NOTE\u00a01 \u2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
\u2022 | Level 1:\u00a0Quoted prices in active markets for identical assets or liabilities. |
\u2022 | Level 2:\u00a0Inputs other than quoted prices that are observable 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. |
\u2022 | Level 3:\u00a0Unobservable inputs with little or no market data available, which require the reporting entity to develop its own assumptions. |
\u2022 | Level 1:\u00a0Quoted prices in active markets for identical assets or liabilities. |
\u2022 | Level 2:\u00a0Inputs other than quoted prices that are observable 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. |
\u2022 | Level 3:\u00a0Unobservable inputs with little or no market data available, which require the reporting entity to develop its own assumptions. |
NOTE\u00a02 \u2014 INVENTORIES |
NOTE\u00a03 \u2014 PROPERTY, PLANT AND EQUIPMENT |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Land and improvements | $ | 345 | $ | 329 | ||
Buildings | 2,442 | 2,445 | ||||
Machinery and equipment | 2,751 | 2,726 | ||||
Internal-use software | 1,483 | 1,609 | ||||
Leasehold improvements | 1,554 | 1,563 | ||||
Construction in process | 1,086 | 797 | ||||
Total property, plant and equipment, gross | 9,661 | 9,469 | ||||
Less accumulated depreciation | 4,795 | 4,725 | ||||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | $ | 4,866 | $ | 4,744 |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Land and improvements | $ | 345 | $ | 329 | ||
Buildings | 2,442 | 2,445 | ||||
Machinery and equipment | 2,751 | 2,726 | ||||
Internal-use software | 1,483 | 1,609 | ||||
Leasehold improvements | 1,554 | 1,563 | ||||
Construction in process | 1,086 | 797 | ||||
Total property, plant and equipment, gross | 9,661 | 9,469 | ||||
Less accumulated depreciation | 4,795 | 4,725 | ||||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | $ | 4,866 | $ | 4,744 |
NOTE\u00a04 \u2014 IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL |
MAY 31, | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
(Dollars in\u00a0millions) | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | |||||||||||||
Indefinite-lived trademarks | $ | 246 | $ | \u2014 | $ | 246 | $ | 281 | $ | \u2014 | $ | 281 | |||||||
Acquired trademarks and other | 47 | 19 | 28 | 22 | 20 | 2 | |||||||||||||
IDENTIFIABLE INTANGIBLE ASSETS, NET | $ | 293 | $ | 19 | $ | 274 | $ | 303 | $ | 20 | $ | 283 |
MAY 31, | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
(Dollars in\u00a0millions) | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | |||||||||||||
Indefinite-lived trademarks | $ | 246 | $ | \u2014 | $ | 246 | $ | 281 | $ | \u2014 | $ | 281 | |||||||
Acquired trademarks and other | 47 | 19 | 28 | 22 | 20 | 2 | |||||||||||||
IDENTIFIABLE INTANGIBLE ASSETS, NET | $ | 293 | $ | 19 | $ | 274 | $ | 303 | $ | 20 | $ | 283 |
MAY 31, | |||||||||||||||||||
2020 | 2019 | ||||||||||||||||||
(Dollars in\u00a0millions) | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | GROSS CARRYING AMOUNT | ACCUMULATED AMORTIZATION | NET CARRYING AMOUNT | |||||||||||||
Indefinite-lived trademarks | $ | 246 | $ | \u2014 | $ | 246 | $ | 281 | $ | \u2014 | $ | 281 | |||||||
Acquired trademarks and other | 47 | 19 | 28 | 22 | 20 | 2 | |||||||||||||
IDENTIFIABLE INTANGIBLE ASSETS, NET | $ | 293 | $ | 19 | $ | 274 | $ | 303 | $ | 20 | $ | 283 |
NOTE\u00a05 \u2014 ACCRUED LIABILITIES |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Compensation and benefits, excluding taxes | $ | 1,248 | $ | 1,232 | ||
Sales-related reserves | 1,178 | 1,218 | ||||
Allowance for cumulative foreign currency translation losses(1) | 405 | \u2014 | ||||
Endorsement compensation | 393 | 424 | ||||
Dividends payable | 384 | 346 | ||||
Import and logistics costs | 273 | 296 | ||||
Taxes other than income taxes payable | 202 | 234 | ||||
Fair value of derivatives | 190 | 52 | ||||
Liabilities held-for-sale(1) | 146 | \u2014 | ||||
Advertising and marketing | 97 | 114 | ||||
Collateral received from counterparties to hedging instruments | \u2014 | 289 | ||||
Other(2) | 668 | 805 | ||||
TOTAL ACCRUED LIABILITIES | $ | 5,184 | $ | 5,010 |
(1) | Refer to Note\u00a020 \u2014 Acquisitions and Divestitures for additional information. |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Compensation and benefits, excluding taxes | $ | 1,248 | $ | 1,232 | ||
Sales-related reserves | 1,178 | 1,218 | ||||
Allowance for cumulative foreign currency translation losses(1) | 405 | \u2014 | ||||
Endorsement compensation | 393 | 424 | ||||
Dividends payable | 384 | 346 | ||||
Import and logistics costs | 273 | 296 | ||||
Taxes other than income taxes payable | 202 | 234 | ||||
Fair value of derivatives | 190 | 52 | ||||
Liabilities held-for-sale(1) | 146 | \u2014 | ||||
Advertising and marketing | 97 | 114 | ||||
Collateral received from counterparties to hedging instruments | \u2014 | 289 | ||||
Other(2) | 668 | 805 | ||||
TOTAL ACCRUED LIABILITIES | $ | 5,184 | $ | 5,010 |
(1) | Refer to Note\u00a020 \u2014 Acquisitions and Divestitures for additional information. |
NOTE\u00a06 \u2014 FAIR VALUE MEASUREMENTS |
MAY\u00a031, 2020 | |||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS | ||||||
Cash | $ | 596 | $ | 596 | $ | \u2014 | |||
Level 1: | |||||||||
U.S. Treasury securities | 1,204 | 800 | 404 | ||||||
Level 2: | |||||||||
Commercial paper and bonds | 32 | \u2014 | 32 | ||||||
Money market funds | 5,973 | 5,973 | \u2014 | ||||||
Time deposits | 981 | 979 | 2 | ||||||
U.S. Agency securities | 1 | \u2014 | 1 | ||||||
Total Level 2 | 6,987 | 6,952 | 35 | ||||||
TOTAL | $ | 8,787 | $ | 8,348 | $ | 439 |
MAY\u00a031, 2019 | |||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS | ||||||
Cash | $ | 853 | $ | 853 | $ | \u2014 | |||
Level 1: | |||||||||
U.S. Treasury securities | 347 | 200 | 147 | ||||||
Level 2: | |||||||||
Commercial paper and bonds | 34 | 1 | 33 | ||||||
Money market funds | 1,637 | 1,637 | \u2014 | ||||||
Time deposits | 1,791 | 1,775 | 16 | ||||||
U.S. Agency securities | 1 | \u2014 | 1 | ||||||
Total Level 2 | 3,463 | 3,413 | 50 | ||||||
TOTAL | $ | 4,663 | $ | 4,466 | $ | 197 |
MAY\u00a031, 2020 | |||||||||||||||||||
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES | |||||||||||||
Level 2: | |||||||||||||||||||
Foreign exchange forwards and options(1) | $ | 94 | $ | 91 | $ | 3 | $ | 205 | $ | 188 | $ | 17 | |||||||
Embedded derivatives | 1 | 1 | \u2014 | 2 | 2 | \u2014 | |||||||||||||
TOTAL | $ | 95 | $ | 92 | $ | 3 | $ | 207 | $ | 190 | $ | 17 |
(1) | If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions would have been reduced by $76 million as of May\u00a031, 2020. As of that date, no amount of cash collateral had been received or posted on the derivative asset and liability balances related to these foreign exchange derivative instruments. |
MAY\u00a031, 2019 | |||||||||||||||||||
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES | |||||||||||||
Level 2: | |||||||||||||||||||
Foreign exchange forwards and options(1) | $ | 611 | $ | 611 | $ | \u2014 | $ | 51 | $ | 51 | $ | \u2014 | |||||||
Embedded derivatives | 11 | 5 | 6 | 3 | 1 | 2 | |||||||||||||
TOTAL | $ | 622 | $ | 616 | $ | 6 | $ | 54 | $ | 52 | $ | 2 |
