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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nike Inc | NYSE:NKE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.07 | -0.08% | 92.34 | 93.65 | 91.87 | 93.08 | 5,784,714 | 01:00:00 |
OREGON
|
93-0584541
|
(State or other jurisdiction of incorporation)
|
(IRS Employer Identification No.)
|
One Bowerman Drive, Beaverton, Oregon
|
97005-6453
|
(Address of principal executive offices)
|
(Zip Code)
|
(503) 671-6453
|
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
|
|
Class B Common Stock
|
New York Stock Exchange
|
(Title of Each Class)
|
(Name of Each Exchange on Which Registered)
|
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
|
||
NONE
|
Indicate by check mark:
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YES
|
NO
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|||
•
|
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
þ
|
¨
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||
•
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if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
¨
|
þ
|
||
•
|
whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
þ
|
¨
|
||
•
|
whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
|
þ
|
¨
|
||
•
|
if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|
þ
|
|||
•
|
whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
||||
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
•
|
whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
¨
|
þ
|
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|
Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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(Except for the information set forth under “Executive Officers of the Registrant” in Item 1 above, Part III is incorporated by reference from the Proxy Statement for the NIKE, Inc. 2016 Annual Meeting of Shareholders.)
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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General
|
Products
|
Sales and Marketing
|
United States Market
|
U.S. Retail Stores
|
Number
|
|
NIKE Brand factory stores
|
196
|
|
NIKE Brand in-line stores, including employee-only stores
|
34
|
|
Converse stores (including factory stores)
|
103
|
|
Hurley stores (including factory and employee stores)
|
29
|
|
TOTAL
|
362
|
|
International Markets
|
Non-U.S. Retail Stores
|
Number
|
|
NIKE Brand factory stores
|
588
|
|
NIKE Brand in-line stores, including employee-only stores
|
72
|
|
Converse stores (including factory stores)
|
23
|
|
TOTAL
|
683
|
|
Significant Customer
|
Orders
|
Product Research, Design and Development
|
Manufacturing
|
International Operations and Trade
|
Competition
|
•
|
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, 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 online.
|
Trademarks and Patents
|
Employees
|
Executive Officers of the Registrant
|
•
|
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 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
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
Maximum Number
(or Approximate Dollar Value)
of Shares that May Yet
Be Purchased Under the
Plans or Programs
(In millions)
|
||||||
March 1 — March 31, 2016
|
|
2,923,173
|
|
|
$
|
61.04
|
|
|
2,923,173
|
|
|
$
|
11,173
|
|
April 1 — April 30, 2016
|
|
4,328,107
|
|
|
$
|
59.69
|
|
|
4,328,107
|
|
|
$
|
10,914
|
|
May 1 — May 31, 2016
|
|
1,765,373
|
|
|
$
|
58.47
|
|
|
1,765,373
|
|
|
$
|
10,811
|
|
|
|
9,016,653
|
|
|
$
|
59.89
|
|
|
9,016,653
|
|
|
|
Performance Graph
|
(In millions, except per share data and financial ratios)
|
Financial History
|
||||||||||||||||||
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||||||||
Year Ended May 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
$
|
27,799
|
|
|
$
|
25,313
|
|
|
$
|
23,331
|
|
Gross profit
|
14,971
|
|
|
14,067
|
|
|
12,446
|
|
|
11,034
|
|
|
10,148
|
|
|||||
Gross margin %
|
46.2
|
%
|
|
46.0
|
%
|
|
44.8
|
%
|
|
43.6
|
%
|
|
43.5
|
%
|
|||||
Net income from continuing operations
|
3,760
|
|
|
3,273
|
|
|
2,693
|
|
|
2,451
|
|
|
2,257
|
|
|||||
Net income (loss) from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(46
|
)
|
|||||
Net income
|
3,760
|
|
|
3,273
|
|
|
2,693
|
|
|
2,472
|
|
|
2,211
|
|
|||||
Earnings per common share from continuing operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
2.21
|
|
|
1.90
|
|
|
1.52
|
|
|
1.37
|
|
|
1.23
|
|
|||||
Diluted
|
2.16
|
|
|
1.85
|
|
|
1.49
|
|
|
1.34
|
|
|
1.20
|
|
|||||
Earnings per common share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
(0.03
|
)
|
|||||
Diluted
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
(0.02
|
)
|
|||||
Weighted average common shares outstanding
|
1,697.9
|
|
|
1,723.5
|
|
|
1,766.7
|
|
|
1,794.6
|
|
|
1,839.9
|
|
|||||
Diluted weighted average common shares outstanding
|
1,742.5
|
|
|
1,768.8
|
|
|
1,811.6
|
|
|
1,832.9
|
|
|
1,879.2
|
|
|||||
Cash dividends declared per common share
|
0.62
|
|
|
0.54
|
|
|
0.47
|
|
|
0.41
|
|
|
0.35
|
|
|||||
Cash flow from operations, inclusive of discontinued operations
|
3,096
|
|
|
4,680
|
|
|
3,013
|
|
|
3,032
|
|
|
1,932
|
|
|||||
Price range of common stock:
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
68.19
|
|
|
52.75
|
|
|
40.13
|
|
|
32.96
|
|
|
28.60
|
|
|||||
Low
|
47.25
|
|
|
36.57
|
|
|
29.56
|
|
|
21.95
|
|
|
19.65
|
|
|||||
At May 31,
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and equivalents
|
$
|
3,138
|
|
|
$
|
3,852
|
|
|
$
|
2,220
|
|
|
$
|
3,337
|
|
|
$
|
2,254
|
|
Short-term investments
|
2,319
|
|
|
2,072
|
|
|
2,922
|
|
|
2,628
|
|
|
1,503
|
|
|||||
Inventories
|
4,838
|
|
|
4,337
|
|
|
3,947
|
|
|
3,484
|
|
|
3,251
|
|
|||||
Working capital, excluding assets and liabilities of discontinued operations
(1)(2)(3)
|
9,667
|
|
|
9,255
|
|
|
8,319
|
|
|
9,391
|
|
|
7,271
|
|
|||||
Total assets, excluding assets of discontinued operations
(1)(2)
|
21,396
|
|
|
21,597
|
|
|
18,587
|
|
|
17,540
|
|
|
14,800
|
|
|||||
Long-term debt
|
2,010
|
|
|
1,079
|
|
|
1,199
|
|
|
1,210
|
|
|
228
|
|
|||||
Capital lease obligations
(4)
|
15
|
|
|
5
|
|
|
74
|
|
|
81
|
|
|
—
|
|
|||||
Redeemable preferred stock
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|||||
Shareholders’ equity
|
12,258
|
|
|
12,707
|
|
|
10,824
|
|
|
11,081
|
|
|
10,319
|
|
|||||
Year-end stock price
|
55.22
|
|
|
50.84
|
|
|
38.46
|
|
|
30.83
|
|
|
27.05
|
|
|||||
Market capitalization
|
92,867
|
|
|
87,044
|
|
|
66,921
|
|
|
55,124
|
|
|
49,546
|
|
|||||
Financial Ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Return on equity
|
30.1
|
%
|
|
27.8
|
%
|
|
24.6
|
%
|
|
23.1
|
%
|
|
22.0
|
%
|
|||||
Return on assets
(1)
|
17.5
|
%
|
|
16.3
|
%
|
|
14.9
|
%
|
|
15.3
|
%
|
|
15.1
|
%
|
|||||
Inventory turns
|
3.8
|
|
|
4.0
|
|
|
4.1
|
|
|
4.2
|
|
|
4.5
|
|
|||||
Current ratio at May 31
(1)
|
2.8
|
|
|
2.5
|
|
|
2.7
|
|
|
3.4
|
|
|
3.0
|
|
|||||
Price/Earnings ratio at May 31
|
25.6
|
|
|
27.5
|
|
|
25.9
|
|
|
22.8
|
|
|
23.0
|
|
(1)
|
Prior year amounts have been updated to reflect the adoption of Accounting Standards Update No. 2015-17, which requires all deferred tax assets and deferred tax liabilities to be classified as non-current. Refer to Recently Adopted Accounting Standards in
Note 1 — Summary of Significant Accounting Policies
in the accompanying Notes to the Consolidated Financial Statements.
|
(2)
|
Assets of discontinued operations were $0 million, $0 million, $0 million, $0 million and $615 million for the years ended
May 31, 2016
,
2015
,
2014
,
2013
and
2012
, respectively.
|
(3)
|
Liabilities of discontinued operations were $0 million, $0 million, $0 million, $18 million and $170 million for the years ended
May 31, 2016
,
2015
,
2014
,
2013
and
2012
, respectively.
|
(4)
|
During the fiscal year ended May 31, 2015, the Company restructured the terms of certain capital leases, which subsequently qualified as operating leases.
|
Selected Quarterly Financial Data
|
(Unaudited)
(In millions, except per share data)
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||||||||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||
Revenues
|
|
$
|
8,414
|
|
|
$
|
7,982
|
|
|
$
|
7,686
|
|
|
$
|
7,380
|
|
|
$
|
8,032
|
|
|
$
|
7,460
|
|
|
$
|
8,244
|
|
|
$
|
7,779
|
|
Gross profit
|
|
3,995
|
|
|
3,721
|
|
|
3,501
|
|
|
3,327
|
|
|
3,689
|
|
|
3,426
|
|
|
3,786
|
|
|
3,593
|
|
||||||||
Gross margin %
|
|
47.5
|
%
|
|
46.6
|
%
|
|
45.6
|
%
|
|
45.1
|
%
|
|
45.9
|
%
|
|
45.9
|
%
|
|
45.9
|
%
|
|
46.2
|
%
|
||||||||
Net income
|
|
1,179
|
|
|
962
|
|
|
785
|
|
|
655
|
|
|
950
|
|
|
791
|
|
|
846
|
|
|
865
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
|
0.69
|
|
|
0.56
|
|
|
0.46
|
|
|
0.38
|
|
|
0.56
|
|
|
0.46
|
|
|
0.50
|
|
|
0.50
|
|
||||||||
Diluted
|
|
0.67
|
|
|
0.54
|
|
|
0.45
|
|
|
0.37
|
|
|
0.55
|
|
|
0.45
|
|
|
0.49
|
|
|
0.49
|
|
||||||||
Weighted average common shares outstanding
|
|
1,709.0
|
|
|
1,729.8
|
|
|
1,706.5
|
|
|
1,726.2
|
|
|
1,693.8
|
|
|
1,722.9
|
|
|
1,682.4
|
|
|
1,715.0
|
|
||||||||
Diluted weighted average common shares outstanding
|
|
1,754.5
|
|
|
1,772.4
|
|
|
1,751.4
|
|
|
1,769.6
|
|
|
1,737.3
|
|
|
1,767.7
|
|
|
1,723.1
|
|
|
1,759.6
|
|
||||||||
Cash dividends declared per common share
|
|
0.14
|
|
|
0.12
|
|
|
0.16
|
|
|
0.14
|
|
|
0.16
|
|
|
0.14
|
|
|
0.16
|
|
|
0.14
|
|
||||||||
Price range of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
|
58.86
|
|
|
40.15
|
|
|
67.65
|
|
|
49.88
|
|
|
68.19
|
|
|
49.75
|
|
|
65.44
|
|
|
52.75
|
|
||||||||
Low
|
|
47.25
|
|
|
36.57
|
|
|
54.01
|
|
|
39.18
|
|
|
53.64
|
|
|
43.35
|
|
|
55.17
|
|
|
47.59
|
|
•
|
Expanding gross margin by:
|
•
|
Optimizing selling and administrative expense by focusing on:
|
•
|
Managing working capital efficiency; and
|
•
|
Deploying capital effectively.
|
•
|
High single-digit to low-double digit revenue growth;
|
•
|
Mid-teens earnings per share growth;
|
•
|
High-twenties to low-thirties percentage rate of return on invested capital;
|
•
|
Free cash flow growing faster than net income; and
|
•
|
Sustainable, profitable, long-term growth through effective management of our diversified portfolio of businesses.
|
•
|
Innovative performance and sportswear products, incorporating proprietary technology platforms such as NIKE Air, Free, Zoom, Lunar, Flywire, Dri-Fit and Flyknit;
|
•
|
Deep brand connections with consumers through our category offense, reinforced by investments in endorsements by high-profile athletes, sports teams and leagues, high-impact marketing around global sporting events and digital marketing; and
|
•
|
Strong category retail presentation online and at NIKE-owned and retail partner stores.
