. But all the geos are seeing similar trends.

Your question on Brazil, obviously there is a lot going on in Brazil with the ramp up to World Cup and the Olympics. We know the unrest and we are watching that situation very closely to-date. There has been no material impact on our operations or our business in Brazil. We remain incredibly excited about the World Cup coming up and all the opportunities around that, and then following that the Olympics. This is, as we have said, our time to shine as a brand and we have some pretty amazing things coming, Charlie alluded to that, in the world of football. So, we are excited about the opportunity in Brazil. But we will stay close to it.

Your next question comes from Kate McShane with Citi. Your line is now open.

Charlie, I would like to also add my congratulations and best wishes.

Thanks, Kate. I appreciate it.

My question is around the supply chain. It was great to hear comments about the innovation in the supply chain and how it could possibly impact gross margins next year. I know it's still early days with Flyknit and other efficiencies that you are finding in the supply chain, but I wondered if you could update us on how this is ramping up as a production discipline.

Are you talking Flyknit specifically?

Yes.

Yes, well, first of all, we continue to be incredibly bullish on Flyknit for a number of reasons that we have talked about before. Performance-wise, sustainability, margin, opportunities going forward, as we scale that technology within running, of course, and then across the other categories. So we are in the midst of a fairly major effort to scale Flyknit across other models. Over this next 12 months you will see some very exciting new versions of Flyknit. I would say, just from a product standpoint, we are just scratching the surface in terms of the potential that it offers from a performance and an aesthetic standpoint. Let alone the manufacturing capabilities that it brings us. The manufacturing payoff will come when, as we get this to even greater scale. We are well on our way, in terms of our plan, to leverage, like I said, Flyknit across categories and even across price points as well. So you will see some very exciting executions, actually starting as early as this August, you will see Flyknit actually meet Nike Free, and that's a great combination. I am tempted to say more, but I can't.

Okay, great, and if I could just follow-up on that question, again with regards to supply chain and some of the labor costs that you are seeing. Obviously, labor has been a big pressure over the last couple of years. I know you have guided for it. But is there anything different that you are seeing or has anything gotten more accelerated in certain geographies where you are manufacturing currently?

Well, as far as acceleration, yes, we have definitely seen some fairly significant increases in wage rates in a couple of countries. I think the one in Indonesia certainly was pretty well publicized. We haven't seen the growth in quite that level in other places. But they have all been added up. I think, as Mark talked about a little bit with respect to Flyknit, I think the longer term solution to addressing a lot of these labor cost issues is really engineering the labor out of the product and that really is with technologies and innovations like Flyknit and there are a number of others that we have in the pipeline that are aimed at the same thing. It will take some time, and that's why one of the reasons we spoke to this on the prepared remarks is that we are very carefully looking at all the other levers of gross margin, including price as well as just how we manage our mix. One of the benefits we have seen in the last year or so is a real strength in the premium end of our business, which is the place where we have the most differentiation and the most opportunity for price. So, long-term, innovation we think is one of the ways to get at this labor cost pressure. On the near-term, we are also obviously looking at price and all the other levers in gross margin.

Your next question comes from Omar Saad with ISI Group. Your line is now open.

Thanks. And, Charlie, let me add my congratulations as well. Great career and to Trevor as well as if he listening in. Can I ask you guys about ecommerce real quick? I know, there's lot of great brands out there that have become pretty high penetration in terms of the mix of the business, revenues generate online. I know you guys have been more focused on the digital side, creating ecosystems, communities as well as the commercial side of the business. How should we think about how and when the online platform can be ready to become a big contributor to the P&L as part of the DTC overall?

Well, DTC and specifically online part of DTC is a huge priority at Nike, and we are investing in that platform fairly aggressively I would say. We see the opportunity there is continuing on, we are investing in mobile for example and seeing some great results there. Obviously, customization continues to be actually a very strong subset of our dotcom business and we see lots of innovation opportunities there that are quite compelling. But overall, DTC, and again specifically the e-commerce dimension, DTC is a huge and growing percentage of our overall business. I think we are just at the very front end. I mean, if you look at DTC as a percentage of some of the big verticals out there, it's quite significant. So we see ourselves along with our retail partners in terms of wholesale dot-com is that there is some very significant opportunity for us and we are very, very focused and bullish.

And the thing that I would add to that, Omar, is that the work that you referenced earlier that we do around the digital experience for consumers and all of the digital connections we have with consumers on the brand side, we think is the multiplier of the e-commerce site. Certainly, there is a lot of things we can do to sharpen our e-commerce platforms, but the connection points of all that traffic that's going through our brand sites and all of the connections we have with consumers, through things like Nike+, we think, have a multiplier effect in e-commerce that most pure play e-commerce players can't match.

As we talked about our digital strategy, we divided into Digital Sport, which is really products and services like the FuelBand, for example, e-commerce and then communications. In communications, there's a lot of the social aspects. And as Don said, we see those all intersecting and that's where the real opportunity for Nike lies, is the intersection of all those pieces of digital in the future.

Got you. And, then Donald, I have a real quick one question on gross margin as they kind of continue to accelerate a little bit here. What's that algorithm going to look like when your highest margin market, China return to more of a growth business and that mix shift, it goes from a drag to a benefit?

That sounded like a statement, Omar, not a question. That will certainly be helpful to put China back on that sustainable growth path and we absolutely are confident that we are going to get China there.

Your next question comes from Christopher Svezia with Susquehanna Financial. Your line is now open.

Charlie, all the best to you in the future in terms of whatever you choose to do but all the best to you and congrats to you.

Thanks.

