Good afternoon everyone and welcome to NIKE’s Fiscal 2014 First Quarter Conference Call. For those who need to reference today's press release you’ll find it at https://investors.nikeinc.com. Leading today's call is Kelley Hall, Vice President, Treasury and 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, 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 future 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 footprint of the current brands owned by NIKE Inc. and should not be relied upon as a financial measure of actual results. Participants may also make reference to 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 Now, I would 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, as we discuss NIKE’s fiscal 2014 first quarter 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. Before we begin our prepared remarks, I would like to take a few minutes to highlight changes to our segment reporting structure for FY 2014. Starting with Q1, we’ve changed our reporting structure for Other Businesses. First, Hurley and NIKE Golf are now included in our NIKE Brand geography results. This reflects changes we’ve made to integrate Hurley into our Action Sports category and optimize our golf business across our NIKE Brand geographies as part of our Category Offense strategies. Second, we will be separately presenting the financial results of Converse. Converse is a key part of our continued growth strategy and this change will provide additional visibility to its financial performance and contribution to NIKE, Inc. For your benefit, we’ve posted a new schedule on our website at investors.nikeinc.com that provides comparable FY 2012 and FY 2013 quarterly revenues and EBIT reflecting the reporting changes we’ve made in FY 2014. With that, let me now introduce the participants of today’s call. Joining us will be NIKE, Inc. President and CEO, Mark Parker, followed by Trevor Edwards, the new 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 would do our best to get 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 hello everyone. 25 years ago NIKE launched its first “Just Do It” ad. Those are three simple words that remain a rallying cry for people striving to reach their full potential. It's a source of inspiration for me, this company and for consumers all over the world. It’s that no excuses voice of the athletes that's really driven the success of this company from the very beginning. And it's what motivates us to achieve even more as we move forward. Last quarter, I told you what to expect from NIKE in fiscal 2014. I said we were set to grow, that we would push ourselves and our partners to better serve the athlete and consumers, because that's how we will reach our full potential and deliver more value to shareholders. Looking at Q1 results, I would say we're off to a great start. NIKE, Inc. first quarter revenues were up 8%, gross margins grew 120 basis points better than projected and diluted earnings per share increased 37% to $0.86. These are outstanding results and they demonstrate our ability to grow and more specifically that NIKE is able to generate profitable sustainable growth. So how are we able to succeed in a challenging global economy? By focusing on the fundamentals, the competitive advantages that help us win and expand our leadership position. And today I want to highlight three, our ability to innovate, the power of the NIKE, Inc. portfolio and our ability to continue to make meaningful connections with consumers. So let’s take a look at the first one, our ability to innovate. It’s what fuels our growth and it always starts with the athlete. How can we make the athletes faster, stronger, better and help them push themselves to new levels of performance. In Q1, we…

Thank you, Mark. As I start my new role and after more than 20 years with NIKE, it’s exciting to see so much opportunity in front of us, and we are focused on realizing that opportunity. At NIKE, we always start with the consumer and as we’ve shared before our Category Offense brings us closer to the consumers, it focuses our teams, and underscores our competitive advantages. Our pipeline of innovative products to make athletes better, our ability to create deep and meaningful connections with consumer and our capability to elevate and transform the marketplace creating more space and more opportunity for our brand to grow. This is the complete offense we often talk about, it is the foundation of our growth strategy and allows us to continue to drive growth in both developed and developing markets. It’s a strategy that only NIKE can execute at such a global scale and it's the basis for the strong financial performance we share today. So on a constant dollar basis, NIKE brand revenue was up 7% for the quarter with growth across most of our key categories and geographies except Greater China. NIKE Brand DTC revenue increased 18% for the quarter with comp growth up 9% and online sales up 12%. And in addition our global futures grew 10%. Our strategies are working and our portfolio of businesses delivered during the quarter across product types, geographies and categories. Now let's focus on three of our key geographies. Our business in North America continues to be a tremendous source of growth for the NIKE Brand. North America provides a great benchmark what is possible around the world, we continue to deliver innovative products, we deepen our consumer connections, we elevate our distribution strategies in the market and in our largest and most penetrated…