|
Results of Operations
|
(Dollars in millions, except per share data)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
Fiscal 2014
|
|
% Change
|
||||||||
Revenues
|
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
6
|
%
|
|
$
|
27,799
|
|
|
10
|
%
|
Cost of sales
|
|
17,405
|
|
|
16,534
|
|
|
5
|
%
|
|
15,353
|
|
|
8
|
%
|
|||
Gross profit
|
|
14,971
|
|
|
14,067
|
|
|
6
|
%
|
|
12,446
|
|
|
13
|
%
|
|||
Gross margin %
|
|
46.2
|
%
|
|
46.0
|
%
|
|
|
|
44.8
|
%
|
|
|
|||||
Demand creation expense
|
|
3,278
|
|
|
3,213
|
|
|
2
|
%
|
|
3,031
|
|
|
6
|
%
|
|||
Operating overhead expense
|
|
7,191
|
|
|
6,679
|
|
|
8
|
%
|
|
5,735
|
|
|
16
|
%
|
|||
Total selling and administrative expense
|
|
10,469
|
|
|
9,892
|
|
|
6
|
%
|
|
8,766
|
|
|
13
|
%
|
|||
% of Revenues
|
|
32.3
|
%
|
|
32.3
|
%
|
|
|
|
31.5
|
%
|
|
|
|||||
Interest expense (income), net
|
|
19
|
|
|
28
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|||
Other (income) expense, net
|
|
(140
|
)
|
|
(58
|
)
|
|
—
|
|
|
103
|
|
|
—
|
|
|||
Income before income taxes
|
|
4,623
|
|
|
4,205
|
|
|
10
|
%
|
|
3,544
|
|
|
19
|
%
|
|||
Income tax expense
|
|
863
|
|
|
932
|
|
|
-7
|
%
|
|
851
|
|
|
10
|
%
|
|||
Effective tax rate
|
|
18.7
|
%
|
|
22.2
|
%
|
|
|
|
24.0
|
%
|
|
|
|||||
Net income
|
|
$
|
3,760
|
|
|
$
|
3,273
|
|
|
15
|
%
|
|
$
|
2,693
|
|
|
22
|
%
|
Diluted earnings per common share
|
|
$
|
2.16
|
|
|
$
|
1.85
|
|
|
17
|
%
|
|
$
|
1.49
|
|
|
24
|
%
|
Consolidated Operating Results
|
(Dollars in millions)
|
Fiscal 2016
|
Fiscal 2015
(1)
|
% Change
|
% Change Excluding Currency Changes
(2)
|
Fiscal 2014
(1)
|
% Change
|
% Change Excluding Currency Changes
(2)
|
||||||||||
NIKE, Inc. Revenues:
|
|
|
|
|
|
|
|
||||||||||
NIKE Brand Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
$
|
19,871
|
|
$
|
18,318
|
|
8
|
%
|
15
|
%
|
$
|
16,208
|
|
13
|
%
|
17
|
%
|
Apparel
|
9,067
|
|
8,637
|
|
5
|
%
|
11
|
%
|
8,109
|
|
7
|
%
|
10
|
%
|
|||
Equipment
|
1,496
|
|
1,631
|
|
-8
|
%
|
-2
|
%
|
1,670
|
|
-2
|
%
|
1
|
%
|
|||
Global Brand Divisions
(3)
|
73
|
|
115
|
|
-37
|
%
|
-30
|
%
|
125
|
|
-8
|
%
|
-2
|
%
|
|||
Total NIKE Brand Revenues
|
30,507
|
|
28,701
|
|
6
|
%
|
13
|
%
|
26,112
|
|
10
|
%
|
14
|
%
|
|||
Converse
|
1,955
|
|
1,982
|
|
-1
|
%
|
2
|
%
|
1,684
|
|
18
|
%
|
21
|
%
|
|||
Corporate
(4)
|
(86
|
)
|
(82
|
)
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
|||
TOTAL NIKE, INC. REVENUES
|
$
|
32,376
|
|
$
|
30,601
|
|
6
|
%
|
12
|
%
|
$
|
27,799
|
|
10
|
%
|
14
|
%
|
Supplemental NIKE Brand Revenues Details:
|
|
|
|
|
|
|
|
||||||||||
NIKE Brand Revenues by:
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
22,577
|
|
$
|
21,952
|
|
3
|
%
|
9
|
%
|
$
|
20,683
|
|
6
|
%
|
10
|
%
|
Sales Direct to Consumer
|
7,857
|
|
6,634
|
|
18
|
%
|
25
|
%
|
5,304
|
|
25
|
%
|
29
|
%
|
|||
Global Brand Divisions
(3)
|
73
|
|
115
|
|
-37
|
%
|
-30
|
%
|
125
|
|
-8
|
%
|
-2
|
%
|
|||
TOTAL NIKE BRAND REVENUES
|
$
|
30,507
|
|
$
|
28,701
|
|
6
|
%
|
13
|
%
|
$
|
26,112
|
|
10
|
%
|
14
|
%
|
NIKE Brand Revenues on a Wholesale Equivalent Basis:
(5)
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
$
|
22,577
|
|
$
|
21,952
|
|
3
|
%
|
9
|
%
|
$
|
20,683
|
|
6
|
%
|
10
|
%
|
Sales from our Wholesale Operations to Direct to Consumer Operations
|
4,672
|
|
3,881
|
|
20
|
%
|
27
|
%
|
3,107
|
|
25
|
%
|
29
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
27,249
|
|
$
|
25,833
|
|
5
|
%
|
12
|
%
|
$
|
23,790
|
|
9
|
%
|
13
|
%
|
NIKE Brand Wholesale Equivalent Revenues by:
(5)
|
|
|
|
|
|
|
|
||||||||||
Men's
|
$
|
15,410
|
|
$
|
14,689
|
|
5
|
%
|
11
|
%
|
$
|
13,996
|
|
5
|
%
|
9
|
%
|
Women's
|
6,296
|
|
5,732
|
|
10
|
%
|
17
|
%
|
4,976
|
|
15
|
%
|
20
|
%
|
|||
Young Athletes'
|
4,560
|
|
4,301
|
|
6
|
%
|
11
|
%
|
3,737
|
|
15
|
%
|
19
|
%
|
|||
Others
(6)
|
983
|
|
1,111
|
|
-12
|
%
|
-4
|
%
|
1,081
|
|
3
|
%
|
7
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
27,249
|
|
$
|
25,833
|
|
5
|
%
|
12
|
%
|
$
|
23,790
|
|
9
|
%
|
13
|
%
|
NIKE Brand Wholesale Equivalent Revenues by:
(5)
|
|
|
|
|
|
|
|
||||||||||
Running
|
$
|
5,017
|
|
$
|
4,863
|
|
3
|
%
|
10
|
%
|
$
|
4,626
|
|
5
|
%
|
9
|
%
|
NIKE Basketball
|
1,378
|
|
1,385
|
|
-1
|
%
|
2
|
%
|
1,178
|
|
18
|
%
|
19
|
%
|
|||
Jordan Brand
|
2,753
|
|
2,329
|
|
18
|
%
|
21
|
%
|
1,941
|
|
20
|
%
|
22
|
%
|
|||
Football (Soccer)
|
2,143
|
|
2,250
|
|
-5
|
%
|
7
|
%
|
2,414
|
|
-7
|
%
|
-2
|
%
|
|||
Men’s Training
|
2,611
|
|
2,545
|
|
3
|
%
|
6
|
%
|
2,485
|
|
2
|
%
|
4
|
%
|
|||
Women’s Training
|
1,344
|
|
1,281
|
|
5
|
%
|
11
|
%
|
1,145
|
|
12
|
%
|
16
|
%
|
|||
Action Sports
|
711
|
|
737
|
|
-4
|
%
|
3
|
%
|
738
|
|
0
|
%
|
4
|
%
|
|||
Sportswear
|
7,513
|
|
6,604
|
|
14
|
%
|
22
|
%
|
5,744
|
|
15
|
%
|
20
|
%
|
|||
Golf
|
706
|
|
769
|
|
-8
|
%
|
-6
|
%
|
788
|
|
-2
|
%
|
0
|
%
|
|||
Others
(7)
|
3,073
|
|
3,070
|
|
0
|
%
|
6
|
%
|
2,731
|
|
12
|
%
|
17
|
%
|
|||
TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES
|
$
|
27,249
|
|
$
|
25,833
|
|
5
|
%
|
12
|
%
|
$
|
23,790
|
|
9
|
%
|
13
|
%
|
(1)
|
Certain prior year amounts have been reclassified to conform to fiscal 2016 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
|
(2)
|
Results have been restated using actual exchange rates in use during the comparative prior year period to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations.
|
(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)
|
References to NIKE Brand wholesale equivalent revenues are intended to provide context as to the total size of our NIKE Brand market footprint if we had no Direct to Consumer operations. NIKE Brand wholesale equivalent revenues consist of (1) sales to external wholesale customers and (2) internal sales from our wholesale operations to our Direct to Consumer operations which are charged at prices that are comparable to prices charged to external wholesale customers.
|
(6)
|
Others include all unisex products, equipment and other products not allocated to Men’s, Women’s and Young Athletes’, as well as certain adjustments that are not allocated to products designated by gender or age.
|
(7)
|
Others include all other categories and certain adjustments that are not allocated at the category level.
|
|
|
Reported Futures Orders
|
|
Futures Orders Excluding
Currency Changes
(1)
|
North America
|
|
6%
|
|
6%
|
Western Europe
|
|
8%
|
|
11%
|
Central & Eastern Europe
|
|
3%
|
|
7%
|
Greater China
|
|
19%
|
|
24%
|
Japan
|
|
24%
|
|
15%
|
Emerging Markets
|
|
3%
|
|
13%
|
TOTAL NIKE BRAND FUTURES ORDERS
|
|
8%
|
|
11%
|
(1)
|
Reported futures have been restated using prior year exchange rates for the comparative period to enhance the visibility of the underlying business trends, excluding the impact of foreign currency exchange rate fluctuations.
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
|
Fiscal 2015
|
|
|
% Change
|
|
Fiscal 2014
|
|
|
% Change
|
|||||
Gross profit
|
|
$
|
14,971
|
|
|
$
|
14,067
|
|
|
6
|
%
|
|
$
|
12,446
|
|
|
13
|
%
|
Gross margin %
|
|
46.2
|
%
|
|
46.0
|
%
|
|
20
|
bps
|
|
44.8
|
%
|
|
120
|
bps
|
•
|
Higher NIKE Brand full-price ASP (increasing gross margin approximately 190 basis points) aligned with our strategy to deliver innovative, premium products with higher prices and, to a lesser extent, due to price increases reflecting inflationary conditions in certain territories;
|
•
|
Growth in our higher-margin DTC business (increasing gross margin approximately 20 basis points);
|
•
|
Higher NIKE Brand product costs (decreasing gross margin approximately 70 basis points) as shifts in mix to higher-cost products and labor input cost inflation were only partially offset by lower material input costs;
|
•
|
Higher off-price mix (decreasing gross margin approximately 30 basis points), primarily reflecting the impacts from clearing excess inventory in North America;
|
•
|
Unfavorable changes in foreign currency exchange rates, net of hedges (decreasing gross margin approximately 40 basis points);
|
•
|
Higher other costs (decreasing gross margin approximately 20 basis points), primarily due to higher product design and development costs; and
|
•
|
Lower gross margin from Converse (decreasing gross margin approximately 20 basis points), primarily resulting from shifts in mix to lower-margin products.
|
•
|
Higher NIKE Brand full-price ASP (increasing gross margin approximately 250 basis points) primarily attributable to shifts in mix to higher-priced products and, to a lesser extent, price increases in response to inflationary conditions in certain territories;
|
•
|
Higher NIKE Brand product costs (decreasing gross margin approximately 190 basis points) largely due to shifts in mix to higher-cost products, labor input cost inflation and higher air freight costs, in part to mitigate the negative impacts from product delays due to the West Coast port congestion in the United States;
|
•
|
Growth in our higher-margin DTC business (increasing gross margin approximately 40 basis points); and
|
•
|
Changes in foreign currency exchange rates (including gains and losses on hedge transactions) increased gross margin approximately 20 basis points.
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
|
Fiscal 2015
|
|
|
% Change
|
|
Fiscal 2014
|
|
|
% Change
|
|||||
Demand creation expense
(1)
|
|
$
|
3,278
|
|
|
$
|
3,213
|
|
|
2
|
%
|
|
$
|
3,031
|
|
|
6
|
%
|
Operating overhead expense
|
|
7,191
|
|
|
6,679
|
|
|
8
|
%
|
|
5,735
|
|
|
16
|
%
|
|||
Total selling and administrative expense
|
|
$
|
10,469
|
|
|
$
|
9,892
|
|
|
6
|
%
|
|
$
|
8,766
|
|
|
13
|
%
|
% of Revenues
|
|
32.3
|
%
|
|
32.3
|
%
|
|
—
|
|
|
31.5
|
%
|
|
80
|
bps
|
(1)
|
Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, television, digital and print advertising, brand events and retail brand presentation.
|
(In millions)
|
|
Fiscal 2016
|
|
|
Fiscal 2015
|
|
|
Fiscal 2014
|
|
|||
Other (income) expense, net
|
|
$
|
(140
|
)
|
|
$
|
(58
|
)
|
|
$
|
103
|
|
|
|
Fiscal 2016
|
|
|
Fiscal 2015
|
|
|
% Change
|
|
Fiscal 2014
|
|
|
% Change
|
||
Effective tax rate
|
|
18.7
|
%
|
|
22.2
|
%
|
|
(350) bps
|
|
|
24.0
|
%
|
|
(180) bps
|
|
Operating Segments
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
(1)
|
|
% Change
|
|
% Change Excluding Currency Changes
(2)
|
|
Fiscal 2014
(1)
|
|
% Change
|
|
% Change Excluding Currency Changes
(2)
|
||||||||||
North America
|
|
$
|
14,764
|
|
|
$
|
13,740
|
|
|
7
|
%
|
|
8
|
%
|
|
$
|
12,299
|
|
|
12
|
%
|
|
12
|
%
|
Western Europe
|
|
5,884
|
|
|
5,705
|
|
|
3
|
%
|
|
14
|
%
|
|
4,979
|
|
|
15
|
%
|
|
21
|
%
|
|||
Central & Eastern Europe
|
|
1,431
|
|
|
1,421
|
|
|
1
|
%
|
|
17
|
%
|
|
1,387
|
|
|
2
|
%
|
|
15
|
%
|
|||
Greater China
|
|
3,785
|
|
|
3,067
|
|
|
23
|
%
|
|
27
|
%
|
|
2,602
|
|
|
18
|
%
|
|
19
|
%
|
|||
Japan
|
|
869
|
|
|
755
|
|
|
15
|
%
|
|
22
|
%
|
|
771
|
|
|
-2
|
%
|
|
9
|
%
|
|||
Emerging Markets
|
|
3,701
|
|
|
3,898
|
|
|
-5
|
%
|
|
13
|
%
|
|
3,949
|
|
|
-1
|
%
|
|
8
|
%
|
|||
Global Brand Divisions
(3)
|
|
73
|
|
|
115
|
|
|
-37
|
%
|
|
-30
|
%
|
|
125
|
|
|
-8
|
%
|
|
-2
|
%
|
|||
Total NIKE Brand Revenues
|
|
30,507
|
|
|
28,701
|
|
|
6
|
%
|
|
13
|
%
|
|
26,112
|
|
|
10
|
%
|
|
14
|
%
|
|||
Converse
|
|
1,955
|
|
|
1,982
|
|
|
-1
|
%
|
|
2
|
%
|
|
1,684
|
|
|
18
|
%
|
|
21
|
%
|
|||
Corporate
(4)
|
|
(86
|
)
|
|
(82
|
)
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
TOTAL NIKE, INC. REVENUES
|
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
6
|
%
|
|
12
|
%
|
|
$
|
27,799
|
|
|
10
|
%
|
|
14
|
%
|
(1)
|
Certain prior year amounts have been reclassified to conform to fiscal 2016 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
|
(2)
|
Results have been restated using actual exchange rates in use during the comparative prior year period to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations.
|
(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.
