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 Year Ended May 31 2016 2015 32 370 30.601 17,405 16,534 14.971 14,067 3.278 3.213 7.191 6,679 10.469 9,892 19 28 (140) (58) 4.623 4,205 863 932 3,760 $ 3,273 2014 27.799 15353 12.446 3,031 5.735 8,766 33 103 3,544 851 $ 2,693 221 2.16 $ $ 1.90 1.85 $ $ 1.52 1.49 $ 0.62 $ 0.54 $ 0.47 Dividends declared per common share The accompanying Notos to the Consolidated Financial Statements are an integral part of this statement. The Notes may be found on the companion website at CengageBrain.com Appendix D Selected Excerpts from Nike Inc, Form 10-K for the Fiscal Year Ended May 31, 2016 D-5 2015 2014 2,693 (32 (161) 5 NIKE, Inc. Consolidated Statements of Comprehensive Income Year Ended May 31 (In millions) 2016 Net income $ 3,760 $ Other comprehensive income (loss), net of tax: 3,273 $ Change in net foreign currency translation adjustment (176) (20) Change in net gains (losses) on cash flow hedges?) (757) 1,188 Change in net gains (losses) on other (7) Total other comprehensive income (loss)net of tax (928) 1.161 TOTAL COMPREHENSIVE INCOME 2,832 $ 4,434 (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 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement The Notes may be found on the companion website at CengageBrain.com (189) 2,504 $ NIKE, Inc. Consolidated Balance Sheets May 31, 2016 2015 $ 3,138 2,319 3,241 4,838 1,489 15,025 3,520 281 131 2,439 21,396 3,852 2,072 3,358 4,337 1,968 15,587 3,011 281 131 2,587 21,597 $ $ (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 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 Accrued liabilities Income taxes payable Total current liabilities Long-term debt Deferred income taxes and other liabilities Commitments and contingencies Redeemable preferred stock Shareholders' equity: Common stock at stated value: Class A convertible - 353 and 355 shares outstanding $ 44 1 2,191 3,037 85 5,358 2,010 1,770 107 74 2,131 3,949 71 6,332 1,079 1,479 - 100% + + VU 74 2.131 3,949 71 6,332 1,079 1479 Current porno Notes payable Accounts payable Accrued liabilities 2,191 Income taxes payable 3,037 35 Total current liabilities 5,358 Long-term debt 2,010 Deferred income taxes and other liabilities 1,770 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 Capital in excess of stated value 7,786 Accumulated other comprehensive income 318 Retained earnings 4,151 Total shareholders' equity 12,258 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 21,396 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 6.773 1.246 4,685 12,707 21,597 The Notes may be found on the companion website at CengageBrain.com Year Ended May 31 2015 2016 2014 3,760 3,2735 2,693 649 (80) 236 13 98 606 (113) 191 43 424 518 (11) 177 68 56 (In millions) Cash provided by operations: Net income Income charges (credits) not affecting cash: Depreciation Deferred income taxes Stock-based compensation Amortization and other Net foreign currency adjustments Changes in certain working capital components and other assets and liabilities: Decrease (increase) in accounts receivable (Increase) in inventories (Increase) in prepaid expenses and other current assets (Decrease) increase in accounts payable, accrued liabilities and income taxes payable Cash provided by operations Cash used by investing activities: Purchases of short-term investments Maturities of short-term investments Sales of short-term investments Investments in reverse repurchase agreements Additions to property, plant and equipment Disposals of property, plant and equipment Decrease (increase) in other assets, net of other liabilities Cach used hy investing activities 60 (590) (161) (216) (621) (144) (298) (505) (210) (889) 3,096 1,237 4680 525 3,013 (5,386) 3.932 1,126 (5,367) 2.924 2,386 150 (1,143) 10 6 (1.034) (4,936) 3,655 2,216 (150) (963) 3 (880) 3 (2) (1,207) (175) Cas used by mvesung acties Cash used by financing activities: (USA 175 Net proceeds from long-term debt