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PAGE
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|
|
U.S. RETAIL STORES
|
NUMBER
|
|
NIKE Brand factory stores
|
217
|
|
NIKE Brand in-line stores (including employee-only stores)
|
29
|
|
Converse stores (including factory stores)
|
109
|
|
Hurley stores (including factory and employee-only stores)
|
29
|
|
TOTAL
|
384
|
|
•
|
Product attributes such as quality; performance and reliability; new product innovation and development and consumer price/value.
|
•
|
Consumer connection and affinity for brands and products, developed through marketing and promotion; social media interaction; customer support and service; identification with prominent and influential athletes, public figures, coaches, teams, colleges and sports leagues who endorse our brands and use our products and active engagement through sponsored sporting events and clinics.
|
•
|
Effective sourcing and distribution of products, with attractive merchandising and presentation at retail, both in-store and digital platforms.
|
|
|
|
Mark G. Parker
, Chairman, President and Chief Executive Officer — Mr. Parker, 63, was appointed President and Chief Executive Officer in January 2006 and named Chairman of the Board in 2016. He has been employed by NIKE since 1979 with primary responsibilities in product research, design and development, marketing and brand management. Mr. Parker was appointed divisional Vice President in charge of product development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998 and President of the NIKE Brand in 2001.
|
|
|
|
|
|
|
|
Andrew Campion
, Executive Vice President and Chief Financial Officer — Mr. Campion, 47, joined NIKE in 2007 as Vice President of Global Planning and Development, leading strategic and financial planning. He was appointed Chief Financial Officer of the NIKE Brand in 2010, responsible for leading all aspects of financial management for the Company's flagship brand. In 2014, he was appointed Senior Vice President, Strategy, Finance and Investor Relations in addition to his role as Chief Financial Officer of NIKE Brand. Mr. Campion assumed the role of Executive Vice President and Chief Financial Officer in August 2015. Prior to joining NIKE, he held leadership roles in strategic planning, mergers and acquisitions, financial planning and analysis, operations and planning, investor relations and tax at The Walt Disney Company from 1996 to 2007.
|
|
|
|
|
|
|
|
Elliott Hill
, President, Consumer and Marketplace — Mr. Hill, 55, joined NIKE in 1988, with primary responsibilities in sales and retail. He has served as Apparel Sales Director in Europe, Retail Development Director in Europe, Vice President of Sales and Retail in EMEA, General Manager of US Retail, Vice President of US Sales, Retail and NIKE.com, and Vice President of Global Retail. Most recently, Mr. Hill served as President of Geographies and Sales and Vice President and General Manager of North America. Mr. Hill was appointed President, Consumer and Marketplace in 2018.
|
|
|
|
|
|
|
|
Hilary K. Krane
, Executive Vice President, Chief Administrative Officer and General Counsel — Ms. Krane, 55, joined NIKE as Vice President and General Counsel in 2010. In 2011, her responsibilities expanded, and she became Vice President, General Counsel and Corporate Affairs. Ms. Krane was appointed Executive Vice President, Chief Administrative Officer and General Counsel in 2013. Prior to joining NIKE, Ms. Krane was General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. from 2006 to 2010. From 1996 to 2006, she was a Partner and Assistant General Counsel at PricewaterhouseCoopers LLP.
|
|
|
|
|
|
|
|
Monique S. Matheson
, Executive Vice President, Global Human Resources — Ms. Matheson, 52, joined NIKE in 1998, with primary responsibilities in the human resources function. She was appointed as Vice President and Senior Business Partner in 2011 and Vice President, Chief Talent and Diversity Officer in 2012. Ms. Matheson was appointed Executive Vice President, Global Human Resources in 2017.
|
|
|
|
|
|
|
|
John F. Slusher
, Executive Vice President, Global Sports Marketing — Mr. Slusher, 50, joined NIKE in 1998, with primary responsibilities in global sports marketing. Mr. Slusher was appointed Director of Sports Marketing for Asia Pacific and Americas in 2006, divisional Vice President of Asia Pacific & Americas Sports Marketing in September 2007 and Vice President, Global Sports Marketing in November 2007. Prior to joining NIKE, Mr. Slusher was an attorney at the law firm of O'Melveny & Myers from 1995 to 1998.
|
|
|
|
|
|
|
|
Eric D. Sprunk
, Chief Operating Officer — Mr. Sprunk, 55, joined NIKE in 1993. He was appointed Finance Director and General Manager of the Americas in 1994, Finance Director for NIKE Europe in 1995, Regional General Manager of NIKE Europe Footwear in 1998 and Vice President & General Manager of the Americas in 2000. Mr. Sprunk was appointed Vice President of Global Footwear in 2001, Vice President of Merchandising and Product in 2009 and Chief Operating Officer in 2013. Prior to joining NIKE, Mr. Sprunk was a certified public accountant with Price Waterhouse from 1987 to 1993.
|
•
|
Slower consumer spending may result in reduced demand for our products, reduced orders from retailers for our products, order cancellations, lower revenues, higher discounts, increased inventories and lower gross margins.
|
•
|
In the future, we may be unable to access financing in the credit and capital markets at reasonable rates in the event we find it desirable to do so.
|
•
|
We conduct transactions in various currencies, which increases our exposure to fluctuations in foreign currency exchange rates relative to the U.S. Dollar. Continued volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies, including in response to certain policies advocated or implemented by the U.S. presidential administration, could have a significant impact on our reported operating results and financial condition.
|
•
|
Continued volatility in the availability and prices for commodities and raw materials we use in our products and in our supply chain (such as cotton or petroleum derivatives) could have a material adverse effect on our costs, gross margins and profitability.
|
•
|
If retailers of our products experience declining revenues or experience difficulty obtaining financing in the capital and credit markets to purchase our products, this could result in reduced orders for our products, order cancellations, late retailer payments, extended payment terms, higher accounts receivable, reduced cash flows, greater expense associated with collection efforts and increased bad debt expense.
|
•
|
If retailers of our products experience severe financial difficulty, some may become insolvent and cease business operations, which could negatively impact the sale of our products to consumers.
|
•
|
If contract manufacturers of our products or other participants in our supply chain experience difficulty obtaining financing in the capital and credit markets to purchase raw materials or to finance capital equipment and other general working capital needs, it may result in delays or non-delivery of shipments of our products.
|
PERIOD
|
TOTAL NUMBER OF SHARES PURCHASED
|
|
AVERAGE PRICE
PAID PER SHARE |
|
APPROXIMATE DOLLAR
VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLANS OR PROGRAMS (IN MILLIONS) |
|
||
March 1 — March 31, 2019
|
2,939,869
|
|
$
|
85.33
|
|
$
|
14,660
|
|
April 1 — April 30, 2019
|
3,303,884
|
|
$
|
86.53
|
|
$
|
14,374
|
|
May 1 — May 31, 2019
|
4,346,128
|
|
$
|
82.85
|
|
$
|
14,014
|
|
|
10,589,881
|
|
$
|
84.69
|
|
|
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG NIKE, INC.; S&P 500 INDEX; THE DOW JONES U.S. FOOTWEAR INDEX; AND S&P APPAREL, ACCESSORIES & LUXURY GOODS INDEX
|
|
(In millions, except per share data and financial ratios)
|
FINANCIAL HISTORY
|
||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
|||||||||||
Year Ended May 31,
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
39,117
|
|
$
|
36,397
|
|
$
|
34,350
|
|
$
|
32,376
|
|
$
|
30,601
|
|
Gross profit
|
17,474
|
|
15,956
|
|
15,312
|
|
14,971
|
|
14,067
|
|
|||||
Gross margin
|
44.7
|
%
|
43.8
|
%
|
44.6
|
%
|
46.2
|
%
|
46.0
|
%
|
|||||
Net income
(1)
|
4,029
|
|
1,933
|
|
4,240
|
|
3,760
|
|
3,273
|
|
|||||
Earnings per common share:
(1)
|
|
|
|
|
|
||||||||||
Basic
|
2.55
|
|
1.19
|
|
2.56
|
|
2.21
|
|
1.90
|
|
|||||
Diluted
|
2.49
|
|
1.17
|
|
2.51
|
|
2.16
|
|
1.85
|
|
|||||
Weighted average common shares outstanding
|
1,579.7
|
|
1,623.8
|
|
1,657.8
|
|
1,697.9
|
|
1,723.5
|
|
|||||
Diluted weighted average common shares outstanding
|
1,618.4
|
|
1,659.1
|
|
1,692.0
|
|
1,742.5
|
|
1,768.8
|
|
|||||
Cash dividends declared per common share
|
0.86
|
|
0.78
|
|
0.70
|
|
0.62
|
|
0.54
|
|
|||||
Cash provided by operations
|
5,903
|
|
4,955
|
|
3,846
|
|
3,399
|
|
4,906
|
|
|||||
At May 31,
|
|
|
|
|
|
||||||||||
Cash and equivalents
|
$
|
4,466
|
|
$
|
4,249
|
|
$
|
3,808
|
|
$
|
3,138
|
|
$
|
3,852
|
|
Short-term investments
|
197
|
|
996
|
|
2,371
|
|
2,319
|
|
2,072
|
|
|||||
Inventories
|
5,622
|
|
5,261
|
|
5,055
|
|
4,838
|
|
4,337
|
|
|||||
Working capital
|
8,659
|
|
9,094
|
|
10,587
|
|
9,667
|
|
9,255
|
|
|||||
Total assets
(2)(3)
|
23,717
|
|
22,536
|
|
23,259
|
|
21,379
|
|
21,590
|
|
|||||
Long-term debt
|
3,464
|
|
3,468
|
|
3,471
|
|
1,993
|
|
1,072
|
|
|||||
Capital lease obligations
|
60
|
|
75
|
|
27
|
|
15
|
|
5
|
|
|||||
Redeemable preferred stock
|
0.3
|
|
0.3
|
|
0.3
|
|
0.3
|
|
0.3
|
|
|||||
Shareholders' equity
(3)
|
9,040
|
|
9,812
|
|
12,407
|
|
12,258
|
|
12,707
|
|
|||||
Market capitalization
|
120,951
|
|
114,983
|
|
87,084
|
|
92,867
|
|
87,044
|
|
|||||
Financial Ratios:
|
|
|
|
|
|
||||||||||
Return on equity
(1)(3)
|
42.7
|
%
|
17.4
|
%
|
34.4
|
%
|
30.1
|
%
|
27.8
|
%
|
|||||
Return on assets
(1)(2)(3)
|
17.4
|
%
|
8.4
|
%
|
19.0
|
%
|
17.5
|
%
|
16.3
|
%
|
|||||
Inventory turns
|
4.0
|
|
4.0
|
|
3.8
|
|
3.8
|
|
4.0
|
|
|||||
Current ratio at May 31
|
2.1
|
|
2.5
|
|
2.9
|
|
2.8
|
|
2.5
|
|
|||||
Price/Earnings ratio at May 31
(1)
|
31.0
|
|
61.4
|
|
21.1
|
|
25.6
|
|
27.5
|
|
(1)
|
Fiscal 2018 reflects the impact from the enactment of the Tax Cuts and Jobs Act. Refer to
Note 9 — Income Taxes
in the accompanying Notes to the Consolidated Financial Statements for additional information.
|
(2)
|
Fiscal 2019 reflects the impact from the a
doption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). Refer to
Note 1 — Summary of Significant Accounting Policies
in the accompanying Notes to the Consolidated Financial Statements f
or additional information.
|
(3)
|
Fiscal 2019 reflects the impact from the adoption of
ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Refer to
Note 1 — Summary of Significant Accounting Policies
in the accompanying Notes to the Consolidated Financial Statements
for additional information.
|
(UNAUDITED)
|
1ST QUARTER
|
|
2ND QUARTER
|
|
3RD QUARTER
|
|
4TH QUARTER
|
||||||||||||||||||||
(In millions, except per share data)
|
2019
|
2018
|
|
2019
|
2018
|
|
2019
|
2018
(1)
|
|
2019
|
2018
|
||||||||||||||||
Revenues
|
$
|
9,948
|
|
$
|
9,070
|
|
|
$
|
9,374
|
|
$
|
8,554
|
|
|
$
|
9,611
|
|
$
|
8,984
|
|
|
$
|
10,184
|
|
$
|
9,789
|
|
Gross profit
|
4,397
|
|
3,962
|
|
|
4,105
|
|
3,678
|
|
|
4,339
|
|
3,938
|
|
|
4,633
|
|
4,378
|
|
||||||||
Gross margin
|
44.2
|
%
|
43.7
|
%
|
|
43.8
|
%
|
43.0
|
%
|
|
45.1 %
|
|
43.8 %
|
|
|
45.5
|
%
|
44.7
|
%
|
||||||||
Net income (loss)
|
1,092
|
|
950
|
|
|
847
|
|
767
|
|
|
1,101
|
|
(921
|
)
|
|
989
|
|
1,137
|
|
||||||||
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
0.69
|
|
0.58
|
|
|
0.54
|
|
0.47
|
|
|
0.70
|
|
(0.57
|
)
|
|
0.63
|
|
0.71
|
|
||||||||
Diluted
|
0.67
|
|
0.57
|
|
|
0.52
|
|
0.46
|
|
|
0.68
|
|
(0.57
|
)
|
|
0.62
|
|
0.69
|
|
||||||||
Weighted average common
shares outstanding |
1,594.0
|
|
1,639.1
|
|
|
1,581.4
|
|
1,627.0
|
|
|
1,572.8
|
|
1,623.5
|
|
|
1,570.2
|
|
1,605.7
|
|
||||||||
Diluted weighted average common
shares outstanding |
1,634.4
|
|
1,676.9
|
|
|
1,620.7
|
|
1,660.9
|
|
|
1,609.6
|
|
1,623.5
|
|
|
1,607.5
|
|
1,641.2
|
|
||||||||
Cash dividends declared per
common share |
0.20
|
|
0.18
|
|
|
0.22
|
|
0.20
|
|
|
0.22
|
|
0.20
|
|
|
0.22
|
|
0.20
|
|
(1)
|
The third quarter of fiscal 2018 reflects the impact from the enactment of the Tax Cuts and Jobs Act. Refer to
Note 9 — Income Taxes
in the accompanying Notes to the Consolidated Financial Statements for additional information.
|
•
|
High single-digit revenue growth;
|
•
|
Gross margin expansion of as much as 50 basis points;
|
•
|
Slight selling and administrative expense leverage;
|
•
|
Mid-teens earnings per share growth; and
|
•
|
Low-thirties percentage rate of return on invested capital.
|
(1)
|
Fiscal 2018 reflects the impact from the enactment of the Tax Cuts and Jobs Act. Refer to
Note 9 — Income Taxes
in the accompanying Notes to the Consolidated Financial Statements for additional information.