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
(1)
|
|
% Change
|
|
Fiscal 2014
(1)
|
|
% Change
|
||||||||
North America
|
|
$
|
3,763
|
|
|
$
|
3,645
|
|
|
3
|
%
|
|
$
|
3,077
|
|
|
18
|
%
|
Western Europe
|
|
1,434
|
|
|
1,275
|
|
|
12
|
%
|
|
855
|
|
|
49
|
%
|
|||
Central & Eastern Europe
|
|
289
|
|
|
249
|
|
|
16
|
%
|
|
279
|
|
|
-11
|
%
|
|||
Greater China
|
|
1,372
|
|
|
993
|
|
|
38
|
%
|
|
816
|
|
|
22
|
%
|
|||
Japan
|
|
174
|
|
|
100
|
|
|
74
|
%
|
|
131
|
|
|
-24
|
%
|
|||
Emerging Markets
|
|
892
|
|
|
818
|
|
|
9
|
%
|
|
952
|
|
|
-14
|
%
|
|||
Global Brand Divisions
|
|
(2,596
|
)
|
|
(2,267
|
)
|
|
-15
|
%
|
|
(1,993
|
)
|
|
-14
|
%
|
|||
Total NIKE Brand
|
|
5,328
|
|
|
4,813
|
|
|
11
|
%
|
|
4,117
|
|
|
17
|
%
|
|||
Converse
|
|
487
|
|
|
517
|
|
|
-6
|
%
|
|
496
|
|
|
4
|
%
|
|||
Corporate
|
|
(1,173
|
)
|
|
(1,097
|
)
|
|
-7
|
%
|
|
(1,036
|
)
|
|
-6
|
%
|
|||
TOTAL CONSOLIDATED EARNINGS
BEFORE INTEREST AND TAXES
|
|
4,642
|
|
|
4,233
|
|
|
10
|
%
|
|
3,577
|
|
|
18
|
%
|
|||
Interest expense (income), net
|
|
19
|
|
|
28
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|||
TOTAL CONSOLIDATED INCOME
BEFORE INCOME TAXES
|
|
$
|
4,623
|
|
|
$
|
4,205
|
|
|
10
|
%
|
|
$
|
3,544
|
|
|
19
|
%
|
(1)
|
Certain prior year amounts have been reclassified to conform to fiscal 2016 presentation. These changes had no impact on previously reported results of operations or shareholders' equity.
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
9,299
|
|
|
$
|
8,506
|
|
|
9
|
%
|
|
10
|
%
|
|
$
|
7,495
|
|
|
13
|
%
|
|
14
|
%
|
Apparel
|
|
4,746
|
|
|
4,410
|
|
|
8
|
%
|
|
8
|
%
|
|
3,937
|
|
|
12
|
%
|
|
12
|
%
|
|||
Equipment
|
|
719
|
|
|
824
|
|
|
-13
|
%
|
|
-13
|
%
|
|
867
|
|
|
-5
|
%
|
|
-5
|
%
|
|||
TOTAL REVENUES
|
|
$
|
14,764
|
|
|
$
|
13,740
|
|
|
7
|
%
|
|
8
|
%
|
|
$
|
12,299
|
|
|
12
|
%
|
|
12
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
10,674
|
|
|
$
|
10,243
|
|
|
4
|
%
|
|
5
|
%
|
|
$
|
9,296
|
|
|
10
|
%
|
|
10
|
%
|
Sales Direct to Consumer
|
|
4,090
|
|
|
3,497
|
|
|
17
|
%
|
|
17
|
%
|
|
3,003
|
|
|
16
|
%
|
|
17
|
%
|
|||
TOTAL REVENUES
|
|
$
|
14,764
|
|
|
$
|
13,740
|
|
|
7
|
%
|
|
8
|
%
|
|
$
|
12,299
|
|
|
12
|
%
|
|
12
|
%
|
EARNINGS BEFORE INTEREST
AND TAXES
|
|
$
|
3,763
|
|
|
$
|
3,645
|
|
|
3
|
%
|
|
|
|
$
|
3,077
|
|
|
18
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
3,985
|
|
|
$
|
3,876
|
|
|
3
|
%
|
|
14
|
%
|
|
$
|
3,299
|
|
|
17
|
%
|
|
25
|
%
|
Apparel
|
|
1,628
|
|
|
1,552
|
|
|
5
|
%
|
|
16
|
%
|
|
1,427
|
|
|
9
|
%
|
|
14
|
%
|
|||
Equipment
|
|
271
|
|
|
277
|
|
|
-2
|
%
|
|
8
|
%
|
|
253
|
|
|
9
|
%
|
|
15
|
%
|
|||
TOTAL REVENUES
|
|
$
|
5,884
|
|
|
$
|
5,705
|
|
|
3
|
%
|
|
14
|
%
|
|
$
|
4,979
|
|
|
15
|
%
|
|
21
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
4,429
|
|
|
$
|
4,451
|
|
|
0
|
%
|
|
10
|
%
|
|
$
|
4,022
|
|
|
11
|
%
|
|
17
|
%
|
Sales Direct to Consumer
|
|
1,455
|
|
|
1,254
|
|
|
16
|
%
|
|
28
|
%
|
|
957
|
|
|
31
|
%
|
|
40
|
%
|
|||
TOTAL REVENUES
|
|
$
|
5,884
|
|
|
$
|
5,705
|
|
|
3
|
%
|
|
14
|
%
|
|
$
|
4,979
|
|
|
15
|
%
|
|
21
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
$
|
1,434
|
|
|
$
|
1,275
|
|
|
12
|
%
|
|
|
|
$
|
855
|
|
|
49
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
882
|
|
|
$
|
827
|
|
|
7
|
%
|
|
23
|
%
|
|
$
|
763
|
|
|
8
|
%
|
|
22
|
%
|
Apparel
|
|
463
|
|
|
499
|
|
|
-7
|
%
|
|
9
|
%
|
|
532
|
|
|
-6
|
%
|
|
5
|
%
|
|||
Equipment
|
|
86
|
|
|
95
|
|
|
-9
|
%
|
|
7
|
%
|
|
92
|
|
|
3
|
%
|
|
14
|
%
|
|||
TOTAL REVENUES
|
|
$
|
1,431
|
|
|
$
|
1,421
|
|
|
1
|
%
|
|
17
|
%
|
|
$
|
1,387
|
|
|
2
|
%
|
|
15
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
1,215
|
|
|
$
|
1,241
|
|
|
-2
|
%
|
|
13
|
%
|
|
$
|
1,245
|
|
|
0
|
%
|
|
11
|
%
|
Sales Direct to Consumer
|
|
216
|
|
|
180
|
|
|
20
|
%
|
|
46
|
%
|
|
142
|
|
|
27
|
%
|
|
48
|
%
|
|||
TOTAL REVENUES
|
|
$
|
1,431
|
|
|
$
|
1,421
|
|
|
1
|
%
|
|
17
|
%
|
|
$
|
1,387
|
|
|
2
|
%
|
|
15
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
$
|
289
|
|
|
$
|
249
|
|
|
16
|
%
|
|
|
|
$
|
279
|
|
|
-11
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
2,599
|
|
|
$
|
2,016
|
|
|
29
|
%
|
|
33
|
%
|
|
$
|
1,600
|
|
|
26
|
%
|
|
28
|
%
|
Apparel
|
|
1,055
|
|
|
925
|
|
|
14
|
%
|
|
17
|
%
|
|
876
|
|
|
6
|
%
|
|
7
|
%
|
|||
Equipment
|
|
131
|
|
|
126
|
|
|
4
|
%
|
|
7
|
%
|
|
126
|
|
|
0
|
%
|
|
1
|
%
|
|||
TOTAL REVENUES
|
|
$
|
3,785
|
|
|
$
|
3,067
|
|
|
23
|
%
|
|
27
|
%
|
|
$
|
2,602
|
|
|
18
|
%
|
|
19
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
2,623
|
|
|
$
|
2,234
|
|
|
17
|
%
|
|
21
|
%
|
|
$
|
2,041
|
|
|
9
|
%
|
|
11
|
%
|
Sales Direct to Consumer
|
|
1,162
|
|
|
833
|
|
|
39
|
%
|
|
44
|
%
|
|
561
|
|
|
48
|
%
|
|
51
|
%
|
|||
TOTAL REVENUES
|
|
$
|
3,785
|
|
|
$
|
3,067
|
|
|
23
|
%
|
|
27
|
%
|
|
$
|
2,602
|
|
|
18
|
%
|
|
19
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
$
|
1,372
|
|
|
$
|
993
|
|
|
38
|
%
|
|
|
|
$
|
816
|
|
|
22
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
570
|
|
|
$
|
452
|
|
|
26
|
%
|
|
34
|
%
|
|
$
|
409
|
|
|
11
|
%
|
|
23
|
%
|
Apparel
|
|
228
|
|
|
230
|
|
|
-1
|
%
|
|
5
|
%
|
|
276
|
|
|
-17
|
%
|
|
-8
|
%
|
|||
Equipment
|
|
71
|
|
|
73
|
|
|
-3
|
%
|
|
3
|
%
|
|
86
|
|
|
-15
|
%
|
|
-6
|
%
|
|||
TOTAL REVENUES
|
|
$
|
869
|
|
|
$
|
755
|
|
|
15
|
%
|
|
22
|
%
|
|
$
|
771
|
|
|
-2
|
%
|
|
9
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
587
|
|
|
$
|
536
|
|
|
10
|
%
|
|
16
|
%
|
|
$
|
597
|
|
|
-10
|
%
|
|
0
|
%
|
Sales Direct to Consumer
|
|
282
|
|
|
219
|
|
|
29
|
%
|
|
37
|
%
|
|
174
|
|
|
26
|
%
|
|
40
|
%
|
|||
TOTAL REVENUES
|
|
$
|
869
|
|
|
$
|
755
|
|
|
15
|
%
|
|
22
|
%
|
|
$
|
771
|
|
|
-2
|
%
|
|
9
|
%
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
$
|
174
|
|
|
$
|
100
|
|
|
74
|
%
|
|
|
|
$
|
131
|
|
|
-24
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Footwear
|
|
$
|
2,536
|
|
|
$
|
2,641
|
|
|
-4
|
%
|
|
14
|
%
|
|
$
|
2,642
|
|
|
0
|
%
|
|
9
|
%
|
Apparel
|
|
947
|
|
|
1,021
|
|
|
-7
|
%
|
|
11
|
%
|
|
1,061
|
|
|
-4
|
%
|
|
5
|
%
|
|||
Equipment
|
|
218
|
|
|
236
|
|
|
-8
|
%
|
|
11
|
%
|
|
246
|
|
|
-4
|
%
|
|
5
|
%
|
|||
TOTAL REVENUES
|
|
$
|
3,701
|
|
|
$
|
3,898
|
|
|
-5
|
%
|
|
13
|
%
|
|
$
|
3,949
|
|
|
-1
|
%
|
|
8
|
%
|
Revenues by:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales to Wholesale Customers
|
|
$
|
3,049
|
|
|
$
|
3,247
|
|
|
-6
|
%
|
|
11
|
%
|
|
$
|
3,483
|
|
|
-7
|
%
|
|
2
|
%
|
Sales Direct to Consumer
|
|
652
|
|
|
651
|
|
|
0
|
%
|
|
23
|
%
|
|
466
|
|
|
40
|
%
|
|
51
|
%
|
|||
TOTAL REVENUES
|
|
$
|
3,701
|
|
|
$
|
3,898
|
|
|
-5
|
%
|
|
13
|
%
|
|
$
|
3,949
|
|
|
-1
|
%
|
|
8
|
%
|
EARNINGS BEFORE INTEREST
AND TAXES
|
|
$
|
892
|
|
|
$
|
818
|
|
|
9
|
%
|
|
|
|
$
|
952
|
|
|
-14
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues
|
|
$
|
73
|
|
|
$
|
115
|
|
|
-37
|
%
|
|
-30
|
%
|
|
$
|
125
|
|
|
-8
|
%
|
|
-2
|
%
|
(Loss) Before Interest and Taxes
|
|
$
|
(2,596
|
)
|
|
$
|
(2,267
|
)
|
|
15
|
%
|
|
|
|
$
|
(1,993
|
)
|
|
14
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
% Change Excluding Currency Changes
|
|
Fiscal 2014
|
|
% Change
|
|
% Change Excluding Currency Changes
|
||||||||||
Revenues
|
|
$
|
1,955
|
|
|
$
|
1,982
|
|
|
-1
|
%
|
|
2
|
%
|
|
$
|
1,684
|
|
|
18
|
%
|
|
21
|
%
|
Earnings Before Interest and Taxes
|
|
$
|
487
|
|
|
$
|
517
|
|
|
-6
|
%
|
|
|
|
$
|
496
|
|
|
4
|
%
|
|
|
(Dollars in millions)
|
|
Fiscal 2016
|
|
Fiscal 2015
|
|
% Change
|
|
Fiscal 2014
|
|
% Change
|
||||||||
Revenues
|
|
$
|
(86
|
)
|
|
$
|
(82
|
)
|
|
—
|
|
|
$
|
3
|
|
|
—
|
|
(Loss) Before Interest and Taxes
|
|
$
|
(1,173
|
)
|
|
$
|
(1,097
|
)
|
|
7
|
%
|
|
$
|
(1,036
|
)
|
|
6
|
%
|
•
|
an increase of $179 million, primarily driven by higher operating overhead expense to support corporate growth initiatives;
|
•
|
a beneficial change of $76 million from net foreign currency losses to net foreign currency gains 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; these gains are reported as a component of consolidated gross margin; and
|
•
|
a beneficial change of $27 million in net foreign currency gains 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
Other (income) expense, net.