(1) | If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $50 million as of May\u00a031, 2019. As of that date, the Company had received $289 million\u00a0of cash collateral from various counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the Company's derivative liability balance as of May\u00a031, 2019. |
MAY\u00a031, 2020 | |||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS | ||||||
Cash | $ | 596 | $ | 596 | $ | \u2014 | |||
Level 1: | |||||||||
U.S. Treasury securities | 1,204 | 800 | 404 | ||||||
Level 2: | |||||||||
Commercial paper and bonds | 32 | \u2014 | 32 | ||||||
Money market funds | 5,973 | 5,973 | \u2014 | ||||||
Time deposits | 981 | 979 | 2 | ||||||
U.S. Agency securities | 1 | \u2014 | 1 | ||||||
Total Level 2 | 6,987 | 6,952 | 35 | ||||||
TOTAL | $ | 8,787 | $ | 8,348 | $ | 439 |
MAY\u00a031, 2019 | |||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS | ||||||
Cash | $ | 853 | $ | 853 | $ | \u2014 | |||
Level 1: | |||||||||
U.S. Treasury securities | 347 | 200 | 147 | ||||||
Level 2: | |||||||||
Commercial paper and bonds | 34 | 1 | 33 | ||||||
Money market funds | 1,637 | 1,637 | \u2014 | ||||||
Time deposits | 1,791 | 1,775 | 16 | ||||||
U.S. Agency securities | 1 | \u2014 | 1 | ||||||
Total Level 2 | 3,463 | 3,413 | 50 | ||||||
TOTAL | $ | 4,663 | $ | 4,466 | $ | 197 |
MAY\u00a031, 2020 | |||||||||||||||||||
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES | |||||||||||||
Level 2: | |||||||||||||||||||
Foreign exchange forwards and options(1) | $ | 94 | $ | 91 | $ | 3 | $ | 205 | $ | 188 | $ | 17 | |||||||
Embedded derivatives | 1 | 1 | \u2014 | 2 | 2 | \u2014 | |||||||||||||
TOTAL | $ | 95 | $ | 92 | $ | 3 | $ | 207 | $ | 190 | $ | 17 |
(1) | If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions would have been reduced by $76 million as of May\u00a031, 2020. As of that date, no amount of cash collateral had been received or posted on the derivative asset and liability balances related to these foreign exchange derivative instruments. |
MAY\u00a031, 2019 | |||||||||||||||||||
DERIVATIVE ASSETS | DERIVATIVE LIABILITIES | ||||||||||||||||||
(Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES | |||||||||||||
Level 2: | |||||||||||||||||||
Foreign exchange forwards and options(1) | $ | 611 | $ | 611 | $ | \u2014 | $ | 51 | $ | 51 | $ | \u2014 | |||||||
Embedded derivatives | 11 | 5 | 6 | 3 | 1 | 2 | |||||||||||||
TOTAL | $ | 622 | $ | 616 | $ | 6 | $ | 54 | $ | 52 | $ | 2 |
\u00a0 | DERIVATIVE ASSETS | |||||||
BALANCE SHEET LOCATION | MAY\u00a031, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Derivatives\u00a0formally designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Prepaid expenses and other current assets | $ | 43 | $ | 509 | |||
Foreign exchange forwards and options | Deferred income taxes and other assets | 1 | \u2014 | |||||
Total derivatives formally designated as hedging instruments | 44 | 509 | ||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Prepaid expenses and other current assets | 48 | 102 | |||||
Embedded derivatives | Prepaid expenses and other current assets | 1 | 5 | |||||
Foreign exchange forwards and options | Deferred income taxes and other assets | 2 | \u2014 | |||||
Embedded derivatives | Deferred income taxes and other assets | \u2014 | 6 | |||||
Total derivatives not designated as hedging instruments | 51 | 113 | ||||||
TOTAL DERIVATIVE ASSETS | $ | 95 | $ | 622 |
\u00a0 | DERIVATIVE LIABILITIES | |||||||
BALANCE SHEET LOCATION | MAY\u00a031, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Derivatives\u00a0formally designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Accrued\u00a0liabilities | $ | 173 | $ | 5 | |||
Foreign exchange forwards and options | Deferred income taxes and other liabilities | 17 | \u2014 | |||||
Total derivatives formally designated as hedging instruments | 190 | 5 | ||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Accrued liabilities | 15 | 46 | |||||
Embedded derivatives | Accrued liabilities | 2 | 1 | |||||
Embedded derivatives | Deferred income taxes and other liabilities | \u2014 | 2 | |||||
Total derivatives not designated as hedging instruments | 17 | 49 | ||||||
TOTAL DERIVATIVE LIABILITIES | $ | 207 | $ | 54 |
NOTE\u00a07 \u2014 SHORT-TERM BORROWINGS AND CREDIT LINES |
MAY 31, | |||||||||||||
2020 | 2019 | ||||||||||||
(Dollars in\u00a0millions) | BORROWINGS | INTEREST RATE | BORROWINGS | INTEREST RATE | |||||||||
Notes payable: | |||||||||||||
Commercial paper(1) | $ | 248 | 1.65 | % | $ | \u2014 | 0.00 | % | |||||
U.S. operations | \u2014 | 0.00 | % | 2 | 0.00 | % | (2)\u00a0 | ||||||
Non-U.S. operations | \u2014 | 0.00 | % | 7 | 26.00 | % | (2)\u00a0 | ||||||
TOTAL NOTES PAYABLE | $ | 248 | $ | 9 |
(1) | Commercial paper borrowings with original maturities greater than three months are included in Proceeds from borrowings, net of debt issuance costs on the Consolidated Statements of Cash Flows. |
(2) | Weighted average interest rate includes non-interest bearing overdrafts. |
MAY 31, | |||||||||||||
2020 | 2019 | ||||||||||||
(Dollars in\u00a0millions) | BORROWINGS | INTEREST RATE | BORROWINGS | INTEREST RATE | |||||||||
Notes payable: | |||||||||||||
Commercial paper(1) | $ | 248 | 1.65 | % | $ | \u2014 | 0.00 | % | |||||
U.S. operations | \u2014 | 0.00 | % | 2 | 0.00 | % | (2)\u00a0 | ||||||
Non-U.S. operations | \u2014 | 0.00 | % | 7 | 26.00 | % | (2)\u00a0 | ||||||
TOTAL NOTES PAYABLE | $ | 248 | $ | 9 |
(1) | Commercial paper borrowings with original maturities greater than three months are included in Proceeds from borrowings, net of debt issuance costs on the Consolidated Statements of Cash Flows. |
NOTE\u00a08 \u2014 LONG-TERM DEBT |
BOOK VALUE OUTSTANDING AS OF MAY\u00a031, | ||||||||||||
Scheduled Maturity (Dollars and Yen in millions) | ORIGINAL PRINCIPAL | INTEREST RATE | INTEREST PAYMENTS | 2020 | 2019 | |||||||
Corporate Term Debt:(1)(2) | ||||||||||||
May 1, 2023 | $ | 500 | 2.25 | % | Semi-Annually | $ | 499 | $ | 498 | |||
March 27, 2025 | 1,000 | 2.40 | % | Semi-Annually | 994 | \u2014 | ||||||
November 1, 2026 | 1,000 | 2.38 | % | Semi-Annually | 995 | 994 | ||||||
March 27, 2027 | 1,000 | 2.75 | % | Semi-Annually | 994 | \u2014 | ||||||
March 27, 2030 | 1,500 | 2.85 | % | Semi-Annually | 1,489 | \u2014 | ||||||
March 27, 2040 | 1,000 | 3.25 | % | Semi-Annually | 985 | \u2014 | ||||||
May 1, 2043 | 500 | 3.63 | % | Semi-Annually | 495 | 495 | ||||||
November 1, 2045 | 1,000 | 3.88 | % | Semi-Annually | 984 | 983 | ||||||
November 1, 2046 | 500 | 3.38 | % | Semi-Annually | 491 | 491 | ||||||
March 27, 2050 | 1,500 | 3.38 | % | Semi-Annually | 1,480 | \u2014 | ||||||
Japanese Yen Notes:(3) | ||||||||||||
August\u00a020,\u00a02001\u00a0through\u00a0November\u00a020,\u00a02020 | \u00a5 | 9,000 | 2.60 | % | Quarterly | $ | 2 | $ | 6 | |||
August\u00a020,\u00a02001\u00a0through\u00a0November\u00a020,\u00a02020 | 4,000 | 2.00 | % | Quarterly | 1 | 3 | ||||||
Total | 9,409 | 3,470 | ||||||||||
Less current maturities | 3 | 6 | ||||||||||
TOTAL LONG-TERM DEBT | $ | 9,406 | $ | 3,464 |
(1) | These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness. |
(2) | The bonds are redeemable at the Company's option at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. However, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest on or after the Par Call Date, as defined in the respective notes. |
(3) | NIKE Logistics YK assumed a total of \u00a513.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August\u00a020, 2001 through November\u00a020, 2020. |