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL
2018 (1) |
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
(2)
|
|
FISCAL 2017
(1)
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
(2)
|
|
||||||
NIKE, Inc. Revenues:
|
|
|
|
|
|
|
|
||||||||||
NIKE Brand Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
24,222
|
|
$
|
22,268
|
|
9
|
%
|
12
|
%
|
$
|
21,081
|
|
6
|
%
|
4
|
%
|
Apparel
|
11,550
|
|
10,733
|
|
8
|
%
|
11
|
%
|
9,654
|
|
11
|
%
|
9
|
%
|
|||
Equipment
|
1,404
|
|
1,396
|
|
1
|
%
|
4
|
%
|
1,425
|
|
-2
|
%
|
-4
|
%
|
|||
Global Brand Divisions
(3)
|
42
|
|
88
|
|
-52
|
%
|
-53
|
%
|
73
|
|
21
|
%
|
12
|
%
|
|||
Total NIKE Brand Revenues
|
37,218
|
|
34,485
|
|
8
|
%
|
11
|
%
|
32,233
|
|
7
|
%
|
5
|
%
|
|||
Converse
|
1,906
|
|
1,886
|
|
1
|
%
|
3
|
%
|
2,042
|
|
-8
|
%
|
-11
|
%
|
|||
Corporate
(4)
|
(7
|
)
|
26
|
|
—
|
|
—
|
|
75
|
|
—
|
|
—
|
|
|||
TOTAL NIKE, INC. REVENUES
|
$
|
39,117
|
|
$
|
36,397
|
|
7
|
%
|
11
|
%
|
$
|
34,350
|
|
6
|
%
|
4
|
%
|
Supplemental NIKE Brand Revenues Details:
|
|
|
|
|
|
|
|
||||||||||
NIKE Brand Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
25,423
|
|
$
|
23,969
|
|
6
|
%
|
10
|
%
|
$
|
23,078
|
|
4
|
%
|
2
|
%
|
Sales through NIKE Direct
|
11,753
|
|
10,428
|
|
13
|
%
|
16
|
%
|
9,082
|
|
15
|
%
|
12
|
%
|
|||
Global Brand Divisions
(3)
|
42
|
|
88
|
|
-52
|
%
|
-53
|
%
|
73
|
|
21
|
%
|
12
|
%
|
|||
TOTAL NIKE BRAND REVENUES
|
$
|
37,218
|
|
$
|
34,485
|
|
8
|
%
|
11
|
%
|
$
|
32,233
|
|
7
|
%
|
5
|
%
|
NIKE Brand Revenues on a Wholesale Equivalent Basis:
(2)
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
25,423
|
|
$
|
23,969
|
|
6
|
%
|
10
|
%
|
$
|
23,078
|
|
4
|
%
|
2
|
%
|
Sales from our Wholesale Operations to NIKE Direct Operations
|
7,127
|
|
6,332
|
|
13
|
%
|
16
|
%
|
5,616
|
|
13
|
%
|
10
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
32,550
|
|
$
|
30,301
|
|
7
|
%
|
11
|
%
|
$
|
28,694
|
|
6
|
%
|
4
|
%
|
NIKE Brand Wholesale Equivalent Revenues by:
(2)
|
|
|
|
|
|
|
|
||||||||||
Men's
|
$
|
17,737
|
|
$
|
16,698
|
|
6
|
%
|
10
|
%
|
$
|
15,819
|
|
6
|
%
|
4
|
%
|
Women's
|
7,380
|
|
6,913
|
|
7
|
%
|
11
|
%
|
6,637
|
|
4
|
%
|
2
|
%
|
|||
NIKE Kids'
|
5,283
|
|
4,906
|
|
8
|
%
|
11
|
%
|
4,838
|
|
1
|
%
|
-1
|
%
|
|||
Others
(5)
|
2,150
|
|
1,784
|
|
21
|
%
|
25
|
%
|
1,400
|
|
27
|
%
|
14
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
32,550
|
|
$
|
30,301
|
|
7
|
%
|
11
|
%
|
$
|
28,694
|
|
6
|
%
|
4
|
%
|
NIKE Brand Wholesale Equivalent Revenues by:
(2)
|
|
|
|
|
|
|
|
||||||||||
Running
|
$
|
4,488
|
|
$
|
4,496
|
|
0
|
%
|
4
|
%
|
$
|
4,576
|
|
-2
|
%
|
-4
|
%
|
NIKE Basketball
|
1,597
|
|
1,494
|
|
7
|
%
|
9
|
%
|
1,292
|
|
16
|
%
|
14
|
%
|
|||
Jordan Brand
|
3,138
|
|
2,856
|
|
10
|
%
|
12
|
%
|
3,098
|
|
-8
|
%
|
-9
|
%
|
|||
Football (Soccer)
|
1,894
|
|
2,146
|
|
-12
|
%
|
-6
|
%
|
1,984
|
|
8
|
%
|
5
|
%
|
|||
Training
|
3,137
|
|
3,126
|
|
0
|
%
|
3
|
%
|
3,080
|
|
1
|
%
|
0
|
%
|
|||
Sportswear
|
12,442
|
|
10,720
|
|
16
|
%
|
21
|
%
|
9,272
|
|
16
|
%
|
13
|
%
|
|||
Others
(6)
|
5,854
|
|
5,463
|
|
7
|
%
|
9
|
%
|
5,392
|
|
1
|
%
|
0
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
32,550
|
|
$
|
30,301
|
|
7
|
%
|
11
|
%
|
$
|
28,694
|
|
6
|
%
|
4
|
%
|
(1)
|
Certain prior year amounts have been reclassified to conform to fiscal 2019 presentation. These changes had no impact on previously reported consolidated results of operations or shareholders' equity.
|
(2)
|
The percent change excluding currency changes and the presentation of wholesale equivalent revenues represent non-GAAP financial measures. See "Use of Non-GAAP Financial Measures" for further information.
|
(3)
|
Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.
|
(4)
|
Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
|
(5)
|
Others include all unisex products, equipment and other products not allocated to Men's, Women's and NIKE Kids', as well as certain adjustments that are not allocated to products designated by gender or age.
|
(6)
|
Others include all other categories and certain adjustments that are not allocated at the category level.
|
|
|
|
|
*Wholesale equivalent
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
FISCAL 2017
|
% CHANGE
|
|
||||||
Demand creation expense
(1)
|
$
|
3,753
|
|
$
|
3,577
|
|
5
|
%
|
$
|
3,341
|
|
7
|
%
|
Operating overhead expense
|
8,949
|
|
7,934
|
|
13
|
%
|
7,222
|
|
10
|
%
|
|||
Total selling and administrative expense
|
$
|
12,702
|
|
$
|
11,511
|
|
10
|
%
|
$
|
10,563
|
|
9
|
%
|
% of revenues
|
32.5
|
%
|
31.6
|
%
|
90
|
bps
|
30.8
|
%
|
80
|
bps
|
(1)
|
Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary product, television, digital and print advertising and media costs, brand events and retail brand presentation.
|
(Dollars In millions)
|
|
FISCAL 2019
|
|
FISCAL 2018
|
|
FISCAL 2017
|
||||||
Other (income) expense, net
|
|
$
|
(78
|
)
|
|
$
|
66
|
|
|
$
|
(196
|
)
|
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
FISCAL 2017
|
% CHANGE
|
|
|||
Effective tax rate
|
16.1
|
%
|
55.3
|
%
|
(3,920) bps
|
13.2
|
%
|
4,210
|
bps
|
(1)
|
The percent change excluding currency changes represents a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" for further information.
|
(2)
|
Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.
|
(3)
|
Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through our central foreign exchange risk management program.
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
10,045
|
|
$
|
9,322
|
|
8
|
%
|
8
|
%
|
$
|
9,684
|
|
-4
|
%
|
-4
|
%
|
Apparel
|
5,260
|
|
4,938
|
|
7
|
%
|
7
|
%
|
4,886
|
|
1
|
%
|
1
|
%
|
|||
Equipment
|
597
|
|
595
|
|
0
|
%
|
0
|
%
|
646
|
|
-8
|
%
|
-8
|
%
|
|||
TOTAL REVENUES
|
$
|
15,902
|
|
$
|
14,855
|
|
7
|
%
|
7
|
%
|
$
|
15,216
|
|
-2
|
%
|
-2
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
10,875
|
|
$
|
10,159
|
|
7
|
%
|
7
|
%
|
$
|
10,756
|
|
-6
|
%
|
-6
|
%
|
Sales through NIKE Direct
|
5,027
|
|
4,696
|
|
7
|
%
|
7
|
%
|
4,460
|
|
5
|
%
|
5
|
%
|
|||
TOTAL REVENUES
|
$
|
15,902
|
|
$
|
14,855
|
|
7
|
%
|
7
|
%
|
$
|
15,216
|
|
-2
|
%
|
-2
|
%
|
EARNINGS BEFORE INTEREST
AND TAXES
|
$
|
3,925
|
|
$
|
3,600
|
|
9
|
%
|
|
$
|
3,875
|
|
-7
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
6,293
|
|
$
|
5,875
|
|
7
|
%
|
12
|
%
|
$
|
5,192
|
|
13
|
%
|
6
|
%
|
Apparel
|
3,087
|
|
2,940
|
|
5
|
%
|
9
|
%
|
2,395
|
|
23
|
%
|
16
|
%
|
|||
Equipment
|
432
|
|
427
|
|
1
|
%
|
5
|
%
|
383
|
|
11
|
%
|
6
|
%
|
|||
TOTAL REVENUES
|
$
|
9,812
|
|
$
|
9,242
|
|
6
|
%
|
11
|
%
|
$
|
7,970
|
|
16
|
%
|
9
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
7,076
|
|
$
|
6,765
|
|
5
|
%
|
9
|
%
|
$
|
5,917
|
|
14
|
%
|
8
|
%
|
Sales through NIKE Direct
|
2,736
|
|
2,477
|
|
10
|
%
|
15
|
%
|
2,053
|
|
21
|
%
|
13
|
%
|
|||
TOTAL REVENUES
|
$
|
9,812
|
|
$
|
9,242
|
|
6
|
%
|
11
|
%
|
$
|
7,970
|
|
16
|
%
|
9
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
$
|
1,995
|
|
$
|
1,587
|
|
26
|
%
|
|
$
|
1,507
|
|
5
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
4,262
|
|
$
|
3,496
|
|
22
|
%
|
25
|
%
|
$
|
2,920
|
|
20
|
%
|
16
|
%
|
Apparel
|
1,808
|
|
1,508
|
|
20
|
%
|
23
|
%
|
1,188
|
|
27
|
%
|
23
|
%
|
|||
Equipment
|
138
|
|
130
|
|
6
|
%
|
8
|
%
|
129
|
|
1
|
%
|
-1
|
%
|
|||
TOTAL REVENUES
|
$
|
6,208
|
|
$
|
5,134
|
|
21
|
%
|
24
|
%
|
$
|
4,237
|
|
21
|
%
|
18
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
3,726
|
|
$
|
3,216
|
|
16
|
%
|
19
|
%
|
$
|
2,774
|
|
16
|
%
|
13
|
%
|
Sales through NIKE Direct
|
2,482
|
|
1,918
|
|
29
|
%
|
33
|
%
|
1,463
|
|
31
|
%
|
27
|
%
|
|||
TOTAL REVENUES
|
$
|
6,208
|
|
$
|
5,134
|
|
21
|
%
|
24
|
%
|
$
|
4,237
|
|
21
|
%
|
18
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
$
|
2,376
|
|
$
|
1,807
|
|
31
|
%
|
|
$
|
1,507
|
|
20
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
3,622
|
|
$
|
3,575
|
|
1
|
%
|
12
|
%
|
$
|
3,285
|
|
9
|
%
|
9
|
%
|
Apparel
|
1,395
|
|
1,347
|
|
4
|
%
|
15
|
%
|
1,185
|
|
14
|
%
|
15
|
%
|
|||
Equipment
|
237
|
|
244
|
|
-3
|
%
|
8
|
%
|
267
|
|
-9
|
%
|
-8
|
%
|
|||
TOTAL REVENUES
|
$
|
5,254
|
|
$
|
5,166
|
|
2
|
%
|
13
|
%
|
$
|
4,737
|
|
9
|
%
|
10
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
3,746
|
|
$
|
3,829
|
|
-2
|
%
|
9
|
%
|
$
|
3,631
|
|
5
|
%
|
6
|
%
|
Sales through NIKE Direct
|
1,508
|
|
1,337
|
|
13
|
%
|
23
|
%
|
1,106
|
|
21
|
%
|
21
|
%
|
|||
TOTAL REVENUES
|
$
|
5,254
|
|
$
|
5,166
|
|
2
|
%
|
13
|
%
|
$
|
4,737
|
|
9
|
%
|
10
|
%
|
EARNINGS BEFORE INTEREST
AND TAXES
|
$
|
1,323
|
|
$
|
1,189
|
|
11
|
%
|
|
$
|
980
|
|
21
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues
|
$
|
42
|
|
$
|
88
|
|
-52
|
%
|
-53
|
%
|
$
|
73
|
|
21
|
%
|
12
|
%
|
Earnings (Loss) Before Interest and Taxes
|
$
|
(3,262
|
)
|
$
|
(2,658
|
)
|
-23
|
%
|
|
$
|
(2,677
|
)
|
1
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
FISCAL 2018
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
FISCAL 2017
|
% CHANGE
|
|
% CHANGE EXCLUDING CURRENCY CHANGES
|
|
||||||
Revenues
|
$
|
1,906
|
|
$
|
1,886
|
|
1
|
%
|
3
|
%
|
$
|
2,042
|
|
-8
|
%
|
-11
|
%
|
Earnings Before Interest and Taxes
|
$
|
303
|
|
$
|
310
|
|
-2
|
%
|
|
$
|
477
|
|
-35
|
%
|
|
(Dollars in millions)
|
FISCAL 2019
|
|
FISCAL 2018
|
|
% CHANGE
|
|
FISCAL 2017
|
|
% CHANGE
|
|
|||
Revenues
|
$
|
(7
|
)
|
$
|
26
|
|
—
|
|
$
|
75
|
|
—
|
|
Earnings (Loss) Before Interest and Taxes
|
$
|
(1,810
|
)
|
$
|
(1,456
|
)
|
-24
|
%
|
$
|
(724
|
)
|
-101
|
%
|
•
|
an unfavorable change of $276 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross margin;
|
•
|
an unfavorable change of $210 million, primarily due to higher operating overhead expense driven by higher wage-related and administrative costs; and
|
•
|
a favorable change in net foreign currency gains and losses of $132 million related to the re-measurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated
Other (income) expense, net
.