My question is, just a follow-up on China for a second. Don, you gave some pretty good color about how we think about revenues first half, second half. Any thoughts about how we think about the margin profile in China? You didn't do so bad here in this current quarter against some easy comparisons but I guess just how do we think about that first half, second half and where maybe some inflection point could really start to happen?

Well, I don't want to get into that level of granularity again, but what I can do is talk to you little bit about some of the dynamics there. Certainly one of the things that was mentioned on the last question was just the high margins we have in China and one of the things that we believe is really exciting about the work we are doing right now with our retail partners is the opportunities still and the economics and productivity of the retail stores is that we can turn inventory faster. We think we can elevate the presentation for our consumers and we think that ultimately is better from a profitability standpoint for us and for the retailers. So, yes, our margins have held up relatively well in the last quarter, and there's a lot of things that we still think we can do going forward to manage that business for a high level of profitability. But I don't want to get into the weeds of trying to guess where margins are going to be for any one quarter. Just one thing to keep underlining here is, our goal is to get that market onto a sustainable profitable path. We are confident we can do it. We know how this works. It's just a question of working through the execution and being patient and disciplined as everybody else mentioned today.

Okay, thank you and then just lastly just on the gross margin outlook for you. I would like to think that you guys are being somewhat conservative in terms of how you are thinking about it. You have done better than you have expected in the past two quarters or so. So I guess what maybe could be the opportunity whereby you guys could outperform your thought process in terms of gross margin. What's the biggest headwind? I think everyone might have anticipated you could have done a little bit better on the gross margin profile for this year, just given the pricing increases. So just maybe a little more color about where maybe the opportunities could be?

Well, one thing to bear in mind and I have mentioned this in the prepared remarks. There is a lot of currency headwind in these numbers for, particularly, the first quarter. So we do hedge which means that for the major currencies, we are largely protected for a period of time, but we don't hedge a 100% and there is a lot of currencies that we don't hedge, particularly developing market currencies. So, a more favorable FX environment would certainly help. From a business standpoint, there is clearly a positive impact to managing inventories and keeping the market within that pull mode and one of the things that obviously we have been doing, as you saw our inventory numbers today, is keeping that inventory in check. So the upsides in this business model, as you know, are keep the inventories tight, make sure the brand is hot, sell-through maximum at full price and that's where the upside comes from. So we have a lot of moving parts in here. I think, as Mark said, we are better and better at this as each quarter goes by and I hope you are right. I hope there is opportunity in the gross margin number.

Operator, we have time for one more question.

Your last question comes from Lindsay Drucker Mann with Goldman Sachs. Your line is now open.

I just wanted to follow-up on North America sales. There was a bit of a divergence in your footwear versus apparel sales and I was curious if you could add a little more color to that and talk whether your futures numbers also reflected a similar trend?

So, again, I am looking at the futures numbers here, hold on. Actually, they are fairly close. The futures will actually accelerate a little bit in apparel more than footwear, but they are pretty even obviously with the number in '12. We have still got great momentum in the marketplace in footwear. As we talked about over the last couple of calls, we are really focused on improving our apparel position. We think it's one of our biggest opportunities. I think we are starting to see some of that momentum and work payoff a little bit, especially in the North American geography.

I think this comment I made about complete offense is really a major factor in our success over this last year or really few years. It's definitely holding true as we move into, or will, as we move into fiscal '14. So, if you look at footwear and apparel, and you look across the categories, they're frankly up and down the price points. I think, we look actually quite strong in North America from a complete picture standpoint, so we continue to be bullish on the opportunities in North America as we move into fiscal '14.

Great. And, then just when you talk about doubling down on innovation are you talking about doubling down on your investment that we should expect much greater frequency of products with innovation associated with them or much innovation associated with it and maybe just help frame what the practical implications of that statement are?

Yes. Well, first of all, as I said there has never been more opportunity to innovate than there is today. And, with that comps, it's not just more. It's better. So, we need to edit against that incredible list of opportunities and make sure that we are investing in things that we think we can leverage for the greatest success to fuel growth, improve performance, sustainability, et cetera. And, really, we have a very disciplined process by which we edit against all those opportunities. So, yes we have some funding that we have put aside to look at getting behind some of these more compelling and innovation opportunities. I won't speak to specifically what those are, but the intent is to really rally behind those opportunities that are going to give us the greatest potential to grow the business. And, frankly, the leverage across categories price points and even the brands within the portfolio, so incredibly excited, but at the same time I know the discipline that needs to go with managing innovation to achieve the greatest impact.

And I would point out as you mentioned earlier. In my prepared remarks, I talked a little bit about the significant investments we have been making over the last three years particularly and our guidance for FY'14 does contemplate that as well. So, as Mark said, we've been investing in places like digital and product innovation and manufacturing innovation so on, and we would continue to do that but that is embedded in our guidance that we gave you for FY'14.

Great. And then just one last one, you talked about the higher share count being a headwind to some degree of your EPS growth for next year and I think of a pretty easy solution to that considering. All the cash you guys are sitting on, so maybe just could you talk about what you plan to do with your extra $1 billion and your balance sheet?

Well, we do anticipate continuing to increase cash returns to shareholders and I think you are well aware of our record on dividend. And, certainly, buying our own stock is going to be a component of that as well and we do expect to be strong buyers of our own stock. We try to do that as efficiently as we can. And, obviously, your ability to see into the future is always a little murky, but we are very enthusiastic about returning cash to shareholders as well as investing in the business and that debt offering we felt was well timed to give us the flexibility going forward to continue to do both.

Great. Thank you.

Well, thank you, everyone. Appreciate you being with us today. Thanks to Charlie one more time for his final call with us and we will talk to you all again on Q1 earnings call.

And this concludes today's conference call. You may now disconnect.