BOOK VALUE OUTSTANDING AS OF MAY\u00a031, | ||||||||||||
Scheduled Maturity (Dollars and Yen in millions) | ORIGINAL PRINCIPAL | INTEREST RATE | INTEREST PAYMENTS | 2020 | 2019 | |||||||
Corporate Term Debt:(1)(2) | ||||||||||||
May 1, 2023 | $ | 500 | 2.25 | % | Semi-Annually | $ | 499 | $ | 498 | |||
March 27, 2025 | 1,000 | 2.40 | % | Semi-Annually | 994 | \u2014 | ||||||
November 1, 2026 | 1,000 | 2.38 | % | Semi-Annually | 995 | 994 | ||||||
March 27, 2027 | 1,000 | 2.75 | % | Semi-Annually | 994 | \u2014 | ||||||
March 27, 2030 | 1,500 | 2.85 | % | Semi-Annually | 1,489 | \u2014 | ||||||
March 27, 2040 | 1,000 | 3.25 | % | Semi-Annually | 985 | \u2014 | ||||||
May 1, 2043 | 500 | 3.63 | % | Semi-Annually | 495 | 495 | ||||||
November 1, 2045 | 1,000 | 3.88 | % | Semi-Annually | 984 | 983 | ||||||
November 1, 2046 | 500 | 3.38 | % | Semi-Annually | 491 | 491 | ||||||
March 27, 2050 | 1,500 | 3.38 | % | Semi-Annually | 1,480 | \u2014 | ||||||
Japanese Yen Notes:(3) | ||||||||||||
August\u00a020,\u00a02001\u00a0through\u00a0November\u00a020,\u00a02020 | \u00a5 | 9,000 | 2.60 | % | Quarterly | $ | 2 | $ | 6 | |||
August\u00a020,\u00a02001\u00a0through\u00a0November\u00a020,\u00a02020 | 4,000 | 2.00 | % | Quarterly | 1 | 3 | ||||||
Total | 9,409 | 3,470 | ||||||||||
Less current maturities | 3 | 6 | ||||||||||
TOTAL LONG-TERM DEBT | $ | 9,406 | $ | 3,464 |
(1) | These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness. |
(2) | The bonds are redeemable at the Company's option at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. However, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest on or after the Par Call Date, as defined in the respective notes. |
NOTE\u00a09 \u2014 INCOME TAXES |
YEAR ENDED MAY\u00a031, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Income before income taxes: | |||||||||
United States | $ | 2,954 | $ | 593 | $ | 744 | |||
Foreign | (67 | ) | 4,208 | 3,581 | |||||
TOTAL INCOME BEFORE INCOME TAXES | $ | 2,887 | $ | 4,801 | $ | 4,325 |
YEAR ENDED MAY\u00a031, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Current: | |||||||||
United States | |||||||||
Federal | $ | (109 | ) | $ | 74 | $ | 1,167 | ||
State | 81 | 56 | 45 | ||||||
Foreign | 756 | 608 | 533 | ||||||
Total Current | 728 | 738 | 1,745 | ||||||
Deferred: | |||||||||
United States | |||||||||
Federal | (231 | ) | (33 | ) | 595 | ||||
State | (47 | ) | (9 | ) | 25 | ||||
Foreign | (102 | ) | 76 | 27 | |||||
Total Deferred | (380 | ) | 34 | 647 | |||||
TOTAL INCOME TAX EXPENSE | $ | 348 | $ | 772 | $ | 2,392 |
\u00a0 | YEAR ENDED MAY\u00a031, | |||||
2020 | 2019 | 2018 | ||||
Federal income tax rate | 21.0 | \u00a0% | 21.0 | \u00a0% | 29.2 | \u00a0% |
State taxes, net of federal benefit | 0.8 | \u00a0% | 1.0 | \u00a0% | 0.8 | \u00a0% |
Foreign earnings | 5.9 | \u00a0% | -1.1 | \u00a0% | -19.2 | \u00a0% |
Foreign-derived intangible income benefit related to the Tax Act | -8.1 | \u00a0% | \u2014 | \u00a0% | \u2014 | \u00a0% |
Transition tax related to the Tax Act | \u2014 | \u00a0% | \u2014 | \u00a0% | 43.3 | \u00a0% |
Remeasurement of deferred tax assets and liabilities related to the Tax Act | \u2014 | \u00a0% | \u2014 | \u00a0% | 3.7 | \u00a0% |
Excess tax benefits from share-based compensation | -7.2 | \u00a0% | -3.6 | \u00a0% | -5.3 | \u00a0% |
Income tax audits and contingency reserves | -1.4 | \u00a0% | 1.3 | \u00a0% | 2.9 | \u00a0% |
U.S. research and development tax credit | -1.8 | \u00a0% | -1.0 | \u00a0% | -0.6 | \u00a0% |
Other, net | 2.9 | \u00a0% | -1.5 | \u00a0% | 0.5 | \u00a0% |
EFFECTIVE INCOME TAX RATE | 12.1 | \u00a0% | 16.1 | \u00a0% | 55.3 | \u00a0% |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Deferred tax assets: | ||||||
Inventories | $ | 84 | $ | 66 | ||
Sales return reserves | 115 | 128 | ||||
Deferred compensation | 295 | 271 | ||||
Stock-based compensation | 168 | 156 | ||||
Reserves and accrued liabilities | 120 | 101 | ||||
Operating lease liabilities | 491 | \u2014 | ||||
Capitalized research and development expenditures | 189 | \u2014 | ||||
Net operating loss carry-forwards | 21 | 81 | ||||
Other | 127 | 125 | ||||
Total deferred tax assets | 1,610 | 928 | ||||
Valuation allowance | (26 | ) | (88 | ) | ||
Total deferred tax assets after valuation allowance | 1,584 | 840 | ||||
Deferred tax liabilities: | ||||||
Foreign withholding tax on undistributed earnings of foreign subsidiaries | (165 | ) | (235 | ) | ||
Property, plant and equipment | (232 | ) | (188 | ) | ||
Right-of-use assets | (423 | ) | \u2014 | |||
Other | (32 | ) | (41 | ) | ||
Total deferred tax liabilities | (852 | ) | (464 | ) | ||
NET DEFERRED TAX ASSET | $ | 732 | $ | 376 |
\u00a0 | MAY 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Unrecognized tax benefits, beginning of the period | $ | 808 | $ | 698 | $ | 461 | |||
Gross increases related to prior period tax positions | 181 | 85 | 19 | ||||||
Gross decreases related to prior period tax positions | (171 | ) | (32 | ) | (12 | ) | |||
Gross increases related to current period tax positions | 50 | 81 | 249 | ||||||
Settlements | (58 | ) | \u2014 | \u2014 | |||||
Lapse of statute of limitations | (28 | ) | (35 | ) | (20 | ) | |||
Changes due to currency translation | (11 | ) | 11 | 1 | |||||
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD | $ | 771 | $ | 808 | $ | 698 |
\u00a0 | YEAR ENDING MAY 31, | ||||||||||||||||||||
(Dollars in millions) | 2021 | 2022 | 2023 | 2024 | 2025-2040 | INDEFINITE | TOTAL | ||||||||||||||
Net\u00a0operating\u00a0losses | $ | \u2014 | $ | 3 | $ | 2 | $ | 2 | $ | 59 | $ | 17 | $ | 83 |
YEAR ENDED MAY\u00a031, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Income before income taxes: | |||||||||
United States | $ | 2,954 | $ | 593 | $ | 744 | |||
Foreign | (67 | ) | 4,208 | 3,581 | |||||
TOTAL INCOME BEFORE INCOME TAXES | $ | 2,887 | $ | 4,801 | $ | 4,325 |
YEAR ENDED MAY\u00a031, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Current: | |||||||||
United States | |||||||||
Federal | $ | (109 | ) | $ | 74 | $ | 1,167 | ||
State | 81 | 56 | 45 | ||||||
Foreign | 756 | 608 | 533 | ||||||
Total Current | 728 | 738 | 1,745 | ||||||
Deferred: | |||||||||
United States | |||||||||
Federal | (231 | ) | (33 | ) | 595 | ||||
State | (47 | ) | (9 | ) | 25 | ||||
Foreign | (102 | ) | 76 | 27 | |||||
Total Deferred | (380 | ) | 34 | 647 | |||||
TOTAL INCOME TAX EXPENSE | $ | 348 | $ | 772 | $ | 2,392 |
\u00a0 | YEAR ENDED MAY\u00a031, | |||||
2020 | 2019 | 2018 | ||||
Federal income tax rate | 21.0 | \u00a0% | 21.0 | \u00a0% | 29.2 | \u00a0% |
State taxes, net of federal benefit | 0.8 | \u00a0% | 1.0 | \u00a0% | 0.8 | \u00a0% |
Foreign earnings | 5.9 | \u00a0% | -1.1 | \u00a0% | -19.2 | \u00a0% |
Foreign-derived intangible income benefit related to the Tax Act | -8.1 | \u00a0% | \u2014 | \u00a0% | \u2014 | \u00a0% |
Transition tax related to the Tax Act | \u2014 | \u00a0% | \u2014 | \u00a0% | 43.3 | \u00a0% |
Remeasurement of deferred tax assets and liabilities related to the Tax Act | \u2014 | \u00a0% | \u2014 | \u00a0% | 3.7 | \u00a0% |
Excess tax benefits from share-based compensation | -7.2 | \u00a0% | -3.6 | \u00a0% | -5.3 | \u00a0% |
Income tax audits and contingency reserves | -1.4 | \u00a0% | 1.3 | \u00a0% | 2.9 | \u00a0% |