|
•
|
Product Costs — NIKE's product costs are exposed to fluctuations in foreign currencies in the following ways:
|
1.
|
Product purchases denominated in currencies other than the functional currency of the transacting entity:
|
a.
|
Certain NIKE entities purchase product from the NTC, a wholly-owned sourcing hub that buys NIKE branded products from third-party factories, predominantly in U.S. Dollars. The NTC, whose functional currency is the U.S. Dollar, then sells the products to NIKE entities in their respective functional currencies. NTC sales to a NIKE entity with a different functional currency results in a foreign currency exposure for the NTC.
|
b.
|
Other NIKE entities purchase product directly from third-party factories in U.S. Dollars. These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S. Dollar.
|
2.
|
Factory input costs: NIKE operates a foreign currency adjustment program with certain factories. The program is designed to more effectively manage foreign currency risk by assuming certain of the factories' foreign currency exposures, some of which are natural offsets to our existing foreign currency exposures. Under this program, our payments to these factories are adjusted for rate fluctuations in the basket of currencies (“factory currency exposure index”) in which the labor, materials and overhead costs incurred by the factories in the production of NIKE branded products (“factory input costs”) are denominated.
|
•
|
Non-Functional Currency Denominated External Sales — A portion of our NIKE Brand and Converse revenues associated with European operations are earned in currencies other than the Euro (e.g., the British Pound) but are recognized at a subsidiary that uses the Euro as its functional currency. These sales generate a foreign currency exposure.
|
•
|
Other Costs — Non-functional currency denominated costs, such as endorsement contracts, also generate foreign currency risk, though to a lesser extent. In certain cases, the Company has entered into contractual agreements which have payments indexed to foreign currencies that create embedded derivative contracts recorded at fair value through
Other (income) expense, net
. Refer to
Note 14 — Risk Management and Derivatives
in the accompanying Notes to the Consolidated Financial Statements for additional detail.
|
•
|
Non-Functional Currency Denominated Monetary Assets and Liabilities — Our global subsidiaries have various assets and liabilities, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies. These balance sheet items are subject to re-measurement which may create fluctuations in
Other (income) expense, net
within our consolidated results of operations.
|
DESCRIPTION OF COMMITMENT
|
CASH PAYMENTS DUE DURING THE YEAR ENDING MAY 31,
|
||||||||||||||||||||
(Dollars in millions)
|
2020
|
2021
|
2022
|
2023
|
2024
|
THEREAFTER
|
TOTAL
|
||||||||||||||
Operating Leases
|
$
|
553
|
|
$
|
513
|
|
$
|
441
|
|
$
|
386
|
|
$
|
345
|
|
$
|
1,494
|
|
$
|
3,732
|
|
Capital Leases and Other Financing Obligations
(1)
|
32
|
|
34
|
|
40
|
|
37
|
|
34
|
|
197
|
|
374
|
|
|||||||
Long-Term Debt
(2)
|
115
|
|
112
|
|
109
|
|
609
|
|
98
|
|
4,617
|
|
5,660
|
|
|||||||
Endorsement Contracts
(3)
|
1,382
|
|
1,274
|
|
1,360
|
|
1,077
|
|
968
|
|
4,148
|
|
10,209
|
|
|||||||
Product Purchase Obligations
(4)
|
5,203
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,203
|
|
|||||||
Other Purchase Obligations
(5)
|
1,331
|
|
411
|
|
225
|
|
166
|
|
135
|
|
492
|
|
2,760
|
|
|||||||
Transition Tax Related to the Tax Act
(6)
|
86
|
|
86
|
|
86
|
|
86
|
|
161
|
|
483
|
|
988
|
|
|||||||
TOTAL
|
$
|
8,702
|
|
$
|
2,430
|
|
$
|
2,261
|
|
$
|
2,361
|
|
$
|
1,741
|
|
$
|
11,431
|
|
$
|
28,926
|
|
(1)
|
Capital leases and other financing obligations include payments related to build-to-suit lease arrangements.
|
(2)
|
The cash payments due for long-term debt include estimated interest payments. Estimates of interest payments are based on outstanding principal amounts, applicable fixed interest rates or currently effective interest rates as of
May 31, 2019
(if variable), timing of scheduled payments and the term of the debt obligations.
|
(3)
|
The amounts listed for endorsement contracts represent approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, public figure, sport team and league endorsers of our products. Actual payments under some contracts may be higher than the amounts listed as these contracts provide for bonuses to be paid to the endorsers based upon athletic achievements and/or royalties on product sales in future periods. Actual payments under some contracts may also be lower as these contracts include provisions for reduced payments if athletic performance declines in future periods.
|
(4)
|
We generally order product at least four to five months in advance of sale based primarily on advanced orders received from external wholesale customers and internal orders from our NIKE Direct in-line stores and digital commerce operations. The amounts listed for product purchase obligations represent agreements (including open purchase orders) to purchase products in the ordinary course of business that are enforceable and legally binding and specify all significant terms. In some cases, prices are subject to change throughout the production process.
|
(5)
|
Other purchase obligations primarily include construction, service and marketing commitments, including marketing commitments associated with endorsement contracts, made in the ordinary course of business. The amounts represent the minimum payments required by legally binding contracts and agreements that specify all significant terms, including open purchase orders for non-product purchases.
|
(6)
|
Represents the future cash payments due as part of the transition tax on deemed repatriation of undistributed earnings of foreign subsidiaries, which is reflected net of foreign tax credits we utilized. Refer to Note 9 — Income Taxes in the accompanying Notes to the Consolidated Financial Statements for additional information.
|
(Dollars in millions)
|
AS OF MAY 31, 2019
|
||
Notes payable, due at mutually agreed-upon dates within one year of issuance or on demand
|
$
|
9
|
|
Payable to Sojitz America for the purchase of inventories, generally due 60 days after shipment of goods from a foreign port
|
$
|
75
|
|
|
EXPECTED MATURITY DATE YEAR ENDING MAY 31,
|
|||||||||||||||||||||||
(Dollars in millions)
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
THEREAFTER
|
|
TOTAL
|
|
FAIR VALUE
|
|
||||||||
Foreign Exchange Risk
|
|
|
|
|
|
|
|
|
||||||||||||||||
Japanese Yen Functional Currency
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term Japanese Yen debt — Fixed rate
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
$
|
6
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9
|
|
$
|
9
|
|
Average interest rate
|
2.4
|
%
|
2.4
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
2.4
|
%
|
|
|||||||||
Interest Rate Risk
|
|
|
|
|
|
|
|
|
||||||||||||||||
Japanese Yen Functional Currency
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term Japanese Yen debt — Fixed rate
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
$
|
6
|
|
$
|
3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9
|
|
$
|
9
|
|
Average interest rate
|
2.4
|
%
|
2.4
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
2.4
|
%
|
|
|||||||||
U.S. Dollar Functional Currency
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term U.S. Dollar debt — Fixed rate
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
500
|
|
$
|
—
|
|
$
|
3,000
|
|
$
|
3,500
|
|
$
|
3,515
|
|
Average interest rate
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
2.3
|
%
|
0.0
|
%
|
3.3
|
%
|
3.1
|
%
|
|
Mark G. Parker
|
Andrew Campion
|
Chairman, President and Chief Executive Officer
|
Executive Vice President and Chief Financial Officer
|
|
YEAR ENDED MAY 31,
|
||||||||
(In millions, except per share data)
|
2019
|
2018
|
2017
|
||||||
Revenues
|
$
|
39,117
|
|
$
|
36,397
|
|
$
|
34,350
|
|
Cost of sales
|
21,643
|
|
20,441
|
|
19,038
|
|
|||
Gross profit
|
17,474
|
|
15,956
|
|
15,312
|
|
|||
Demand creation expense
|
3,753
|
|
3,577
|
|
3,341
|
|
|||
Operating overhead expense
|
8,949
|
|
7,934
|
|
7,222
|
|
|||
Total selling and administrative expense
|
12,702
|
|
11,511
|
|
10,563
|
|
|||
Interest expense (income), net
|
49
|
|
54
|
|
59
|
|
|||
Other (income) expense, net
|
(78
|
)
|
66
|
|
(196
|
)
|
|||
Income before income taxes
|
4,801
|
|
4,325
|
|
4,886
|
|
|||
Income tax expense
|
772
|
|
2,392
|
|
646
|
|
|||
NET INCOME
|
$
|
4,029
|
|
$
|
1,933
|
|
$
|
4,240
|
|
Earnings per common share:
|
|
|
|
||||||
Basic
|
$
|
2.55
|
|
$
|
1.19
|
|
$
|
2.56
|
|
Diluted
|
$
|
2.49
|
|
$
|
1.17
|
|
$
|
2.51
|
|
Weighted average common shares outstanding:
|
|
|
|
||||||
Basic
|
1,579.7
|
|
1,623.8
|
|
1,657.8
|
|
|||
Diluted
|
1,618.4
|
|
1,659.1
|
|
1,692.0
|
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
4,029
|
|
$
|
1,933
|
|
$
|
4,240
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||||
Change in net foreign currency translation adjustment
|
(173
|
)
|
(6
|
)
|
16
|
|
|||
