Nike Inc. was founded in 1962 by Bill Bowerman and Phil Knight as a partnership under the name Blue Ribbon Sports. Our modest goal then was to distribute low-cost, high-quality Japanese athletic shoes to American consumers in an effort to break Germany's dominance of the domestic industry. Today, in 2000, Nike Inc. not only manufactures and distributes athletic shoes at every marketable price point in a global marketplace, but more than 40% of our sales come from athletic apparel, athletic equipment and subsidiary ventures. Nike maintains traditional and non-traditional distribution channels in more than 100 countries targeting its major market regions: United States, Europe, Asia Pacific and the Americas (excluding the United States). We use over 20,000 retailers, Nike Factory stores, Nike stores, NikeTowns, Cole Haan stores and Internet-based websites to sell our athletic and leisure products. We dominate sales in the athletic footwear industry with a global market share of 33%. Nike Inc. has managed to achieve this leading position through "quality manufacturing, innovative products and aggressive marketing". As a result, by the end of fiscal 1999, Nike's 20,700 employees generated nearly $8.8 billion in revenue. Our main product focus is sports footwear designed for specific uses in sports and/or leisure. We also sell athletic apparel under the same trademarks and brand names as many of our footwear lines. Among our newest product offerings, we sell a line of Nike-branded performance equipment that includes sports balls, watches, glasses, skates, clubs and other equipment designed for athletic activities. In addition, we use the following wholly owned subsidiaries to sell additional sports-related items and commodities: Cole Haan Holdings Inc., Nike Team Sports, Inc., Nike IHM, Inc. and Bauer Nike Hockey Inc. Our Most Popular Products Categories of products include the following: • Running • Basketball • Cross-Training • Outdoor Activities • Tennis • Golf • Football • Baseball • Soccer • Cycling • Volleyball • Wrestling • Cheerleading • Water Activities • Auto Racing • Other Athletic & Recreational Uses Trends of sales and revenues Revenue in the fiscal year ended May 31, 1999, decreased 8% from the previous year to $8.777 billion. As illustrated in the chart below, this marked the first time since 1994 that revenue fell. Despite this year's decline, Nike Inc. achieved revenue growth of 300% over a 10-year period, rising from revenues of $2.235 billion in 1990. Figure 1* Obtained from Nike's 1999 annual report, Inc. Although revenues declined in 1999, net income increased 13% over the previous year. As the chart below illustrates, net income has been volatile in the second half of the years '90.