Do you accept these cookies and the processing of personal data involved? On July 20, 2018, the Compensation Committee (the "Committee") of the Board of Directors of NIKE, Inc. (the "Company"), approved a form of discretionary performance award agreement (the "DPA") to enable the Company to award cash incentives to employees in recognition of Company and individual performance. Because of the uncertainty inherent in these matters, actual results could differ from the estimates we use in applying the critical accounting policies. We sell our products through NIKE-owned retail stores and through digital platforms (which we refer to collectively as our "NIKE Direct" operations), to retail accounts and a mix of independent distributors, licensees and sales representatives in virtually all countries around the world. if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Recorded contingent liabilities are based on the best information available and actual losses in any future period are inherently uncertain. Our products are subject to risks associated with overseas sourcing, manufacturing and financing. The increase in ASP per unit was primarily attributable to higher full-price ASP. 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 $59 million for fiscal 2017. The Company intends to use excess cash, future cash from operations and/or proceeds from debt to fund repurchases. Deferred tax assets at May 31, 2018 and 2017 were reduced by a valuation allowance primarily relating to tax benefits of certain entities with operating losses. The ASU is required to be applied using a modified retrospective approach at the beginning of the earliest period presented, with optional practical expedients. In addition, we have significant amounts of cash, cash equivalents and other investments on deposit or in accounts with banks or other financial institutions in the United States and abroad. Monique S. Matheson, Executive Vice President, Global Human Resources - Ms. Matheson, 51, joined NIKE in 1998, with primary responsibilities in the human resources function. Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar. You need endurance training to prepare your body and mind to go the distance. These factors, among others, could affect our ability to manufacture products or procure materials, our ability to import products, our ability to sell products in international markets and our cost of doing business. The program is designed to more effectively manage foreign currency risk by assuming certain of the factories' foreign currency exposures, some of which are natural offsets to the Company ' s existing foreign currency exposures. 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. Demand creation expense also increased as lower advertising costs were more than offset by increased marketing support for the Rio Olympics in the first quarter, as well as higher sports marketing costs. A cumulative dividend of $0.10 per share is payable annually on May 31 and no dividends may be declared or paid on the common stock of the Company unless dividends on the redeemable preferred stock have been declared and paid in full. The Company, similar to many other multinational corporations, does a significant amount of business that would be impacted by changes to the trade policies of the U.S. and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions). PRODUCT BENEFITS: Nike Dry fabric helps you stay dry and comfortable. Diluted earnings per common share reflects a 2% decline in the weighted average diluted common shares outstanding, driven by our share repurchase program. As such, the Company has revised the Consolidated Balance Sheets as of May 31, 2017 , and has reduced Capital in excess of stated value by $2.9 billion and increased Retained earnings by the same amount. The terms of the plan also allow for annual discretionary profit sharing contributions, as determined by the Board of Directors, to the accounts of eligible U.S. employees who work at least 1,000 hours in a year. Investors should also be aware that while NIKE does, from time to time, communicate with securities analysts, it is against NIKE's policy to disclose to them any material non-public information or other confidential commercial information. Fifth Restated Bylaws, as amended (see Exhibit 3.2). 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. For fiscal 2017, unit sales of footwear increased 5% and higher ASP per pair contributed approximately 3 percentage points of footwear revenue growth. This is the pace you could race or run hard for about 3 miles. Cash collateral received or posted related to the Company ' s credit related contingent features is presented in the Cash provided by operations component of the Consolidated Statements of Cash Flows. 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. Accordingly, changes in the fair values of the interest rate swaps are considered to exactly offset changes in the fair value of the underlying long-term debt. Opinions on the Financial Statements and Internal Control over Financial Reporting. 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. All share and per share amounts are reflective of the two-for-one stock split that began trading at the split-adjusted price on December 24, 2015. We will continue to monitor our internal control over financial reporting for effectiveness throughout the transformation. Already today, adidas is a much better and stronger company than ever before. These rates are set approximately nine and twelve months in advance of the future selling seasons to which they relate (specifically, for each currency, one standard rate applies to the fall and holiday selling seasons and one standard rate applies to the spring and summer selling seasons) based on average market spot rates in the calendar month preceding the date they are established. Every training run in this plan has an accompanying Guided Run that you can find in the Nike Run Club App. Cash provided by operations  was also impacted by the change in Accounts Receivable, net , which decreased $187 million , primarily due to improved collection timing, compared to an increase of $426 million in fiscal 2017. The instruments not included in the VaR are intercompany loans denominated in non-functional currencies, fixed interest rate Japanese Yen denominated debt, fixed interest rate U.S. Dollar denominated debt and interest rate swaps. During fiscal 2018, Sojitz America provided financing and purchasing services for NIKE Brand products sold in certain NIKE markets including Argentina, Brazil, Canada, India, South Africa and Uruguay (collectively the "Sojitz Markets"), excluding products produced and sold in the same country. Our success depends on our ability to identify, originate and define product trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner. The Company continues to assess the effect the guidance will have on its existing accounting policies and the Consolidated Financial Statements and expects there will be an increase in assets and liabilities on the Consolidated Balance Sheets at adoption due to the recording of right-of-use assets and corresponding lease liabilities, which may be material. At May 31, 2018 and 2017 , the Company did not hold any short-term investments classified as trading or held-to-maturity. We are subject to data security and privacy risks that could negatively affect our results, operations or reputation. commission file no. Negative publicity regarding production methods, alleged practices or workplace or related conditions of any of our suppliers, manufacturers or licensees could adversely affect our brand image and sales and force us to locate alternative suppliers, manufacturers or licenses. There are various modeling techniques that can be used in the VaR computation. If we are unable to maintain our current associations with professional athletes, sports teams and leagues, or other public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments. For the years ended May 31, 2018 and 2017 , the Company did not consider its securities to be other-than-temporarily impaired, and accordingly, did not recognize any impairment losses. Prior to joining NIKE, Ms. Krane was General Counsel and Senior Vice President for Corporate Affairs at Levi Strauss & Co. from 2006 to 2010. 