Change in net gains (losses) on cash flow hedges
|
503
|
|
76
|
|
(515
|
)
|
|||
Change in net gains (losses) on other
|
(7
|
)
|
34
|
|
(32
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
323
|
|
104
|
|
(531
|
)
|
|||
TOTAL COMPREHENSIVE INCOME
|
$
|
4,352
|
|
$
|
2,037
|
|
$
|
3,709
|
|
|
MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
ASSETS
|
|
|
||||
Current assets:
|
|
|
||||
Cash and equivalents
|
$
|
4,466
|
|
$
|
4,249
|
|
Short-term investments
|
197
|
|
996
|
|
||
Accounts receivable, net
|
4,272
|
|
3,498
|
|
||
Inventories
|
5,622
|
|
5,261
|
|
||
Prepaid expenses and other current assets
|
1,968
|
|
1,130
|
|
||
Total current assets
|
16,525
|
|
15,134
|
|
||
Property, plant and equipment, net
|
4,744
|
|
4,454
|
|
||
Identifiable intangible assets, net
|
283
|
|
285
|
|
||
Goodwill
|
154
|
|
154
|
|
||
Deferred income taxes and other assets
|
2,011
|
|
2,509
|
|
||
TOTAL ASSETS
|
$
|
23,717
|
|
$
|
22,536
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
||||
Current liabilities:
|
|
|
||||
Current portion of long-term debt
|
$
|
6
|
|
$
|
6
|
|
Notes payable
|
9
|
|
336
|
|
||
Accounts payable
|
2,612
|
|
2,279
|
|
||
Accrued liabilities
|
5,010
|
|
3,269
|
|
||
Income taxes payable
|
229
|
|
150
|
|
||
Total current liabilities
|
7,866
|
|
6,040
|
|
||
Long-term debt
|
3,464
|
|
3,468
|
|
||
Deferred income taxes and other liabilities
|
3,347
|
|
3,216
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
|
||
Redeemable preferred stock
|
—
|
|
—
|
|
||
Shareholders' equity:
|
|
|
||||
Common stock at stated value:
|
|
|
||||
Class A convertible — 315 and 329 shares outstanding
|
—
|
|
—
|
|
||
Class B — 1,253 and 1,272 shares outstanding
|
3
|
|
3
|
|
||
Capital in excess of stated value
|
7,163
|
|
6,384
|
|
||
Accumulated other comprehensive income (loss)
|
231
|
|
(92
|
)
|
||
Retained earnings
|
1,643
|
|
3,517
|
|
||
Total shareholders' equity
|
9,040
|
|
9,812
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
23,717
|
|
$
|
22,536
|
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Cash provided by operations:
|
|
|
|
||||||
Net income
|
$
|
4,029
|
|
$
|
1,933
|
|
$
|
4,240
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
||||||
Depreciation
|
705
|
|
747
|
|
706
|
|
|||
Deferred income taxes
|
34
|
|
647
|
|
(273
|
)
|
|||
Stock-based compensation
|
325
|
|
218
|
|
215
|
|
|||
Amortization and other
|
15
|
|
27
|
|
10
|
|
|||
Net foreign currency adjustments
|
233
|
|
(99
|
)
|
(117
|
)
|
|||
Changes in certain working capital components and other assets and liabilities:
|
|
|
|
||||||
(Increase) decrease in accounts receivable
|
(270
|
)
|
187
|
|
(426
|
)
|
|||
(Increase) decrease in inventories
|
(490
|
)
|
(255
|
)
|
(231
|
)
|
|||
(Increase) decrease in prepaid expenses and other current and non-current assets
|
(203
|
)
|
35
|
|
(120
|
)
|
|||
Increase (decrease) in accounts payable, accrued liabilities and other current and non-current liabilities
|
1,525
|
|
1,515
|
|
(158
|
)
|
|||
Cash provided by operations
|
5,903
|
|
4,955
|
|
3,846
|
|
|||
Cash provided (used) by investing activities:
|
|
|
|
||||||
Purchases of short-term investments
|
(2,937
|
)
|
(4,783
|
)
|
(5,928
|
)
|
|||
Maturities of short-term investments
|
1,715
|
|
3,613
|
|
3,623
|
|
|||
Sales of short-term investments
|
2,072
|
|
2,496
|
|
2,423
|
|
|||
Additions to property, plant and equipment
|
(1,119
|
)
|
(1,028
|
)
|
(1,105
|
)
|
|||
Disposals of property, plant and equipment
|
5
|
|
3
|
|
13
|
|
|||
Other investing activities
|
—
|
|
(25
|
)
|
(34
|
)
|
|||
Cash provided (used) by investing activities
|
(264
|
)
|
276
|
|
(1,008
|
)
|
|||
Cash used by financing activities:
|
|
|
|
||||||
Net proceeds from long-term debt issuance
|
—
|
|
—
|
|
1,482
|
|
|||
Long-term debt payments, including current portion
|
(6
|
)
|
(6
|
)
|
(44
|
)
|
|||
Increase (decrease) in notes payable
|
(325
|
)
|
13
|
|
327
|
|
|||
Payments on capital lease and other financing obligations
|
(27
|
)
|
(23
|
)
|
(17
|
)
|
|||
Proceeds from exercise of stock options and other stock issuances
|
700
|
|
733
|
|
489
|
|
|||
Repurchase of common stock
|
(4,286
|
)
|
(4,254
|
)
|
(3,223
|
)
|
|||
Dividends — common and preferred
|
(1,332
|
)
|
(1,243
|
)
|
(1,133
|
)
|
|||
Tax payments for net share settlement of equity awards
|
(17
|
)
|
(55
|
)
|
(29
|
)
|
|||
Cash used by financing activities
|
(5,293
|
)
|
(4,835
|
)
|
(2,148
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
(129
|
)
|
45
|
|
(20
|
)
|
|||
Net increase (decrease) in cash and equivalents
|
217
|
|
441
|
|
670
|
|
|||
Cash and equivalents, beginning of year
|
4,249
|
|
3,808
|
|
3,138
|
|
|||
CASH AND EQUIVALENTS, END OF YEAR
|
$
|
4,466
|
|
$
|
4,249
|
|
$
|
3,808
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
||||||
Interest, net of capitalized interest
|
$
|
153
|
|
$
|
125
|
|
$
|
98
|
|
Income taxes
|
757
|
|
529
|
|
703
|
|
|||
Non-cash additions to property, plant and equipment
|
160
|
|
294
|
|
266
|
|
|||
Dividends declared and not paid
|
347
|
|
320
|
|
300
|
|
|
COMMON STOCK
|
CAPITAL IN EXCESS OF STATED VALUE
|
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
RETAINED EARNINGS
|
|
TOTAL
|
|
||||||||||||||
|
CLASS A
|
|
CLASS B
|
||||||||||||||||||||
(In millions, except per share data)
|
SHARES
|
|
AMOUNT
|
|
|
SHARES
|
|
AMOUNT
|
|
||||||||||||||
Balance at May 31, 2016
|
353
|
|
$
|
—
|
|
|
1,329
|
|
$
|
3
|
|
$
|
5,038
|
|
$
|
318
|
|
$
|
6,899
|
|
$
|
12,258
|
|
Stock options exercised
|
|
|
|
17
|
|
|
525
|
|
|
|
525
|
|
|||||||||||
Conversion to Class B Common Stock
|
(24
|
)
|
|
|
24
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Repurchase of Class B Common Stock
|
|
|
|
(60
|
)
|
|
(189
|
)
|
|
(3,060
|
)
|
(3,249
|
)
|
||||||||||
Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share)
|
|
|
|
|
|
|
|
(1,159
|
)
|
(1,159
|
)
|
||||||||||||
Issuance of shares to employees, net of shares withheld for employee taxes
|
|
|
|
4
|
|
|
121
|
|
|
(13
|
)
|
108
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
215
|
|
|
|
215
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
4,240
|
|
4,240
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
(531
|
)
|
|
(531
|
)
|
||||||||||||
Balance at May 31, 2017
|
329
|
|
$
|
—
|
|
|
1,314
|
|
$
|
3
|
|
$
|
5,710
|
|
$
|
(213
|
)
|
$
|
6,907
|
|
$
|
12,407
|
|
Stock options exercised
|
|
|
|
24
|
|
|
600
|
|
|
|
600
|
|
|||||||||||
Repurchase of Class B Common Stock
|
|
|
|
(70
|
)
|
|
(254
|
)
|
|
(4,013
|
)
|
(4,267
|
)
|
||||||||||
Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share)
|
|
|
|
|
|
|
|
(1,265
|
)
|
(1,265
|
)
|
||||||||||||
Issuance of shares to employees, net of shares withheld for employee taxes
|
|
|
|
4
|
|
|
110
|
|
|
(28
|
)
|
82
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
218
|
|
|
|
218
|
|
||||||||||||
Net income
|
|
|
|
|
|
|
|
1,933
|
|
1,933
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
104
|
|
|
104
|
|
||||||||||||
Reclassifications to retained earnings in accordance with ASU 2018-02 (Note 1)
|
|
|
|
|
|
|
17
|
|
(17
|
)
|
—
|
|
|||||||||||
Balance at May 31, 2018
|
329
|
|
$
|
—
|
|
|
1,272
|
|
$
|
3
|
|
$
|
6,384
|
|
$
|
(92
|
)
|
$
|
3,517
|
|
$
|
9,812
|
|
Stock options exercised
|
|
|
|
18
|
|
|
539
|
|
|
|
539
|
|
|||||||||||
Conversion to Class B Common Stock
|
(14
|
)
|
|
|
14
|
|
|
|
|
|
—
|
|
|||||||||||
Repurchase of Class B Common Stock
|
|
|
|
(54
|
)
|
|
(227
|
)
|
|
(4,056
|
)
|
(4,283
|
)
|
||||||||||
Dividends on common stock ($0.86 per share) and preferred stock ($0.10 per share)
|
|
|
|
|
|
|
|
|
|
(1,360
|
)
|
(1,360
|
)
|
||||||||||
Issuance of shares to employees, net of shares withheld for employee taxes
|
|
|
|
3
|
|
|
142
|
|
|
(3
|
)
|
139
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
|
325
|
|
|
|
|
325
|
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
4,029
|
|
4,029
|
|
||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
323
|
|
|
|
323
|
|
|||||||||
Adoption of ASU 2016-16 (Note 1)
|
|
|
|
|
|
|
|
|
|
(507
|
)
|
(507
|
)
|
||||||||||
Adoption of ASC Topic 606 (Note 1)
|
|
|
|
|
|
|
|
|
|
23
|
|
23
|
|
||||||||||
Balance at May 31, 2019
|
315
|
|
$
|
—
|
|
|
1,253
|
|
$
|
3
|
|
$
|
7,163
|
|
$
|
231
|
|
$
|
1,643
|
|
$
|
9,040
|
|
Note 1
|
Summary of Significant Accounting Policies
|
|
Note 2
|
Inventories
|
|
Note 3
|
Property, Plant and Equipment
|
|
Note 4
|
Identifiable Intangible Assets and Goodwill
|
|
Note 5
|
Accrued Liabilities
|
|
Note 6
|
Fair Value Measurements
|
|
Note 7
|
Short-Term Borrowings and Credit Lines
|
|
Note 8
|
Long-Term Debt
|
|
Note 9
|
Income Taxes
|
|
Note 10
|
Redeemable Preferred Stock
|
|
Note 11
|
Common Stock and Stock-Based Compensation
|
|
Note 12
|
Earnings Per Share
|
|
Note 13
|
Benefit Plans
|
|
Note 14
|
||
Note 15
|
Accumulated Other Comprehensive Income (Loss)
|
|
Note 16
|
Revenues
|
|
Note 17
|
Operating Segments and Related Information
|
|
Note 18
|
Commitments and Contingencies
|
NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Level 1: Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3: Unobservable inputs with little or no market data available, which require the reporting entity to develop its own assumptions.
