Question 13 At the most recent balance sheet date, Nike's shareholder claims to the company's assets totaled (in millions): O a. $3. O b. $9,968 O c. $12,767 O d. $37,740 NIKE, INC. CONSOLIDATED STATEMENTS OF INCOME (in millions, except per share data) 2021 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 Earings per common share Basic Dluted Weighted average common shares outstanding Basic Dated The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement $ S YEAR ENDED MAY 31, 2020 37,403 S 21,162 16,241 3,592 9,534 13,126 89 139 44,538 S 24,576 19,962 3,114 9,911 13,025 262 14 6.601 934 6,727 S 304 S 3.56 $ 1.573.0 1,6094 2.887 348 2,539 1.63 1.60 5 2019 1.5588 1,6016 39,117 21,643 17.474 3,753 8,949 12,702 49 (78) 4,801 772 4,029 2.55 2.49 1,579.7 16184 2021 FORM 10-KS NIKE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED MAY 31, (Dollars in millions) 2021 2020 Net income. 2,539 $ (148) 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 (130) (9) (287) Total other comprehensive income (loss), net of tax TOTAL COMPREHENSIVE INCOME 2,252 $ The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 2021 FORM 10-K 58 $ 5,727 $ 496 (825) 5 5,403 $ 2019 4,029 (173) 503 (7) 323 4,362 CONSOLIDATED BALANCE SHEETS (in millions) ASSETS Current assets Cash and equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other cument assets Total current assets Property, plant and equipment, net Operating lease right-of-use assets, net Identifiable intangible assets, net Goodwil Defered income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Cument tables Current portion of long-term cebl Notes payable Accounts payable Cunent portion of operating lease tables Accrued abilities Income taxes payable Total curent labe Long-term debl Operating lease labies Deferred income taxes and other lab Commitments and contingendes (Note 16) Redeemable preferred stock Shareholders equity Common stock at stated value Class A convertible-305 and 315 shares outstanding Class B-1,273 and 1,243 shares outstanding Capital in excess of stated value Accumulated other comprehensive Income (0) Retained namings (en) Total shareholders' equy TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY The accompanying Noles to the Consolidated Financial Statements are an integral part of this sta 5 1 2021 MAY 31, 9.800 S 3.587 4/463 6,854 1406 20,291 4,904 3,113 200 242 2.921 37,740 5 11 2 2.836 467 6.063 306 9,674 0,413 2,901 2.965 3 0.005 (380) 3,179 12,767 37,740 2020 8.348 439 2,749 7.367 1663 20,556 4.800 3,007 274 223 2.326 31,342 3 248 2248 445 5,164 156 8.284 9,400 2,913 2604 3 1290 (56) (191) ROSS 31.342 NIKE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2021 (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 cument and non-current assets Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current labilities 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 Repayment of borrowings 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 activites 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 Nor-cash additions to property, plant and equipment Dividends declared and not paid dated Ensial Skalementare integral part of this statement $ S YEAR ENDED MAY 31, 2020 2,539 $ 721 (380) 429 398 23 1,239 (1,854) (654) 24 2.485 (2,426) -74 2,379 (1,086) 31 (1.028) 6.134 40 5,727 S 744 (385) 611 53 (138) (1,006) 507 (182) 1.326 6,657 (9,961) 4,236 2,449 (695) 171 (3,800) (52) (197) 1,172 (608) (1,638) (136) (1458) 143 1,541 8.348 9,809 S 293 S 1,177 179 438 (6) 885 (3,067) (1452) (52) 2,491 (68) 3,882 4,406 8,348 S 140 $ 1.009 121 380 2019 4,029 705 34 325 15 233 (270) (490) (203) 1,525 5,903 (2.937) 1,715 2.072 (1,119) 5 (325) (6) 700 (4,286) (1,332) (44) (5,293) (129) 217 4.249 4,466 153 757 180 347 NIKE, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN ACCUMULATED CLASS A CLASS B EXCESS OF STATED OTHER RETAINED COMPREHENSIVE EARNINGS INCOME (LOSS) AMOUNT SHARES AMOUNT VALUE (DEFICIT) TOTAL (In millions, except per share data) Balance at May 31, 2018 Stock options exercised SHARES 329 S 1,272 S 35 (92) 5 3,617 9,812 539 18 (14) 14 (54) (4,056) (4,283) Conversion to Class B Common Stock Repurchase of Class B Common Sfock Dividends on common stock (50.86 per share) and preferred stock ($0.10 per share) (1,360) (1360) Issuance of shares to employees, net of shares withheld for employee taxes (3) 139 325 Stock-based compensation 4,029 Net income 323 (507) Other comprehensive income poss) Adoption of ASU 2016-16 (Note 1) Adoption of ASC Topic 606 (Note 1) Balance at May 31, 2019 1,253 $ Stock options exercised 20 (34) Repurchase of Class 8 Common Stock Dividends on common stock ($0.955 per share) and preferred stock (30.10 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 316 S 1,243 S Stock options exercised 21 Conversion to Class B Common Stock (10) 10 Repurchase of Class 8 Common Stock Dividends on common stock ($1.070 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) Balance at May 31, 2021 305 $ - 1,273 31 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 315 S (5) 35 36 6,384 S 539 (227) 142 325 7,163 703 (161) 165 429 8,299 S 954 (28) 129 611 9,966 323 231 S (287) (56) $ (324) (360) 4,029 (507) 23 1,643 (2.872) (1491) (9) 2.539 (1) (191) (022) (1,692) (43) 9,040 703 (3.033) (1491) 156 429 2.539 (287) (1) 8.055 964 (050) (1,092) 00 611 5,727 5.727 (324) 3179 $ 12,767 CASH AND EQUIVALENTS Cash and equivalents represent cash and short-tenn, highly liquid investments, that are both readily convertible to known amounts of cash, and so near their maturity they present insignificant risk of changes in value because of changes in interest rates, including commercial paper, US Treasury, US Agency, money market funds, time deposits and corporate debt securities with maturities of 90 days or less at the date of purchase SHORT-TERM INVESTMENTS Short-term investments consist of highly liquid investments, including commercial paper, U.S. Treasury, U.S. Agency time deposits and corporate debt securities with maturities