nike 10k pdf

Management is committed to maintaining an environment where all NIKE employees have the opportunity to reach their full potential. NIKE 10K 2011. In certain contracts, the Company offers minimum guaranteed royalty payments. 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. whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. *, 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). Net income, adjusted for non-cash items, generated $3,473 million of operating cash flow for fiscal 2018 compared to $4,781 million for fiscal 2017 . *, 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). The updated guidance requires excess tax benefits and deficiencies from share-based payment awards to be recorded in income tax expense in the income statement. Table of Contents. The independent registered public accounting firm and the internal corporate auditors have full access to the Audit & Finance Committee, with and without the presence of management, to discuss any appropriate matters. He has served as Apparel Sales Director in Europe, Retail Development Director in Europe, Vice President of Sales and Retail in EMEA, General Manager of US Retail, Vice President of US Sales, Retail and, and Vice President of Global Retail. Continued volatility in the markets and exchange rates for foreign currencies and contracts in foreign currencies, including in response to certain policies advocated or implemented by the U.S. presidential administration, could have a significant impact on our reported operating results and financial condition. Inventory balances of $5,261 million and $5,055 million at May 31, 2018 and 2017 , respectively, were substantially all finished goods. Our earnings are also exposed to movements in short- and long-term market interest rates. In some instances, we ship product directly from our supplier to the customer, with the related inventory and cost of sales recognized on a specific identification basis. Annual report [Section 13 and 15(d), not S-K Item 405] All significant intercompany transactions and balances have been eliminated. Failure to respond in a timely and adequate manner could have a material adverse effect on our sales and profitability. We monitor protectionist trends and developments throughout the world that may materially impact our industry, and we engage in administrative and judicial processes to mitigate trade restrictions. Unit sales of apparel grew 2% and higher ASP per unit contributed approximately 1 percentage point of apparel revenue growth, primarily due to higher full-price ASP. These letters of credit were issued primarily for the purchase of inventory and as guarantees of the Company's performance under certain self-insurance and other programs. These sales generate a foreign currency exposure. Accordingly, we are subject to the risks generally associated with global trade and doing business abroad, which include foreign laws and regulations, varying consumer preferences across geographic regions, political unrest, disruptions or delays in cross-border shipments and changes in economic conditions in countries in which our products are manufactured or where we sell products. The remaining provisions of the Tax Act, which were a net benefit to the effective tax rate, did not have a material impact on the Company's Consolidated Financial Statements during fiscal 2018. In fiscal 2018 , we purchased 69.7 million shares of NIKE's Class B Common Stock for $4,267 million (an average price of $ 61.25 per share) under the four-year, $12 billion program approved by the Board of Directors in November 2015. Any significant failure in our distribution facilities could result in an adverse effect on our business. For the portion of the indices denominated in the local or functional currency of the factory, the Company may elect to place formally designated cash flow hedges. In the event of default or failure of one or more of our counterparties, we could incur significant losses, which could negatively impact our results of operations and financial condition. There have been proposals to reform foreign tax laws that could significantly impact how U.S. multinational corporations are taxed on foreign earnings. Inventory levels in excess of customer demand may result in inventory write-downs, and the sale of excess inventory at discounted prices could significantly impair our brand image and have an adverse effect on our operating results, financial condition and cash flows. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset or a significant decline in the observable market value of an asset, among others. Shop specialist running clothes and shoes online from Nike Running at | Free UK Delivery & Returns | Browse Nike running gear online Typically, the Company may enter into hedge contracts starting up to 12 to 24 months in advance of the forecasted transaction and may place incremental hedges up to 100% of the exposure by the time the forecasted transaction occurs. in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. Level 2: Inputs other than observable quoted prices 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. The update to the standard is effective for the Company on June 1, 2019, with early adoption permitted in any interim period. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects. When anticipated transaction estimates or actual transaction amounts decline below hedged levels, or if it is no longer probable a forecasted transaction will occur by the end of the originally specified time period or within an additional two-month period of time thereafter, we are required to reclassify the cumulative change in fair value of the over-hedged portion of the related hedge contract from Other comprehensive income to Other expense (income), net during the quarter in which the decrease occurs. View Nike Fiscal Year 2020 10-K (Annual Report) (1).pdf from FINANCE finance at University of Southern California. 