|
|
AS OF MAY 31, 2019
|
||||||||
(Dollars in millions)
|
AS REPORTED
|
|
EFFECT OF ADOPTION
|
|
BALANCES WITHOUT ADOPTION OF
TOPIC 606 |
|
|||
Accounts receivable, net
|
$
|
4,272
|
|
$
|
782
|
|
$
|
3,490
|
|
Prepaid expenses and other current assets
|
1,968
|
|
410
|
|
1,558
|
|
|||
Total current assets
|
16,525
|
|
1,192
|
|
15,333
|
|
|||
TOTAL ASSETS
|
23,717
|
|
1,192
|
|
22,525
|
|
|||
Accrued liabilities
|
5,010
|
|
1,192
|
|
3,818
|
|
|||
Total current liabilities
|
7,866
|
|
1,192
|
|
6,674
|
|
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
23,717
|
|
$
|
1,192
|
|
$
|
22,525
|
|
NOTE 2 — INVENTORIES
|
NOTE 3 — PROPERTY, PLANT AND EQUIPMENT
|
|
AS OF MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
Land and improvements
|
$
|
329
|
|
$
|
331
|
|
Buildings
|
2,445
|
|
2,195
|
|
||
Machinery, equipment and internal-use software
|
4,335
|
|
4,230
|
|
||
Leasehold improvements
|
1,563
|
|
1,494
|
|
||
Construction in process
|
797
|
|
641
|
|
||
Total property, plant and equipment, gross
|
9,469
|
|
8,891
|
|
||
Less accumulated depreciation
|
4,725
|
|
4,437
|
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
|
$
|
4,744
|
|
$
|
4,454
|
|
NOTE 4 — IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL
|
|
AS OF MAY 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
||||||||||||||||
(Dollars in millions)
|
GROSS CARRYING AMOUNT
|
|
ACCUMULATED AMORTIZATION
|
|
NET CARRYING AMOUNT
|
|
|
GROSS CARRYING AMOUNT
|
|
ACCUMULATED AMORTIZATION
|
|
NET CARRYING AMOUNT
|
|
||||||
Indefinite-lived trademarks
|
$
|
281
|
|
$
|
—
|
|
$
|
281
|
|
|
$
|
281
|
|
$
|
—
|
|
$
|
281
|
|
Acquired trademarks and other
|
22
|
|
20
|
|
2
|
|
|
22
|
|
18
|
|
4
|
|
||||||
IDENTIFIABLE INTANGIBLE ASSETS, NET
|
$
|
303
|
|
$
|
20
|
|
$
|
283
|
|
|
$
|
303
|
|
$
|
18
|
|
$
|
285
|
|
NOTE 5 — ACCRUED LIABILITIES
|
|
AS OF MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
Compensation and benefits, excluding taxes
|
$
|
1,232
|
|
$
|
897
|
|
Sales-related reserves
(1)
|
1,218
|
|
20
|
|
||
Endorsement compensation
|
424
|
|
425
|
|
||
Dividends payable
|
346
|
|
320
|
|
||
Import and logistics costs
|
296
|
|
268
|
|
||
Collateral received from counterparties to hedging instruments
|
289
|
|
23
|
|
||
Taxes other than income taxes payable
|
234
|
|
224
|
|
||
Advertising and marketing
|
114
|
|
140
|
|
||
Fair value of derivatives
|
52
|
|
184
|
|
||
Other
(2)
|
805
|
|
768
|
|
||
TOTAL ACCRUED LIABILITIES
|
$
|
5,010
|
|
$
|
3,269
|
|
(1)
|
Sales-related reserves as of
May 31, 2019
reflect the Company's fiscal 2019 adoption of Topic 606. As of May 31, 2018, Sales-related reserves reflect the Company's prior accounting under Topic 605. Refer to
Note 1 — Summary of Significant Accounting Policies
for additional information on the adoption of the new standard.
|
(2)
|
Other consists of various accrued expenses with no individual item accounting for more than
5%
of the total Accrued liabilities balance at
May 31, 2019
and
2018
.
|
NOTE 6 — FAIR VALUE MEASUREMENTS
|
|
AS OF MAY 31, 2019
|
||||||||
(Dollars in millions)
|
ASSETS AT FAIR VALUE
|
|
CASH AND EQUIVALENTS
|
|
SHORT-TERM INVESTMENTS
|
|
|||
Cash
|
$
|
853
|
|
$
|
853
|
|
$
|
—
|
|
Level 1:
|
|
|
|
||||||
U.S. Treasury securities
|
347
|
|
200
|
|
147
|
|
|||
Level 2:
|
|
|
|
||||||
Commercial paper and bonds
|
34
|
|
1
|
|
33
|
|
|||
Money market funds
|
1,637
|
|
1,637
|
|
—
|
|
|||
Time deposits
|
1,791
|
|
1,775
|
|
16
|
|
|||
U.S. Agency securities
|
1
|
|
—
|
|
1
|
|
|||
Total Level 2
|
3,463
|
|
3,413
|
|
50
|
|
|||
TOTAL
|
$
|
4,663
|
|
$
|
4,466
|
|
$
|
197
|
|
|
AS OF MAY 31, 2018
|
||||||||
(Dollars in millions)
|
ASSETS AT FAIR VALUE
|
|
CASH AND EQUIVALENTS
|
|
SHORT-TERM INVESTMENTS
|
|
|||
Cash
|
$
|
415
|
|
$
|
415
|
|
$
|
—
|
|
Level 1:
|
|
|
|
||||||
U.S. Treasury securities
|
1,178
|
|
500
|
|
678
|
|
|||
Level 2:
|
|
|
|
||||||
Commercial paper and bonds
|
451
|
|
153
|
|
298
|
|
|||
Money market funds
|
2,174
|
|
2,174
|
|
—
|
|
|||
Time deposits
|
925
|
|
907
|
|
18
|
|
|||
U.S. Agency securities
|
102
|
|
100
|
|
2
|
|
|||
Total Level 2
|
3,652
|
|
3,334
|
|
318
|
|
|||
TOTAL
|
$
|
5,245
|
|
$
|
4,249
|
|
$
|
996
|
|
|
AS OF MAY 31, 2019
|
||||||||||||||||||
|
DERIVATIVE ASSETS
|
|
DERIVATIVE LIABILITIES
|
||||||||||||||||
(Dollars in millions)
|
ASSETS AT FAIR VALUE
|
|
OTHER CURRENT ASSETS
|
|
OTHER LONG-TERM ASSETS
|
|
|
LIABILITIES AT FAIR VALUE
|
|
ACCRUED LIABILITIES
|
|
OTHER LONG-TERM LIABILITIES
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards and options
(1)
|
$
|
611
|
|
$
|
611
|
|
$
|
—
|
|
|
$
|
51
|
|
$
|
51
|
|
$
|
—
|
|
Embedded derivatives
|
11
|
|
5
|
|
6
|
|
|
3
|
|
1
|
|
2
|
|
||||||
TOTAL
|
$
|
622
|
|
$
|
616
|
|
$
|
6
|
|
|
$
|
54
|
|
$
|
52
|
|
$
|
2
|
|
(1)
|
If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by
$50 million
as of
May 31, 2019
. As of that date, the Company had received
$289 million
of cash collateral from various counterparties related to foreign exchange derivative instruments.
No
amount of collateral was posted on the Company's derivative liability balance as of
May 31, 2019
.
|
|
AS OF MAY 31, 2018
|
||||||||||||||||||
|
DERIVATIVE ASSETS
|
|
DERIVATIVE LIABILITIES
|
||||||||||||||||
(Dollars in millions)
|
ASSETS AT FAIR VALUE
|
|
OTHER CURRENT ASSETS
|
|
OTHER LONG-TERM ASSETS
|
|
|
LIABILITIES AT FAIR VALUE
|
|
ACCRUED LIABILITIES
|
|
OTHER LONG-TERM LIABILITIES
|
|
||||||
Level 2:
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards and options
(1)
|
$
|
389
|
|
$
|
237
|
|
$
|
152
|
|
|
$
|
182
|
|
$
|
182
|
|
$
|
—
|
|
Embedded derivatives
|
11
|
|
3
|
|
8
|
|
|
8
|
|
2
|
|
6
|
|
||||||
TOTAL
|
$
|
400
|
|
$
|
240
|
|
$
|
160
|
|
|
$
|
190
|
|
$
|
184
|
|
$
|
6
|
|
(1)
|
If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by
$182 million
as of
May 31, 2018
. As of that date, the Company had received
$23 million
of cash collateral from various counterparties related to foreign exchange derivative instruments.
No
amount of collateral was posted on the Company's derivative liability balance as of
May 31, 2018
.
|
NOTE 7 — SHORT-TERM BORROWINGS AND CREDIT LINES
|
|
AS OF MAY 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
(Dollars in millions)
|
BORROWINGS
|
|
INTEREST RATE
|
|
BORROWINGS
|
|
INTEREST RATE
|
||||||
Notes payable:
|
|
|
|
|
|
|
|
||||||
Commercial paper
|
$
|
—
|
|
0.00
|
%
|
|
|
$
|
325
|
|
1.77
|
%
|
|
U.S. operations
|
2
|
|
0.00
|
%
|
(1)
|
|
1
|
|
0.00
|
%
|
(1)
|
||
Non-U.S. operations
|
7
|
|
26.00
|
%
|
(1)
|
|
10
|
|
18.11
|
%
|
(1)
|
||
TOTAL NOTES PAYABLE
|
$
|
9
|
|
|
|
|
$
|
336
|
|
|
|
||
Interest-bearing accounts payable:
|
|
|
|
|
|
|
|
||||||
Sojitz America
|
$
|
75
|
|
3.27
|
%
|
|
|
$
|
61
|
|
2.82
|
%
|
|
(1)
|
Weighted average interest rate includes non-interest bearing overdrafts.
|
NOTE 8 — LONG-TERM DEBT
|
|
|
|
|
BOOK VALUE OUTSTANDING
AS OF MAY 31, |
||||||||
Scheduled Maturity (Dollars and Yen in millions)
|
ORIGINAL PRINCIPAL
|
|
INTEREST RATE
|
|
INTEREST PAYMENTS
|
2019
|
2018
|
|||||
Corporate Bond Payables:
(1)(2)
|
|
|
|
|
|
|||||||
May 1, 2023
|
$
|
500
|
|
2.25
|
%
|
Semi-Annually
|
$
|
498
|
|
$
|
498
|
|
November 1, 2026
|
1,000
|
|
2.38
|
%
|
Semi-Annually
|
994
|
|
994
|
|
|||
May 1, 2043
|
500
|
|
3.63
|
%
|
Semi-Annually
|
495
|
|
495
|
|
|||
November 1, 2045
|
1,000
|
|
3.88
|
%
|
Semi-Annually
|
983
|
|
982
|
|
|||
November 1, 2046
|
500
|
|
3.38
|
%
|
Semi-Annually
|
491
|
|
490
|
|
|||
Japanese Yen Notes:
(3)
|
|
|
|
|
|
|||||||
August 20, 2001 through November 20, 2020
|
¥
|
9,000
|
|
2.60
|
%
|
Quarterly
|
$
|
6
|
|
$
|
10
|
|
August 20, 2001 through November 20, 2020
|
4,000
|
|
2.00
|
%
|
Quarterly
|
3
|
|
5
|
|
|||
Total
|
|
|
|
3,470
|
|
3,474
|
|
|||||
Less current maturities
|
|
|
|
6
|
|
6
|
|
|||||
TOTAL LONG-TERM DEBT
|
|
|
|
$
|
3,464
|
|
$
|
3,468
|
|
(1)
|
These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness.
|
(2)
|
The bonds are redeemable at the Company's option up to three months prior to the scheduled maturity date for the bonds maturing in 2023 and 2026, and up to six months prior to the scheduled maturity date for the bonds maturing in 2043, 2045 and 2046, at a price equal to the greater of (i)
100%
of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. Within three and six months to scheduled maturity, respectively, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to
100%
of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest.
|
(3)
|
NIKE Logistics YK assumed a total of
¥13.0 billion
in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.