U.S. research and development tax credit | -1.8 | \u00a0% | -1.0 | \u00a0% | -0.6 | \u00a0% |
Other, net | 2.9 | \u00a0% | -1.5 | \u00a0% | 0.5 | \u00a0% |
EFFECTIVE INCOME TAX RATE | 12.1 | \u00a0% | 16.1 | \u00a0% | 55.3 | \u00a0% |
MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
Deferred tax assets: | ||||||
Inventories | $ | 84 | $ | 66 | ||
Sales return reserves | 115 | 128 | ||||
Deferred compensation | 295 | 271 | ||||
Stock-based compensation | 168 | 156 | ||||
Reserves and accrued liabilities | 120 | 101 | ||||
Operating lease liabilities | 491 | \u2014 | ||||
Capitalized research and development expenditures | 189 | \u2014 | ||||
Net operating loss carry-forwards | 21 | 81 | ||||
Other | 127 | 125 | ||||
Total deferred tax assets | 1,610 | 928 | ||||
Valuation allowance | (26 | ) | (88 | ) | ||
Total deferred tax assets after valuation allowance | 1,584 | 840 | ||||
Deferred tax liabilities: | ||||||
Foreign withholding tax on undistributed earnings of foreign subsidiaries | (165 | ) | (235 | ) | ||
Property, plant and equipment | (232 | ) | (188 | ) | ||
Right-of-use assets | (423 | ) | \u2014 | |||
Other | (32 | ) | (41 | ) | ||
Total deferred tax liabilities | (852 | ) | (464 | ) | ||
NET DEFERRED TAX ASSET | $ | 732 | $ | 376 |
\u00a0 | MAY 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Unrecognized tax benefits, beginning of the period | $ | 808 | $ | 698 | $ | 461 | |||
Gross increases related to prior period tax positions | 181 | 85 | 19 | ||||||
Gross decreases related to prior period tax positions | (171 | ) | (32 | ) | (12 | ) | |||
Gross increases related to current period tax positions | 50 | 81 | 249 | ||||||
Settlements | (58 | ) | \u2014 | \u2014 | |||||
Lapse of statute of limitations | (28 | ) | (35 | ) | (20 | ) | |||
Changes due to currency translation | (11 | ) | 11 | 1 | |||||
UNRECOGNIZED TAX BENEFITS, END OF THE PERIOD | $ | 771 | $ | 808 | $ | 698 |
\u00a0 | YEAR ENDING MAY 31, | ||||||||||||||||||||
(Dollars in millions) | 2021 | 2022 | 2023 | 2024 | 2025-2040 | INDEFINITE | TOTAL | ||||||||||||||
Net\u00a0operating\u00a0losses | $ | \u2014 | $ | 3 | $ | 2 | $ | 2 | $ | 59 | $ | 17 | $ | 83 |
NOTE\u00a010 \u2014 REDEEMABLE PREFERRED STOCK |
NOTE\u00a011 \u2014 COMMON STOCK AND STOCK-BASED COMPENSATION |
\u00a0 | YEAR ENDED MAY 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Stock options(1) | $ | 237 | $ | 207 | $ | 149 | |||
ESPPs | 53 | 40 | 34 | ||||||
Restricted stock | 139 | 78 | 35 | ||||||
TOTAL STOCK-BASED COMPENSATION EXPENSE | $ | 429 | $ | 325 | $ | 218 |
(1) | Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees meeting certain retirement eligibility requirements. Accelerated stock option expense was $53 million, $41 million and $18 million for the fiscal years ended May\u00a031, 2020, 2019 and 2018, respectively. |
\u00a0 | YEAR ENDED MAY 31, | |||||
2020 | 2019 | 2018 | ||||
Dividend yield | 1.0 | % | 1.0 | % | 1.2 | % |
Expected volatility | 23.0 | % | 26.6 | % | 16.4 | % |
Weighted average expected life (in years) | 6.0 | 6.0 | 6.0 | |||
Risk-free interest rate | 1.5 | % | 2.8 | % | 2.0 | % |
SHARES(1) | WEIGHTED AVERAGE OPTION PRICE | ||||
(In\u00a0millions) | |||||
Options outstanding as of May\u00a031, 2019 | 91.3 | $ | 50.59 | ||
Exercised | (20.1 | ) | 35.26 | ||
Forfeited | (2.2 | ) | 75.74 | ||
Granted | 19.1 | 85.29 | |||
Options outstanding as of May\u00a031, 2020 | 88.1 | $ | 60.98 |
(1) | Includes stock appreciation rights transactions. |
SHARES | WEIGHTED AVERAGE GRANT DATE FAIR VALUE | |||||
(In\u00a0millions) | ||||||
Nonvested as of May\u00a031, 2019 | 4.4 | $ | 70.93 | |||
Vested | (1.1 | ) | 72.64 | |||
Forfeited | (0.3 | ) | 79.62 | |||
Granted | 3.8 | 88.26 | ||||
Nonvested as of May\u00a031, 2020 | 6.8 | $ | 79.84 |
\u00a0 | YEAR ENDED MAY 31, | ||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
Stock options(1) | $ | 237 | $ | 207 | $ | 149 | |||
ESPPs | 53 | 40 | 34 | ||||||
Restricted stock | 139 | 78 | 35 | ||||||
TOTAL STOCK-BASED COMPENSATION EXPENSE | $ | 429 | $ | 325 | $ | 218 |
\u00a0 | YEAR ENDED MAY 31, | |||||
2020 | 2019 | 2018 | ||||
Dividend yield | 1.0 | % | 1.0 | % | 1.2 | % |
Expected volatility | 23.0 | % | 26.6 | % | 16.4 | % |
Weighted average expected life (in years) | 6.0 | 6.0 | 6.0 | |||
Risk-free interest rate | 1.5 | % | 2.8 | % | 2.0 | % |
SHARES(1) | WEIGHTED AVERAGE OPTION PRICE | ||||
(In\u00a0millions) | |||||
Options outstanding as of May\u00a031, 2019 | 91.3 | $ | 50.59 | ||
Exercised | (20.1 | ) | 35.26 | ||
Forfeited | (2.2 | ) | 75.74 | ||
Granted | 19.1 | 85.29 | |||
Options outstanding as of May\u00a031, 2020 | 88.1 | $ | 60.98 |
SHARES | WEIGHTED AVERAGE GRANT DATE FAIR VALUE | |||||
(In\u00a0millions) | ||||||
Nonvested as of May\u00a031, 2019 | 4.4 | $ | 70.93 | |||
Vested | (1.1 | ) | 72.64 | |||
Forfeited | (0.3 | ) | 79.62 | |||
Granted | 3.8 | 88.26 | ||||
Nonvested as of May\u00a031, 2020 | 6.8 | $ | 79.84 |
NOTE\u00a012 \u2014 EARNINGS PER SHARE |
\u00a0 | YEAR ENDED MAY 31, | ||||||||
(In millions, except per share data) | 2020 | 2019 | 2018 | ||||||
Net income available to common stockholders | $ | 2,539 | $ | 4,029 | $ | 1,933 | |||
Determination of shares: | |||||||||
Weighted average common shares outstanding | 1,558.8 | 1,579.7 | 1,623.8 | ||||||
Assumed conversion of dilutive stock options and awards | 32.8 | 38.7 | 35.3 | ||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 1,591.6 | 1,618.4 | 1,659.1 | ||||||
Earnings per common share: | |||||||||
Basic | $ | 1.63 | $ | 2.55 | $ | 1.19 | |||
Diluted | $ | 1.60 | $ | 2.49 | $ | 1.17 |
\u00a0 | YEAR ENDED MAY 31, | ||||||||
(In millions, except per share data) | 2020 | 2019 | 2018 | ||||||
Net income available to common stockholders | $ | 2,539 | $ | 4,029 | $ | 1,933 | |||
Determination of shares: | |||||||||
Weighted average common shares outstanding | 1,558.8 | 1,579.7 | 1,623.8 | ||||||
Assumed conversion of dilutive stock options and awards | 32.8 | 38.7 | 35.3 | ||||||
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 1,591.6 | 1,618.4 | 1,659.1 | ||||||
Earnings per common share: | |||||||||
Basic | $ | 1.63 | $ | 2.55 | $ | 1.19 | |||
Diluted | $ | 1.60 | $ | 2.49 | $ | 1.17 |
NOTE\u00a013 \u2014 BENEFIT PLANS |
NOTE\u00a014 \u2014 RISK MANAGEMENT AND DERIVATIVES |
\u00a0 | DERIVATIVE ASSETS | |||||||
BALANCE SHEET LOCATION | MAY\u00a031, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Derivatives\u00a0formally designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Prepaid expenses and other current assets | $ | 43 | $ | 509 | |||
Foreign exchange forwards and options | Deferred income taxes and other assets | 1 | \u2014 | |||||
Total derivatives formally designated as hedging instruments | 44 | 509 | ||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Prepaid expenses and other current assets | 48 | 102 | |||||
Embedded derivatives | Prepaid expenses and other current assets | 1 | 5 | |||||
Foreign exchange forwards and options | Deferred income taxes and other assets | 2 | \u2014 | |||||
Embedded derivatives | Deferred income taxes and other assets | \u2014 | 6 | |||||
Total derivatives not designated as hedging instruments | 51 | 113 | ||||||
TOTAL DERIVATIVE ASSETS | $ | 95 | $ | 622 |
\u00a0 | DERIVATIVE LIABILITIES | |||||||
