CORRESP: Correspondence
Published on
April 9, 2008
Via Edgar and Overnight Courier
_______________________________
Mr. Terence O'Brien
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: NIKE, Inc.
Form 10-K, for the year ended May 31, 2007
File No. 001-10635
Dear Mr. O'Brien:
We are responding to the comments contained in the Staff's letter
dated March 3, 2008 to our Form 10-K for the year ended May 31, 2007
(the "comment letter"). Each of the numbered responses below
corresponds to the Staff's numbered comments included in the comment
letter.
Form 10-K for the year ended May 31, 2007
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Executive Compensation
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Definitive Proxy Statement on Schedule 14A filed on August 3, 2007
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General
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1. We note that the Compensation Discussion and Analysis section
follows the Executive Compensation discussion starting with
the summary compensation table on page 15. Please note that
the Commission has stated that the CD&A is meant to be a
narrative overview that puts into perspective the numbers and
narrative that follow it. In future filings we suggest that
the Compensation Discussion and Analysis discussion precedes
the tabular disclosure of the compensation discussion. In
this regard, please also see the Staff Observations in the
Review of Executive Compensation, available in the Corporation
Finance section of our website.
We will make this change in our next proxy statement.
Item 7. Management's Discussion and Analysis of Financial Condition
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and Results of Operations, page 22.
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2. In future filings, please consider expanding your MD&A to
provide more background understanding, quantified data and
forward-looking information. The following list is not
intended to address each area of expanded analysis, but only
presents several examples:
- Discuss your views about the underlying reasons that U.S.
Region unit sales growth has slowed, and your views about
the near and middle term prospects in this regard. If
material, quantification and discussions about particular
products, incentives, and discounts may be helpful.
- Provide more detail about the increase in off-price and
lower priced kids products and how you see this trend
developing.
- Provide more details about the increase in closeouts and
sales discounts, and your views about whether this
represents a market trend, general economic conditions, or
some other development.
- Provide more consistent quantified data by country or sub-
region.
We are committed to providing information that establishes a basis
for understanding the key drivers of our business and, to the extent
they exist and we are able to identify and quantify them, trends that
are relevant to understanding our future business outlook. In future
filings we will consider expanding the information provided in the MD&A
to incorporate background information, consistent and/or quantified
data and forward-looking information where we are able to identify
material trends that we believe would be helpful to the reader.
Potential Payments Upon Termination or Change In Control, page 24.
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Change in Control Compensation?Acceleration of Equity Awards, page 24.
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3. In accordance with Item 402(b)(2)(xi) of Regulation S-K,
please provide the rationale for providing a single trigger
for payments in the event of a change in control.
We will discuss the rationale for the trigger on payments in the event
of a change in control in our next proxy statement.
Compensation Discussion and Analysis, page 28.
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Objectives and Elements of Our Compensation Program, page 28.
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4. We note that your discussion does not seem to address how the
amounts paid or awarded under one compensation element
affected the decisions you made regarding amounts paid or
awarded under other compensation elements. Consistent with
Item 402(b)(1)(vi) of Regulation S-K, in future filings please
place in context how and why the determinations made by the
compensation committee with regard to one compensation element
may or may not have influenced decisions the compensation
committee made with respect to other compensation elements it
considered or awarded. For example, discuss any policies you
have in place for allocating between currently paid and long-
term compensation and between cash and equity compensation.
We will address this in our next proxy statement.
Performance-Based Stock Options, page 33.
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5. In future filings, please disclose how the compensation
committee determines the number of stock options to be granted
to each named executive officer and why such numbers are
considered appropriate.
We will address this in our next proxy statement.
Note 17-Operating Segments and Related Information, page 73.
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Regarding the requirements of paragraph 38 of SFAS 131, we believe
there are no unusual qualitative factors related to any individual
foreign country revenues, assets or operating profits that would
require disclosure outside of general quantitative materiality
guidelines. Thus in relation to SFAS 131, we provide the following:
Revenues
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Revenues attributable to the United States represented 47% of our
total consolidated revenues for the year ended May 31, 2007, and we
disclosed them. We also disclose material foreign revenues by
geographic areas based on our reportable segments. We do not believe
revenues attributable to any individual foreign country are material to
our consolidated results of operations. As we have a broad base of
revenues, the countries that represented the next largest percentage of
revenues during the year ended May 31, 2007 were the United Kingdom,
Japan and China, which each accounted for approximately 5% of
consolidated revenues. We do not believe this amount of revenues is
significant enough to warrant individual country disclosure.
Long-lived Assets
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Information regarding long-lived assets by broad geographic area is
disclosed based on our reportable segments. The majority of our long-
lived assets reside in the United States and represent Nike-owned
distribution centers and associated equipment and IT systems, and our
world headquarters in Oregon and associated furniture, fixtures and IT
systems. Long-lived assets in the United States represent 59% of our
consolidated property, plant and equipment, net as of May 31, 2007, and
is disclosed. The next largest concentration of long-lived assets is
in Japan where we own a distribution center and the related equipment,
IT systems, furniture, and fixtures for our operations, which
represents 16% of Nike's consolidated long-lived assets, and is
disclosed. Total long-lived assets in Belgium (where again we own and
operate a distribution center for our Europe, Middle East and Africa
geographic region) represent approximately 12% of Nike's total long-
lived assets. We will disclose the value of long-lived assets located
in Belgium in future filings. No other individual country currently
represents more than 5% of total long-lived assets, as we primarily
lease our office space and utilize third party distribution centers.
We will continue to evaluate the value of our long-lived assets by
country and consider expanding the information provided in our
disclosure as the concentration of our long lived assets by country
changes.
Exhibits.
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7. In future filings please ensure that all of your exhibits are
filed or incorporated by reference in accordance with Item
10(d) of Regulation S-K.
We have reviewed the exhibits filed or incorporated by reference
in our 10-K for the year ended May 31, 2007, and have confirmed that
all exhibits incorporated by reference were in accordance with Item
10(d) of Regulation S-K. We will continue to comply with Item 10(d) in
future filings.
We acknowledge that (i) the company is responsible for the
adequacy and accuracy of the disclosure in the filing, (ii) staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the
filing, and (iii) the company may not assert staff comments as a
defense in any proceeding initiated by the Commission or any person
under the federal securities laws of the United States.
Very truly yours,
/s/ Donald W. Blair
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Donald W. Blair
Vice President and Chief Financial Officer