|
NOTE 9 — INCOME TAXES
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Income before income taxes:
|
|
|
|
||||||
United States
|
$
|
593
|
|
$
|
744
|
|
$
|
1,240
|
|
Foreign
|
4,208
|
|
3,581
|
|
3,646
|
|
|||
TOTAL INCOME BEFORE INCOME TAXES
|
$
|
4,801
|
|
$
|
4,325
|
|
$
|
4,886
|
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
United States
|
|
|
|
||||||
Federal
|
$
|
74
|
|
$
|
1,167
|
|
$
|
398
|
|
State
|
56
|
|
45
|
|
82
|
|
|||
Foreign
|
608
|
|
533
|
|
439
|
|
|||
Total Current
|
738
|
|
1,745
|
|
919
|
|
|||
Deferred:
|
|
|
|
||||||
United States
|
|
|
|
||||||
Federal
|
(33
|
)
|
595
|
|
(279
|
)
|
|||
State
|
(9
|
)
|
25
|
|
(9
|
)
|
|||
Foreign
|
76
|
|
27
|
|
15
|
|
|||
Total Deferred
|
34
|
|
647
|
|
(273
|
)
|
|||
TOTAL INCOME TAX EXPENSE
|
$
|
772
|
|
$
|
2,392
|
|
$
|
646
|
|
|
YEAR ENDED MAY 31,
|
|||||
|
2019
|
2018
|
2017
|
|||
Federal income tax rate
|
21.0
|
%
|
29.2
|
%
|
35.0
|
%
|
State taxes, net of federal benefit
|
1.2
|
%
|
1.2
|
%
|
1.1
|
%
|
Foreign earnings
|
-2.1
|
%
|
-17.5
|
%
|
-20.7
|
%
|
Transition tax related to the Tax Act
|
—
|
%
|
43.3
|
%
|
—
|
%
|
Remeasurement of deferred tax assets and liabilities related to the Tax Act
|
—
|
%
|
3.7
|
%
|
—
|
%
|
Excess tax benefits from share-based compensation
|
-3.6
|
%
|
-5.3
|
%
|
—
|
%
|
Resolution of a U.S. tax matter
|
—
|
%
|
—
|
%
|
-3.2
|
%
|
U.S. Research and Development tax credit
|
-1.1
|
%
|
-0.6
|
%
|
-0.6
|
%
|
Other, net
|
0.7
|
%
|
1.3
|
%
|
1.6
|
%
|
EFFECTIVE INCOME TAX RATE
|
16.1
|
%
|
55.3
|
%
|
13.2
|
%
|
|
AS OF MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
Deferred tax assets:
|
|
|
||||
Inventories
|
$
|
66
|
|
$
|
73
|
|
Sales return reserves
|
128
|
|
104
|
|
||
Deferred compensation
|
271
|
|
250
|
|
||
Stock-based compensation
|
156
|
|
135
|
|
||
Reserves and accrued liabilities
|
101
|
|
102
|
|
||
Net operating loss carry-forwards
|
81
|
|
88
|
|
||
Other
|
125
|
|
106
|
|
||
Total deferred tax assets
|
928
|
|
858
|
|
||
Valuation allowance
|
(88
|
)
|
(95
|
)
|
||
Total deferred tax assets after valuation allowance
|
840
|
|
763
|
|
||
Deferred tax liabilities:
|
|
|
||||
Foreign withholding tax on undistributed earnings of foreign subsidiaries
|
(235
|
)
|
(155
|
)
|
||
Property, plant and equipment
|
(188
|
)
|
(167
|
)
|
||
Intangibles
|
(23
|
)
|
(77
|
)
|
||
Other
|
(18
|
)
|
(26
|
)
|
||
Total deferred tax liabilities
|
(464
|
)
|
(425
|
)
|
||
NET DEFERRED TAX ASSET
|
$
|
376
|
|
$
|
338
|
|
|
AS OF MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Unrecognized tax benefits, beginning of the period
|
$
|
698
|
|
$
|
461
|
|
$
|
506
|
|
Gross increases related to prior period tax positions
|
85
|
|
19
|
|
31
|
|
|||
Gross decreases related to prior period tax positions
|
(32
|
)
|
(12
|
)
|
(163
|
)
|
|||
Gross increases related to current period tax positions
|
81
|
|
249
|
|
115
|
|
|||
Settlements
|
—
|
|
—
|
|
(12
|
)
|
|||
Lapse of statute of limitations
|
(35
|
)
|
(20
|
)
|
(21
|
)
|
|||
Changes due to currency translation
|
11
|
|
1
|
|
5
|
|
|||
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD
|
$
|
808
|
|
$
|
698
|
|
$
|
461
|
|
|
YEAR ENDING MAY 31,
|
||||||||||||||||||||
(Dollars in millions)
|
2020
|
2021
|
2022
|
2023
|
2024-2039
|
INDEFINITE
|
TOTAL
|
||||||||||||||
Net operating losses
|
$
|
5
|
|
$
|
2
|
|
$
|
1
|
|
$
|
26
|
|
$
|
34
|
|
$
|
189
|
|
$
|
257
|
|
NOTE 10 — REDEEMABLE PREFERRED STOCK
|
NOTE 11 — COMMON STOCK AND STOCK-BASED COMPENSATION
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
Stock options
(1)
|
$
|
207
|
|
$
|
149
|
|
$
|
145
|
|
ESPPs
|
40
|
|
34
|
|
36
|
|
|||
Restricted stock
|
78
|
|
35
|
|
34
|
|
|||
TOTAL STOCK-BASED COMPENSATION EXPENSE
|
$
|
325
|
|
$
|
218
|
|
$
|
215
|
|
(1)
|
Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees meeting certain retirement eligibility requirements. Accelerated stock option expense was
$41 million
,
$18 million
and
$14 million
for the years ended
May 31, 2019
,
2018
and
2017
, respectively.
|
|
YEAR ENDED MAY 31,
|
|||||
|
2019
|
2018
|
2017
|
|||
Dividend yield
|
1.0
|
%
|
1.2
|
%
|
1.1
|
%
|
Expected volatility
|
26.6
|
%
|
16.4
|
%
|
17.4
|
%
|
Weighted average expected life (in years)
|
6.0
|
|
6.0
|
|
6.0
|
|
Risk-free interest rate
|
2.8
|
%
|
2.0
|
%
|
1.3
|
%
|
|
SHARES
(1)
|
|
WEIGHTED AVERAGE OPTION PRICE
|
|
|
|
(In millions)
|
|
|||
Options outstanding as of May 31, 2018
|
93.2
|
|
$
|
40.73
|
|
Exercised
|
(18.2
|
)
|
29.70
|
|
|
Forfeited
|
(1.8
|
)
|
66.66
|
|
|
Granted
|
18.1
|
|
81.79
|
|
|
Options outstanding as of May 31, 2019
|
91.3
|
|
$
|
50.59
|
|
(1)
|
Includes stock appreciation rights transactions.
|
|
|
SHARES
|
|
WEIGHTED AVERAGE GRANT DATE
FAIR VALUE |
|
|
|
|
(In millions)
|
|
|
||
Nonvested as of May 31, 2018
|
|
2.8
|
|
$
|
59.14
|
|
Vested
|
|
(0.6
|
)
|
59.01
|
|
|
Forfeited
|
|
(0.3
|
)
|
66.24
|
|
|
Granted
|
|
2.5
|
|
80.95
|
|
|
Nonvested as of May 31, 2019
|
|
4.4
|
|
$
|
70.93
|
|
NOTE 12 — EARNINGS PER SHARE
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions, except per share data)
|
2019
|
2018
|
2017
|
||||||
Net income available to common stockholders
|
$
|
4,029
|
|
$
|
1,933
|
|
$
|
4,240
|
|
Determination of shares:
|
|
|
|
||||||
Weighted average common shares outstanding
|
1,579.7
|
|
1,623.8
|
|
1,657.8
|
|
|||
Assumed conversion of dilutive stock options and awards
|
38.7
|
|
35.3
|
|
34.2
|
|
|||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
1,618.4
|
|
1,659.1
|
|
1,692.0
|
|
|||
Earnings per common share:
|
|
|
|
||||||
Basic
|
$
|
2.55
|
|
$
|
1.19
|
|
$
|
2.56
|
|
Diluted
|
$
|
2.49
|
|
$
|
1.17
|
|
$
|
2.51
|
|
NOTE 13 — BENEFIT PLANS
|
NOTE 14 — RISK MANAGEMENT AND DERIVATIVES
|
|
DERIVATIVE ASSETS
|
|
DERIVATIVE LIABILITIES
|
||||||||||||
|
BALANCE SHEET LOCATION
|
AS OF MAY 31,
|
|
BALANCE SHEET LOCATION
|
AS OF MAY 31,
|
||||||||||
(Dollars in millions)
|
2019
|
2018
|
|
2019
|
2018
|
||||||||||
Derivatives formally designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forwards and options
|
Prepaid expenses and other current assets
|
$
|
509
|
|
$
|
118
|
|
|
Accrued liabilities
|
$
|
5
|
|
$
|
156
|
|
Foreign exchange forwards and options
|
Deferred income taxes and other assets
|
—
|
|
152
|
|
|
Deferred income taxes and other liabilities
|
—
|
|
—
|
|
||||
Total derivatives formally designated as hedging instruments
|
|
509
|
|
270
|
|
|
|
5
|
|
156
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forwards and options
|
Prepaid expenses and other current assets
|
102
|
|
119
|
|
|
Accrued liabilities
|
46
|
|
26
|
|
||||
Embedded derivatives
|
Prepaid expenses and other current assets
|
5
|
|
3
|
|
|
Accrued liabilities
|
1
|
|
2
|
|
||||
Embedded derivatives
|
Deferred income taxes and other assets
|
6
|
|
8
|
|
|
Deferred income taxes and other liabilities
|
2
|
|
6
|
|
||||
Total derivatives not designated as hedging instruments
|
|
113
|
|
130
|
|
|
|
49
|
|
34
|
|
||||
TOTAL DERIVATIVES
|
|
$
|
622
|
|
$
|
400
|
|
|
|
$
|
54
|
|
$
|
190
|
|
|
YEAR ENDED MAY 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
(Dollars in millions)
|
TOTAL
|
|
AMOUNT OF
GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY |
|
|
TOTAL
|
|
AMOUNT OF
GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY |
|
|
TOTAL
|
|
AMOUNT OF
GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY |
|
||||||
Revenues
|
$
|
39,117
|
|
$
|
(5
|
)
|
|
$
|
36,397
|
|
$
|
34
|
|
|
$
|
34,350
|
|
$
|
96
|
|
Cost of sales
|
21,643
|
|
53
|
|
|
20,441
|
|
(90
|
)
|
|
19,038
|
|
339
|
|
||||||
Demand creation expense
|
3,753
|
|
—
|
|
|
3,577
|
|
1
|
|
|
3,341
|
|
—
|
|
||||||
Other (income) expense, net
|
(78
|
)
|
35
|
|
|
66
|
|
(69
|
)
|
|
(196
|
)
|
199
|
|
||||||
Interest expense (income), net
|
49
|
|
(7
|
)
|
|
54
|
|
(7
|
)
|
|
59
|
|
(4
|
)
|
(Dollars in millions)
|
AMOUNT OF GAIN (LOSS)
RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES (1) |
|
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME (1) |
||||||||||||||||||
YEAR ENDED MAY 31,
|
|
LOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME |
|
YEAR ENDED MAY 31,
|
|||||||||||||||||
2019
|
2018
|
2017
|
|
|
2019
|
2018
|
2017
|
||||||||||||||
Derivatives designated as
cash flow hedges: |
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards
and options |
$
|
14
|
|
$
|
19
|
|
$
|
72
|
|
|
Revenues
|
|
$
|
(5
|
)
|
$
|
34
|
|
$
|
96
|
|
Foreign exchange forwards
and options |
405
|
|
(50
|
)
|
43
|
|
|
Cost of sales
|
|
53
|
|
(90
|
)
|
339
|
|
||||||
Foreign exchange forwards
and options |
2
|
|
1
|
|
(4
|
)
|
|
Demand creation expense
|
|
—
|
|
1
|
|
—
|
|
||||||
Foreign exchange forwards
and options |
156
|
|
(19
|
)
|
37
|
|
|
Other (income) expense, net
|
|
35
|
|
(69
|
)
|
199
|
|
||||||
Interest rate swaps
(2)
|
—
|
|
—
|
|
(54
|
)
|
|
Interest expense (income), net
|
|
(7
|
)
|
(7
|
)
|
(4
|
)
|
||||||
Total designated cash
flow hedges |
$
|
577
|
|
$
|
(49
|
)
|
$
|
94
|
|
|
|
|
$
|
76
|
|
$
|
(131
|
)
|
$
|
630
|
|
(1)
|
For the years ended
May 31, 2019
,
2018
and
2017
, the amounts recorded in
Other (income) expense, net
as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.
|
(2)
|
Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest expense (income), net over the term of the issued debt.
|
|
AMOUNT OF GAIN (LOSS) RECOGNIZED
IN INCOME ON DERIVATIVES |
|
LOCATION OF GAIN (LOSS)
RECOGNIZED IN INCOME ON DERIVATIVES |
||||||||
|
YEAR ENDED MAY 31,
|
|
|||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
|
|||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Foreign exchange forwards and options
|
$
|
166
|
|
$
|
(57
|
)
|
$
|
(44
|
)
|
|
Other (income) expense, net
|
Embedded derivatives
|
7
|
|
(4
|
)
|
(2
|
)
|
|
Other (income) expense, net
|
NOTE 15 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
(Dollars in millions)
|
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
(1)
|
|
CASH FLOW HEDGES
|
|
NET INVESTMENT HEDGES
(1)
|
|
OTHER
|
|
TOTAL
|
|
|||||
Balance at May 31, 2018
|
$
|
(173
|
)
|
$
|
17
|
|
$
|
115
|
|
$
|
(51
|
)
|
$
|
(92
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||||||
Other comprehensive gains (losses) before reclassifications
(2)
|
(173
|
)
|
573
|
|
—
|
|
10
|
|
410
|
|
|||||
Reclassifications to net income of previously deferred (gains) losses
(3)
|
—
|
|
(70
|
)
|
—
|
|
(17
|
)
|
(87
|
)
|
|||||
Total other comprehensive income (loss)
|
(173
|
)
|
503
|
|
—
|
|
(7
|
)
|
323
|
|
|||||
Balance at May 31, 2019
|
$
|
(346
|
)
|
$
|
520
|
|
$
|
115
|
|
$
|
(58
|
)
|
$
|
231
|
|
(1)
|
The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
|
(2)
|
Net of tax benefit (expense) of $
0 million
, $
(4) million
, $
0 million
, $
1 million
and $
(3) million
, respectively.
|
(3)
|
Net of tax (benefit) expense of $
0 million
, $
6 million
, $
0 million
, $
0 million
and $
6 million
, respectively.