Thanks, Trevor. Earlier on this call, Mark and Trevor described how our Q1 results demonstrate key NIKE assets and capabilities that enable us to drive growth and competitive advantage. I’m going to build on that by illustrating how we use those competitive advantages to create value for our shareholders. Let me start with the NIKE portfolio. As Mark indicated, our global portfolio of businesses gives us the ability to deploy our innovation, marketing and operational capabilities across the broadest range of opportunities in the industry. It also provides us with the diversification to deliver consistent growth and manage risk. Our Q1 results certainly reflect the strength of our portfolio. Revenue was higher for every geography except China as our European geographies led the way with accelerated growth in revenues and futures. Converse also posted high-teens revenue growth. On a category basis, strength in Running, Basketball and global football set the pace. And on the product side, premium performance apparel outgrew moderately priced sportswear driving higher average prices and gross margin. The second competitive edge is our ability to connect with consumers to our brands, our products and our retail presentation all through a category lens. As Trevor said, those connections have never been deeper or stronger allowing us to expand the market and gain share. They also enable us to move the consumer to more premium products and price points increasing productivity and profitability for NIKE and our retailers. You’ve seen this reflected in our Q1 results as our gross margins expanded 120 basis points due in part to higher net average prices and a shift in mix to higher margin products. The third competitive edge is innovation. As Mark and Trevor both noted, innovative products such as Flyknit and Hypervenom footwear and Tech Pack sportswear apparel were examples of…

[Operator Instructions] And your first question comes from Bob Drbul with Barclays. Your line is now open. Robert Drbul – Barclays Capital: Good evening.

Hey Bob.

Hi, Bob. Robert Drbul – Barclays Capital: Trevor welcome.

Thank you very much. Robert Drbul – Barclays Capital: Good luck. The question that I have on the European business and the business in China can you talk about the macro impacting you, I mean the numbers have been very impressive and especially both Western Europe and Central Europe especially in the futures side. So is the macro a big factor there and how sustainable do you think these impressive results can be?

Well Bob, first of all I just want to reiterate one of the things that we’ve seen over the course of years with our businesses is the strength of our business is much more a function of whether we've got the product right, the brand is strong and our distribution is really compelling than the macro. So I think we certainly have seen in Southern Europe some impact from macros, but I think our overall results in Western Europe and China is really driven by what we’re putting out there in the marketplace.

Yes Bob this is Trevor obviously. And probably what I would add is that, in both of those marketplaces that we’re talking about what we've certainly seen is our ability to stay connected with our consumer and build the brand has been sort of like paramount in driving the growth that we've been seeing. Certainly the thing that we're working on and did in both markets was to reset them to ensure that we continue to maintain a really strong pull in the marketplace. And we’re working through that in China, but obviously we’re seeing some really good results come through in Western Europe. Robert Drbul – Barclays Capital: Okay and then the other question was just on the Women's business in U.S., the training business, and I think some of the legend product. Can you just talk about -- if you feel like you’re getting traction there and a lot of the initiatives if you could elaborate a little bit more just in that specific product?

Yes I’m actually super excited about the work that we’ve been doing in the women's business. We are actually seeing some really good positive momentum as we talk about putting those new concepts into the marketplace. The things that we focused on really was first and foremost get the product right and so as you commented on the Legend Pant, we’re seeing some great success with all the parts we are putting through. We’re really focused at the premium end and that’s been doing really well for us. We continue to connect with our consumers, obviously the Training Club is a great example of how we do that. And so the third area that we’re focused on right now is really the distribution. And really making sure that now we can get – give the consumer access to that product. That’s why we’ve created these concepts. As these concepts get better, we’ll roll them out into more of our retail stores. We’re super excited about what we’re seeing and the results that we’re getting. Robert Drbul – Barclays Capital: Okay. Thank you very much. Good luck.

Thank you.

Thank you, Bob.