issuance 981 Long-term debt payments, including current portion (106) (0) (Decrease) increase in notes payable (67) (63) Payments on capital lease obligations (7) (19) Proceeds from exercise of stock options and other stock issuances 507 514 Excess tax benefits from share-based payment arrangements 281 218 Repurchase of common stock (3,238) (2,534) Dividends --- common and preferred (1,022) (899) Cash used by financing activities (2,671) (2,790) Effect of exchange rate changes on cash and equivalents (105) (83) Net (decrease) increase in cash and equivalents (714) 1,632 Cash and equivalents, beginning of year 3,852 2.220 CASH AND EQUIVALENTS, END OF YEAR $ 3,138 3,852 $ Supplemental disclosure of cash flow information: Cash paid during the year for Interest, net of capitalized interest 70 53 Income taxes 748 1,262 252 206 Non-cash additions to property, plant and equipment 271 240 Dividends declared and not paid The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement. (60) 75 (17) 383 132 (2.628) (799) (2.914) (9) (1.117) 3,337 2,220 53 856 167 209 The Notes may be found on the companion website at CengageBrain.com ! (73) Common Stock Captam ACCUMU Class A Excess Other Class B (In millions, except per share data) Shares of Stated Comprehensive Retained Amount Shares Balance at May 31, 2013 Amount Value Income 356 $ Earnings Total Stock options exercised 1,433 $ 3 $ 5,184 $ 274 $ 5,620 $ 11,081 (1) 22 445 Conversion to Class B Common 445 Stock 1 Repurchase of Class B Common Stock Dividends on common stock ($0.47 (11) (2,617) (2,628) per share) Issuance of shares to employees (821) (821) 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 92 191 Stock-based compensation Forfeiture of shares from (5) (3) (8) employees 3,273 3,273 Net income 1,161 1.161 Other comprehensive income (loss) 355 $ Balance at May 31, 2015 1,357 $ 3 $ 1,246 $ 4,685 $ 12,707 6,773 $ 22 680 680 Stock options exercised Conversion to Class B Common Stock (2) 2 Repurchase of Class B Common (8) (3,238) (3,230) (55) Stock Dividends on common stock ($0.62 (1,053) (1.053) per share) 115 236 191 - 115 100% + (8) 3.273 3.273 1.161 $ 4,685 S 12.707 680 1.161 1246 - 2) (8) (3,230) (3,238) Forfeiture of shares from employees Net income Other comprehensive income (loss) Balance at May 31, 2015 355 $ 1,357 $ 3 $ 6,773 $ Stock options exercised 22 680 Conversion to Class B Common Stock (2) 2 Repurchase of Class B Common Stock (55) Dividends on common stock ($0.62 per share) Issuance of shares to employees 3 115 Stock-based compensation 236 Forfeiture of shares from employees (10) Net income Other comprehensive income (loss) 353 $ 1,329 $ Balance at May 31, 2016 7,786 $ The accompanying Notos to the Consolidated Financial Statements are an integral part of this statement The Notes may be found on the companion website at CengageBrain.com (1.053) (1.053) 115 236 (11) (21) 3.760 3,760 (928) $ 4,151 $ 12,258 (928) 318 3 Total assets at May 31, 2014: 18,594 Stockholders' equity at May 31, 2014: 12,000 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Do not round interim calculations. Round the nearest dollar. Round all other final answers to one decimal place. When required, use the rounded final answers in subsequent computations a. $ May 31, 2 9,255 2.462 X c. e. days 9 days May 31, 2016 Working capital (in millions) 9,667 b. Current ratio 2.87 Quick ratio d. Accounts receivable turnover Number of days' sales in receivables days f. Inventory turnover Number of days' sales In Inventory days h. Ratio of liabilities to stockholders' equity 1. Asset turnover 1. Return on total assets k. Return on common stockholders' equity 1. Price-earnings ratio, assuming that the market price was $54.90 per share on May 29, 2016, and $52.81 per share on May 30, 2015. Percentage relationship of net income to sales 2. The working capital increased between 2015 and 2016. The current and quick ratios both increased % % % % m. % 96 during 2016. T aminan