|
(Dollars in millions)
|
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
(1)
|
|
CASH FLOW HEDGES
|
|
NET INVESTMENT HEDGES
(1)
|
|
OTHER
|
|
TOTAL
|
|
|||||
Balance at May 31, 2017
|
$
|
(191
|
)
|
$
|
(52
|
)
|
$
|
115
|
|
$
|
(85
|
)
|
$
|
(213
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||||||
Other comprehensive gains (losses) before reclassifications
(2)
|
(6
|
)
|
(52
|
)
|
—
|
|
2
|
|
(56
|
)
|
|||||
Reclassifications to net income of previously deferred (gains) losses
(3)
|
—
|
|
128
|
|
—
|
|
32
|
|
160
|
|
|||||
Total other comprehensive income (loss)
|
(6
|
)
|
76
|
|
—
|
|
34
|
|
104
|
|
|||||
Reclassifications to retained earnings in accordance with ASU 2018-02
(4)
|
24
|
|
(7
|
)
|
—
|
|
—
|
|
17
|
|
|||||
Balance at May 31, 2018
|
$
|
(173
|
)
|
$
|
17
|
|
$
|
115
|
|
$
|
(51
|
)
|
$
|
(92
|
)
|
(1)
|
The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.
|
(2)
|
Net of tax benefit (expense) of $
(24) million
, $
(3) million
, $
0 million
, $
(4) million
and $
(31) million
, respectively.
|
(3)
|
Net of tax (benefit) expense of $
0 million
, $
(3) million
, $
0 million
, $
0 million
and $
(3) million
, respectively.
|
(4)
|
Refer to
Note 1 — Summary of Significant Accounting Policies
for additional information on the adoption of ASU 2018-02 during the third quarter of fiscal 2018.
|
|
AMOUNT OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME |
LOCATION OF GAIN (LOSS)
RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME |
|||||
|
YEAR ENDED MAY 31,
|
||||||
(Dollars in millions)
|
2019
|
2018
|
|||||
Gains (losses) on cash flow hedges:
|
|
|
|
||||
Foreign exchange forwards and options
|
$
|
(5
|
)
|
$
|
34
|
|
Revenues
|
Foreign exchange forwards and options
|
53
|
|
(90
|
)
|
Cost of sales
|
||
Foreign exchange forwards and options
|
—
|
|
1
|
|
Demand creation expense
|
||
Foreign exchange forwards and options
|
35
|
|
(69
|
)
|
Other (income) expense, net
|
||
Interest rate swaps
|
(7
|
)
|
(7
|
)
|
Interest expense (income), net
|
||
Total before tax
|
76
|
|
(131
|
)
|
|
||
Tax (expense) benefit
|
(6
|
)
|
3
|
|
|
||
Gain (loss) net of tax
|
70
|
|
(128
|
)
|
|
||
Gains (losses) on other
|
17
|
|
(32
|
)
|
Other (income) expense, net
|
||
Total before tax
|
17
|
|
(32
|
)
|
|
||
Tax (expense) benefit
|
—
|
|
—
|
|
|
||
Gain (loss) net of tax
|
17
|
|
(32
|
)
|
|
||
Total net gain (loss) reclassified for the period
|
$
|
87
|
|
$
|
(160
|
)
|
|
NOTE 16 — REVENUES
|
|
YEAR ENDED MAY 31, 2019
|
||||||||||||||||||||||||||
(Dollars in millions)
|
NORTH AMERICA
|
|
EUROPE, MIDDLE EAST & AFRICA
|
|
GREATER CHINA
|
|
ASIA PACIFIC & LATIN AMERICA
|
|
GLOBAL BRAND DIVISIONS
|
|
TOTAL NIKE BRAND
|
|
CONVERSE
|
|
CORPORATE
|
|
TOTAL NIKE, INC.
|
|
|||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Footwear
|
$
|
10,045
|
|
$
|
6,293
|
|
$
|
4,262
|
|
$
|
3,622
|
|
$
|
—
|
|
$
|
24,222
|
|
$
|
1,658
|
|
$
|
—
|
|
$
|
25,880
|
|
Apparel
|
5,260
|
|
3,087
|
|
1,808
|
|
1,395
|
|
—
|
|
11,550
|
|
118
|
|
—
|
|
11,668
|
|
|||||||||
Equipment
|
597
|
|
432
|
|
138
|
|
237
|
|
—
|
|
1,404
|
|
24
|
|
—
|
|
1,428
|
|
|||||||||
Other
(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
42
|
|
42
|
|
106
|
|
(7
|
)
|
141
|
|
|||||||||
TOTAL REVENUES
|
$
|
15,902
|
|
$
|
9,812
|
|
$
|
6,208
|
|
$
|
5,254
|
|
$
|
42
|
|
$
|
37,218
|
|
$
|
1,906
|
|
$
|
(7
|
)
|
$
|
39,117
|
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Sales to Wholesale Customers
|
$
|
10,875
|
|
$
|
7,076
|
|
$
|
3,726
|
|
$
|
3,746
|
|
$
|
—
|
|
$
|
25,423
|
|
$
|
1,247
|
|
$
|
—
|
|
$
|
26,670
|
|
Sales through Direct to Consumer
|
5,027
|
|
2,736
|
|
2,482
|
|
1,508
|
|
—
|
|
11,753
|
|
553
|
|
—
|
|
12,306
|
|
|||||||||
Other
(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
42
|
|
42
|
|
106
|
|
(7
|
)
|
141
|
|
|||||||||
TOTAL REVENUES
|
$
|
15,902
|
|
$
|
9,812
|
|
$
|
6,208
|
|
$
|
5,254
|
|
$
|
42
|
|
$
|
37,218
|
|
$
|
1,906
|
|
$
|
(7
|
)
|
$
|
39,117
|
|
(1)
|
Other revenues for Global Brand Divisions and Converse are primarily attributable to licensing businesses. Other revenues for Corporate primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse but managed through the Company's central foreign exchange risk management program.
|
NOTE 17 — OPERATING SEGMENTS AND RELATED INFORMATION
|
|
YEAR ENDED MAY 31,
|
||||||||
(Dollars in millions)
|
2019
|
2018
|
2017
|
||||||
REVENUES
|
|
|
|
||||||
North America
|
$
|
15,902
|
|
$
|
14,855
|
|
$
|
15,216
|
|
Europe, Middle East & Africa
|
9,812
|
|
9,242
|
|
7,970
|
|
|||
Greater China
|
6,208
|
|
5,134
|
|
4,237
|
|
|||
Asia Pacific & Latin America
|
5,254
|
|
5,166
|
|
4,737
|
|
|||
Global Brand Divisions
|
42
|
|
88
|
|
73
|
|
|||
Total NIKE Brand
|
37,218
|
|
34,485
|
|
32,233
|
|
|||
Converse
|
1,906
|
|
1,886
|
|
2,042
|
|
|||
Corporate
|
(7
|
)
|
26
|
|
75
|
|
|||
TOTAL NIKE, INC. REVENUES
|
$
|
39,117
|
|
$
|
36,397
|
|
$
|
34,350
|
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
|
|
||||||
North America
|
$
|
3,925
|
|
$
|
3,600
|
|
$
|
3,875
|
|
Europe, Middle East & Africa
|
1,995
|
|
1,587
|
|
1,507
|
|
|||
Greater China
|
2,376
|
|
1,807
|
|
1,507
|
|
|||
Asia Pacific & Latin America
|
1,323
|
|
1,189
|
|
980
|
|
|||
Global Brand Divisions
|
(3,262
|
)
|
(2,658
|
)
|
(2,677
|
)
|
|||
Total NIKE Brand
|
6,357
|
|
5,525
|
|
5,192
|
|
|||
Converse
|
303
|
|
310
|
|
477
|
|
|||
Corporate
|
(1,810
|
)
|
(1,456
|
)
|
(724
|
)
|
|||
Total NIKE, Inc. Earnings Before Interest and Taxes
|
4,850
|
|
4,379
|
|
4,945
|
|
|||
Interest expense (income), net
|
49
|
|
54
|
|
59
|
|
|||
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES
|
$
|
4,801
|
|
$
|
4,325
|
|
$
|
4,886
|
|
ADDITIONS TO LONG-LIVED ASSETS
|
|
|
|
||||||
North America
|
$
|
117
|
|
$
|
196
|
|
$
|
223
|
|
Europe, Middle East & Africa
|
233
|
|
240
|
|
173
|
|
|||
Greater China
|
49
|
|
76
|
|
51
|
|
|||
Asia Pacific & Latin America
|
47
|
|
49
|
|
59
|
|
|||
Global Brand Divisions
|
278
|
|
286
|
|
278
|
|
|||
Total NIKE Brand
|
724
|
|
847
|
|
784
|
|
|||
Converse
|
18
|
|
22
|
|
30
|
|
|||
Corporate
|
333
|
|
325
|
|
387
|
|
|||
TOTAL ADDITIONS TO LONG-LIVED ASSETS
|
$
|
1,075
|
|
$
|
1,194
|
|
$
|
1,201
|
|
DEPRECIATION
|
|
|
|
||||||
North America
|
$
|
149
|
|
$
|
160
|
|
$
|
140
|
|
Europe, Middle East & Africa
|
111
|
|
116
|
|
106
|
|
|||
Greater China
|
50
|
|
56
|
|
54
|
|
|||
Asia Pacific & Latin America
|
53
|
|
55
|
|
54
|
|
|||
Global Brand Divisions
|
195
|
|
217
|
|
233
|
|
|||
Total NIKE Brand
|
558
|
|
604
|
|
587
|
|
|||
Converse
|
31
|
|
33
|
|
28
|
|
|||
Corporate
|
116
|
|
110
|
|
91
|
|
|||
TOTAL DEPRECIATION
|
$
|
705
|
|
$
|
747
|
|
$
|
706
|
|
|
AS OF MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
ACCOUNTS RECEIVABLE, NET
|
|
|
||||
North America
|
$
|
1,718
|
|
$
|
1,443
|
|
Europe, Middle East & Africa
|
1,164
|
|
870
|
|
||
Greater China
|
245
|
|
101
|
|
||
Asia Pacific & Latin America
|
771
|
|
720
|
|
||
Global Brand Divisions
|
105
|
|
102
|
|
||
Total NIKE Brand
|
4,003
|
|
3,236
|
|
||
Converse
|
243
|
|
240
|
|
||
Corporate
|
26
|
|
22
|
|
||
TOTAL ACCOUNTS RECEIVABLE, NET
|
$
|
4,272
|
|
$
|
3,498
|
|
INVENTORIES
|
|
|
||||
North America
|
$
|
2,328
|
|
$
|
2,270
|
|
Europe, Middle East & Africa
|
1,390
|
|
1,433
|
|
||
Greater China
|
693
|
|
580
|
|
||
Asia Pacific & Latin America
|
694
|
|
687
|
|
||
Global Brand Divisions
|
126
|
|
91
|
|
||
Total NIKE Brand
|
5,231
|
|
5,061
|
|
||
Converse
|
269
|
|
268
|
|
||
Corporate
|
122
|
|
(68
|
)
|
||
TOTAL INVENTORIES
|
$
|
5,622
|
|
$
|
5,261
|
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
||||
North America
|
$
|
814
|
|
$
|
848
|
|
Europe, Middle East & Africa
|
929
|
|
849
|
|
||
Greater China
|
237
|
|
256
|
|
||
Asia Pacific & Latin America
|
326
|
|
339
|
|
||
Global Brand Divisions
|
665
|
|
597
|
|
||
Total NIKE Brand
|
2,971
|
|
2,889
|
|
||
Converse
|
100
|
|
115
|
|
||
Corporate
|
1,673
|
|
1,450
|
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
|
$
|
4,744
|
|
$
|
4,454
|
|
|
AS OF MAY 31,
|
|||||
(Dollars in millions)
|
2019
|
2018
|
||||
United States
|
$
|
3,174
|
|
$
|
2,930
|
|
Belgium
|
618
|
|
534
|
|
||
China
|
242
|
|
262
|
|
NOTE 18 — COMMITMENTS AND CONTINGENCIES
|
|
YEAR ENDING MAY 31,
|
||||||||||||||||||||
(Dollars in millions)
|
2020
|
2021
|
2022
|
2023
|
2024
|
THEREAFTER
|
TOTAL
|
||||||||||||||
Operating leases
|
$
|
553
|
|
$
|
513
|
|
$
|
441
|
|
$
|
386
|
|
$
|
345
|
|
$
|
1,494
|
|
$
|
3,732
|
|
Capital leases and other financing obligations
(1)
|
32
|
|
34
|
|
40
|
|
37
|
|
34
|
|
197
|
|
374
|
|
(1)
|
Capital leases and other financing obligations include payments related to build-to-suit lease arrangements.
|
(a)
|
The following documents are filed as part of this report:
|
|
|
|
FORM 10-K PAGE NO.
|
1.
|
Financial Statements:
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
2.
|
Financial Statement Schedule:
|
|
|
||
|
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
|
|
|
|
|
3.