|
•
|
a $203 million increase, primarily in corporate overhead expense related to corporate initiatives to support growth of the business as well as higher performance-based compensation;
|
•
|
a $144 million beneficial change from net foreign currency losses to net foreign currency gains, reported as a component of
Other (income) expense, net
; and
|
•
|
an approximate $2 million increase in foreign exchange losses 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; these losses are reported as a component of consolidated gross margin.
|
Foreign Currency Exposures and Hedging Practices
|
•
|
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. When the NTC sells to a NIKE entity with a different functional currency, the result is 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 Western Europe and Central & Eastern Europe geography revenues, as well as a portion of our Converse European operations revenues, 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 also entered into other contractual agreements which have payments that are indexed to foreign currencies and create embedded derivative contracts that are recorded at fair value through
Other (income) expense, net
.
Refer to
Note 16 — 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.
|
Liquidity and Capital Resources
|
Description of Commitment
|
|
Cash Payments Due During the Year Ending May 31,
|
||||||||||||||||||||||||||
(In millions)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating Leases
|
|
$
|
491
|
|
|
$
|
453
|
|
|
$
|
395
|
|
|
$
|
347
|
|
|
$
|
301
|
|
|
$
|
1,244
|
|
|
$
|
3,231
|
|
Capital Leases
|
|
7
|
|
|
5
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||||
Long-Term Debt
(1)
|
|
115
|
|
|
75
|
|
|
74
|
|
|
74
|
|
|
71
|
|
|
3,365
|
|
|
3,774
|
|
|||||||
Endorsement Contracts
(2)
|
|
1,198
|
|
|
1,238
|
|
|
945
|
|
|
827
|
|
|
698
|
|
|
4,514
|
|
|
9,420
|
|
|||||||
Product Purchase Obligations
(3)
|
|
4,149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,149
|
|
|||||||
Other Purchase Obligations
(4)
|
|
384
|
|
|
118
|
|
|
90
|
|
|
48
|
|
|
42
|
|
|
90
|
|
|
772
|
|
|||||||
TOTAL
|
|
$
|
6,344
|
|
|
$
|
1,889
|
|
|
$
|
1,506
|
|
|
$
|
1,297
|
|
|
$
|
1,112
|
|
|
$
|
9,213
|
|
|
$
|
21,361
|
|
(1)
|
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, 2016
(if variable), timing of scheduled payments and the term of the debt obligations.
|
(2)
|
The amounts listed for endorsement contracts represent approximate amounts of base compensation and minimum guaranteed royalty fees we are obligated to pay athlete, 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.
|
(3)
|
We generally order product at least four to five months in advance of sale based primarily on futures orders received from external wholesale customers and internal orders from our DTC in-line stores and e-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 that specify all significant terms. In some cases, prices are subject to change throughout the production process.
|
(4)
|
Other purchase obligations primarily include 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.
|
|
Outstanding as of
|
||
(In millions)
|
May 31, 2016
|
||
Notes payable, due at mutually agreed-upon dates within one year of issuance or on demand
|
$
|
1
|
|
Payable to Sojitz America for the purchase of inventories, generally due 60 days after shipment of goods from a foreign port
|
39
|
|
New Accounting Pronouncements
|
Critical Accounting Policies
|
Market Risk Measurement
|
|
|
Expected Maturity Date
Year Ending May 31,
|
||||||||||||||||||||||||||||||
(Dollars in millions)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
Fair
Value
|
||||||||||||||||
Foreign Exchange Risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Japanese Yen Functional Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term Japanese Yen debt — Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
28
|
|
Average interest rate
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
0.0
|
%
|
|
2.4
|
%
|
|
|
|||||||||
Interest Rate Risk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Japanese Yen Functional Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term Japanese Yen debt — Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
28
|
|
Average interest rate
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
2.4
|
%
|
|
0.0
|
%
|
|
2.4
|
%
|
|
|
|||||||||
U.S. Dollar Functional Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Long-term U.S. Dollar debt — Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Principal payments
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
2,038
|
|
|
$
|
2,097
|
|
Average interest rate
|
|
6.2
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
|
|
|||||||||
Anticipated long-term U.S. Dollar debt issuance - Floating rate swapped to fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Notional
(1)
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
38
|
|
Weighted-average fixed rate
|
|
2.2
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
2.2
|
%
|
|
|
|||||||||
Weighted-average floating rate
|
|
0.7
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.7
|
%
|
|
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
Mark G. Parker
|
Andrew Campion
|
Chairman, President and Chief Executive Officer
|
Chief Financial Officer
|
Report of Independent Registered Public Accounting Firm
|
NIKE, Inc. Consolidated Statements of Income
|
|
|
Year Ended May 31,
|
||||||||||
(In millions, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Revenues
|
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
$
|
27,799
|
|
Cost of sales
|
|
17,405
|
|
|
16,534
|
|
|
15,353
|
|
|||
Gross profit
|
|
14,971
|
|
|
14,067
|
|
|
12,446
|
|
|||
Demand creation expense
|
|
3,278
|
|
|
3,213
|
|
|
3,031
|
|
|||
Operating overhead expense
|
|
7,191
|
|
|
6,679
|
|
|
5,735
|
|
|||
Total selling and administrative expense
|
|
10,469
|
|
|
9,892
|
|
|
8,766
|
|
|||
Interest expense (income), net
|
|
19
|
|
|
28
|
|
|
33
|
|
|||
Other (income) expense, net
|
|
(140
|
)
|
|
(58
|
)
|
|
103
|
|
|||
Income before income taxes
|
|
4,623
|
|
|
4,205
|
|
|
3,544
|
|
|||
Income tax expense
|
|
863
|
|
|
932
|
|
|
851
|
|
|||
NET INCOME
|
|
$
|
3,760
|
|
|
$
|
3,273
|
|
|
$
|
2,693
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
2.21
|
|
|
$
|
1.90
|
|
|
$
|
1.52
|
|
Diluted
|
|
$
|
2.16
|
|
|
$
|
1.85
|
|
|
$
|
1.49
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per common share
|
|
$
|
0.62
|
|
|
$
|
0.54
|
|
|
$
|
0.47
|
|
NIKE, Inc. Consolidated Statements of Comprehensive Income
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
|
$
|
3,760
|
|
|
$
|
3,273
|
|
|
$
|
2,693
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
||||||
Change in net foreign currency translation adjustment
(1)
|
|
(176
|
)
|
|
(20
|
)
|
|
(32
|
)
|
|||
Change in net gains (losses) on cash flow hedges
(2)
|
|
(757
|
)
|
|
1,188
|
|
|
(161
|
)
|
|||
Change in net gains (losses) on other
(3)
|
|
5
|
|
|
(7
|
)
|
|
4
|
|
|||
Total other comprehensive income (loss), net of tax
|
|
(928
|
)
|
|
1,161
|
|
|
(189
|
)
|
|||
TOTAL COMPREHENSIVE INCOME
|
|
$
|
2,832
|
|
|
$
|
4,434
|
|
|
$
|
2,504
|
|
(1)
|
Net of tax benefit (expense) of
$0 million
,
$0 million
and
$0 million
, respectively.
|
(2)
|
Net of tax benefit (expense) of
$35 million
,
$(31) million
and
$18 million
, respectively.
|
(3)
|
Net of tax benefit (expense) of
$0 million
,
$0 million
and
$0 million
, respectively.
|
NIKE, Inc. Consolidated Balance Sheets
|
|
|
May 31,
|
||||||
(In millions)
|
|
2016
|
|
2015
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and equivalents
|
|
$
|
3,138
|
|
|
$
|
3,852
|
|
Short-term investments
|
|
2,319
|
|
|
2,072
|
|
||
Accounts receivable, net
|
|
3,241
|
|
|
3,358
|
|
||
Inventories
|
|
4,838
|
|
|
4,337
|
|
||
Prepaid expenses and other current assets
|
|
1,489
|
|
|
1,968
|
|
||
Total current assets
|
|
15,025
|
|
|
15,587
|
|
||
Property, plant and equipment, net
|
|
3,520
|
|
|
3,011
|
|
||
Identifiable intangible assets, net
|
|
281
|
|
|
281
|
|
||
Goodwill
|
|
131
|
|
|
131
|
|
||
Deferred income taxes and other assets
|
|
2,439
|
|
|
2,587
|
|
||
TOTAL ASSETS
|
|
$
|
21,396
|
|
|
$
|
21,597
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current portion of long-term debt
|
|
$
|
44
|
|
|
$
|
107
|
|
Notes payable
|
|
1
|
|
|
74
|
|
||
Accounts payable
|
|
2,191
|
|
|
2,131
|
|
||
Accrued liabilities
|
|
3,037
|
|
|
3,949
|
|
||
Income taxes payable
|
|
85
|
|
|
71
|
|
||
Total current liabilities
|
|
5,358
|
|
|
6,332
|
|
||
Long-term debt
|
|
2,010
|
|
|
1,079
|
|
||
Deferred income taxes and other liabilities
|
|
1,770
|
|
|
1,479
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Redeemable preferred stock
|
|
—
|
|
|
—
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Common stock at stated value:
|
|
|
|
|
||||
Class A convertible — 353 and 355 shares outstanding
|
|
—
|
|
|
—
|
|
||
Class B — 1,329 and 1,357 shares outstanding
|
|
3
|
|
|
3
|
|
||
Capital in excess of stated value
|
|
7,786
|
|
|
6,773
|
|
||
Accumulated other comprehensive income
|
|
318
|
|
|
1,246
|
|
||
Retained earnings
|
|
4,151
|
|
|
4,685
|
|
||
Total shareholders’ equity
|
|
12,258
|
|
|
12,707
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
21,396
|
|
|
$
|
21,597
|
|
NIKE, Inc. Consolidated Statements of Cash Flows
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cash provided by operations:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
3,760
|
|
|
$
|
3,273
|
|
|
$
|
2,693
|
|
Income charges (credits) not affecting cash:
|
|
|
|
|
|
|
||||||
Depreciation
|
|
649
|
|
|
606
|
|
|
518
|
|
|||
Deferred income taxes
|
|
(80
|
)
|
|
(113
|
)
|
|
(11
|
)
|
|||
Stock-based compensation
|
|
236
|
|
|
191
|
|
|
177
|
|
|||
Amortization and other
|
|
13
|
|
|
43
|
|
|
68
|
|
|||
Net foreign currency adjustments
|
|
98
|
|
|
424
|
|
|
56
|
|
|||
Changes in certain working capital components and other assets and liabilities:
|
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable
|
|
60
|
|
|
(216
|
)
|
|
(298
|
)
|
|||
(Increase) in inventories
|
|
(590
|
)
|
|
(621
|
)
|
|
(505
|
)
|
|||
(Increase) in prepaid expenses and other current assets
|
|
(161
|
)
|
|
(144
|
)
|
|
(210
|
)
|
|||
(Decrease) increase in accounts payable, accrued liabilities and income taxes payable
|
|
(889
|
)
|
|
1,237
|
|
|
525
|
|
|||
Cash provided by operations
|
|
3,096
|
|
|
4,680
|
|
|
3,013
|
|
|||
Cash used by investing activities:
|
|
|
|
|
|
|
||||||
Purchases of short-term investments
|
|
(5,367
|
)
|
|
(4,936
|
)
|
|
(5,386
|
)
|
|||
Maturities of short-term investments
|
|
2,924
|
|
|
3,655
|
|
|
3,932
|
|
|||
Sales of short-term investments
|
|
2,386
|
|
|
2,216
|
|
|
1,126
|
|
|||
Investments in reverse repurchase agreements
|
|
150
|
|
|
(150
|
)
|
|
—
|
|
