NIKE, Inc. Announces Unfavorable Arbitration Ruling of Approximately $52.5 Million Involving Converse Subsidiary

NIKE, Inc. Announces Unfavorable Arbitration Ruling of Approximately $52.5 Million Involving Converse Subsidiary

May 17, 2006

    BEAVERTON, Ore., May 17 /Xinhua-PRNewswire/ -- NIKE,
Inc. (NYSE: NKE) today announced an arbitration ruling
arising from a contract dispute between the company's
Converse subsidiary and Alon International, S.A., a former
licensee for Converse in Brazil, Argentina, Paraguay and
Uruguay. The arbitrator awarded Alon $52.5 million in
damages, plus legal fees, less some amounts previously paid
to Alon. This potential liability had not been accrued by
Nike, and will likely result in a charge to earnings for
the company's fiscal 2006 fourth quarter ending May 31,
2006.

    (Logo: 
http://www.newscom.com/cgi-bin/prnh/19990818/NIKELOGO )

    "We disagree with the ruling and will exercise our
legal right to challenge both the award and the amount of
damages," said Nike, Inc. General Counsel Jim Carter.

    Standard confidentiality provisions in the arbitration
rules forbid the company from commenting on the substance
of the ruling.

    The actual amount of the fourth quarter charge will be
decided by the arbitrator's final determination of
attorney's fees, as well as Nike's assessment of the likely
outcome of any further proceedings. Nike expects to report
its fourth quarter and fiscal 2006 year-end earnings near
the end of June 2006; the company has not yet announced the
exact date.

    About NIKE, Inc. 

    NIKE, Inc. based near Beaverton, Oregon is the world's
leading designer, marketer and distributor of authentic
athletic footwear, apparel, equipment and accessories for a
wide variety of sports and fitness activities. Wholly owned
Nike subsidiaries include Converse Inc., which designs,
markets and distributes athletic footwear, apparel and
accessories; NIKE Bauer Hockey, Inc., a leading designer
and distributor of hockey equipment; Cole Haan, a leading
designer and marketer of luxury shoes, handbags,
accessories and coats; Hurley International LLC, which
designs, markets and distributes action sports and youth
lifestyle footwear, apparel and accessories and Exeter
Brands Group LLC, which designs and markets athletic
footwear and apparel for the value retail channel.

    For more information, please contact:

    Investors Contact:

     Pamela Catlett,
     NIKE, Inc.
     Tel:   [phone]

    Media Contact:

     Alan Marks,
     NIKE, Inc.
     Tel:   [phone]

SOURCE  NIKE, Inc.