2016-01,  Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . "Management's Annual Report on Internal Control Over Financial Reporting" is included in Item 8 of this Report. As a result, its non-U.S. Dollar denominated monetary assets and liabilities will now be subject to re-measurement and recorded in Other expense (income), net , within the Consolidated Statements of Income beginning in fiscal 2019. The weighted average fair value per share of the options granted during the years ended May 31, 2018 , 2017 and 2016 , computed as of the grant date using the Black-Scholes pricing model, was $9.82 , $9.38 and $12.66 , respectively. On a quarterly basis, we evaluate the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity. By continuing to browse our site, you agree to the use of these cookies. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Further, our unaffiliated contract manufacturers have experienced and may continue to experience in the future, unexpected increases in work wages, whether government mandated or otherwise and increases in compliance costs due to governmental regulation concerning certain metals used in the manufacturing of our products. Resource. We take various actions to prevent the unauthorized use and/or disclosure of our confidential information and intellectual property rights. As we continue to develop new technologies, we are simultaneously focused on the design of innovative products incorporating such technologies throughout our product categories. Throughout this Annual Report on Form 10-K, we discuss non-GAAP financial measures, including references to wholesale equivalent revenues and currency-neutral revenues, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Refer to Note 15 - Commitments and Contingencies for information about the Company's lease obligations. 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 specify all significant terms. 2018-02,  Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . Stay cool and dry as you blast through your route in the Women's Nike 10K Running Shorts. If, on June 30, 2018, all of these shares were converted into Class B Common Stock, the commensurate ownership percentage of our Class B Common Stock would be approximately 17%. Mr. Slusher was appointed Director of Sports Marketing for Asia Pacific and Americas in 2006, divisional Vice President of Asia Pacific & Americas Sports Marketing in September 2007 and Vice President, Global Sports Marketing in November 2007. The Company's NIKE Direct operations are managed within each geographic operating segment. Lower NIKE Direct margins (decreasing gross margin approximately 20 basis points) reflecting the impact of higher off-price sales. All derivatives are recorded at fair value on the Consolidated Balance Sheets and changes in the fair value of derivative financial instruments are either recognized in Accumulated other comprehensive income (a component of Total shareholders' equity ), Long-term debt or Net income depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge and, if designated, the extent to which the hedge is effective. NIKE is the largest seller of athletic footwear and apparel in the world. Social media, which accelerates and potentially amplifies the scope of negative publicity, can increase the challenges of responding to negative claims. Leveraging the power of digital, NIKE plans to drive growth - by accelerating innovation and product creation, moving even closer to the consumer through key cities, and deepening one-to-one connections. Sales and operating results of Jordan Brand products are reported within the respective NIKE Brand geographic operating segments. NIKE, Inc. is a worldwide leader in the design, development and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories and services. Report. Recipients of restricted stock units are entitled to dividend equivalent cash payments upon vesting. Because the terms of the LTIP awards, as applicable to the Company's named executive officers, did not contemplate the Tax Cuts and Jobs Act, the Committee determined to award these one-time DPA grants so as to put the Officers in the same position as the non-executive officer LTIP participants. Our success depends on our global distribution facilities. A significant amount of the Company's promotional expenses result from payments under endorsement contracts. Refer to Note 11 - Common Stock and Stock-Based Compensation for additional information on the Company's stock-based compensation programs. (2) Other NIKE entities purchase product directly from third party factories in U.S. New $15 Billion Share Repurchase Program Announced NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2018 fourth quarter and full year ended May 31, 2018. We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other expense (income), net had an unfavorable impact on our Income before income taxes of $110 million for fiscal 2018. We are heavily dependent on information technology systems and networks, including the Internet and third-party services ("Information Technology Systems"), across our supply chain, including product design, production, forecasting, ordering, manufacturing, transportation, sales and distribution, as well as for processing financial information for external and internal reporting purposes, retail operations and other business activities. The graph assumes an investment of $100 on May 31, 2013 in each of our Class B Common Stock and the stocks comprising the Standard & Poor's 500 Stock Index; the Standard & Poor's Apparel, Accessories & Luxury Goods Index; and the Dow Jones U.S. Revenues  by approximately 1 percentage point. Our current agreements with Sojitz America expire on May 31, 2019. Technical innovation in the design and manufacturing process of footwear, apparel and athletic equipment receives continued emphasis as we strive to produce products that help to enhance athletic performance, reduce injury and maximize comfort, while reducing waste. For contracts for which we estimate we will not meet the minimum guaranteed amount of royalty fees through sales of product, we record the amount of the guaranteed payment in excess of that earned through sales of product in Demand creation expense uniformly over the contract term. Currently, we have several such agreements in place. Gross margin increased 90 basis points as higher full-price ASP and favorable standard foreign currency exchange rates more than offset higher product costs. FOOTWEAR INDEX. There were no outstanding net investment hedges as of May 31, 2018 and 2017. Derivatives designated as cash flow hedges: For the years ended May 31, 2018 , 2017 and 2016 , the amounts recorded in