|||
Additions to property, plant and equipment
|
|
(1,143
|
)
|
|
(963
|
)
|
|
(880
|
)
|
|||
Disposals of property, plant and equipment
|
|
10
|
|
|
3
|
|
|
3
|
|
|||
Decrease (increase) in other assets, net of other liabilities
|
|
6
|
|
|
—
|
|
|
(2
|
)
|
|||
Cash used by investing activities
|
|
(1,034
|
)
|
|
(175
|
)
|
|
(1,207
|
)
|
|||
Cash used by financing activities:
|
|
|
|
|
|
|
||||||
Net proceeds from long-term debt issuance
|
|
981
|
|
|
—
|
|
|
—
|
|
|||
Long-term debt payments, including current portion
|
|
(106
|
)
|
|
(7
|
)
|
|
(60
|
)
|
|||
(Decrease) increase in notes payable
|
|
(67
|
)
|
|
(63
|
)
|
|
75
|
|
|||
Payments on capital lease obligations
|
|
(7
|
)
|
|
(19
|
)
|
|
(17
|
)
|
|||
Proceeds from exercise of stock options and other stock issuances
|
|
507
|
|
|
514
|
|
|
383
|
|
|||
Excess tax benefits from share-based payment arrangements
|
|
281
|
|
|
218
|
|
|
132
|
|
|||
Repurchase of common stock
|
|
(3,238
|
)
|
|
(2,534
|
)
|
|
(2,628
|
)
|
|||
Dividends — common and preferred
|
|
(1,022
|
)
|
|
(899
|
)
|
|
(799
|
)
|
|||
Cash used by financing activities
|
|
(2,671
|
)
|
|
(2,790
|
)
|
|
(2,914
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
|
(105
|
)
|
|
(83
|
)
|
|
(9
|
)
|
|||
Net (decrease) increase in cash and equivalents
|
|
(714
|
)
|
|
1,632
|
|
|
(1,117
|
)
|
|||
Cash and equivalents, beginning of year
|
|
3,852
|
|
|
2,220
|
|
|
3,337
|
|
|||
CASH AND EQUIVALENTS, END OF YEAR
|
|
$
|
3,138
|
|
|
$
|
3,852
|
|
|
$
|
2,220
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
||||||
Interest, net of capitalized interest
|
|
$
|
70
|
|
|
$
|
53
|
|
|
$
|
53
|
|
Income taxes
|
|
748
|
|
|
1,262
|
|
|
856
|
|
|||
Non-cash additions to property, plant and equipment
|
|
252
|
|
|
206
|
|
|
167
|
|
|||
Dividends declared and not paid
|
|
271
|
|
|
240
|
|
|
209
|
|
NIKE, Inc. Consolidated Statements of Shareholders’ Equity
|
|
|
Common Stock
|
|
Capital in
Excess
of Stated
Value
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
|
||||||||||||||||||||
|
|
Class A
|
|
Class B
|
|
|||||||||||||||||||||||||
(In millions, except per share data)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at May 31, 2013
|
|
356
|
|
|
$
|
—
|
|
|
1,433
|
|
|
$
|
3
|
|
|
$
|
5,184
|
|
|
$
|
274
|
|
|
$
|
5,620
|
|
|
$
|
11,081
|
|
Stock options exercised
|
|
|
|
|
|
22
|
|
|
|
|
445
|
|
|
|
|
|
|
445
|
|
|||||||||||
Conversion to Class B Common Stock
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Repurchase of Class B Common Stock
|
|
|
|
|
|
(73
|
)
|
|
|
|
(11
|
)
|
|
|
|
(2,617
|
)
|
|
(2,628
|
)
|
||||||||||
Dividends on common stock ($0.47 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(821
|
)
|
|
(821
|
)
|
||||||||||||
Issuance of shares to employees
|
|
|
|
|
|
3
|
|
|
|
|
78
|
|
|
|
|
|
|
78
|
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
177
|
|
|
|
|
|
|
177
|
|
||||||||||||
Forfeiture of shares from employees
|
|
|
|
|
|
(1
|
)
|
|
|
|
(8
|
)
|
|
|
|
(4
|
)
|
|
(12
|
)
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,693
|
|
|
2,693
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
(189
|
)
|
|
|
|
(189
|
)
|
||||||||||||
Balance at May 31, 2014
|
|
355
|
|
|
$
|
—
|
|
|
1,385
|
|
|
$
|
3
|
|
|
$
|
5,865
|
|
|
$
|
85
|
|
|
$
|
4,871
|
|
|
$
|
10,824
|
|
Stock options exercised
|
|
|
|
|
|
27
|
|
|
|
|
639
|
|
|
|
|
|
|
639
|
|
|||||||||||
Repurchase of Class B Common Stock
|
|
|
|
|
|
(58
|
)
|
|
|
|
(9
|
)
|
|
|
|
(2,525
|
)
|
|
(2,534
|
)
|
||||||||||
Dividends on common stock ($0.54 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(931
|
)
|
|
(931
|
)
|
||||||||||||
Issuance of shares to employees
|
|
|
|
|
|
3
|
|
|
|
|
92
|
|
|
|
|
|
|
92
|
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
191
|
|
|
|
|
|
|
191
|
|
||||||||||||
Forfeiture of shares from employees
|
|
|
|
|
|
—
|
|
|
|
|
(5
|
)
|
|
|
|
(3
|
)
|
|
(8
|
)
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,273
|
|
|
3,273
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
1,161
|
|
|
|
|
1,161
|
|
||||||||||||
Balance at May 31, 2015
|
|
355
|
|
|
$
|
—
|
|
|
1,357
|
|
|
$
|
3
|
|
|
$
|
6,773
|
|
|
$
|
1,246
|
|
|
$
|
4,685
|
|
|
$
|
12,707
|
|
Stock options exercised
|
|
|
|
|
|
22
|
|
|
|
|
680
|
|
|
|
|
|
|
680
|
|
|||||||||||
Conversion to Class B Common Stock
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Repurchase of Class B Common Stock
|
|
|
|
|
|
(55
|
)
|
|
|
|
(8
|
)
|
|
|
|
(3,230
|
)
|
|
(3,238
|
)
|
||||||||||
Dividends on common stock ($0.62 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,053
|
)
|
|
(1,053
|
)
|
||||||||||||
Issuance of shares to employees
|
|
|
|
|
|
3
|
|
|
|
|
115
|
|
|
|
|
|
|
115
|
|
|||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
236
|
|
|
|
|
|
|
236
|
|
||||||||||||
Forfeiture of shares from employees
|
|
|
|
|
|
—
|
|
|
|
|
(10
|
)
|
|
|
|
(11
|
)
|
|
(21
|
)
|
||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,760
|
|
|
3,760
|
|
||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
(928
|
)
|
|
|
|
(928
|
)
|
||||||||||||
Balance at May 31, 2016
|
|
353
|
|
|
$
|
—
|
|
|
1,329
|
|
|
$
|
3
|
|
|
$
|
7,786
|
|
|
$
|
318
|
|
|
$
|
4,151
|
|
|
$
|
12,258
|
|
Note 1
|
||
Note 2
|
||
Note 3
|
||
Note 4
|
||
Note 5
|
||
Note 6
|
||
Note 7
|
||
Note 8
|
||
Note 9
|
||
Note 10
|
||
Note 11
|
||
Note 12
|
||
Note 13
|
||
Note 14
|
||
Note 15
|
||
Note 16
|
||
Note 17
|
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 for which there is little or no market data available, which require the reporting entity to develop its own assumptions.
|
NOTE 2 — Inventories
|
NOTE 3 — Property, Plant and Equipment
|
|
|
As of May 31,
|
||||||
(In millions)
|
|
2016
|
|
2015
|
||||
Land
|
|
$
|
286
|
|
|
$
|
273
|
|
Buildings
|
|
1,467
|
|
|
1,250
|
|
||
Machinery, equipment and internal-use software
|
|
3,510
|
|
|
3,329
|
|
||
Leasehold improvements
|
|
1,338
|
|
|
1,150
|
|
||
Construction in process
|
|
437
|
|
|
350
|
|
||
Total property, plant and equipment, gross
|
|
7,038
|
|
|
6,352
|
|
||
Less accumulated depreciation
|
|
3,518
|
|
|
3,341
|
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
|
|
$
|
3,520
|
|
|
$
|
3,011
|
|
NOTE 4 — Identifiable Intangible Assets and Goodwill
|
NOTE 5 — Accrued Liabilities
|
|
|
As of May 31,
|
||||||
(In millions)
|
|
2016
|
|
2015
|
||||
Compensation and benefits, excluding taxes
|
|
$
|
943
|
|
|
$
|
997
|
|
Endorsement compensation
|
|
393
|
|
|
388
|
|
||
Dividends payable
|
|
271
|
|
|
240
|
|
||
Import and logistics costs
|
|
198
|
|
|
207
|
|
||
Fair value of derivatives
|
|
162
|
|
|
162
|
|
||
Taxes other than income taxes payable
|
|
159
|
|
|
172
|
|
||
Advertising and marketing
|
|
119
|
|
|
117
|
|
||
Collateral received from counterparties to hedging instruments
|
|
105
|
|
|
968
|
|
||
Other
(1)
|
|
687
|
|
|
698
|
|
||
TOTAL ACCRUED LIABILITIES
|
|
$
|
3,037
|
|
|
$
|
3,949
|
|
(1)
|
Other consists of various accrued expenses with no individual item accounting for more than
5%
of the total Accrued liabilities balance at
May 31, 2016
and
2015
.
|
NOTE 6 — Fair Value Measurements
|
|
|
As of May 31, 2016
|
||||||||||||||
(In millions)
|
|
Assets at Fair Value
|
|
Cash Equivalents
|
|
Short-term Investments
|
|
Other Long-term Assets
|
||||||||
Cash
|
|
$
|
774
|
|
|
$
|
774
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
1,265
|
|
|
100
|
|
|
1,165
|
|
|
—
|
|
||||
Level 2:
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
|
831
|
|
|
827
|
|
|
4
|
|
|
—
|
|
||||
U.S. Agency securities
|
|
679
|
|
|
—
|
|
|
679
|
|
|
—
|
|
||||
Commercial paper and bonds
|
|
733
|
|
|
262
|
|
|
471
|
|
|
—
|
|
||||
Money market funds
|
|
1,175
|
|
|
1,175
|
|
|
—
|
|
|
—
|
|
||||
Total level 2
|
|
3,418
|
|
|
2,264
|
|
|
1,154
|
|
|
—
|
|
||||
Level 3:
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable preferred stock
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
TOTAL
|
|
$
|
5,467
|
|
|
$
|
3,138
|
|
|
$
|
2,319
|
|
|
$
|
10
|
|
|
|
As of May 31, 2015
|
||||||||||||||
(In millions)
|
|
Assets at Fair Value
|
|
Cash Equivalents
|
|
Short-term Investments
|
|
Other Long-term Assets
|
||||||||
Cash
|
|
$
|
615
|
|
|
$
|
615
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Level 1:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
869
|
|
|
225
|
|
|
644
|
|
|
—
|
|
||||
Level 2:
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
|
684
|
|
|
684
|
|
|
—
|
|
|
—
|
|
||||
U.S. Agency securities
|
|
976
|
|
|
110
|
|
|
866
|
|
|
—
|
|
||||
Commercial paper and bonds
|
|
914
|
|
|
352
|
|
|
562
|
|
|
—
|
|
||||
Money market funds
|
|
1,866
|
|
|
1,866
|
|
|
—
|
|
|
—
|
|
||||
Total level 2
|
|
4,440
|
|
|
3,012
|
|
|
1,428
|
|
|
—
|
|
||||
Level 3:
|
|
|
|
|
|
|
|
|
||||||||
Non-marketable preferred stock
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
TOTAL
|
|
$
|
5,932
|
|
|
$
|
3,852
|
|
|
$
|
2,072
|
|
|
$
|
8
|
|
|
|
As of May 31, 2016
|
||||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
(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)
|
|
$
|
603
|
|
|
$
|
487
|
|
|
$
|
116
|
|
|
$
|
145
|
|
|
$
|
115
|
|
|
$
|
30
|
|
Embedded derivatives
|
|
7
|
|
|
2
|
|
|
5
|
|
|
9
|
|
|
2
|
|
|
7
|
|
||||||
Interest rate swaps
(2)
|
|
7
|
|
|
7
|
|
|
—
|
|
|
45
|
|
|
45
|
|
|
—
|
|
||||||
TOTAL
|
|
$
|
617
|
|
|
$
|
496
|
|
|
$
|
121
|
|
|
$
|
199
|
|
|
$
|
162
|
|
|
$
|
37
|
|
(1)
|
If the foreign exchange derivative instruments had been netted in the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by
$136 million
as of
May 31, 2016
. As of that date, the Company had received
$105 million
of cash collateral from various counterparties related to these foreign exchange derivative instruments.
No
amount of collateral was posted on the Company’s derivative liability balance as of
May 31, 2016
.
|
(2)
|
As of
May 31, 2016
,
no
amount of cash collateral had been received or posted on the derivative asset and liability balances related to the Company's interest rate swaps.
|
|
|
As of May 31, 2015
|
||||||||||||||||||||||
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||
(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)
|
|
$
|
1,554
|
|
|
$
|
1,034
|
|
|
$
|
520
|
|
|
$
|
164
|
|
|
$
|
160
|
|
|
$
|
4
|
|
Embedded derivatives
|
|
7
|
|
|
2
|
|
|
5
|
|
|
11
|
|
|
2
|
|
|
9
|
|
||||||
Interest rate swaps
(2)
|
|
78
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
TOTAL
|
|
$
|
1,639
|
|
|
$
|
1,114
|
|
|
$
|
525
|
|
|
$
|
175
|
|
|
$
|
162
|
|
|
$
|
13
|
|
(1)
|
If the foreign exchange derivative instruments had been netted in the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by
$161 million
as of
May 31, 2015
. As of that date, the Company had received
$900 million
of cash collateral and
$74 million
of securities from various counterparties related to these foreign exchange derivative instruments.
