1) Did Nike use the direct or indirect method in reporting net cash flows from operating activities? ____________

2) What was Nikes net income for the current year ended 5/31/2020? ______________________

What was the net cash flow from operating activities for the current year? ________________ What were the four major items accounting for the difference between net income and net cash flow from operating activities for the year ended 5/31/2020?______

3) How much did NIKE pay in cash for taxes during the current year ended 5/31/2020? _______ Where did you find this number? ________________________________________________

4) Calculate the following ratios for the current year ended 5/31/2020 only. Show computations - Free cash flow = Cash provided by operating activities capital expenditures cash dividends

- P/CF (similar to the P/E ratio but not!): Price per share/Cash flow per share

NIKE, INC. CONSOLIDATED STATEMENTS OF INCOME $ (In millions, except per share data) Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted YEAR ENDED MAY 31, 2020 2019 37,403 $ 39,117 S 21,162 21,643 16,241 17,474 3,592 3,753 9,534 8,949 13,126 12,702 89 49 139 (78) 2,887 4,801 348 772 2,539 $ 4,029 $ 2018 36,397 20,441 15,956 3,577 7,934 11,511 54 66 4,325 2,392 1,933 $ 1.19 $ $ 1.63 $ 1.60 $ 2.55 $ 2.49 $ 1.17 1,558.8 1,591.6 1,579.7 1,618.4 1,623.8 1,659.1 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. 2020 FORM 10-K 56 NIKE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED MAY 31, 2020 2019 2,539 $ 4,029 $ 2018 1,933 $ (Dollars in millions) Net income Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustment Change in net gains (losses) on cash flow hedges Change in net gains (losses) on other Total other comprehensive income (loss), net of tax TOTAL COMPREHENSIVE INCOME (148) (130) (9) (287) 2,252 $ (173) 503 (7) 323 4,352 $ (6) 76 34 104 2,037 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement CONSOLIDATED BALANCE SHEETS MAY 31, 2020 2019 $ 8,348 $ 439 2,749 7,367 1,653 20,556 4,866 3,097 4,466 197 4,272 5,622 1,968 16,525 4,744 274 (In millions) ASSETS Current assets: Cash and equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Operating lease right-of-use assets, net Identifiable intangible assets, net Goodwill Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease liabilities Accrued liabilities Income taxes payable Total current liabilities Long-term debt Operating lease liabilities Deferred income taxes and other liabilities 223 2,326 31,342 S 283 154 2,011 23,717 $ $ 6 3 S 248 9 2,612 2,248 445 5,184 156 8,284 9,406 2,913 2,684 5,010 229 7,866 3,464 3,347 Commitments and contingencies (Note 18) 23, $ 6 9 9 2,612 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease liabilities Accrued liabilities Income taxes payable Total current liabilities Long-term debt Operating lease liabilities Deferred income taxes and other liabilities Commitments and contingencies (Note 18) Redeemable preferred stock 3 S 248 2,248 445 5,184 156 8,284 9,406 2,913 2,684 5,010 229 7,866 3,464 3,347 Shareholders' equity: Common stock at stated value: : Class A convertible - 315 and 315 shares outstanding Class B - 1,243 and 1,253 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (loss) Retained earnings (deficit) Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3 7,163 231 3 8,299 (56) (191) 8,055 31,342 $ 1,643 9,040 23,717 $ CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED MAY 31, 2019 2020 2018 S 2,539 S 4,029 S 1,933 721 (380) 429 398 23 705 34 325 15 233 747 647 218 27 (99) 1,239 (1,854) (654) (270) (490) (203) 187 (255) 35 24 2,485 1,525 5,903 1,515 4,955 (Dollars in millions) Cash provided (used) by operations: Net income Adjustments to reconcile net income to net cash provided (used) by operations: Depreciation Deferred income taxes Stock-based compensation Amortization, impairment and other Net foreign currency adjustments Changes in certain working capital components and other assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventories (Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities Cash provided (used) by operations Cash provided (used) by investing activities: Purchases of short-term investments Maturities of short-term investments Sales of short-term investments Additions to property, plant and equipment Other investing activities Cash provided (used) by investing activities Cash provided (used) by financing activities: Proceeds from borrowings, net of debt issuance costs Increase (decrease) in notes payable, net Proceeds from exercise of stock options and other stock issuances Repurchase of common stock Dividends - common and preferred Other financing activities Cash provided (used) by financing activities Effect of exchange rate changes on cash and equivalents Net increase (decrease) in cash and equivalents Cash and equivalents, beginning of year CASH AND EQUIVALENTS, END OF YEAR Supplemental disclosure of cash flow information: Cash paid during the year for: Interest, net of capitalized interest Income taxes Non-cash additions to property, plant and equipment Dividends declared and not paid (2,426) 74 2,379 (1,086) 31 (1.028) (2,937) 1,715 2,072 (1,119) 5 (264) (4,783) 3,613 2,496 (1.028) (22) 276 13 733 6,134 49 885 (3.067) (1.452) (58) 2.491 (66) 3,882 4,466 8,348 $ (325) 700 (4,286) (1,332) (50) (5,293) (129) 217 4,249 4,466 $ (4,254) (1,243) (84) (4,835) 45 441 3,808 4,249 $ S 140 S 1,028 121 385 153 S 757 160 347 125 529 294 320 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN CLASS A CLASS B EXCESS OF STATED SHARES AMOUNT SHARES AMOUNT VALUE 329 $ 1,314 $ 3 $ 5,710 $ 24 600 (70) (254) ACCUMULATED OTHER RETAINED COMPREHENSIVE EARNINGS INCOME (LOSS) (DEFICIT) TOTAL (213) $ 6,907 $ 12,407 600 (4,013) (4,267) (1,265) (1,265) 4 110 (28) 82 218 218 1.933 1,933 104 104 17 (17) 3,517 $ 329 $ 1,272 $ 3 $ (92) $ 9,812 6,384 $ 539 18 539 (14) 14 (54) (227) (4,056) (4,283) 360) (1,360) (In millions, except per share data) Balance at May 31, 2017 Stock options exercised Repurchase of Class B Common Stock Dividends on common stock ($0.78 per share) and preferred stock (50.10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Reclassifications to retained earnings in accordance with ASU 2018-02 Balance at May 31, 2018 Stock options exercised Conversion to Class B Common Stock Repurchase of Class B Common Stock Dividends on common stock ($0.86 per share) and preferred stock (50.10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Adoption of ASU 2016-16 (Note 1) Adoption of ASC Topic 606 (Note 1) Balance at May 31, 2019 Stock options exercised Repurchase of Class B Common Stock Dividends on common stock ($0.955 per share) and preferred stock (S0.10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (loss) Adoption of ASC Topic 842 (Note 1) Balance at May 31, 2020 3 142 (3) 139 325 325 4,029 4,029 323 323 (507) 23 (507) 23 315 $ 1,253 $ 3 $ 7,163 $ 231 $ 1,643 $ 9,040 20 703 703 (34) (161) (2,872) (3,033) (1,491) (1,491) 4 165 (9) 156 429 429 2,539 (287) 2,539 (287) (1) (1) 315 $ 1,243 $ 3 $ 8,299 $ (56) $ (191) $ 8,055