And your next question comes from Omar Saad with ISI Group. Your line is now open. Omar Saad – ISI Group: Thanks. Good afternoon. One of the themes like kind of heard throughout the call and seems to have been present the last several quarters is your own retail business really performing extremely well, not that your wholesale business is struggling, but this relative out performance really sticks out even in places like China, but also in the U.S. can you talk about this shift? How much of it is strategic that you’re directing or is that where your consumer is taking you, what does this mean for some of your wholesale partners? Kind of looking at this bigger picture here, any insight you could provide, because it’s pretty interesting what’s going on?

Sorry Omar, great question there. I think part of it is our strategy around our DTC, we clearly use DTC as an opportunity for us to really improve our assortments to make sure that we have the best lines. And so what we’re able to do is really use it as a spearhead and so what you’re seeing in our DTC doors is really great performance, because we have the right assortments coming through those doors. The more we learn, the more we then take those to our retail partners. And so what we’ve been seeing is our ability to drive a really integrated marketplace is really helping to drive these kinds of results. But obviously, we use our DTC as a lab, as it were and also is a way to ensure that we can get our premium products to the marketplace.

Yes, I’ll jump into the – I have always said that focus on our DTC business, this effort to become a better retailer will make us a better wholesale partner, which is what Trevor just talked about, and I think that's really paying off. We’ve learned so much as we’ve committed to being a great retailer that we’re applying to becoming a really good wholesale partner that’s most obvious in the North America, in the U.S. market, where we are more advanced in the market segmentation that we’re doing with some of our top accounts and that’s the model that we’re working diligently on in Europe, Western Europe, especially and then certainly in China. We are in different stages of that development. But very confident that that model will actually translate well around the world. Omar Saad – ISI Group: Thanks. And then really quick on China, as you kind of go through the reset there, how do you think about maybe reducing or resetting all those lower volume concession shops and maybe doing more of these kind of high volume, whether it’s DTC or with partners? Is that the kind of shift that’s necessary on the ground at retail there?

Yes. I would say that our true intent in China is to make sure that we drive a more productive and profitable retail. And we believe that you do that by segmenting the market and creating greater differentiation, I mean in the marketplace. That gives the consumer more targeted experiences. At the same time, we’re working really on driving our merchandising strategies, working at the door level. So that we can ensure that the consumers are getting exactly what they need. And then at the same point, we’re also looking at driving a better operating platform that allows us to get the right product to that consumer at the right time. And so that obviously doing that will create more shifts, so that we have the opportunity to go for the next wave of growth that we see in China, because we truly see tremendous potential. Omar Saad – ISI Group: Thanks, great quarter guys.

Thank you, Omar.

Thank you.

Your next question comes from Robby Ohmes with Bank of America. Your line is now open. Robert Ohmes – Bank of America Merrill Lynch: Thanks, great quarter guys.

Thank you.

Hi, Robby. Robert Ohmes – Bank of America Merrill Lynch: Hey, I just had two quick questions, one just a follow-up on North America. Some of the retailers have been talking about how great their business is with you. We’ve heard it start to come more from places like Kohl's and Macy's and even some of the shoes that have been highlighted, have been things like the Roshe, which is a lower price point so the ASPs still are positive and look strong in your futures. But could you maybe help us understand or is your channel distribution shifting a little bit in terms of what’s leading the growth either with the family channel, or again Macy's et cetera and how that might play into the ASP outlook as we look over the next year? Thanks.

Well, let me just jump in and say there is no shift in our channel strategy. What you I think are seeing is a result of our focus in we often like to say our complete offense. So you see shoes like the Roshe, which has been widely successful, more accessible price point in some ways. And that’s actually taking place in many, many different channels. But really it’s bringing that kind of innovation to more accessible price point in general. But our fixation, our obsession on bringing performance not only to the very top of the line, but throughout the line is continuing. And I think you’ll see some shifts here and there, but overall you’re going to see us over the course of this coming year drive some incredible innovation that’s going to keep the focus on premium and our unique position is then to draft off of that and create this complete offense down through the price points as well. Robert Ohmes – Bank of America Merrill Lynch: And then just quick follow-up question, small business for you, but Golf, could you sort of walk us through what's made that business weaker and when you see it turning more positive?