No
amount of collateral was posted on the Company’s derivative liability balance as of
May 31, 2015
.
|
(2)
|
As of
May 31, 2015
, the Company had received
$68 million
of cash collateral related to its interest rate swaps.
|
NOTE 7 — Short-Term Borrowings and Credit Lines
|
|
|
As of May 31,
|
|
|||||||||||||
|
|
2016
|
|
2015
|
||||||||||||
(Dollars in millions)
|
|
Borrowings
|
|
|
Interest Rate
|
|
Borrowings
|
|
|
Interest Rate
|
||||||
Notes payable:
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. operations
|
|
$
|
—
|
|
|
0.00
|
%
|
(1)
|
|
$
|
—
|
|
|
0.00
|
%
|
(1)
|
Non-U.S. operations
|
|
1
|
|
|
13.00
|
%
|
(1)
|
|
74
|
|
|
12.39
|
%
|
(1)
|
||
TOTAL NOTES PAYABLE
|
|
$
|
1
|
|
|
|
|
|
$
|
74
|
|
|
|
|
||
Interest-bearing accounts payable:
|
|
|
|
|
|
|
|
|
|
|
||||||
Sojitz America
|
|
$
|
39
|
|
|
1.27
|
%
|
|
|
$
|
78
|
|
|
0.98
|
%
|
|
(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
|
|
2016
|
|
2015
|
|||||||
Corporate Bond Payables:
(1)
|
|
|
|
|
|
|
|
|
|
|
|||||||
October 15, 2015
(2)
|
|
$
|
100
|
|
|
5.15
|
%
|
|
Semi-Annually
|
|
$
|
—
|
|
|
$
|
101
|
|
May 1, 2023
(3)
|
|
$
|
500
|
|
|
2.25
|
%
|
|
Semi-Annually
|
|
499
|
|
|
499
|
|
||
May 1, 2043
(3)
|
|
$
|
500
|
|
|
3.63
|
%
|
|
Semi-Annually
|
|
499
|
|
|
499
|
|
||
November 1, 2045
(4)
|
|
$
|
1,000
|
|
|
3.88
|
%
|
|
Semi-Annually
|
|
991
|
|
|
—
|
|
||
Promissory Notes:
|
|
|
|
|
|
|
|
|
|
|
|||||||
April 1, 2017
(5)
|
|
$
|
40
|
|
|
6.20
|
%
|
|
Monthly
|
|
38
|
|
|
39
|
|
||
January 1, 2018
(5)
|
|
$
|
19
|
|
|
6.79
|
%
|
|
Monthly
|
|
—
|
|
|
19
|
|
||
Japanese Yen Notes:
|
|
|
|
|
|
|
|
|
|
|
|||||||
August 20, 2001 through November 20, 2020
(6)
|
|
¥
|
9,000
|
|
|
2.60
|
%
|
|
Quarterly
|
|
18
|
|
|
20
|
|
||
August 20, 2001 through November 20, 2020
(6)
|
|
¥
|
4,000
|
|
|
2.00
|
%
|
|
Quarterly
|
|
9
|
|
|
9
|
|
||
Total
|
|
|
|
|
|
|
|
2,054
|
|
|
1,186
|
|
|||||
Less current maturities
|
|
|
|
|
|
|
|
|
|
44
|
|
|
107
|
|
|||
TOTAL LONG-TERM DEBT
|
|
|
|
|
|
|
|
$
|
2,010
|
|
|
$
|
1,079
|
|
(1)
|
These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness.
|
(2)
|
The Company has entered into interest rate swap agreements whereby the Company receives fixed interest payments at the same rate as the note and pays variable interest payments based on the
six
-month LIBOR plus a spread. The swaps have the same notional amount and maturity date as the corresponding note. On October 15, 2015, the Company repaid the long-term debt which had previously been hedged with these interest rate swaps. Accordingly, as of
May 31, 2016
, the Company had no interest rate swaps designated as fair value hedges.
|
(3)
|
The bonds are redeemable at the Company's option prior to February 1, 2023 and November 1, 2042, respectively, 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. Subsequent to February 1, 2023 and November 1, 2042, 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.
|
(4)
|
The bonds are redeemable at the Company's option prior to May 1, 2045, 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. Subsequent to May 1, 2045, 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.
|
(5)
|
The Company assumed a total of
$59 million
in bonds payable as part of its agreement to purchase certain Corporate properties; this was treated as a non-cash financing transaction. The property serves as collateral for the debt. The purchase of these properties was accounted for as a business combination where the total consideration of
$85 million
was allocated to the land and buildings acquired; no other tangible or intangible assets or liabilities resulted from the purchase. The bonds mature in 2017 and 2018 and the Company does not have the ability to re-negotiate the terms of the debt agreements and would incur significant financial penalties if the notes were paid-off prior to maturity. During the year ended
May 31, 2016
, the notes due January 1, 2018 were legally defeased and an insignificant loss on defeasance was recognized.
|
(6)
|
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,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Income before income taxes:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
956
|
|
|
$
|
1,967
|
|
|
$
|
3,066
|
|
Foreign
|
|
3,667
|
|
|
2,238
|
|
|
478
|
|
|||
TOTAL INCOME BEFORE INCOME TAXES
|
|
$
|
4,623
|
|
|
$
|
4,205
|
|
|
$
|
3,544
|
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
|
||||||
United States
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
304
|
|
|
$
|
596
|
|
|
$
|
259
|
|
State
|
|
71
|
|
|
80
|
|
|
104
|
|
|||
Foreign
|
|
568
|
|
|
369
|
|
|
499
|
|
|||
Total
|
|
943
|
|
|
1,045
|
|
|
862
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
United States
|
|
|
|
|
|
|
||||||
Federal
|
|
(57
|
)
|
|
(66
|
)
|
|
19
|
|
|||
State
|
|
(16
|
)
|
|
(11
|
)
|
|
(3
|
)
|
|||
Foreign
|
|
(7
|
)
|
|
(36
|
)
|
|
(27
|
)
|
|||
Total
|
|
(80
|
)
|
|
(113
|
)
|
|
(11
|
)
|
|||
TOTAL INCOME TAX EXPENSE
|
|
$
|
863
|
|
|
$
|
932
|
|
|
$
|
851
|
|
|
|
Year Ended May 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Federal income tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal benefit
|
|
1.1
|
%
|
|
0.9
|
%
|
|
1.8
|
%
|
Foreign earnings
|
|
-18.6
|
%
|
|
-15.7
|
%
|
|
2.2
|
%
|
Deferred charge
|
|
0.4
|
%
|
|
0.9
|
%
|
|
-14.6
|
%
|
Other, net
|
|
0.8
|
%
|
|
1.1
|
%
|
|
-0.4
|
%
|
EFFECTIVE INCOME TAX RATE
|
|
18.7
|
%
|
|
22.2
|
%
|
|
24.0
|
%
|
|
|
As of May 31,
|
||||||
(In millions)
|
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Allowance for doubtful accounts
|
|
$
|
5
|
|
|
$
|
11
|
|
Inventories
|
|
88
|
|
|
59
|
|
||
Sales return reserves
|
|
182
|
|
|
143
|
|
||
Deferred compensation
|
|
274
|
|
|
258
|
|
||
Stock-based compensation
|
|
206
|
|
|
179
|
|
||
Reserves and accrued liabilities
|
|
78
|
|
|
92
|
|
||
Net operating loss carry-forwards
|
|
44
|
|
|
10
|
|
||
Undistributed earnings of foreign subsidiaries
|
|
179
|
|
|
149
|
|
||
Other
|
|
72
|
|
|
76
|
|
||
Total deferred tax assets
|
|
1,128
|
|
|
977
|
|
||
Valuation allowance
|
|
(52
|
)
|
|
(9
|
)
|
||
Total deferred tax assets after valuation allowance
|
|
1,076
|
|
|
968
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
|
(268
|
)
|
|
(220
|
)
|
||
Intangibles
|
|
(92
|
)
|
|
(93
|
)
|
||
Other
|
|
(4
|
)
|
|
(38
|
)
|
||
Total deferred tax liability
|
|
(364
|
)
|
|
(351
|
)
|
||
NET DEFERRED TAX ASSET
|
|
$
|
712
|
|
|
$
|
617
|
|
|
|
As of May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Unrecognized tax benefits, beginning of the period
|
|
$
|
438
|
|
|
$
|
506
|
|
|
$
|
447
|
|
Gross increases related to prior period tax positions
(1)
|
|
49
|
|
|
32
|
|
|
814
|
|
|||
Gross decreases related to prior period tax positions
(1)
|
|
(20
|
)
|
|
(123
|
)
|
|
(166
|
)
|
|||
Gross increases related to current period tax positions
|
|
81
|
|
|
82
|
|
|
125
|
|
|||
Gross decreases related to current period tax positions
|
|
—
|
|
|
(9
|
)
|
|
(30
|
)
|
|||
Settlements
(1)
|
|
(13
|
)
|
|
(27
|
)
|
|
(676
|
)
|
|||
Lapse of statute of limitations
|
|
(17
|
)
|
|
(10
|
)
|
|
(4
|
)
|
|||
Changes due to currency translation
|
|
(12
|
)
|
|
(13
|
)
|
|
(4
|
)
|
|||
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD
|
|
$
|
506
|
|
|
$
|
438
|
|
|
$
|
506
|
|
(1)
|
During the fourth quarter of the fiscal year ended May 31, 2014, the Company reached a resolution with the IRS on a U.S. Unilateral Advanced Pricing Agreement that covers intercompany transfer pricing for fiscal years 2011 through 2020. As a result, the Company recorded a gross increase in unrecognized tax benefits related to prior period tax positions, a gross decrease in unrecognized tax benefits related to prior period tax positions and a settlement. The net impact of these items resulted in a decrease to unrecognized tax benefits.
|
|
|
Year Ending May 31,
|
||||||||||||||||||||||||||
(In millions)
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021-2035
|
|
Indefinite
|
|
|
Total
|
|
||||||||||||
Net operating losses
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
35
|
|
|
$
|
101
|
|
|
$
|
143
|
|
NOTE 10 — Redeemable Preferred Stock
|
NOTE 11 — Common Stock and Stock-Based Compensation
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Stock options
(1)
|
|
$
|
171
|
|
|
$
|
136
|
|
|
$
|
125
|
|
ESPPs
|
|
31
|
|
|
24
|
|
|
22
|
|
|||
Restricted stock
|
|
34
|
|
|
31
|
|
|
30
|
|
|||
TOTAL STOCK-BASED COMPENSATION EXPENSE
|
|
$
|
236
|
|
|
$
|
191
|
|
|
$
|
177
|
|
(1)
|
Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees eligible for accelerated stock option vesting upon retirement. Accelerated stock option expense for the years ended
May 31, 2016
,
2015
and
2014
was
$30 million
,
$19 million
and
$15 million
, respectively.
|
|
|
Year Ended May 31,
|
|||||||
|
|
2016
|
|
2015
|
|
2014
|
|||
Dividend yield
|
|
1.0
|
%
|
|
1.2
|
%
|
|
1.3
|
%
|
Expected volatility
|
|
23.6
|
%
|
|
23.6
|
%
|
|
27.9
|
%
|
Weighted average expected life (in years)
|
|
5.8
|
|
|
5.8
|
|
|
5.3
|
|
Risk-free interest rate
|
|
1.7
|
%
|
|
1.7
|
%
|
|
1.3
|
%
|
|
|
Shares
(1)
|
|
Weighted Average
Option Price
|
|||
|
|
(In millions)
|
|
|
|||
Options outstanding May 31, 2013
|
|
135.3
|
|
|
$
|
17.36
|
|
Exercised
|
|
(22.0
|
)
|
|
14.15
|
|
|
Forfeited
|
|
(2.5
|
)
|
|
24.17
|
|
|
Granted
|
|
16.3
|
|
|
31.77
|
|
|
Options outstanding May 31, 2014
|
|
127.1
|
|
|
19.64
|
|
|
Exercised
|
|
(27.2
|
)
|
|
15.39
|
|
|
Forfeited
|
|
(2.1
|
)
|
|
29.51
|
|
|
Granted
|
|
18.4
|
|
|
38.84
|
|
|
Options outstanding May 31, 2015
|
|
116.2
|
|
|
23.50
|
|
|
Exercised
|
|
(22.5
|
)
|
|
17.75
|
|
|
Forfeited
|
|
(2.3
|
)
|
|
39.96
|
|
|
Granted
|
|
20.6
|
|
|
56.41
|
|
|
Options outstanding May 31, 2016
|
|
112.0
|
|
|
$
|
30.38
|
|
Options exercisable at May 31,
|
|
|
|
|
|||
2014
|
|
74.0
|
|
|
$
|
15.71
|
|
2015
|
|
68.6
|
|
|
18.26
|
|
|
2016
|
|
66.5
|
|
|
21.48
|
|
(1)
|
Includes stock appreciation rights transactions.
