limited to, our ability to execute our strategies and achieve our goals within the currently projected costs and the expected
timeframes; the availability and cost of raw materials and renewable energy; unforeseen production, design, operational and
technological difficulties; the outcome of research efforts and future technology developments, including the ability to scale
projects and technologies on a commercially competitive basis such as carbon sequestration and/or other related processes;
compliance with, and changes or additions to, global and regional regulations, taxes, charges, mandates or requirements relating
to greenhouse gas emissions, carbon costs or climate-related goals; adapting products to customer preferences and customer
acceptance of sustainable supply chain solutions; and the actions of competitors and competitive pressures. As a result, there is
no assurance that we will be able to successfully execute our strategies and achieve our sustainability-related goals, which could
damage our reputation and customer and other stakeholder relationships and have an adverse effect on our business, results of
operations and financial condition.
Extreme weather conditions and natural disasters could negatively impact our operating results and financial condition.
Given the broad and global scope of our operations, we are particularly vulnerable to the physical risks of climate change, such
as shifts in weather patterns. Extreme weather conditions in the areas in which our retail stores, suppliers, manufacturers,
customers, distribution centers, offices, headquarters and vendors are located could adversely affect our operating results and
financial condition. Moreover, natural disasters such as earthquakes, hurricanes, wildfires, tsunamis, floods or droughts, whether
occurring in the United States or abroad, and their related consequences and effects, including energy shortages and public
health issues, have in the past temporarily disrupted, and could in the future disrupt, our operations, the operations of our
vendors, manufacturers and other suppliers or have in the past resulted in, and in the future could result in, economic instability
that may negatively impact our operating results and financial condition. In particular, if a natural disaster or severe weather event
were to occur in an area in which we or our suppliers, manufacturers, employees, customers, distribution centers or vendors are
located, our continued success would depend, in part, on the safety and availability of the relevant personnel and facilities and
proper functioning of our or third parties' computer, network, telecommunication and other systems and operations. In addition, a
natural disaster or severe weather event could negatively impact retail traffic to our stores or stores that carry our products and
could have an adverse impact on consumer spending, any of which could in turn result in negative point-of-sale trends for our
merchandise. Further, climate change may increase both the frequency and severity of extreme weather conditions and natural
disasters, which may affect our business operations, either in a particular region or globally, as well as the activities of our third-
party vendors and other suppliers, manufacturers and customers. We believe the diversity of locations in which we operate, our
operational size, disaster recovery and business continuity planning and our information technology systems and networks,
including the Internet and third-party services ("Information Technology Systems"), position us well, but may not be sufficient for
all or for concurrent eventualities. If we were to experience a local or regional disaster or other business continuity event or
concurrent events, we could experience operational challenges, in particular depending upon how a local or regional event may
affect our human capital across our operations or with regard to particular aspects of our operations, such as key executive
officers or personnel. For example, our world headquarters is located in an active seismic zone, which is at a higher risk for
earthquakes and the related consequences or effects. Further, if we are unable to find alternative suppliers, replace capacity at
key manufacturing or distribution locations or quickly repair damage to our Information Technology Systems or supply systems,
we could be late in delivering, or be unable to deliver, products to our customers. These events could result in reputational
damage, lost sales, cancellation charges or markdowns, all of which could have an adverse effect on our business, results of
operations and financial condition.
Our financial condition and results of operations have been, and could in the future be, adversely affected by a
pandemic, epidemic or other public health emergency.
Pandemics, including the COVID-19 pandemic, and other public health emergencies, and preventative measures taken to
contain or mitigate such crises have caused, and may in the future cause, business slowdown or shutdown in affected areas and
significant disruption in the financial markets, both globally and in the United States. These events have led to and could again
lead to adverse impacts to our global supply chain, factory cancellation costs, store closures, and a decline in retail traffic and
discretionary spending by consumers and, in turn, materially impact our business, sales, financial condition and results of
operations as well as cause a volatile effective tax rate driven by changes in the mix of earnings across our jurisdictions. We
cannot predict whether, and to what degree, our sales, operations and financial results could in the future be affected by the
pandemic and preventative measures. Risks presented by pandemics and other public health emergencies include, but are not
limited to:
• Deterioration in economic conditions in the United States and globally, including the effect of prolonged periods of inflation
on our consumers and vendors;
• Disruption to our distribution centers, contract manufacturers, finished goods factories and other vendors, through the effects
of facility closures, increased operating costs, reductions in operating hours, labor shortages, and real time changes in
operating procedures, such as additional cleaning and disinfection procedures, which have had, and could in the future
again have, a significant impact on our planned inventory production and distribution, including higher inventory levels or
inventory shortages in various markets;
NIKE, INC. 12