BALANCE SHEET LOCATION | MAY\u00a031, | |||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Derivatives\u00a0formally designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Accrued\u00a0liabilities | $ | 173 | $ | 5 | |||
Foreign exchange forwards and options | Deferred income taxes and other liabilities | 17 | \u2014 | |||||
Total derivatives formally designated as hedging instruments | 190 | 5 | ||||||
Derivatives not designated as hedging instruments: | ||||||||
Foreign exchange forwards and options | Accrued liabilities | 15 | 46 | |||||
Embedded derivatives | Accrued liabilities | 2 | 1 | |||||
Embedded derivatives | Deferred income taxes and other liabilities | \u2014 | 2 | |||||
Total derivatives not designated as hedging instruments | 17 | 49 | ||||||
TOTAL DERIVATIVE LIABILITIES | $ | 207 | $ | 54 |
YEAR ENDED MAY 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
(Dollars in millions) | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | ||||||||||||||
Revenues | $ | 37,403 | $ | (17 | ) | $ | 39,117 | $ | (5 | ) | $ | 36,397 | $ | 34 | ||||||
Cost of sales | 21,162 | 364 | 21,643 | 53 | 20,441 | (90 | ) | |||||||||||||
Demand creation expense | 3,592 | (2 | ) | 3,753 | \u2014 | 3,577 | 1 | |||||||||||||
Other (income) expense, net | 139 | 181 | (78 | ) | 35 | 66 | (69 | ) | ||||||||||||
Interest expense (income), net | 89 | (7 | ) | 49 | (7 | ) | 54 | (7 | ) |
(Dollars in millions) | AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES(1) | AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME(1) | |||||||||||||||||||
YEAR ENDED MAY 31, | LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | YEAR ENDED MAY 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||
Foreign exchange forwards and options | $ | 28 | $ | 14 | $ | 19 | Revenues | $ | (17 | ) | $ | (5 | ) | $ | 34 | ||||||
Foreign exchange forwards and options | 283 | 405 | (50 | ) | Cost of sales | 364 | 53 | (90 | ) | ||||||||||||
Foreign exchange forwards and options | 1 | 2 | 1 | Demand creation expense | (2 | ) | \u2014 | 1 | |||||||||||||
Foreign exchange forwards and options | 90 | 156 | (19 | ) | Other (income) expense, net | 181 | 35 | (69 | ) | ||||||||||||
Interest rate swaps(2) | \u2014 | \u2014 | \u2014 | Interest expense (income), net | (7 | ) | (7 | ) | (7 | ) | |||||||||||
Total designated cash flow hedges | $ | 402 | $ | 577 | $ | (49 | ) | $ | 519 | $ | 76 | $ | (131 | ) |
(1) | For the fiscal years ended May\u00a031, 2020, 2019 and 2018, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial. |
(2) | Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest expense (income), net over the term of the issued debt. |
AMOUNT OF GAIN (LOSS) RECOGNIZED\u00a0 IN INCOME ON DERIVATIVES | LOCATION OF GAIN (LOSS)\u00a0\u00a0 RECOGNIZED IN INCOME\u00a0\u00a0 ON DERIVATIVES | ||||||||||
YEAR ENDED MAY 31, | |||||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||
Foreign exchange forwards and options | $ | 76 | $ | 166 | $ | (57 | ) | Other (income) expense, net | |||
Embedded derivatives | (1 | ) | 7 | (4 | ) | Other (income) expense, net |
YEAR ENDED MAY 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
(Dollars in millions) | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | TOTAL | AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY | ||||||||||||||
Revenues | $ | 37,403 | $ | (17 | ) | $ | 39,117 | $ | (5 | ) | $ | 36,397 | $ | 34 | ||||||
Cost of sales | 21,162 | 364 | 21,643 | 53 | 20,441 | (90 | ) | |||||||||||||
Demand creation expense | 3,592 | (2 | ) | 3,753 | \u2014 | 3,577 | 1 | |||||||||||||
Other (income) expense, net | 139 | 181 | (78 | ) | 35 | 66 | (69 | ) | ||||||||||||
Interest expense (income), net | 89 | (7 | ) | 49 | (7 | ) | 54 | (7 | ) |
(Dollars in millions) | AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES(1) | AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME(1) | |||||||||||||||||||
YEAR ENDED MAY 31, | LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | YEAR ENDED MAY 31, | |||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||
Derivatives designated as cash flow hedges: | |||||||||||||||||||||
Foreign exchange forwards and options | $ | 28 | $ | 14 | $ | 19 | Revenues | $ | (17 | ) | $ | (5 | ) | $ | 34 | ||||||
Foreign exchange forwards and options | 283 | 405 | (50 | ) | Cost of sales | 364 | 53 | (90 | ) | ||||||||||||
Foreign exchange forwards and options | 1 | 2 | 1 | Demand creation expense | (2 | ) | \u2014 | 1 | |||||||||||||
Foreign exchange forwards and options | 90 | 156 | (19 | ) | Other (income) expense, net | 181 | 35 | (69 | ) | ||||||||||||
Interest rate swaps(2) | \u2014 | \u2014 | \u2014 | Interest expense (income), net | (7 | ) | (7 | ) | (7 | ) | |||||||||||
Total designated cash flow hedges | $ | 402 | $ | 577 | $ | (49 | ) | $ | 519 | $ | 76 | $ | (131 | ) |
(1) | For the fiscal years ended May\u00a031, 2020, 2019 and 2018, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial. |
(2) | Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest expense (income), net over the term of the issued debt. |
AMOUNT OF GAIN (LOSS) RECOGNIZED\u00a0 IN INCOME ON DERIVATIVES | LOCATION OF GAIN (LOSS)\u00a0\u00a0 RECOGNIZED IN INCOME\u00a0\u00a0 ON DERIVATIVES | ||||||||||
YEAR ENDED MAY 31, | |||||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||||
Derivatives not designated as hedging instruments: | |||||||||||
Foreign exchange forwards and options | $ | 76 | $ | 166 | $ | (57 | ) | Other (income) expense, net | |||
Embedded derivatives | (1 | ) | 7 | (4 | ) | Other (income) expense, net |
NOTE\u00a015 \u2014 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
(Dollars in millions) | FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1) | CASH FLOW HEDGES | NET INVESTMENT HEDGES(1) | OTHER | TOTAL | ||||||||||
Balance at May\u00a031, 2019 | $ | (346 | ) | $ | 520 | $ | 115 | $ | (58 | ) | $ | 231 | |||
Other comprehensive income (loss): | |||||||||||||||
Other comprehensive gains (losses) before reclassifications(2) | (149 | ) | 387 | \u2014 | (8 | ) | 230 | ||||||||
Reclassifications to net income of previously deferred (gains) losses(3) | 1 | (517 | ) | \u2014 | (1 | ) | (517 | ) | |||||||
Total other comprehensive income (loss) | (148 | ) | (130 | ) | \u2014 | (9 | ) | (287 | ) | ||||||
Balance at May\u00a031, 2020 | $ | (494 | ) | $ | 390 | $ | 115 | $ | (67 | ) | $ | (56 | ) |
(1) | The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity. |
(2) | Net of tax benefit (expense) of $0 million, $(15) million, $0 million, $1 million and $(14) million, respectively. |
(3) | Net of tax (benefit) expense of $0 million, $2 million, $0 million, $0 million and $2 million, respectively. |
(Dollars in millions) | FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1) | CASH FLOW HEDGES | NET INVESTMENT HEDGES(1) | OTHER | TOTAL | ||||||||||
Balance at May\u00a031, 2018 | $ | (173 | ) | $ | 17 | $ | 115 | $ | (51 | ) | $ | (92 | ) | ||
Other comprehensive income (loss): | |||||||||||||||
Other comprehensive gains (losses) before reclassifications(2) | (173 | ) | 573 | \u2014 | 10 | 410 | |||||||||
Reclassifications to net income of previously deferred (gains) losses(3) | \u2014 | (70 | ) | \u2014 | (17 | ) | (87 | ) | |||||||
Total other comprehensive income (loss) | (173 | ) | 503 | \u2014 | (7 | ) | 323 | ||||||||
Balance at May\u00a031, 2019 | $ | (346 | ) | $ | 520 | $ | 115 | $ | (58 | ) | $ | 231 |
(1) | The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity. |