Other expense (income), 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. These covenants include limits on our disposal of fixed assets and the amount of debt secured by liens we may incur as well as limits on the indebtedness we can incur relative to our net worth. NIKE Direct revenues increased 27%, driven by strong digital commerce sales growth, the addition of new stores and comparable store sales growth of 10%. The form of DPA is intended to enhance the Company's ability to pay for performance on a case-by-case basis by supplementing the Company's existing performance-based compensation plans, including the Amended and Restated Long-Term Incentive Plan ("LTIP") and the Executive Performance Sharing Plan. For fiscal 2017, our consolidated gross margin was 160 basis points lower than fiscal 2016, primarily driven by the following factors: Higher NIKE Brand full-price ASP, net of discounts, on a wholesale equivalent basis (increasing gross margin approximately 70 basis points) aligned with our strategy to deliver innovative, premium products to the consumer; Higher NIKE Brand product costs (decreasing gross margin approximately 100 basis points) as an increase in the mix of higher cost products and labor input cost inflation more than offset lower material input costs; Unfavorable changes in net foreign currency exchange rates, including hedges (decreasing gross margin approximately 90 basis points); and. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "project," "will be," "will continue," "will likely result" or words or phrases of similar meaning. Estimates of discretionary discounts, returns and claims are based on (1) historical rates, (2) specific identification of outstanding claims and outstanding returns not yet received from customers and (3) estimated discounts, returns and claims expected, but not yet finalized with customers. These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S. Dollar. We believe that existing cash, cash equivalents, short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future. Selling and administrative expense increased due to higher operating overhead and demand creation expense. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility and could have a negative impact on revenues and profits. Long-term debt , net of unamortized premiums, discounts and debt issuance costs, comprises the following : Scheduled Maturity (Dollars and Yen in millions), August 20, 2001 through November 20, 2020. Supplemental disclosure of cash flow information: Non-cash additions to property, plant and equipment, Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share), Issuance of shares to employees, net of shares withheld for employee taxes, Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share), Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share), Reclassifications to retained earnings in accordance with ASU 2018-02, Summary of Significant Accounting Policies, Identifiable Intangible Assets and Goodwill, Common Stock and Stock-Based Compensation, Operating Segments and Related Information. This could impact the quality of our decisions to exercise lease options at previously negotiated rents and to renew expiring leases at negotiated rents. 10-K - Annual Report - 10-K 2019-07-23 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MAY 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE … The non-current portion is included in Deferred income taxes and other assets on the Consolidated Balance Sheets. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. In addition to our own sensitive and proprietary business information, we collect transactional and personal information about our customers and users of our digital experiences, which include online distribution channels and product engagement and personal fitness applications. Like every athlete, we train and work hard to up our game season after season, year after year. We rely on a concentrated source base of contract manufacturers to supply a significant portion of our footwear products. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . *, Form of Discretionary Performance Award Agreement.*. 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). The Company has, in the past, hedged and may, in the future, hedge the risk of variability in foreign currency-denominated net investments in wholly-owned international operations. Nike aims to be a brand with purpose that moves the world forward. Management has reviewed and discussed these critical accounting policies with the Audit & Finance Committee of the Board of Directors. De-selecting these cookies may result in seeing advertising that is not as relevant to you or you not being able to link effectively with Facebook, Twitter, or other social networks and/or not allowing you to share content on social media. If a quantitative fair value measurement calculation is required for these intangible assets, the Company utilizes the relief-from-royalty method. Gathered elastic waistband with drawcord delivers adjustable comfort. The principal materials used in our apparel products - natural and synthetic fabrics and threads, specialized performance fabrics designed to efficiently wick moisture away from the body, retain heat or repel rain and/or snow as well as plastic and metal hardware - are available in countries where our manufacturing takes place. In general, endorsement payments are expensed on a straight-line basis over the term of the contract. Capital leases and other financing obligations include payments related to build-to-suit lease arrangements. Footwear revenues declined 4% for fiscal 2018, as lower revenues in nearly all categories, most notably the Jordan Brand, more than offset higher revenues in Sportswear. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. We are actively monitoring actions that may result in additional anti-dumping measures and could affect our industry. All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. There are provisions within our articles of incorporation and Oregon law intended to protect shareholder interests by providing the Board of Directors a means to attempt to deny coercive takeover attempts or to negotiate with a potential acquirer in order to obtain more favorable terms.

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