|
Exhibits:
|
|
3.1
|
||
3.2
|
||
4.1
|
||
4.2
|
||
4.3
|
||
4.4
|
||
4.5
|
||
4.6
|
||
10.1
|
||
10.2
|
||
10.3
|
||
10.4
|
||
10.5
|
10.6
|
|
10.7
|
|
10.8
|
|
10.9
|
|
10.10
|
|
10.11
|
|
10.12
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21
|
|
10.22
|
|
21
|
|
23
|
|
31.1
|
|
31.2
|
|
32
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Extension Definition Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
(Dollars in millions)
|
BALANCE AT BEGINNING OF
PERIOD |
|
CHARGED
TO
COSTS AND
EXPENSES
|
|
CHARGED
TO OTHER ACCOUNTS (1) |
|
WRITE-OFFS,
NET |
|
BALANCE
AT END OF PERIOD |
|
|||||
Sales returns reserve
|
|
|
|
|
|
||||||||||
For the year ended May 31, 2017
|
$
|
444
|
|
$
|
696
|
|
$
|
3
|
|
$
|
(800
|
)
|
$
|
343
|
|
For the year ended May 31, 2018
|
343
|
|
640
|
|
5
|
|
(658
|
)
|
330
|
|
|||||
For the year ended May 31, 2019
(2)
|
734
|
|
1,959
|
|
(30
|
)
|
(1,820
|
)
|
843
|
|
(1)
|
Amounts included in this column primarily relate to foreign currency translation.
|
(2)
|
As a result of the adoption of ASC Topic 606 during the first quarter of fiscal 2019, an asset for the estimated cost of inventory for expected products returns is now recognized separately from the liability for sales returns reserves, which is presented above.
|
NIKE, INC.
|
||
By:
|
|
/s/ MARK G. PARKER
Mark G. Parker
Chairman, President and Chief Executive Officer
|
Date:
|
|
July 23, 2019
|
SIGNATURE
|
TITLE
|
DATE
|
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
|
||
/s/ MARK G. PARKER
Mark G. Parker
|
Chairman, President and Chief Executive Officer
|
July 23, 2019
|
PRINCIPAL FINANCIAL OFFICER:
|
|
|
/s/ ANDREW CAMPION
Andrew Campion
|
Executive Vice President and Chief Financial Officer
|
July 23, 2019
|
PRINCIPAL ACCOUNTING OFFICER:
|
||
/s/ CHRIS L. ABSTON
Chris L. Abston
|
Corporate Controller
|
July 23, 2019
|
DIRECTORS:
|
||
/s/ CATHLEEN A. BENKO
Cathleen A. Benko
|
Director
|
July 23, 2019
|
/s/ ELIZABETH J. COMSTOCK
Elizabeth J. Comstock
|
Director
|
July 23, 2019
|
/s/ JOHN G. CONNORS
John G. Connors
|
Director
|
July 23, 2019
|
/s/ TIMOTHY D. COOK
Timothy D. Cook
|
Director
|
July 23, 2019
|
/s/ JOHN J. DONAHOE II
John J. Donahoe II
|
Director
|
July 23, 2019
|
/s/ ALAN B. GRAF, JR.
Alan B. Graf, Jr.
|
Director
|
July 23, 2019
|
/s/ PETER B. HENRY
Peter B. Henry
|
Director
|
July 23, 2019
|
/s/ TRAVIS A. KNIGHT
Travis A. Knight
|
Director
|
July 23, 2019
|
/s/ JOHN C. LECHLEITER
John C. Lechleiter
|
Director
|
July 23, 2019
|
/s/ MICHELLE A. PELUSO
Michelle A. Peluso
|
Director
|
July 23, 2019
|
/s/ JOHN W. ROGERS, JR.
John W. Rogers, Jr.
|
Director
|
July 23, 2019
|
/s/ JOHN R. THOMPSON, JR.
John R. Thompson, Jr.
|
Director
|
July 23, 2019
|
Entity Name
|
Jurisdiction of Formation
|
Accelerator Studio LLC
|
Delaware
|
Air Manufacturing Innovation Vietnam LLC
|
Vietnam
|
All Star C.V.
|
Netherlands
|
American Converse S.L.U.
|
Spain
|
American NIKE S.L.U.
|
Spain
|
A.S. Roma Merchandising S.R.L.
|
Italy
|
BRS NIKE Taiwan Inc.
|
Taiwan
|
Converse (Asia Pacific) Limited
|
Hong Kong
|
Converse Canada Corp.
|
Canada
|
Converse Canada Holding B.V.
|
Netherlands
|
Converse Deutschland GmbH
|
Germany
|
Converse Europe Limited
|
United Kingdom
|
Converse Footwear Technical Service (Zhongshan) Co., Ltd.
|
People’s Republic of China
|
Converse France S.A.S.
|
France
|
Converse Hong Kong Holding Company Limited
|
Hong Kong
|
Converse Hong Kong Limited
|
Hong Kong
|
Converse Inc.
|
Delaware
|
Converse Korea LLC
|
South Korea
|
Converse Netherlands B.V.
|
Netherlands
|
Converse Retail B.V.
|
Netherlands
|
Converse Retail GmbH
|
Austria
|
Converse Retail Italy S.r.l.
|
Italy
|
Converse Retail (UK) Limited
|
United Kingdom
|
Converse Sporting Goods (China) Co., Ltd.
|
People’s Republic of China
|
Converse Trading Company B.V.
|
Netherlands
|
F.C. Internazionale Merchandising s.r.l.
|
Italy
|
French Football Merchandising S.A.S.
|
France
|
Hurley 999, S.L.U.
|
Spain
|
Hurley Australia Pty. Ltd.
|
Australia
|
Hurley International LLC
|
Oregon
|
Hurley Phantom C.V.
|
Netherlands
|
LATAM Comercio de Productos Esportivos Ltda.
|
Brazil
|
NIKE 360 Holding B.V.
|
Netherlands
|
NIKE 360 Jordan with Limited Liability
|
Jordan
|
NIKE Air Ace B.V.
|
Netherlands
|
NIKE Air Force LP
|
Canada
|
NIKE Alpha Force LLC
|
Delaware
|
NIKE Amplify LLC
|
Delaware
|
NIKE Argentina S.R.L.
|
Argentina
|
NIKE Asia Holding B.V.
|
Netherlands
|
NIKE Australia Pty. Ltd.
|
Australia
|
NIKE Barcelona Merchandising S.L.U
|
Spain
|
NIKE Canada Corp.
|
Canada
|
NIKE Canada Holding B.V.
|
Netherlands
|
NIKE Chelsea Merchandising Limited
|
United Kingdom
|
NIKE Chile B.V.
|
Netherlands
|
NIKE China Holding HK Limited
|
Hong Kong
|
NIKE Codrus Coöperatief U.A.
|
Netherlands
|
Entity Name
|
Jurisdiction of Formation
|
NIKE Commercial (China) Co., Ltd.
|
People’s Republic of China
|
NIKE CR d.o.o
|
Croatia
|
NIKE Czech s.r.o.
|
Czech Republic
|
NIKE de Chile Ltda.
|
Chile
|
NIKE de Mexico, S. de R.L. de C.V.
|
Mexico
|
NIKE Denmark ApS
|
Denmark
|
NIKE Deutschland GmbH
|
Germany
|
NIKE do Brasil Comercio e Participacoes Ltda.
|
Brazil
|
NIKE Europe Holding B.V.
|
Netherlands
|
NIKE European Operations Netherlands B.V.
|
Netherlands
|
NIKE Finance Ltd.
|
Bermuda
|
NIKE Finland OY
|
Finland
|
NIKE Flight B.V.
|
Netherlands
|
NIKE France S.A.S.
|
France
|
NIKE Fuel B.V.
|
Netherlands
|
NIKE Galaxy Holding B.V.
|
Netherlands
|
NIKE Gesellschaft m.b.H.
|
Austria
|
NIKE Global Holding B.V.
|
Netherlands
|
NIKE GLOBAL SERVICES PTE. LTD.
|
Singapore
|
NIKE Global Trading B.V.
|
Netherlands
|
NIKE GLOBAL TRADING PTE. LTD.
|
Singapore
|
NIKE Group Holding B.V.
|
Netherlands
|
NIKE Hellas EPE
|
Greece
|
NIKE Holding, LLC
|
Delaware
|
NIKE Hong Kong Limited
|
Hong Kong
|
NIKE Hungary LLC
|
Hungary
|
NIKE IHM, Inc.
|
Missouri
|
NIKE India Holding B.V.
|
Netherlands
|
NIKE India Private Limited
|
India
|
NIKE Innovate C.V.
|
Netherlands
|
NIKE International Holding B.V.
|
Netherlands
|
NIKE International Holding, Inc.
|
Delaware
|
NIKE International LLC
|
Delaware
|
NIKE International Ltd.
|
Bermuda
|
NIKE Israel Ltd.
|
Israel
|
NIKE Italy S.R.L.
|
Italy
|
NIKE Japan Corp.
|
Japan
|
NIKE Japan Group LLC
|
Japan
|
NIKE Korea LLC
|
South Korea
|
NIKE Laser Holding B.V.
|
Netherlands
|
NIKE Licenciamentos Ltda.
|
Brazil
|
NIKE Logistics Yugen Kaisha
|
Japan
|
NIKE Magista, Inc.
|
Delaware
|
NIKE Mercurial Corp.
|
Delaware
|
NIKE Mercurial Hong Kong Limited
|
Hong Kong
|
NIKE Mercurial I Limited
|
United Kingdom
|
NIKE Mexico Holdings, LLC
|
Delaware
|
NIKE New Zealand Company
|
New Zealand
|
NIKE Norway AS
|
Norway
|
NIKE NZ Holding B.V.
|
Netherlands
|
Entity Name
|
Jurisdiction of Formation
|
NIKE Offshore Holding B.V.
|
Netherlands
|
NIKE Panama S. de R.L.
|
Panama
|
NIKE Philippines, Inc.
|
Philippines
|
NIKE Poland Sp. z o.o.
|
Poland
|
NIKE Retail B.V.
|
Netherlands
|
NIKE Retail Hellas Ltd.
|
Greece
|
NIKE Retail Israel Ltd.
|
Israel
|
NIKE Retail LLC
|
Russia
|
NIKE Retail Poland Sp. z o.o.
|
Poland
|
NIKE Retail Services, Inc.
|
Oregon
|
NIKE Retail Turkey
|
Turkey
|
NIKE Roshe, Inc.
|
Delaware
|
NIKE Russia LLC
|
Russia
|
NIKE SALES (MALAYSIA) SDN. BHD.
|
Malaysia
|
NIKE Shox Ltd.
|
Israel
|
NIKE SINGAPORE PTE. LTD.
|
Singapore
|
NIKE Slovakia s.r.o.
|
Slovakia
|
NIKE Sourcing India Private Limited
|
India
|
NIKE Sourcing (Guangzhou) Co., Ltd.
|
People’s Republic of China
|
NIKE South Africa (Proprietary) Limited
|
South Africa
|
NIKE South Africa Holdings LLC
|
Delaware
|
NIKE Spiridon, Inc.
|
Delaware
|
NIKE Sports (China) Company, Ltd.
|
People’s Republic of China
|
NIKE Sweden AB
|
Sweden
|
NIKE Swift B.V.
|
Netherlands
|
NIKE (Switzerland) GmbH
|
Switzerland
|
NIKE Taiwan Limited
|
Taiwan
|
NIKE Tempo LLC
|
Delaware
|
NIKE Terra LLC
|
Delaware
|
NIKE (Thailand) Limited
|
Thailand
|
NIKE TN, Inc.
|
Oregon
|
NIKE Trading Company B.V.
|
Netherlands
|
NIKE UK Holding B.V.
|
Netherlands
|
NIKE (UK) Limited
|
United Kingdom
|
NIKE USA, Inc.
|
Oregon
|
NIKE Vapor Ltd.
|
United Kingdom
|
NIKE Victory Cooperatief U.A.
|
Netherlands
|
NIKE Vietnam Limited Liability Company
|
Vietnam
|
NIKE Vision, Timing and Techlab, LP
|
Texas
|
NIKE Vomero Cooperatief U.A.
|
Netherlands
|
NIKE Wholesale LLC
|
Slovenia
|
North West Merchandising Limited
|
United Kingdom
|
PT Hurley Indonesia
|
Indonesia
|
PT NIKE Indonesia
|
Indonesia
|
Triax Insurance, Inc.
|
Hawaii
|
Twin Dragons Global Limited
|
Hong Kong
|
Twin Dragons Holding B.V.
|
Netherlands
|
York64 LLC
|
Delaware
|
Yugen Kaisha Hurley Japan
|
Japan
|
Dated:
|
July 23, 2019
|
|
|
|
/s/ Mark G. Parker
|
|
|
Mark G. Parker
|
|
|
Chief Executive Officer
|
Dated:
|
July 23, 2019
|
|
|
|
/s/ Andrew Campion
|
|
|
Andrew Campion
Chief Financial Officer
|
Dated:
|
July 23, 2019
|
|
|
|
/s/ Mark G. Parker
|
|
|
Mark G. Parker
|
|
|
Chief Executive Officer
|
Dated:
|
July 23, 2019
|
|
|
|
/s/ Andrew Campion
|
|
|
Andrew Campion
Chief Financial Officer
|