1. Nike Common Stock Valuation - May 24, 2010 Nike Common Stock Valuation As of May 24, 2010 By Valentyn Khokhlov, MBA

2. Nike Common Stock Valuation - May 24, 2010 Purpose The fair price is defined as the price having the same multiple to an underlying factor as the average price for the group of the comparable companies. The valuation performed as of May 24, 2010. The underlying factors considered are EBITDA, revenue, net earnings and book value of assets. The comparable companies are the leading public corporations in the textile/footwear industry. The purpose of this valuation is to assess the fair price of Nike common stock and check if the stock currently is over- or under-priced.

3. Nike Common Stock Valuation - May 24, 2010 Executive Summary Nike shares seem to be overpriced relative to comparable companies using all the multiples but the P/E ratio. Fair price should be around $57 if valued using EV/EBITDA, EV/Sales and M/B ratios. Nike shares are almost fairly priced when using the P/E ratio: market price is $72, and the P/E multiple valuation is about $68.

4. Nike Common Stock Valuation - May 24, 2010 Valuation Summary values in these columns are in USD millions

5. Nike Common Stock Valuation - May 24, 2010 Market Data

6. Nike Common Stock Valuation - May 24, 2010 Comparable Companies Adidas (ADS:GR) Skechers (SKX) Deckers (DECK) Puma (PUM:GR) Timberland (TBL) Coach Inc. (COH) VF Corporation (VFC) CROCS Inc. (CROX) Steven Madden (SHOO) Lacrosse Footwear (BOOT) Phoenix Footwear Group (PXG) Note: for some multiples a smaller group of top peer companies (shown in bold) was analyzed to derive an alternative multiple.

7. Nike Common Stock Valuation - May 24, 2010 Trailing Values In millions, except for share price. Values in EUR for Adidas and Puma, and in USD for other companies. The trailing (TTM) values, as well as EV and market capitalization are used as per Yahoo! Finance, http://finance.yahoo.com.http://finance.yahoo.com EV for Adidas and Puma, which aren’t listed on Yahoo! Finance, are as per http://www.infinancials.com/en/financial%20ratio,adidas%20AG,30045ED.html, converted into EUR using 1.2488 USD/EUR rate. http://www.infinancials.com/en/financial%20ratio,adidas%20AG,30045ED.html Market capitalization for Adidas and Puma are calculated using the current market price and the amount of shares outstanding as per the last annual report.

8. Nike Common Stock Valuation - May 24, 2010 Current Values In millions, except for share price. Values in EUR for Adidas and Puma, and in USD for other companies. The current values, i.e. values as per the last annual report, are taken from the Bloomberg Business Week, http://investing.businessweek.com/businessweek/. http://investing.businessweek.com/businessweek/ EBITDA is estimated using the EBITDA to sales ratio.

9. Nike Common Stock Valuation - May 24, 2010 Multiples Valuation

10. Nike Common Stock Valuation - May 24, 2010 Current EV/EBITDA full peer group top peers

11. Nike Common Stock Valuation - May 24, 2010 Trailing EV/EBITDA full peer group top peers

12. Nike Common Stock Valuation - May 24, 2010 Current EV/Revenue full peer group top peers

13. Nike Common Stock Valuation - May 24, 2010 Trailing EV/Revenue full peer group top peers

14. Nike Common Stock Valuation - May 24, 2010 Current P/E full peer group top peers

15. Nike Common Stock Valuation - May 24, 2010 Trailing P/E full peer group top peers

16. Nike Common Stock Valuation - May 24, 2010 Current M/B full peer group top peers

17. Nike Common Stock Valuation - May 24, 2010 EV/EBITDA Regression Analysis

18. Nike Common Stock Valuation - May 24, 2010 Regression Model The model used to calculate EV/EBITDA multiple as a function of key inputs multiplied by regression coefficients rather than a simple statistic. The key determinants of the EV/EBITDA ratio are: –Tax rate (effective tax rate assessed), –Depreciation & amortization to EBITDA (DA/EBITDA ratio), –Capital expenditures to EBITDA (Capex/EBITDA ratio), –Increase in working capital to EBITDA (dWC/EBITDA ratio), –Revenue growth rate (not included: no reliable data). Values from the latest annual reports used as inputs. The regression was run on 9 peer companies, the resulting R 2 is 0.61.

19. Nike Common Stock Valuation - May 24, 2010 EV/EBITDA Regression The EV/EBITDA formula as assessed using the regression is: 6.5695 x (Tax rate) + 7.3581 x (DA/EBITDA) + 14.6181 x (Capex/EBITDA) + + 1.2023 x (dWC/EBITDA) + 3.6142