(2) | Net of tax benefit (expense) of $0 million, $(4) million, $0 million, $1 million and $(3) million, respectively. |
(3) | Net of tax (benefit) expense of $0 million, $6 million, $0 million, $0 million and $6 million, respectively. |
AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | ||||||
YEAR ENDED MAY 31, | |||||||
(Dollars in millions) | 2020 | 2019 | |||||
Gains (losses) on foreign currency translation adjustment | $ | (1 | ) | $ | \u2014 | Other (income) expense, net | |
Total before tax | (1 | ) | \u2014 | ||||
Tax (expense) benefit | \u2014 | \u2014 | |||||
Gain (loss) net of tax | (1 | ) | \u2014 | ||||
Gains (losses) on cash flow hedges: | |||||||
Foreign exchange forwards and options | $ | (17 | ) | (5 | ) | Revenues | |
Foreign exchange forwards and options | 364 | 53 | Cost of sales | ||||
Foreign exchange forwards and options | (2 | ) | \u2014 | Demand creation expense | |||
Foreign exchange forwards and options | 181 | 35 | Other (income) expense, net | ||||
Interest rate swaps | (7 | ) | (7 | ) | Interest expense (income), net | ||
Total before tax | 519 | 76 | |||||
Tax (expense) benefit | (2 | ) | (6 | ) | |||
Gain (loss) net of tax | 517 | 70 | |||||
Gains (losses) on other | 1 | 17 | Other (income) expense, net | ||||
Total before tax | 1 | 17 | |||||
Tax (expense) benefit | \u2014 | \u2014 | |||||
Gain (loss) net of tax | 1 | 17 | |||||
Total net gain (loss) reclassified for the period | $ | 517 | $ | 87 |
(Dollars in millions) | FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1) | CASH FLOW HEDGES | NET INVESTMENT HEDGES(1) | OTHER | TOTAL | ||||||||||
Balance at May\u00a031, 2019 | $ | (346 | ) | $ | 520 | $ | 115 | $ | (58 | ) | $ | 231 | |||
Other comprehensive income (loss): | |||||||||||||||
Other comprehensive gains (losses) before reclassifications(2) | (149 | ) | 387 | \u2014 | (8 | ) | 230 | ||||||||
Reclassifications to net income of previously deferred (gains) losses(3) | 1 | (517 | ) | \u2014 | (1 | ) | (517 | ) | |||||||
Total other comprehensive income (loss) | (148 | ) | (130 | ) | \u2014 | (9 | ) | (287 | ) | ||||||
Balance at May\u00a031, 2020 | $ | (494 | ) | $ | 390 | $ | 115 | $ | (67 | ) | $ | (56 | ) |
(1) | The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity. |
(2) | Net of tax benefit (expense) of $0 million, $(15) million, $0 million, $1 million and $(14) million, respectively. |
(3) | Net of tax (benefit) expense of $0 million, $2 million, $0 million, $0 million and $2 million, respectively. |
(Dollars in millions) | FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1) | CASH FLOW HEDGES | NET INVESTMENT HEDGES(1) | OTHER | TOTAL | ||||||||||
Balance at May\u00a031, 2018 | $ | (173 | ) | $ | 17 | $ | 115 | $ | (51 | ) | $ | (92 | ) | ||
Other comprehensive income (loss): | |||||||||||||||
Other comprehensive gains (losses) before reclassifications(2) | (173 | ) | 573 | \u2014 | 10 | 410 | |||||||||
Reclassifications to net income of previously deferred (gains) losses(3) | \u2014 | (70 | ) | \u2014 | (17 | ) | (87 | ) | |||||||
Total other comprehensive income (loss) | (173 | ) | 503 | \u2014 | (7 | ) | 323 | ||||||||
Balance at May\u00a031, 2019 | $ | (346 | ) | $ | 520 | $ | 115 | $ | (58 | ) | $ | 231 |
(1) | The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity. |
(2) | Net of tax benefit (expense) of $0 million, $(4) million, $0 million, $1 million and $(3) million, respectively. |
(3) | Net of tax (benefit) expense of $0 million, $6 million, $0 million, $0 million and $6 million, respectively. |
AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME | ||||||
YEAR ENDED MAY 31, | |||||||
(Dollars in millions) | 2020 | 2019 | |||||
Gains (losses) on foreign currency translation adjustment | $ | (1 | ) | $ | \u2014 | Other (income) expense, net | |
Total before tax | (1 | ) | \u2014 | ||||
Tax (expense) benefit | \u2014 | \u2014 | |||||
Gain (loss) net of tax | (1 | ) | \u2014 | ||||
Gains (losses) on cash flow hedges: | |||||||
Foreign exchange forwards and options | $ | (17 | ) | (5 | ) | Revenues | |
Foreign exchange forwards and options | 364 | 53 | Cost of sales | ||||
Foreign exchange forwards and options | (2 | ) | \u2014 | Demand creation expense | |||
Foreign exchange forwards and options | 181 | 35 | Other (income) expense, net | ||||
Interest rate swaps | (7 | ) | (7 | ) | Interest expense (income), net | ||
Total before tax | 519 | 76 | |||||
Tax (expense) benefit | (2 | ) | (6 | ) | |||
Gain (loss) net of tax | 517 | 70 | |||||
Gains (losses) on other | 1 | 17 | Other (income) expense, net | ||||
Total before tax | 1 | 17 | |||||
Tax (expense) benefit | \u2014 | \u2014 | |||||
Gain (loss) net of tax | 1 | 17 | |||||
Total net gain (loss) reclassified for the period | $ | 517 | $ | 87 |
NOTE\u00a016 \u2014 REVENUES |
YEAR ENDED MAY\u00a031, 2020 | |||||||||||||||||||||||||||
(Dollars in millions) | NORTH AMERICA | EUROPE, MIDDLE EAST & AFRICA | GREATER CHINA | ASIA PACIFIC & LATIN AMERICA | GLOBAL BRAND DIVISIONS | TOTAL NIKE BRAND | CONVERSE | CORPORATE | TOTAL NIKE, INC. | ||||||||||||||||||
Revenues by: | |||||||||||||||||||||||||||
Footwear | $ | 9,329 | $ | 5,892 | $ | 4,635 | $ | 3,449 | $ | \u2014 | $ | 23,305 | $ | 1,642 | $ | \u2014 | $ | 24,947 | |||||||||
Apparel | 4,639 | 3,053 | 1,896 | 1,365 | \u2014 | 10,953 | 89 | \u2014 | 11,042 | ||||||||||||||||||
Equipment | 516 | 402 | 148 | 214 | \u2014 | 1,280 | 25 | \u2014 | 1,305 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 30 | 30 | 90 | (11 | ) | 109 | |||||||||||||||||
TOTAL REVENUES | $ | 14,484 | $ | 9,347 | $ | 6,679 | $ | 5,028 | $ | 30 | $ | 35,568 | $ | 1,846 | $ | (11 | ) | $ | 37,403 | ||||||||
Revenues by: | |||||||||||||||||||||||||||
Sales to Wholesale Customers | $ | 9,371 | $ | 6,574 | $ | 3,803 | $ | 3,408 | $ | \u2014 | $ | 23,156 | $ | 1,154 | $ | \u2014 | $ | 24,310 | |||||||||
Sales through Direct to Consumer | 5,113 | 2,773 | 2,876 | 1,620 | \u2014 | 12,382 | 602 | \u2014 | 12,984 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 30 | 30 | 90 | (11 | ) | 109 | |||||||||||||||||
TOTAL REVENUES | $ | 14,484 | $ | 9,347 | $ | 6,679 | $ | 5,028 | $ | 30 | $ | 35,568 | $ | 1,846 | $ | (11 | ) | $ | 37,403 |
YEAR ENDED MAY\u00a031, 2019 | |||||||||||||||||||||||||||
(Dollars in millions) | NORTH AMERICA | EUROPE, MIDDLE EAST & AFRICA | GREATER CHINA | ASIA PACIFIC & LATIN AMERICA | GLOBAL BRAND DIVISIONS | TOTAL NIKE BRAND | CONVERSE | CORPORATE | TOTAL NIKE, INC. | ||||||||||||||||||
Revenues by: | |||||||||||||||||||||||||||
Footwear | $ | 10,045 | $ | 6,293 | $ | 4,262 | $ | 3,622 | $ | \u2014 | $ | 24,222 | $ | 1,658 | $ | \u2014 | $ | 25,880 | |||||||||
Apparel | 5,260 | 3,087 | 1,808 | 1,395 | \u2014 | 11,550 | 118 | \u2014 | 11,668 | ||||||||||||||||||
Equipment | 597 | 432 | 138 | 237 | \u2014 | 1,404 | 24 | \u2014 | 1,428 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 42 | 42 | 106 | (7 | ) | 141 | |||||||||||||||||
TOTAL REVENUES | $ | 15,902 | $ | 9,812 | $ | 6,208 | $ | 5,254 | $ | 42 | $ | 37,218 | $ | 1,906 | $ | (7 | ) | $ | 39,117 | ||||||||
Revenues by: | |||||||||||||||||||||||||||
Sales to Wholesale Customers | $ | 10,875 | $ | 7,076 | $ | 3,726 | $ | 3,746 | $ | \u2014 | $ | 25,423 | $ | 1,247 | $ | \u2014 | $ | 26,670 | |||||||||