over 90 days at the date of purchase. At May 31, 2021 and 2020, Short-term investiments consisted of available-for-sale debt securities, which are recorded at tair value with unrealized gains and losses reported, net of tax, in Accumulated other comprehensive income (loss), unless unrealized losses are determined to be unrecoverable Realized gains and losses on the sale of securities are determined by specific identification. The Company considers at available for sale debt securities, including those with maturity dates beyond 12 months, as available to support cument operational liquidity needs and, therefore, classifies all securities with maturity dates beyond 90 days at the date of purchase as current assets within Short-temi investments on the Consolidated Balance Sheets Refer to Note 6-Far Value Measurements for more information on the Company's Short-term investments ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE Accounts receivable, net consist primarily of amounts due from customers. The Company makes ongoing estimates relating to the collectability of its accounts receivable and maintains an allowance for expected losses resulting from the inability of its customers to make required payments. In addition to judgments about the creditworthiness of significant customers based on ongoing credit evaluations, the Company considers historical levels of credt losses, as well as macroeconomic and industry trends, such as the impacts of COVID-19, to determine the amount of the allowance, Accounts receivable with anticipated collection dates greater than 12 months from the balance sheet date and related towances are considered non-ourent and recorded in Deferred income taxes and other assets. The allowance for uncollectible accounts receivable was 303 million and $214 million as of May 31, 2021 and 2020, respectively INVENTORY VALUATION Inventories are stated at lower of cost and net realizable value and valued on either an average or a specific identification cost basis. In some instances, the Company ships products directly from its suppliers to the customer, with the related inventory and cost of sales recognized on a specific identification basis inventory costs primarily consist of product cost from the Company's suppliers, as well as inbound freight, import duties, toxes, insurance, logistics and other handling fees PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION Property, plant and equipment are recorded at cont. Depreciation is determined on a straight-ine basis for land improvements, buildings and leasehold improvements over 70 40 years and for machinery and equipment over 2 to 15 years Depreciation and amonturation of assets used in manufacturing, warehousing and product distribution are recorded in Cost of sales. Depreciation and amortization of all other wats are recorded in Operating overhead expense. SOFTWARE DEVELOPMENT COSTS Expenditures for major software purchases and software developed for internal use are capitalized and amortized over a 2-to 12-year period on a streghe ane bass. The Company's policy provides for the capitalization of extemal direct costs associated with developing or obtaining intemal use computer software The Company ope certain payroll and payrol-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizatie payroll costs with respect to these employees is limited to the medrecty spent on such projects Costs associated w siminary project stage activities, taring maintenance and all other post-implementation stage activities are expensed as inoured Development costs of computer software to be sold, leased or otherwise marketed as an integral part of a product are subject to capitalization beginning when a products technological feasibility has been established and ending when a product is available for general release to customers in most instances, the Company's products are releated soon after technological feasibility has been established therefore, software development costs incurred subsequent to achievement of ichnological feasibility are y not signcant, and generally, most software development costs have been expensed ured expenses and other current assets of $507 million, $422 milion and $45 million, respectively, and an increase in Deferred income taxes and other labilities of $40 milion on the Consolidated Balance Sheets NOTE 2-INVENTORIES Inventory balances of 56,854 million and $7,367 million as of May 31, 2021 and 2020, respectively, were substantially all finished goods NOTE 3 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net included the following MAY 31, (Dollars in millions) 345 Land and improvements Buildings 2,442 Machinery and equipment 2.751 Internal-use software 1,483 Leasehold improvements 1,554 Construction in process 1,086 Total property, plant and equipment, gross 10.001 9,661 Less accumulated depreciation 5,157 4795 TOTAL PROPERTY, PLANT AND EQUIPMENT, NET $ 4,904 4,866 Capitalized interest was not material for the years ended May 31, 2021, 2020 and 2019 NOTE 4 - -IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL Identifiable intangible assets, net consist of indefinite-ived trademarks, acquired trademarks and other intangible assets. The following table summarizes the Company's Identifiable intangible assets, net balances as of May 31, 2021 and 2020 MAY 31, 2021 2020 GROSS NET NET CARRYING (Dollars in milions) AMOUNT 246 AMOUNT 240 Indefinite ved trademarks GROSS ACCUMULATED CARRYING CARRYING ACCUMULATED CARRYING AMORTIZATION AMOUNT AMOUNT AMORTIZATION $ 246 $ 240 $ $ 27 23 27 S 269 1 S 20 Acquired trademarks and other 50 47 293 $ 19 19 5 274 1 296 IDENTIFIABLE INTANGIBLE ASSETS, NET Goodwil was $242 million and $223 milion as of May 31, 2021 and 2020, respectively, and there were no accumulated impairment kases as of May 31, 2021 and 2020 Additionally, the impact to Goodwill during fiscal 2021 and 2020 as a result of acquisitions and divesttures was not material 2021 FORM 10K 2021 363 5 3,305 3,023 1,391 1.608 311 2020