(income), net. To minimize credit risk, we have structured these net investment hedges to be generally less than six months in duration. Upon maturity, the hedges are settled based on the current fair value of the forward contracts with the realized gain or loss remaining in OCI; concurrent with settlement, we enter into new forward contracts at the current market rate. The fair value of outstanding net investment hedges at May 31, 2011 was $23 million in liabilities. At May 31, 2010, the fair value was $32 million in assets. Cash flows from net investment hedge settlements totaled ($23) million and $5 million in the years ended May 31, 2011 and 2010, respectively. 

Liquidity and Capital Resources 

Cash Flow Activity 

Cash provided by operations was $1.8 billion for fiscal 2011 compared to $3.2 billion for fiscal 2010. Our primary source of operating cash flow for fiscal 2011 was net income of $2.1 billion. Our working capital was a net cash outflow of $708 million for fiscal 2011 as compared to a positive net cash inflow of $694 million for fiscal 2010. Our investments in working capital increased primarily due to an increase in inventory and higher accounts receivable. Inventory at the end of fiscal 2011 increased 33% compared to fiscal 2010, primarily driven by a 15% increase in futures orders, growth in replenishment programs for high-turnover styles, early purchases of key seasonal items with longer production lead times as well as the growth of Direct to Consumer operations. Changes in currency exchange rates and higher product costs also contributed to the increase in dollar inventory. The increase in accounts receivable was mainly attributable to the increase in revenues during fiscal 2011. 

Cash used by investing activities was $1.0 billion during fiscal 2011, compared to $1.3 billion for fiscal 2010. The year-over-year decrease was primarily due to lower net purchases of short-term investments. Net purchases of short- term investments were $537 million (net of sales and maturities) in fiscal 2011 compared to $937 million during fiscal 2010. 

Cash used by financing activities was $2.0 billion for fiscal 2011 compared to $1.1 billion used in fiscal 2010. The increase in cash used by financing activities was primarily due to an increase in share repurchases and dividends paid, partially offset by an increase in notes payable. 

In fiscal 2011, we purchased 23.8 million shares of NIKE’s class B common stock for $1.9 billion. These repurchases were made under the four-year, $5 billion program approved by our Board of Directors which commenced in December 2009 and as of the end of fiscal 2011, we have repurchased 30.4 million shares for $2.3 billion under this program. We continue to expect funding of share repurchases will come from operating cash flow, excess cash, and/or debt. The timing and the amount of shares purchased will be dictated by our capital needs and stock market conditions. 

Off-Balance Sheet Arrangements 

In connection with various contracts and agreements, we provide routine indemnifications relating to the enforceability of intellectual property rights, coverage for legal issues that arise and other items where