Sales through Direct to Consumer | 5,027 | 2,736 | 2,482 | 1,508 | \u2014 | 11,753 | 553 | \u2014 | 12,306 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 42 | 42 | 106 | (7 | ) | 141 | |||||||||||||||||
TOTAL REVENUES | $ | 15,902 | $ | 9,812 | $ | 6,208 | $ | 5,254 | $ | 42 | $ | 37,218 | $ | 1,906 | $ | (7 | ) | $ | 39,117 |
YEAR ENDED MAY\u00a031, 2020 | |||||||||||||||||||||||||||
(Dollars in millions) | NORTH AMERICA | EUROPE, MIDDLE EAST & AFRICA | GREATER CHINA | ASIA PACIFIC & LATIN AMERICA | GLOBAL BRAND DIVISIONS | TOTAL NIKE BRAND | CONVERSE | CORPORATE | TOTAL NIKE, INC. | ||||||||||||||||||
Revenues by: | |||||||||||||||||||||||||||
Footwear | $ | 9,329 | $ | 5,892 | $ | 4,635 | $ | 3,449 | $ | \u2014 | $ | 23,305 | $ | 1,642 | $ | \u2014 | $ | 24,947 | |||||||||
Apparel | 4,639 | 3,053 | 1,896 | 1,365 | \u2014 | 10,953 | 89 | \u2014 | 11,042 | ||||||||||||||||||
Equipment | 516 | 402 | 148 | 214 | \u2014 | 1,280 | 25 | \u2014 | 1,305 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 30 | 30 | 90 | (11 | ) | 109 | |||||||||||||||||
TOTAL REVENUES | $ | 14,484 | $ | 9,347 | $ | 6,679 | $ | 5,028 | $ | 30 | $ | 35,568 | $ | 1,846 | $ | (11 | ) | $ | 37,403 | ||||||||
Revenues by: | |||||||||||||||||||||||||||
Sales to Wholesale Customers | $ | 9,371 | $ | 6,574 | $ | 3,803 | $ | 3,408 | $ | \u2014 | $ | 23,156 | $ | 1,154 | $ | \u2014 | $ | 24,310 | |||||||||
Sales through Direct to Consumer | 5,113 | 2,773 | 2,876 | 1,620 | \u2014 | 12,382 | 602 | \u2014 | 12,984 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 30 | 30 | 90 | (11 | ) | 109 | |||||||||||||||||
TOTAL REVENUES | $ | 14,484 | $ | 9,347 | $ | 6,679 | $ | 5,028 | $ | 30 | $ | 35,568 | $ | 1,846 | $ | (11 | ) | $ | 37,403 |
YEAR ENDED MAY\u00a031, 2019 | |||||||||||||||||||||||||||
(Dollars in millions) | NORTH AMERICA | EUROPE, MIDDLE EAST & AFRICA | GREATER CHINA | ASIA PACIFIC & LATIN AMERICA | GLOBAL BRAND DIVISIONS | TOTAL NIKE BRAND | CONVERSE | CORPORATE | TOTAL NIKE, INC. | ||||||||||||||||||
Revenues by: | |||||||||||||||||||||||||||
Footwear | $ | 10,045 | $ | 6,293 | $ | 4,262 | $ | 3,622 | $ | \u2014 | $ | 24,222 | $ | 1,658 | $ | \u2014 | $ | 25,880 | |||||||||
Apparel | 5,260 | 3,087 | 1,808 | 1,395 | \u2014 | 11,550 | 118 | \u2014 | 11,668 | ||||||||||||||||||
Equipment | 597 | 432 | 138 | 237 | \u2014 | 1,404 | 24 | \u2014 | 1,428 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 42 | 42 | 106 | (7 | ) | 141 | |||||||||||||||||
TOTAL REVENUES | $ | 15,902 | $ | 9,812 | $ | 6,208 | $ | 5,254 | $ | 42 | $ | 37,218 | $ | 1,906 | $ | (7 | ) | $ | 39,117 | ||||||||
Revenues by: | |||||||||||||||||||||||||||
Sales to Wholesale Customers | $ | 10,875 | $ | 7,076 | $ | 3,726 | $ | 3,746 | $ | \u2014 | $ | 25,423 | $ | 1,247 | $ | \u2014 | $ | 26,670 | |||||||||
Sales through Direct to Consumer | 5,027 | 2,736 | 2,482 | 1,508 | \u2014 | 11,753 | 553 | \u2014 | 12,306 | ||||||||||||||||||
Other | \u2014 | \u2014 | \u2014 | \u2014 | 42 | 42 | 106 | (7 | ) | 141 | |||||||||||||||||
TOTAL REVENUES | $ | 15,902 | $ | 9,812 | $ | 6,208 | $ | 5,254 | $ | 42 | $ | 37,218 | $ | 1,906 | $ | (7 | ) | $ | 39,117 |
NOTE\u00a017 \u2014 OPERATING SEGMENTS AND RELATED INFORMATION |
YEAR ENDED MAY 31, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
REVENUES | |||||||||
North America | $ | 14,484 | $ | 15,902 | $ | 14,855 | |||
Europe, Middle East & Africa | 9,347 | 9,812 | 9,242 | ||||||
Greater China | 6,679 | 6,208 | 5,134 | ||||||
Asia Pacific & Latin America | 5,028 | 5,254 | 5,166 | ||||||
Global Brand Divisions | 30 | 42 | 88 | ||||||
Total NIKE Brand | 35,568 | 37,218 | 34,485 | ||||||
Converse | 1,846 | 1,906 | 1,886 | ||||||
Corporate | (11 | ) | (7 | ) | 26 | ||||
TOTAL NIKE, INC. REVENUES | $ | 37,403 | $ | 39,117 | $ | 36,397 | |||
EARNINGS BEFORE INTEREST AND TAXES | |||||||||
North America | $ | 2,899 | $ | 3,925 | $ | 3,600 | |||
Europe, Middle East & Africa | 1,541 | 1,995 | 1,587 | ||||||
Greater China | 2,490 | 2,376 | 1,807 | ||||||
Asia Pacific & Latin America | 1,184 | 1,323 | 1,189 | ||||||
Global Brand Divisions | (3,468 | ) | (3,262 | ) | (2,658 | ) | |||
Converse | 297 | 303 | 310 | ||||||
Corporate | (1,967 | ) | (1,810 | ) | (1,456 | ) | |||
Interest expense (income), net | 89 | 49 | 54 | ||||||
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES | $ | 2,887 | $ | 4,801 | $ | 4,325 | |||
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT | |||||||||
North America | $ | 110 | $ | 117 | $ | 196 | |||
Europe, Middle East & Africa | 139 | 233 | 240 | ||||||
Greater China | 28 | 49 | 76 | ||||||
Asia Pacific & Latin America | 41 | 47 | 49 | ||||||
Global Brand Divisions | 438 | 278 | 286 | ||||||
Total NIKE Brand | 756 | 724 | 847 | ||||||
Converse | 12 | 18 | 22 | ||||||
Corporate | 356 | 333 | 325 | ||||||
TOTAL ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT | $ | 1,124 | $ | 1,075 | $ | 1,194 | |||
DEPRECIATION | |||||||||
North America | $ | 148 | $ | 149 | $ | 160 | |||
Europe, Middle East & Africa | 132 | 111 | 116 | ||||||
Greater China | 44 | 50 | 56 | ||||||
Asia Pacific & Latin America | 46 | 53 | 55 | ||||||
Global Brand Divisions | 214 | 195 | 217 | ||||||
Total NIKE Brand | 584 | 558 | 604 | ||||||
Converse | 25 | 31 | 33 | ||||||
Corporate | 112 | 116 | 110 | ||||||
TOTAL DEPRECIATION | $ | 721 | $ | 705 | $ | 747 |
AS OF MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
ACCOUNTS RECEIVABLE, NET | ||||||
North America | $ | 1,020 | $ | 1,718 | ||
Europe, Middle East & Africa | 712 | 1,164 | ||||
Greater China | 321 | 245 | ||||
Asia Pacific & Latin America(1) | 425 | 771 | ||||
Global Brand Divisions | 65 | 105 | ||||
Total NIKE Brand | 2,543 | 4,003 | ||||
Converse | 149 | 243 | ||||
Corporate | 57 | 26 | ||||
TOTAL ACCOUNTS RECEIVABLE, NET | $ | 2,749 | $ | 4,272 | ||
INVENTORIES | ||||||
North America | $ | 3,077 | $ | 2,328 | ||
Europe, Middle East & Africa | 2,070 | 1,390 | ||||
Greater China | 882 | 693 | ||||
Asia Pacific & Latin America(1) | 770 | 694 | ||||
Global Brand Divisions | 137 | 126 | ||||
Total NIKE Brand | 6,936 | 5,231 | ||||
Converse | 341 | 269 | ||||
Corporate | 90 | 122 | ||||
TOTAL INVENTORIES | $ | 7,367 | $ | 5,622 | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||||||
North America | $ | 645 | $ | 814 | ||
Europe, Middle East & Africa | 885 | 929 | ||||
Greater China | 214 | 237 | ||||
Asia Pacific & Latin America(1) | 296 | 326 | ||||
Global Brand Divisions | 830 | 665 | ||||
Total NIKE Brand | 2,870 | 2,971 | ||||
Converse | 80 | 100 | ||||
Corporate | 1,916 | 1,673 | ||||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | $ | 4,866 | $ | 4,744 |
(1) | Excludes assets held-for-sale as of May\u00a031, 2020. See Note\u00a020 \u2014 Acquisitions and Divestitures for additional information. |
MAY\u00a031, | ||||||
(Dollars in millions) | 2020(1) | 2019 | ||||
United States | $ | 5,114 | $ | 3,174 | ||
Belgium | 606 | 618 | ||||
China | 457 | 242 |
YEAR ENDED MAY 31, | |||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | ||||||
REVENUES | |||||||||
North America | $ | 14,484 | $ | 15,902 | $ | 14,855 | |||
Europe, Middle East & Africa | 9,347 | 9,812 | 9,242 | ||||||
Greater China | 6,679 | 6,208 | 5,134 | ||||||
Asia Pacific & Latin America | 5,028 | 5,254 | 5,166 | ||||||
Global Brand Divisions | 30 | 42 | 88 | ||||||
Total NIKE Brand | 35,568 | 37,218 | 34,485 | ||||||
Converse | 1,846 | 1,906 | 1,886 | ||||||