|
NOTE 12 — Earnings Per Share
|
|
|
Year Ended May 31,
|
||||||||||
(In millions, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Determination of shares:
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
|
1,697.9
|
|
|
1,723.5
|
|
|
1,766.7
|
|
|||
Assumed conversion of dilutive stock options and awards
|
|
44.6
|
|
|
45.3
|
|
|
44.9
|
|
|||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
1,742.5
|
|
|
1,768.8
|
|
|
1,811.6
|
|
|||
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
2.21
|
|
|
$
|
1.90
|
|
|
$
|
1.52
|
|
Diluted
|
|
$
|
2.16
|
|
|
$
|
1.85
|
|
|
$
|
1.49
|
|
NOTE 13 — Benefit Plans
|
NOTE 14 — Accumulated Other Comprehensive Income
|
(In millions)
|
|
Foreign Currency Translation Adjustment
(1)(2)
|
|
Cash Flow Hedges
|
|
Net Investment Hedges
(1)(2)
|
|
Other
|
|
Total
|
||||||||||
Balance at May 31, 2015
|
|
$
|
(31
|
)
|
|
$
|
1,220
|
|
|
$
|
115
|
|
|
$
|
(58
|
)
|
|
$
|
1,246
|
|
Other comprehensive gains (losses) before reclassifications
(3)
|
|
(178
|
)
|
|
(47
|
)
|
|
—
|
|
|
6
|
|
|
(219
|
)
|
|||||
Reclassifications to net income of previously deferred (gains) losses
(4)
|
|
2
|
|
|
(710
|
)
|
|
—
|
|
|
(1
|
)
|
|
(709
|
)
|
|||||
Other comprehensive income (loss)
|
|
(176
|
)
|
|
(757
|
)
|
|
—
|
|
|
5
|
|
|
(928
|
)
|
|||||
Balance at May 31, 2016
|
|
$
|
(207
|
)
|
|
$
|
463
|
|
|
$
|
115
|
|
|
$
|
(53
|
)
|
|
$
|
318
|
|
(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)
|
Beginning balances have been updated to reflect the proper classification of
$20 million
of deferred tax balances between Foreign Currency Translation Adjustment and Net Investment Hedges.
|
(3)
|
Net of tax benefit (expense) of $
0 million
, $
28 million
, $
0 million
, $
(2) million
and $
26 million
, respectively.
|
(4)
|
Net of tax (benefit) expense of $
0 million
, $
7 million
, $
0 million
, $
2 million
and $
9 million
, respectively.
|
(In millions)
|
|
Foreign Currency Translation Adjustment
(1)(2)
|
|
Cash Flow Hedges
|
|
Net Investment Hedges
(1)(2)
|
|
Other
|
|
Total
|
||||||||||
Balance at May 31, 2014
|
|
$
|
(11
|
)
|
|
$
|
32
|
|
|
$
|
115
|
|
|
$
|
(51
|
)
|
|
$
|
85
|
|
Other comprehensive gains (losses) before reclassifications
(3)
|
|
(20
|
)
|
|
1,447
|
|
|
—
|
|
|
33
|
|
|
1,460
|
|
|||||
Reclassifications to net income of previously deferred (gains) losses
(4)
|
|
—
|
|
|
(259
|
)
|
|
—
|
|
|
(40
|
)
|
|
(299
|
)
|
|||||
Other comprehensive income (loss)
|
|
(20
|
)
|
|
1,188
|
|
|
—
|
|
|
(7
|
)
|
|
1,161
|
|
|||||
Balance at May 31, 2015
|
|
$
|
(31
|
)
|
|
$
|
1,220
|
|
|
$
|
115
|
|
|
$
|
(58
|
)
|
|
$
|
1,246
|
|
(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)
|
Beginning and ending balances have been updated to reflect the proper classification of
$20 million
of deferred tax balances between Foreign Currency Translation Adjustment and Net Investment Hedges.
|
(3)
|
Net of tax benefit (expense) of $
0 million
, $
(33) million
, $
0 million
, $
0 million
and $
(33) million
, respectively.
|
(4)
|
Net of tax (benefit) expense of $
0 million
, $
2 million
, $
0 million
, $
0 million
and $
2 million
, respectively.
|
|
|
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
||||||
|
|
||||||||
|
|
Year Ended May 31,
|
|||||||
(In millions)
|
|
2016
|
|
2015
|
|||||
Gains (losses) on foreign currency translation adjustment
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
Other (income) expense, net
|
Total before tax
|
|
(2
|
)
|
|
—
|
|
|
||
Tax (expense) benefit
|
|
—
|
|
|
—
|
|
|
||
Gain (loss) net of tax
|
|
(2
|
)
|
|
—
|
|
|
||
Gains (losses) on cash flow hedges:
|
|
|
|
|
|
||||
Foreign exchange forwards and options
|
|
(88
|
)
|
|
(95
|
)
|
Revenues
|
||
Foreign exchange forwards and options
|
|
586
|
|
|
220
|
|
Cost of sales
|
||
Foreign exchange forwards and options
|
|
—
|
|
|
—
|
|
Total selling and administrative expense
|
||
Foreign exchange forwards and options
|
|
219
|
|
|
136
|
|
Other (income) expense, net
|
||
Total before tax
|
|
717
|
|
|
261
|
|
|
||
Tax (expense) benefit
|
|
(7
|
)
|
|
(2
|
)
|
|
||
Gain (loss) net of tax
|
|
710
|
|
|
259
|
|
|
||
Gains (losses) on other
|
|
3
|
|
|
40
|
|
Other (income) expense, net
|
||
Total before tax
|
|
3
|
|
|
40
|
|
|
||
Tax (expense) benefit
|
|
(2
|
)
|
|
—
|
|
|
||
Gain (loss) net of tax
|
|
1
|
|
|
40
|
|
|
||
Total net gain (loss) reclassified for the period
|
|
$
|
709
|
|
|
$
|
299
|
|
|
NOTE 15 — Commitments and Contingencies
|
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Operating leases
|
|
$
|
491
|
|
|
$
|
453
|
|
|
$
|
395
|
|
|
$
|
347
|
|
|
$
|
301
|
|
|
$
|
1,244
|
|
|
$
|
3,231
|
|
Capital leases
|
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
NOTE 16 — Risk Management and Derivatives
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||
(In millions)
|
|
Balance Sheet
Location
|
|
2016
|
|
2015
|
|
Balance Sheet
Location
|
|
2016
|
|
2015
|
||||||||
Derivatives formally designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forwards and options
|
|
Prepaid expenses and other current assets
|
|
$
|
447
|
|
|
$
|
825
|
|
|
Accrued liabilities
|
|
$
|
38
|
|
|
$
|
140
|
|
Interest rate swaps
|
|
Prepaid expenses and other current assets
|
|
7
|
|
|
78
|
|
|
Accrued liabilities
|
|
45
|
|
|
—
|
|
||||
Foreign exchange forwards and options
|
|
Deferred income taxes and other assets
|
|
90
|
|
|
520
|
|
|
Deferred income taxes and other liabilities
|
|
12
|
|
|
4
|
|
||||
Interest rate swaps
|
|
Deferred income taxes and other assets
|
|
—
|
|
|
—
|
|
|
Deferred income taxes and other liabilities
|
|
—
|
|
|
—
|
|
||||
Total derivatives formally designated as hedging instruments
|
|
|
|
544
|
|
|
1,423
|
|
|
|
|
95
|
|
|
144
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forwards and options
|
|
Prepaid expenses and other current assets
|
|
40
|
|
|
209
|
|
|
Accrued liabilities
|
|
76
|
|
|
20
|
|
||||
Embedded derivatives
|
|
Prepaid expenses and other current assets
|
|
2
|
|
|
2
|
|
|
Accrued liabilities
|
|
2
|
|
|
2
|
|
||||
Foreign exchange forwards and options
|
|
Deferred income taxes and other assets
|
|
26
|
|
|
—
|
|
|
Deferred income taxes and other liabilities
|
|
19
|
|
|
—
|
|
||||
Embedded derivatives
|
|
Deferred income taxes and other assets
|
|
5
|
|
|
5
|
|
|
Deferred income taxes and other liabilities
|
|
7
|
|
|
9
|
|
||||
Total derivatives not designated as hedging instruments
|
|
|
|
73
|
|
|
216
|
|
|
|
|
104
|
|
|
31
|
|
||||
TOTAL DERIVATIVES
|
|
|
|
$
|
617
|
|
|
$
|
1,639
|
|
|
|
|
$
|
199
|
|
|
$
|
175
|
|
(In millions)
|
|
Amount of Gain (Loss)
Recognized in Other
Comprehensive Income
on Derivatives
(1)
|
|
Amount of Gain (Loss)
Reclassified From Accumulated
Other Comprehensive Income into Income
(1)
|
||||||||||||||||||||||
Year Ended May 31,
|
|
Location of Gain (Loss) Reclassified From
Accumulated Other Comprehensive Income Into Income
|
|
Year Ended May 31,
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2016
|
|
2015
|
|
2014
|
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Derivatives designated as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards and options
|
|
$
|
90
|
|
|
$
|
(202
|
)
|
|
$
|
(48
|
)
|
|
Revenues
|
|
$
|
(88
|
)
|
|
$
|
(95
|
)
|
|
$
|
14
|
|
Foreign exchange forwards and options
|
|
(57
|
)
|
|
1,109
|
|
|
(78
|
)
|
|
Cost of sales
|
|
586
|
|
|
220
|
|
|
12
|
|
||||||
Foreign exchange forwards and options
|
|
—
|
|
|
—
|
|
|
4
|
|
|
Total selling and administrative expense
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign exchange forwards and options
|
|
(25
|
)
|
|
497
|
|
|
(21
|
)
|
|
Other (income) expense, net
|
|
219
|
|
|
136
|
|
|
10
|
|
||||||
Interest rate swaps
|
|
(83
|
)
|
|
76
|
|
|
—
|
|
|
Interest expense (income), net
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total designated cash flow hedges
|
|
(75
|
)
|
|
1,480
|
|
|
(143
|
)
|
|
|
|
717
|
|
|
261
|
|
|
36
|
|
||||||
Derivatives designated as net investment hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forwards and options
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Other (income) expense, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
For the years ended
May 31, 2016
,
2015
and
2014
, the amounts recorded in
Other (income) expense, net
as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.
|
|
|
Amount of Gain (Loss) Recognized in
Income on Derivatives
|
|
Location of Gain (Loss)
Recognized in Income on Derivatives
|
||||||||||
|
|
Year Ended May 31,
|
|
|||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
|
|||||||
Derivatives designated as fair value hedges:
|
|
|
|
|
|
|
|
|
||||||
Interest rate swaps
(1)
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
Interest expense (income), net
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange forwards and options
|
|
(68
|
)
|
|
611
|
|
|
(75
|
)
|
|
Other (income) expense, net
|
|||
Embedded derivatives
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
Other (income) expense, net
|
(1)
|
All interest rate swaps designated as fair value hedges meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. Refer to “Fair Value Hedges” in this note for additional detail.