Yes, the issue with Golf is really – it’s really much more of an operational issue that actually drove the weakness in this particular quarter. We had some supply chain challenge in Canada and that's really the impact that drove that. But other than that, the business continues and fundamentally being at really good place. So that was really just a result of just a small thing. Robert Ohmes – Bank of America Merrill Lynch: Great. Thanks very much guys.

And your next question comes from Kate McShane with Citi. Your line is now open. Kate McShane – Citigroup Global Markets Inc.: Thank you. Good afternoon.

Hi, Kate.

Good afternoon. Kate McShane – Citigroup Global Markets Inc.: I think you had mentioned in your comments that you saw some gross margin expansion in China and I wonder what that implies for where you are with working through your inventory in the region?

Well, I would go back to some of the language we used, which is there’s going to be a lot of volatility in China, and I would say overall, we are continuing to make progress in managing inventory. I don't think I would read the gross margin results as any sort of milestone along the road. We are making progress. We do feel that we are getting that market set in right place. I think it's really more the broad global drivers that helped our margins everywhere. Things like easing raw materials cost, shifts and mix, those are the things that I think were the more powerful drivers of what was going on in China. Kate McShane – Citigroup Global Markets Inc.: Okay. Great and my second question is, as you reset China, is there any change in mix of product in apparel versus footwear with the changes that you’re making or is the mix of products generally staying the same?

I would say that the broader mix will probably stay the same how the mix actually affected at a store level will be different because we really are working on just making sure that we have the right assortments in each of the doors, but I think overall the mix will generally be the same.

Let me add that the category focus in China is going to be more intense, we’re actually trying to zero-in on the shorter listed categories that have the greatest potential for growth. So we’ll have the more targeted mix of products, but the ratio of footwear and apparel we’re not seeing a dramatic shift in that ratio. That said see tremendous upside in the apparel business in China for NIKE to move forward and frankly around the world. That’s one of the – what I would call underpenetrated segments of our business today. But no specific targeted change in the overall mix in China except for maybe more of a focus in terms of the category breadth. Kate McShane – Citigroup Global Markets Inc.: Thank you.

And your next question comes from Lindsay Drucker Mann with Goldman Sachs. Your line is now open. Lindsay Drucker Mann – Goldman Sachs: Thanks. Good afternoon everyone.

Hi Lindsay.

Hi Lindsay. Lindsay Drucker Mann – Goldman Sachs: On the gross margin front, can you talk about the key differences versus your original guidance that led to the upside to be versus your expectation and then as you think about the next quarter where you expect those tailwinds to moderate so that you see a little bit more modest improvement?

Well it’s one of the things that were little better than what we expected. We did have an even more favorable product mix than we expected that was one of the pluses, we also had our investments in our North America distribution center come in a little bit later than what we had originally expected. We have had tremendous growth in North America and we’ve been doing some work in our Memphis hub putting some new capacity in down there and we expected a lot of those cost to hit in the first quarter and they came in the second. So those are two other things that really shifted versus our guidance. I think if you look at the year-on-year drivers as I said, it was easing raw material costs, shifts to premium price increases. We had some great results out of Converse and DTC has been quite strong. We think those really will carry through a lot of the balance of the year plus or minus. But couple of things that are changing. We are seeing the FX headwinds get a little stiffer and we also expect that we’re going to have those supply chain investments particularly in North America start to flow in a little bit later in the year. So those are really what I would call out of the major shifts from the first quarter into the balance of the year. Lindsay Drucker Mann – Goldman Sachs: Okay, thanks. And on the North American Direct-to-Consumer piece, can you maybe I missed it, but what was your e-commence growth in the region in the period, and can you talk about some of the initiatives you have in place to drive growth in that platform?

Yes usually we don't give that level of granularity by geography. Overall we were up. I believe it was 12% online. And one of the things to bear in mind is we had an extremely strong year last year. So we’re about 50% two year growth on the online business and we are continuing to be extremely enthusiastic about the potential for that piece of our business.

