Scan the many segments of our business and you’ll see consistent growth with pockets of exceptional performance. Asia Pacific continues to churn, led by strong revenue growth in Japan. Another stellar performance from the NIKE team in Europe. Global equipment sales blowing through the $500 million mark. And you don’t need to be a golfer to know the pin-rattling effect NIKE Golf is having on courses around the world. Let’s bring up the lens a bit. Overall, revenues grew five percent for the year. In these times of imploding techs, when Wall Street’s crystal ball has fogged over, five percent is reason enough for some global consumer product companies to break out the cake. But we expect more of ourselves at NIKE. And we don’t like cake. We divide our global business into four regions: the United States, Europe, Asia Pacific, and the Americas. While each region increased revenue in FY ’01, most of our growth came from outside the United States, a reality we have been stating (and nurturing) for several years. Fiscal 2001 saw NIKE brand revenues outside the United States grow by 19 percent in constant dollars, but only ten percent in real dollars. So, why the big disparity? In a word, currency valuations. OK, that’s two words, but they both point to one immutable force: the U.S. dollar remained relatively strong against most world currencies, especially the euro. This came despite the well-known slowdown of the U.S. economic machine. The lingering negative impact of weak international currencies was particularly tough on our business and results for fiscal 2001. Our hedging strategies help minimize the risks of being a truly international company. But, because we are a company passionate about growth and excellence, doing business in more than 140 countries, we are exposed to vagaries in the global economy over which no company has control. (At least no company that we’re aware of, anyway.) In the United States, clearly the most developed and competitive market for our athletic products, revenues grew two percent for the year. Despite weakness in categories such as cross training, NIKE continues to lead the athletic footwear market in share and product innovation, proof of the evolutionary strength of the NIKE brand. Apparel in the U.S. is in vibrant recovery after several tough quarters. Up nine percent in revenue for the year, U.S. Apparel garnered good momentum in the second half of fiscal 2001. The weak euro significantly impacted revenues in the European region (which now also contains results from the Mideast and Africa). In constant dollars, revenues increased 19 percent for the year. After the negative effect of currency, revenues grew only seven percent. Again, we have no control over the euro, but we do have control over the NIKE brand and the positive impact it can have on athletic life in Europe. The European market for athletic footwear and apparel continues to thrive. Every day, new, more sophisticated retail shops open with a commitment to presentation and service that NIKE is helping to define. Consumers are ravenous for superior product and communication and are looking to NIKE more than ever to provide it. It’s the same emotional connection growing in Europe that NIKE created in the U.S. 20 years ago. Want to know what NIKE feels like in Europe? Check out nikefootball.com; that’ll give you plenty to chew on. In the Asia Pacific region, constant dollar revenues grew 21 percent, or 16 percent after the effect of currency. Success in Asia for any company in our industry depends on authentic sports positioning and the ability to deliver technology-based performance products. So, we have a huge headstart. We’re especially enthusiastic about the World Cup coming to Japan and Korea in 2002 — a great opportunity to leverage our football success into expanded brand power. NIKE brand revenues grew nine percent in the Americas region; helped by a 46 percent increase in sales in Mexico. In constant dollars, regional revenues increased 11 percent. Solid design from NIKE continues to change thinking in global footwear. NIKE Shox brought a new concept in spring-loaded performance to runners, trainers and basketball players. NIKE’s Presto, a curious combination of fit, performance and style, became the subject of pirate websites seeking and providing tips on where to grab a pair of these coveted shoes. We also got some highly productive playing time from our Women’s Get Fit initiative and Brand Jordan, where our performance basketball and lifestyle product continued to be in strong demand. Basketball has historically been a key driver of U.S. revenue growth. FY ’01 saw NIKE hoops reinvigorated by exceptionally cool product and the frenzy around our NIKE Freestyle commercial. If we’re to believe the kids (and we do), this drum-thumping dribble dance is the most popular ad we’ve done in 20 years. Other brands, which include Cole Haan and Bauer among others, saw a seven percent increase in revenues for the year. Strong consumer interest in its redesigned footwear line helped Cole Haan revenues grow 18 percent, the largest increase for the brand in years. With revenues growing at a slower rate, we were aggressive in containing our spending levels. Total selling, general and administrative (SG&A) expenses, the cost of creating demand and running the business, grew by just three percent. Much of the increased spending came early in the fiscal year during our marketing support for the Sydney Olympics and the European Championships 2000. In fact, in the second half of FY ’01, SG&A was lower in dollars than the same period last year. So, sales were up and expenses were kept pretty much in check. Then why did we post a mere four percent increase in earnings per share? Gross margins were the main culprit. Besides affecting the translation value of international revenues, the impact of currency fluctuations also shows up in gross margins. In addition, we experienced difficulties implementing new demand and supply planning software in the third quarter. This created a two-fold problem for us: the creation of excess overall footwear inventory, and insufficient inventory of key products for which retailers had placed orders. This contributed to full-year gross margins falling to 39.0 percent of sales compared to 39.9 percent in the prior year. Of course, we continue to be inspired by the performances of the athletes we support every day in all types of sports around the world. Unless you were in the stadium, there is no way to convey the collective human buzz that hung in the Sydney air as Cathy Freeman turned the final corner on her way to gold in the 400 meters. Lance, Mia, Andre — owners of accomplishments so well documented by others that we won’t attempt to add more here. OK, we can say a word or two about Tiger. C’mon, did you ever think you would see the day when the media would write headlines about some golfer changing the ball he plays? Then again, Tiger is not “some golfer.” As only a very few have done before him, he transcends his game, transcends sports, to affect dreams and engage cultures. He’s the kind of athlete we love, but then again, we love them all. Fiscal 2001 was not without its challenges. In measuring our results, the truth is never as simple as the numbers, whether they tell a story of double-digit growth or of rebuilding for the future. This year, like every year, we have seen some of each. We are capable of much more. One more pause for thought — a recent study revealed that American kids have only 25 percent of their life considered as “free time,” compared to about 40 percent in 1981. Think about that the next time your kid asks you to do something that has nothing to do with homework, lessons or driving them somewhere. And if you’re sitting home reading this, waiting for the stock to go up, go out and play. Work up a sweat. It’s good for our business.