Corporate | (11 | ) | (7 | ) | 26 | ||||
TOTAL NIKE, INC. REVENUES | $ | 37,403 | $ | 39,117 | $ | 36,397 | |||
EARNINGS BEFORE INTEREST AND TAXES | |||||||||
North America | $ | 2,899 | $ | 3,925 | $ | 3,600 | |||
Europe, Middle East & Africa | 1,541 | 1,995 | 1,587 | ||||||
Greater China | 2,490 | 2,376 | 1,807 | ||||||
Asia Pacific & Latin America | 1,184 | 1,323 | 1,189 | ||||||
Global Brand Divisions | (3,468 | ) | (3,262 | ) | (2,658 | ) | |||
Converse | 297 | 303 | 310 | ||||||
Corporate | (1,967 | ) | (1,810 | ) | (1,456 | ) | |||
Interest expense (income), net | 89 | 49 | 54 | ||||||
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES | $ | 2,887 | $ | 4,801 | $ | 4,325 | |||
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT | |||||||||
North America | $ | 110 | $ | 117 | $ | 196 | |||
Europe, Middle East & Africa | 139 | 233 | 240 | ||||||
Greater China | 28 | 49 | 76 | ||||||
Asia Pacific & Latin America | 41 | 47 | 49 | ||||||
Global Brand Divisions | 438 | 278 | 286 | ||||||
Total NIKE Brand | 756 | 724 | 847 | ||||||
Converse | 12 | 18 | 22 | ||||||
Corporate | 356 | 333 | 325 | ||||||
TOTAL ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT | $ | 1,124 | $ | 1,075 | $ | 1,194 | |||
DEPRECIATION | |||||||||
North America | $ | 148 | $ | 149 | $ | 160 | |||
Europe, Middle East & Africa | 132 | 111 | 116 | ||||||
Greater China | 44 | 50 | 56 | ||||||
Asia Pacific & Latin America | 46 | 53 | 55 | ||||||
Global Brand Divisions | 214 | 195 | 217 | ||||||
Total NIKE Brand | 584 | 558 | 604 | ||||||
Converse | 25 | 31 | 33 | ||||||
Corporate | 112 | 116 | 110 | ||||||
TOTAL DEPRECIATION | $ | 721 | $ | 705 | $ | 747 |
AS OF MAY 31, | ||||||
(Dollars in millions) | 2020 | 2019 | ||||
ACCOUNTS RECEIVABLE, NET | ||||||
North America | $ | 1,020 | $ | 1,718 | ||
Europe, Middle East & Africa | 712 | 1,164 | ||||
Greater China | 321 | 245 | ||||
Asia Pacific & Latin America(1) | 425 | 771 | ||||
Global Brand Divisions | 65 | 105 | ||||
Total NIKE Brand | 2,543 | 4,003 | ||||
Converse | 149 | 243 | ||||
Corporate | 57 | 26 | ||||
TOTAL ACCOUNTS RECEIVABLE, NET | $ | 2,749 | $ | 4,272 | ||
INVENTORIES | ||||||
North America | $ | 3,077 | $ | 2,328 | ||
Europe, Middle East & Africa | 2,070 | 1,390 | ||||
Greater China | 882 | 693 | ||||
Asia Pacific & Latin America(1) | 770 | 694 | ||||
Global Brand Divisions | 137 | 126 | ||||
Total NIKE Brand | 6,936 | 5,231 | ||||
Converse | 341 | 269 | ||||
Corporate | 90 | 122 | ||||
TOTAL INVENTORIES | $ | 7,367 | $ | 5,622 | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||||||
North America | $ | 645 | $ | 814 | ||
Europe, Middle East & Africa | 885 | 929 | ||||
Greater China | 214 | 237 | ||||
Asia Pacific & Latin America(1) | 296 | 326 | ||||
Global Brand Divisions | 830 | 665 | ||||
Total NIKE Brand | 2,870 | 2,971 | ||||
Converse | 80 | 100 | ||||
Corporate | 1,916 | 1,673 | ||||
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET | $ | 4,866 | $ | 4,744 |
MAY\u00a031, | ||||||
(Dollars in millions) | 2020(1) | 2019 | ||||
United States | $ | 5,114 | $ | 3,174 | ||
Belgium | 606 | 618 | ||||
China | 457 | 242 |
NOTE\u00a018 \u2014 COMMITMENTS AND CONTINGENCIES |
NOTE\u00a019 \u2014 LEASES |
(Dollars in millions) | AS OF MAY 31, 2020(1) | ||
Fiscal 2021 | $ | 550 | |
Fiscal 2022 | 514 | ||
Fiscal 2023 | 456 | ||
Fiscal 2024 | 416 | ||
Fiscal 2025 | 374 | ||
Thereafter | 1,474 | ||
Total undiscounted future cash flows related to lease payments | $ | 3,784 | |
Less: Interest | 426 | ||
Present value of lease liabilities | $ | 3,358 |
(1) | Excludes $67 million of future operating lease payments for lease agreements signed but not yet commenced. |
AS OF MAY\u00a031, 2019 | |||||||||
(Dollars in millions) | OPERATING LEASES | CAPITAL LEASES AND OTHER FINANCING OBLIGATIONS(1) | TOTAL | ||||||
Fiscal 2020 | $ | 553 | $ | 32 | $ | 585 | |||
Fiscal 2021 | 513 | 34 | 547 | ||||||
Fiscal 2022 | 441 | 40 | 481 | ||||||
Fiscal 2023 | 386 | 37 | 423 | ||||||
Fiscal 2024 | 345 | 34 | 379 | ||||||
Thereafter | 1,494 | 197 | 1,691 | ||||||
TOTAL | $ | 3,732 | $ | 374 | $ | 4,106 |
(1) | Capital leases and other financing obligations include payments related to build-to-suit lease arrangements. |
AS OF MAY\u00a031, | ||
2020 | ||
Weighted-average remaining lease term (years) | 8.7 | |
Weighted-average discount rate | 2.4 | % |
FISCAL YEAR ENDED | |||
(Dollars in millions) | MAY\u00a031, 2020 | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | 532 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities(1) | $ | 705 |
(Dollars in millions) | AS OF MAY 31, 2020(1) | ||
Fiscal 2021 | $ | 550 | |
Fiscal 2022 | 514 | ||
Fiscal 2023 | 456 | ||
Fiscal 2024 | 416 | ||
Fiscal 2025 | 374 | ||
Thereafter | 1,474 | ||
Total undiscounted future cash flows related to lease payments | $ | 3,784 | |
Less: Interest | 426 | ||
Present value of lease liabilities | $ | 3,358 |
AS OF MAY\u00a031, 2019 | |||||||||
(Dollars in millions) | OPERATING LEASES | CAPITAL LEASES AND OTHER FINANCING OBLIGATIONS(1) | TOTAL | ||||||
Fiscal 2020 | $ | 553 | $ | 32 | $ | 585 | |||
Fiscal 2021 | 513 | 34 | 547 | ||||||
Fiscal 2022 | 441 | 40 | 481 | ||||||
Fiscal 2023 | 386 | 37 | 423 | ||||||
Fiscal 2024 | 345 | 34 | 379 | ||||||
Thereafter | 1,494 | 197 | 1,691 | ||||||
TOTAL | $ | 3,732 | $ | 374 | $ | 4,106 |
AS OF MAY\u00a031, 2019 | |||||||||
(Dollars in millions) | OPERATING LEASES | CAPITAL LEASES AND OTHER FINANCING OBLIGATIONS(1) | TOTAL | ||||||
Fiscal 2020 | $ | 553 | $ | 32 | $ | 585 | |||
Fiscal 2021 | 513 | 34 | 547 | ||||||
Fiscal 2022 | 441 | 40 | 481 | ||||||
Fiscal 2023 | 386 | 37 | 423 | ||||||
Fiscal 2024 | 345 | 34 | 379 | ||||||
Thereafter | 1,494 | 197 | 1,691 | ||||||
TOTAL | $ | 3,732 | $ | 374 | $ | 4,106 |
AS OF MAY\u00a031, | ||
2020 | ||
Weighted-average remaining lease term (years) | 8.7 | |
Weighted-average discount rate | 2.4 | % |
FISCAL YEAR ENDED | |||
(Dollars in millions) | MAY\u00a031, 2020 | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ | 532 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities(1) | $ | 705 |
NOTE\u00a020 \u2014 ACQUISITIONS AND DIVESTITURES |
\u2022 | Assets of $506 million, primarily consisting of $264 million of Inventories and $138 million of Accounts receivable, net which were reclassified to Prepaid expenses and other current assets on the Company's Consolidated Balance Sheets; and |
\u2022 | Liabilities of $146 million, primarily consisting of $85 million of Accrued liabilities, as well as $49 million of Accounts Payable, which was reclassified to Accrued liabilities on the Company's Consolidated Balance Sheets. |
NOTE\u00a021 \u2014 SUBSEQUENT EVENTS |
(Dollars in\u00a0millions) | BALANCE\u00a0AT BEGINNING\u00a0OF\u00a0\u00a0 PERIOD | CHARGED\u00a0TO\u00a0COSTS AND\u00a0EXPENSES | CHARGED\u00a0 \u00a0TO OTHER\u00a0\u00a0 ACCOUNTS(1) | WRITE-OFFS,\u00a0\u00a0 NET | BALANCE\u00a0\u00a0 AT\u00a0END OF PERIOD | ||||||||||
Sales returns reserve | |||||||||||||||
For the fiscal year ended May\u00a031, 2018 | $ | 343 | $ | 640 | $ | 5 | $ | (658 | ) | $ | 330 | ||||
For the fiscal year ended May 31, 2019(2) | 734 | 1,959 | (30 | ) | (1,820 | ) | 843 | ||||||||
For the fiscal year ended May\u00a031, 2020 | 843 | 1,941 | (31 | ) | (2,071 | ) | 682 |
(1) | Amounts included in this column primarily relate to foreign currency translation. |