Yes, I mean I would say as Mark pointed out that's one of the most critical growth drivers for us in the future. So we expect to see continued momentum and growth in that part of the business. Lindsay Drucker Mann – Goldman Sachs: Is there anything in terms of functionality or marketing or otherwise we can look forward to specifically in the U.S., balance of the year or in the next couple of years?

Yes, we continue to make sure that we improved the site and all the experiences. But you will kind of see those as they rolled out in the months coming up. Lindsay Drucker Mann – Goldman Sachs : Okay, thanks.

You are next question comes from Matthew Ross with JPMorgan. Your line is now opened. Matthew Ross – JPMorgan: Yes, congrats on a good print. I wanted real quick, share repurchase was almost doubled last two quarters and you took on $1 billion of debt also in the quarter. Can you speak to the mindset around capital allocation and how should we think of this as part of the earnings algorithm going forward?

Well, the debt issuance does not signify any change in our approach to capital allocation. As we’ve been pretty consistent over the last few years that we believe we’re going to be throwing off quite a bit of cash flow. We expect to be continuously raising our return of cash to the shareholders, at the same time that we will be investing in the business. And that pattern of consistent increases in cash return to shareholders as well as consistent increase investment in our business is what we’ve actually demonstrated over the last decade, so no change there. The offering of debt at the time we did it, I think gives us tremendous flexibility in our capital structure and frankly those interest rates were outstanding. Matthew Ross – JPMorgan: Okay. And then more of a clarification, on your full year guidance is EPS still expected to grow at a double-digit rate for the year?

We don’t give that level of EPS guidance. We try to give people parameters to help them understand what’s ahead. But at this point, I’d rather stay with the guidance that’s in the prepared remarks. Matthew Ross – JPMorgan: Okay. Was there any change from last quarter?

I think the conversation was about line-item guidance and I think that's where I’d like to stay on the guidance.

Matthew feel free to follow-up with the IR team. We'll walk you through it. Matthew Ross – JPMorgan: Okay, great.

Operator, we have time for one more question.

And your last question comes from Jim Duffy with Stifel. Your line is now open. Jim Duffy – Stifel Nicolaus: Thanks, hello everyone.

Hi, Jim

Hi, Jim Jim Duffy – Stifel Nicolaus: I’m interested in some more commentary on the strategy to continue to take prices higher, have you seen any evidence of resistance to price, and has the reception to price been consistent across regions?

I think we’re looking at in sort of a really two ways right, one is sort of making sure that we have great price value in the marketplace. So we always want to make sure that each season we go in and we’re evaluating the pricing that we’re currently setting to make sure that we actually are taking the opportunities when that there to go back to the right price, at the same time what we’re also doing is driving the change in the mix of our business. So you will see us really drive a lot of premium concepts certainly we’ve seen that across the board, and we’re certainly seeing really not a lot of resistance to that at all. In fact we’re seeing tremendous growth around our premium businesses. So as Mark talked about process really the complete offense, making sure that we are competitive on the one side, but also taking price when the opportunity prevails itself. Jim Duffy – Stifel Nicolaus: Great, thanks. And then Don so some of the increased FX headwinds seem to be from emerging market currencies does that make it more costly or difficult to hedge against the exposure?

Well, you are exactly right. And in fact for many of those currencies it's really not very economical to hedge them, but over the last few years we've taken a number of steps to reduce our overall exposure, we have built an internal trading company we have really done some adjustments to how we source. And so we think we’ve done some things that have reduced the exposure. But the currencies like the Reais, the Argentine Peso, the Russian Ruble, it's not great tools out there to economically hedge them. So to some degree, we are exposed at some level for those currencies. And what we do is we really manage our overall P&L equation across the whole portfolio. So as we talked about these adjustments are there, but we're not so exposed to anyone currency and we've got lots of levers to pool across the portfolio to continue to deliver consistent growth. Jim Duffy – Stifel Nicolaus: That's helpful. Thanks, see you in a couple of weeks.

Thank you.

Thanks everyone for joining us. And we'll talk to you next quarter.

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