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. Prior to joining NIKE, he held leadership roles in strategic planning, mergers and acquisitions, financial planning and analysis, operations and planning, investor relations and tax at The Walt Disney Company from 1996 to 2007. Revenues increased in nearly all key categories, led by Sportswear and Football (Soccer). Dollar currency pairs . Nike, Inc. is a Growth Company. Cash used by financing activities was $4,835 million for fiscal 2018 compared to $2,148 million for fiscal 2017 . Annual Report Scroll. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). s derivative liability balance as of May 31, 2018. amount of cash collateral had been received or posted on the derivative asset and liability balance related to these foreign exchange derivative instruments. Nike asks you to accept cookies for performance, social media and advertising purposes. NIKE is a consumer products company and the relative popularity of various sports and fitness activities and changing design trends affect the demand for our products. This method assumes trade names and trademarks have value to the extent their owner is relieved of the obligation to pay royalties for the benefits received from them. If one of our counterparties were to become insolvent or file for bankruptcy, our ability to recover losses incurred as a result of default, or our assets deposited or held in accounts with such counterparty, may be limited by the counterparty's liquidity or the applicable laws governing the insolvency or bankruptcy proceedings. The total notional amount of outstanding undesignated derivative instruments was  $6.1 billion  as of  May 31, 2018 . Any breach of our or our service providers' network, or other vendor systems, may result in the loss of confidential business and financial data, misappropriation of our consumers', users' or employees' personal information or a disruption of our business. He was appointed Chief Financial Officer of the NIKE Brand in 2010, responsible for leading all aspects of financial management for the Company's flagship brand. Comparable direct distribution markets (i.e., markets served under a direct distribution model for comparable periods in the current and prior fiscal years) declined 12%, reducing total Converse revenues by approximately 11 percentage points for fiscal 2018. Our NIKE Direct operations, both through our digital commerce operations and retail stores, also compete with multi-brand retailers selling our products. These undistributed foreign earnings were subject to the U.S. one-time mandatory transition tax and are eligible to be repatriated to the U.S. without additional U.S. tax under the Tax Act. That means you'll get to run Long Runs that challenge you. Any amounts of non-cash collateral received, such as securities, are not recorded on the Consolidated Balance Sheets pursuant to U.S. GAAP. At least quarterly, we assess the likelihood that our deferred tax asset balance will be recovered from future taxable income. As the Company completes its analysis of the Tax Act, including collecting, preparing and analyzing necessary information, performing and refining calculations and obtaining additional guidance from the U.S. Internal Revenue Services (IRS), U.S. Treasury Department, Financial Accounting Standards Board (FASB) or other standard setting and regulatory bodies on the Tax Act, it may record adjustments to the provisional amounts, which may be material. For example, we and our subsidiaries are engaged in a number of intercompany transactions across multiple tax jurisdictions. Footwear revenue growth for fiscal 2017 was attributable to higher revenues in our Sportswear and Jordan Brand categories, partially offset by declines in other categories. We file for, own and maintain many U.S. and foreign utility patents, as well as many U.S. and foreign design patents protecting components, technologies, materials, manufacturing techniques, features, functionality, and industrial and aesthetic designs used in and for the manufacture of various athletic and leisure footwear and apparel, athletic equipment and digital devices and related software applications. If global economic and financial market conditions do not improve or deteriorate, the following factors could have a material adverse effect on our business, operating results and financial condition: Slower consumer spending may result in reduced demand for our products, reduced orders from retailers for our products, order cancellations, lower revenues, higher discounts, increased inventories and lower gross margins. NIKE Direct revenues grew 13% for fiscal 2018 due to strong digital commerce sales growth, comparable store sales growth of 6% and the addition of new stores. Prepaid advertising and promotion expenses totaled $730 million and $558 million at May 31, 2018 and 2017 , respectively, of which $359 million and $311 million , respectively, was recorded in Prepaid expenses and other current assets , and $371 million and $247 million , respectively, was recorded in Deferred income taxes and other assets, depending on the period to which the prepayment applies. If changes in market conditions result in reductions in the estimated net realizable value of our inventory below our previous estimate, we would increase our reserve in the period in which we made such a determination. Financial information about geographic and segment operations appears in Note 17 - Operating Segments and Related Information of the accompanying Notes to the Consolidated Financial Statements. NTC sales to a NIKE entity with a different functional currency result in a foreign currency exposure for the NTC. We may be adversely affected by the financial health of our customers. Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment. Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change. The interest rate is based on the U.S. Treasury (constant maturity) risk-free rate in effect at the date of grant for periods corresponding with the expected term of the options. During the fourth quarter of fiscal 2018, management identified a misstatement related to the historical allocation of repurchases of Class B Common stock between Capital in excess of stated value and Retained earnings . The total provisional expense recorded during the period for the remeasurement of deferred tax assets and liabilities was $158 million . 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