|
NOTE 17 — Operating Segments and Related Information
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
REVENUES
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
14,764
|
|
|
$
|
13,740
|
|
|
$
|
12,299
|
|
Western Europe
|
|
5,884
|
|
|
5,705
|
|
|
4,979
|
|
|||
Central & Eastern Europe
|
|
1,431
|
|
|
1,421
|
|
|
1,387
|
|
|||
Greater China
|
|
3,785
|
|
|
3,067
|
|
|
2,602
|
|
|||
Japan
|
|
869
|
|
|
755
|
|
|
771
|
|
|||
Emerging Markets
|
|
3,701
|
|
|
3,898
|
|
|
3,949
|
|
|||
Global Brand Divisions
|
|
73
|
|
|
115
|
|
|
125
|
|
|||
Total NIKE Brand
|
|
30,507
|
|
|
28,701
|
|
|
26,112
|
|
|||
Converse
|
|
1,955
|
|
|
1,982
|
|
|
1,684
|
|
|||
Corporate
|
|
(86
|
)
|
|
(82
|
)
|
|
3
|
|
|||
TOTAL NIKE CONSOLIDATED REVENUES
|
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
$
|
27,799
|
|
EARNINGS BEFORE INTEREST AND TAXES
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
3,763
|
|
|
$
|
3,645
|
|
|
$
|
3,077
|
|
Western Europe
|
|
1,434
|
|
|
1,275
|
|
|
855
|
|
|||
Central & Eastern Europe
|
|
289
|
|
|
249
|
|
|
279
|
|
|||
Greater China
|
|
1,372
|
|
|
993
|
|
|
816
|
|
|||
Japan
|
|
174
|
|
|
100
|
|
|
131
|
|
|||
Emerging Markets
|
|
892
|
|
|
818
|
|
|
952
|
|
|||
Global Brand Divisions
|
|
(2,596
|
)
|
|
(2,267
|
)
|
|
(1,993
|
)
|
|||
Total NIKE Brand
|
|
5,328
|
|
|
4,813
|
|
|
4,117
|
|
|||
Converse
|
|
487
|
|
|
517
|
|
|
496
|
|
|||
Corporate
|
|
(1,173
|
)
|
|
(1,097
|
)
|
|
(1,036
|
)
|
|||
Total NIKE Consolidated Earnings Before Interest and Taxes
|
|
4,642
|
|
|
4,233
|
|
|
3,577
|
|
|||
Interest expense (income), net
|
|
19
|
|
|
28
|
|
|
33
|
|
|||
TOTAL NIKE CONSOLIDATED INCOME BEFORE INCOME TAXES
|
|
$
|
4,623
|
|
|
$
|
4,205
|
|
|
$
|
3,544
|
|
ADDITIONS TO LONG-LIVED ASSETS
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
242
|
|
|
$
|
208
|
|
|
$
|
240
|
|
Western Europe
|
|
215
|
|
|
216
|
|
|
120
|
|
|||
Central & Eastern Europe
|
|
17
|
|
|
20
|
|
|
19
|
|
|||
Greater China
|
|
44
|
|
|
69
|
|
|
63
|
|
|||
Japan
|
|
13
|
|
|
15
|
|
|
9
|
|
|||
Emerging Markets
|
|
51
|
|
|
37
|
|
|
55
|
|
|||
Global Brand Divisions
|
|
258
|
|
|
225
|
|
|
225
|
|
|||
Total NIKE Brand
|
|
840
|
|
|
790
|
|
|
731
|
|
|||
Converse
|
|
39
|
|
|
69
|
|
|
30
|
|
|||
Corporate
|
|
312
|
|
|
144
|
|
|
161
|
|
|||
TOTAL ADDITIONS TO LONG-LIVED ASSETS
|
|
$
|
1,191
|
|
|
$
|
1,003
|
|
|
$
|
922
|
|
DEPRECIATION
|
|
|
|
|
|
|
||||||
North America
|
|
$
|
133
|
|
|
$
|
121
|
|
|
$
|
109
|
|
Western Europe
|
|
72
|
|
|
75
|
|
|
71
|
|
|||
Central & Eastern Europe
|
|
12
|
|
|
12
|
|
|
11
|
|
|||
Greater China
|
|
48
|
|
|
46
|
|
|
38
|
|
|||
Japan
|
|
18
|
|
|
22
|
|
|
19
|
|
|||
Emerging Markets
|
|
25
|
|
|
27
|
|
|
25
|
|
|||
Global Brand Divisions
|
|
230
|
|
|
210
|
|
|
175
|
|
|||
Total NIKE Brand
|
|
538
|
|
|
513
|
|
|
448
|
|
|||
Converse
|
|
27
|
|
|
18
|
|
|
16
|
|
|||
Corporate
|
|
84
|
|
|
75
|
|
|
54
|
|
|||
TOTAL DEPRECIATION
|
|
$
|
649
|
|
|
$
|
606
|
|
|
$
|
518
|
|
|
|
As of May 31,
|
||||||
(In millions)
|
|
2016
|
|
2015
|
||||
ACCOUNTS RECEIVABLE, NET
|
|
|
|
|
||||
North America
|
|
$
|
1,689
|
|
|
$
|
1,737
|
|
Western Europe
|
|
378
|
|
|
344
|
|
||
Central & Eastern Europe
|
|
194
|
|
|
242
|
|
||
Greater China
|
|
74
|
|
|
84
|
|
||
Japan
|
|
129
|
|
|
134
|
|
||
Emerging Markets
|
|
409
|
|
|
461
|
|
||
Global Brand Divisions
|
|
76
|
|
|
88
|
|
||
Total NIKE Brand
|
|
2,949
|
|
|
3,090
|
|
||
Converse
|
|
270
|
|
|
258
|
|
||
Corporate
|
|
22
|
|
|
10
|
|
||
TOTAL ACCOUNTS RECEIVABLE, NET
|
|
$
|
3,241
|
|
|
$
|
3,358
|
|
INVENTORIES
|
|
|
|
|
||||
North America
|
|
$
|
2,363
|
|
|
$
|
2,207
|
|
Western Europe
|
|
929
|
|
|
699
|
|
||
Central & Eastern Europe
|
|
210
|
|
|
169
|
|
||
Greater China
|
|
375
|
|
|
249
|
|
||
Japan
|
|
146
|
|
|
94
|
|
||
Emerging Markets
|
|
478
|
|
|
528
|
|
||
Global Brand Divisions
|
|
35
|
|
|
32
|
|
||
Total NIKE Brand
|
|
4,536
|
|
|
3,978
|
|
||
Converse
|
|
306
|
|
|
237
|
|
||
Corporate
|
|
(4
|
)
|
|
122
|
|
||
TOTAL INVENTORIES
|
|
$
|
4,838
|
|
|
$
|
4,337
|
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
|
|
||||
North America
|
|
$
|
742
|
|
|
$
|
632
|
|
Western Europe
|
|
589
|
|
|
451
|
|
||
Central & Eastern Europe
|
|
50
|
|
|
47
|
|
||
Greater China
|
|
234
|
|
|
254
|
|
||
Japan
|
|
223
|
|
|
205
|
|
||
Emerging Markets
|
|
109
|
|
|
103
|
|
||
Global Brand Divisions
|
|
511
|
|
|
484
|
|
||
Total NIKE Brand
|
|
2,458
|
|
|
2,176
|
|
||
Converse
|
|
125
|
|
|
122
|
|
||
Corporate
|
|
937
|
|
|
713
|
|
||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
|
|
$
|
3,520
|
|
|
$
|
3,011
|
|
|
|
Year Ended May 31,
|
||||||||||
(In millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Footwear
|
|
$
|
19,871
|
|
|
$
|
18,318
|
|
|
$
|
16,208
|
|
Apparel
|
|
9,067
|
|
|
8,637
|
|
|
8,109
|
|
|||
Equipment
|
|
1,496
|
|
|
1,631
|
|
|
1,670
|
|
|||
Other
|
|
1,942
|
|
|
2,015
|
|
|
1,812
|
|
|||
TOTAL NIKE CONSOLIDATED REVENUES
|
|
$
|
32,376
|
|
|
$
|
30,601
|
|
|
$
|
27,799
|
|
(a)
|
The following documents are filed as part of this report:
|
|
|
|
Form 10-K
Page No.
|
|
|
|
1.
|
Financial Statements:
|
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Consolidated Statements of Income for each of the three years ended May 31, 2016, May 31, 2015 and May 31, 2014
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for each of the three years ended May 31, 2016, May 31, 2015 and May 31, 2014
|
|
|
|
|
|
Consolidated Balance Sheets at May 31, 2016 and May 31, 2015
|
|
|
|
|
|
Consolidated Statements of Cash Flows for each of the three years ended May 31, 2016, May 31, 2015 and May 31, 2014
|
|
|
|
|
|
Consolidated Statements of Shareholders’ Equity for each of the three years ended May 31, 2016, May 31, 2015 and May 31, 2014
|
|
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
2.
|
Financial Statement Schedule:
|
|
|
|
|
|
II — Valuation and Qualifying Accounts
|
|
|
|
|
|
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
|
Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2015).
|
3.2
|
Third Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed June 21, 2013).
|
4.1
|
Restated Articles of Incorporation, as amended (see Exhibit 3.1).
|
4.2
|
Third Restated Bylaws, as amended (see Exhibit 3.2).
|
4.3
|
Indenture dated as of April 26, 2013, by and between NIKE, Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 tot he Company's Form 8-Q filed April 26, 2013).
|
4.4
|
Second Supplemental Indenture, dated as of October 29, 2015, by and between NIKE, Inc. and Deutsche Bank Trust Company Americas, as trustee, including the form of 3.875% Notes due 2045 (incorporated by reference to Exhibit 5.2 to the Company's Form 8-Q filed October 29, 2015).
|
10.1
|
Form of Non-Statutory Stock Option Agreement for options granted to non-employee directors prior to May 31, 2010 under the 1990 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed June 21, 2005).*
|
10.2
|
Form of Non-Statutory Stock Option Agreement for options granted to non-employee directors after May 31, 2010 under the 1990 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010).*
|
10.3
|
Form of Non-Statutory Stock Option Agreement for options granted to executives prior to May 31, 2010 under the 1990 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009).*
|
10.4
|
Form of Restricted Stock Agreement for non-employee directors under the 1990 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2014).*
|
10.5
|
Form of Non-Statutory Stock Option Agreement for options granted to executives after May 31, 2010 under the Stock Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2015).*
|
10.6
|
Form of Indemnity Agreement entered into between the Company and each of its officers and directors (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008).*
|
10.7
|
NIKE, Inc. 1990 Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2014).*
|
10.8
|
NIKE, Inc. Executive Performance Sharing Plan (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2012).*
|
10.9
|
NIKE, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2015).*
|
10.10
|
NIKE, Inc. Deferred Compensation Plan (Amended and Restated effective April 1, 2013) (incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2013).*
|
10.11
|
NIKE, Inc. Deferred Compensation Plan (Amended and Restated effective June 1, 2004) (applicable to amounts deferred before January 1, 2005) (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2004).*
|
10.12
|
Amendment No. 1 effective January 1, 2008 to the NIKE, Inc. Deferred Compensation Plan (June 1, 2004 Restatement) (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009).*
|
10.13
|
NIKE, Inc. Foreign Subsidiary Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2008).*
|
10.14
|
Amended and Restated Covenant Not To Compete and Non-Disclosure Agreement between NIKE, Inc. and Mark G. Parker dated July 24, 2008 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 24, 2008).*
|
10.15
|
Form of Restricted Stock Agreement under the Stock Incentive Plan for awards after May 31, 2010 (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2015).*
|
10.16
|
Form of Restricted Stock Unit Agreement under the Stock Incentive Plan (incorporated by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2015).*
|
10.17
|
Covenant Not to Compete and Non-Disclosure Agreement between NIKE, Inc. and Andrew Campion dated January 23, 2007.*
|
10.18
|
Covenant Not to Compete and Non-Disclosure Agreement between NIKE, Inc. and Eric D. Sprunk dated April 18, 2001 (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010).*
|
10.19
|
Covenant Not to Compete and Non-Disclosure Agreement between NIKE, Inc. and Trevor A. Edwards dated November 14, 2002 (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2008).*
|
10.20
|
Covenant Not to Compete and Non-Disclosure Agreement between NIKE, Inc. and Jeanne Jackson dated March 4, 2009 (incorporated by reference to Exhibit 10.21 to the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2014).*
|
10.21
|
Policy for Recoupment of Incentive Compensation (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed July 20, 2010).*
|
10.22
|
Credit Agreement dated as of August 28, 2015 among NIKE, Inc., Bank of America, N.A., as Administrative Agent, Citibank N.A., as Syndication Agent, Deutsche Bank A.G. New York Branch and HSBC Bank USA, National Association, as Co-Documentation Agents, and the other Banks named therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 2, 2015).
|
10.23
|
Executive Performance Sharing Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed September 23, 2015).
|
10.24
|
Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed September 23, 2015).
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges.
|
21
|
Subsidiaries of the Registrant.
|
23
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (included within this Annual Report on Form 10-K).
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
|
32
|
Section 1350 Certifications.
|
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
|
(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, 2014
|
|
$
|
241
|
|
|
$
|
619
|
|
|
$
|
(3
|
)
|
|
$
|
(549
|
)
|
|
$
|
308
|
|
For the year ended May 31, 2015
|
|
308
|
|
|
726
|
|
|
(35
|
)
|
|
(620
|
)
|
|
379
|
|
|||||
For the year ended May 31, 2016
|
|
379
|
|
|
788
|
|
|
(15
|
)
|
|
(708
|
)
|
|
444
|
|
|||||
Allowance for doubtful accounts
(2)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the year ended May 31, 2014
|
|
$
|
104
|
|
|
$
|
13
|
|
|
$
|
(2
|
)
|
|
$
|
(37
|
)
|
|
$
|
78
|
|
For the year ended May 31, 2015
|
|
78
|
|
|
35
|
|
|
(15
|
)
|
|
(20
|
)
|
|
78
|
|
|||||
For the year ended May 31, 2016
|
|
78
|
|
|
52
|
|
|
(2
|
)
|
|
(85
|
)
|
|
43
|
|
(1)
|
Amounts included in this column primarily relate to foreign currency translation.
|
(2)
|
Includes both current and non-current portions of the allowance for doubtful accounts. The non-current portion is included in Deferred income taxes and other assets on the Consolidated Balance Sheets.
|
NIKE, INC.
|
||
By:
|
|
/s/ MARK G. PARKER
|
|
|
Mark G. Parker
|
|
|
Chairman, President and Chief Executive Officer
|
Date:
|
|
July 21, 2016
|
|
|
|
Signature
|
Title
|
Date
|
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
|
|
|
/s/ MARK G. PARKER
Mark G. Parker
|
Chairman, President and Chief Executive Officer
|
July 21, 2016
|
PRINCIPAL FINANCIAL OFFICER:
|
|
|
/s/ ANDREW CAMPION
Andrew Campion
|
Chief Financial Officer
|
July 21, 2016
|
PRINCIPAL ACCOUNTING OFFICER:
|
|
|
/s/ CHRIS L. ABSTON
Chris L. Abston
|
Corporate Controller
|
July 21, 2016
|
DIRECTORS:
|
|
|
/s/ ELIZABETH J. COMSTOCK
Elizabeth J. Comstock
|
Director
|
July 21, 2016
|
/s/ JOHN G. CONNORS
John G. Connors
|
Director
|
July 21, 2016
|
/s/ TIMOTHY D. COOK
Timothy D. Cook
|
Director
|
July 21, 2016
|
/s/ JOHN J. DONAHOE II
John J. Donahoe II
|
Director
|
July 21, 2016
|
/s/ ALAN B. GRAF, JR.
Alan B. Graf, Jr.
|
Director
|
July 21, 2016
|
/s/ TRAVIS A. KNIGHT
Travis A. Knight
|
Director
|
July 21, 2016
|
/s/ JOHN C. LECHLEITER
John C. Lechleiter
|
Director
|
July 21, 2016
|
/s/ MICHELLE A. PELUSO
Michelle A. Peluso
|
Director
|
July 21, 2016
|
/s/ JOHNATHAN A. RODGERS
Johnathan A. Rodgers
|
Director
|
July 21, 2016
|
/s/ JOHN R. THOMPSON, JR.
John R. Thompson, Jr.
|
Director
|
July 21, 2016
|
/s/ PHYLLIS M. WISE
Phyllis M. Wise
|
Director
|
July 21, 2016
|
1 Year Nike Chart |
1 Month Nike Chart |
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