NIKE, INC.

CONSOLIDATED STATEMENTS OF INCOME

Year Ended May 31,

2011

2010

2009

(In millions, except per share data)

Revenues

$

20,862

$

19,014

$

19,176

Cost of sales

11,354

10,214

10,572

Gross margin

9,508

8,800

8,604

Demand creation expense

2,448

2,356

2,352

Operating overhead expense

4,245

3,970

3,798

Total selling and administrative expense

6,693

6,326

6,150

Restructuring charges (Note 16)

—

—

195

Goodwill impairment (Note 4)

—

—

199

Intangible and other asset impairment (Note 4)

—

—

202

Interest expense (income), net (Notes 6, 7 and 8)

4

6

(10

)

Other (income), net (Note 17)

(33

)

(49

)

(89

)

Income before income taxes

2,844

2,517

1,957

Income taxes (Note 9)

711

610

470

Net income

$

2,133

$

1,907

$

1,487

Basic earnings per common share (Notes 1 and 12)

$

4.48

$

3.93

$

3.07

Diluted earnings per common share (Notes 1 and 12)

$

4.39

$

3.86

$

3.03

Dividends declared per common share

$

1.20

$

1.06

$

0.98

NIKE, INC.
CONSOLIDATED BALANCE SHEETS

		May 31,
		2011				2010
		(In millions)
ASSETS
Current assets:
Cash and equivalents		$	1,955			$	3,079
Short-term investments (Note 6)			2,583				2,067
Accounts receivable, net (Note 1)			3,138				2,650
Inventories (Notes 1 and 2)			2,715				2,041
Deferred income taxes (Note 9)			312				249
Prepaid expenses and other current assets			594				873
Total current assets			11,297				10,959
Property, plant and equipment, net (Note 3)			2,115				1,932
Identifiable intangible assets, net (Note 4)			487				467
Goodwill (Note 4)			205				188
Deferred income taxes and other assets (Notes 9 and 17)			894				873
Total assets		$	14,998			$	14,419
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt (Note 8)		$	200			$	7
Notes payable (Note 7)			187				139
Accounts payable (Note 7)			1,469				1,255
Accrued liabilities (Notes 5 and 17)			1,985				1,904
Income taxes payable (Note 9)			117				59
Total current liabilities			3,958				3,364
Long-term debt (Note 8)			276				446
Deferred income taxes and other liabilities (Notes 9 and 17)			921				855
Commitments and contingencies (Note 15)			—				—
Redeemable Preferred Stock (Note 10)			—				—
Shareholders’ equity:
Common stock at stated value (Note 11):
Class A convertible — 90 and 90 shares outstanding			—				—
Class B — 378 and 394 shares outstanding			3				3
Capital in excess of stated value			3,944				3,441
Accumulated other comprehensive income (Note 14)			95				215
Retained earnings			5,801				6,095
Total shareholders’ equity			9,843				9,754
Total liabilities and shareholders’ equity		$	14,998			$	14,419

-Net profit margin

-Return on assets (using total assets)

-Total asset turnover (using total assets)

-DuPont analysis

-Operating income margin

-Return on operating assets (EXTRA using end-of-year operating assets)

-Operating asset turnover (EXTRA using end-of-year operating assets)

-Gross Profit margin

-Horizontal Analysis

-Vertical Analysis

Then we must do the following:

-Interprets and discusses results (tells reader what the numbers mean)

-Evaluation (tells readers decision points or recommendations