Nike : Q222 Financial Schedules & Key Financial Metrics

NIKE, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	THREE MONTHS ENDED	%	SIX MONTHS ENDED	%
(In millions, except per share data)	11/30/2021	11/30/2020	Change 11/30/2021	11/30/2020	Change
Revenues	$	11,357	$	11,243	1% $	23,605	$	21,837	8%
Cost of sales		6,144		6,396	-4%	12,696		12,249	4%
Gross profit		5,213		4,847	8%	10,909		9,588	14%
Gross margin		45.9 %		43.1 %		46.2 %		43.9 %
Demand creation expense		1,017		729	40%	1,935		1,406	38%
Operating overhead expense		2,742		2,538	8%	5,396		4,836	12%
Total selling and administrative expense		3,759		3,267	15%	7,331		6,242	17%
% of revenues		33.1 %		29.1 %		31.1 %		28.6 %
Interest expense (income), net		55		70	-	112		135	-
Other (income) expense, net		(102)		54	-	(141)		40	-
Income before income taxes		1,501		1,456	3%	3,607		3,171	14%
Income tax expense		164		205	-20%	396		402	-1%
Effective tax rate		10.9 %		14.1 %		11.0 %		12.7 %
NET INCOME	$	1,337	$	1,251	7% $	3,211	$	2,769	16%
Earnings per common share:
Basic	$	0.84	$	0.80	5% $	2.03	$	1.77	15%
Diluted	$	0.83	$	0.78	6% $	1.98	$	1.73	14%
Weighted average common shares outstanding:
Basic		1,582.4		1,573.0		1,582.2		1,567.4
Diluted		1,617.4		1,609.5		1,618.5		1,601.9
Dividends declared per common share	$	0.305	$	0.275	$	0.580	$	0.520

NIKE, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	November 30,	November 30,
(Dollars in millions)		2021		2020	% Change
ASSETS
Current assets:
Cash and equivalents	$	10,751	$	8,635	25%
Short-term investments		4,352		3,177	37%
Accounts receivable, net		3,746		3,713	1%
Inventories		6,506		6,090	7%
Prepaid expenses and other current assets		1,822		1,992	-9%
Total current assets		27,177		23,607	15%
Property, plant and equipment, net		4,812		4,959	-3%
Operating lease right-of-use assets, net		3,017		3,086	-2%
Identifiable intangible assets, net		265		270	-2%
Goodwill		242		223	9%
Deferred income taxes and other assets		3,404		2,691	26%
TOTAL ASSETS	$	38,917	$	34,836	12%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	-	$	-	-
Notes payable		9		41	-78%
Accounts payable		2,795		2,154	30%
Current portion of operating lease liabilities		462		458	1%
Accrued liabilities		5,431		6,030	-10%
Income taxes payable		160		188	-15%
Total current liabilities		8,857		8,871	0%
Long-term debt		9,417		9,410	0%
Operating lease liabilities		2,835		2,896	-2%
Deferred income taxes and other liabilities		2,884		3,019	-4%
Redeemable preferred stock		-		-	-
Shareholders' equity		14,924		10,640	40%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	38,917	$	34,836	12%

NIKE, Inc.

DIVISIONAL REVENUES

(Unaudited)

						% Change					% Change
	THREE MONTHS ENDED	%	Excluding	SIX MONTHS ENDED	%	Excluding
	Currency	Currency
(Dollars in millions)	11/30/2021	11/30/2020	Change		11/30/2020	Change
Changes1 11/30/2021	Changes1
North America
Footwear	$	2,852	$	2,512	14%	13% $	6,116	$	5,469	12%	12%
Apparel		1,480		1,368	8%	8%	2,910		2,493	17%	16%
Equipment		145		126	15%	16%	330		269	23%	23%
Total		4,477		4,006	12%	12%	9,356		8,231	14%	13%
Europe, Middle East & Africa
Footwear		1,806		1,731	4%	4%	3,789		3,533	7%	4%
Apparel		1,202		1,104	9%	8%	2,361		2,075	14%	11%
Equipment		134		123	9%	7%	299		260	15%	11%
Total		3,142		2,958	6%	6%	6,449		5,868	10%	7%
Greater China
Footwear		1,235		1,567	-21%	-25%	2,684		2,818	-5%	-11%
Apparel		564		681	-17%	-21%	1,040		1,159	-10%	-16%
Equipment		45		50	-10%	-15%	102		101	1%	-6%
Total		1,844		2,298	-20%	-24%	3,826		4,078	-6%	-13%
Asia Pacific & Latin America
Footwear		887		991	-10%	-8%	1,909		1,749	9%	9%
Apparel		402		432	-7%	-5%	787		733	7%	8%
Equipment		58		48	21%	22%	116		88	32%	32%
Total		1,347		1,471	-8%	-6%	2,812		2,570	9%	10%
Global Brand Divisions2		6		8	-25%	-5%	13		12	8%	13%
TOTAL NIKE BRAND		10,816		10,741	1%	0%	22,456		20,759	8%	6%
Converse		557		476	17%	16%	1,186		1,039	14%	11%
Corporate3		(16)		26	-	-	(37)		39	-	-
TOTAL NIKE, INC.	$	11,357	$	11,243	1%	0% $	23,605	$	21,837	8%	6%
REVENUES
TOTAL NIKE BRAND
Footwear	$	6,780	$	6,801	0%	-1% $	14,498	$	13,569	7%	5%
Apparel		3,648		3,585	2%	1%	7,098		6,460	10%	8%
Equipment		382		347	10%	9%	847		718	18%	15%
Global Brand Divisions2		6		8	-25%	-5%	13		12	8%	13%
TOTAL NIKE BRAND	$	10,816	$	10,741	1%	0% $	22,456	$	20,759	8%	6%
REVENUES

• The percent change has been calculated using actual exchange rates in use during the comparative prior year period and is provided to enhance the visibility of the underlying business trends by excluding the impact of translation arising from foreign currency exchange rate fluctuations, which is considered a non-GAAP financial measure. Management uses this non-GAAP financial measure when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes this non-GAAP financial measure provides investors with additional financial information that should be considered when assessing the Company's underlying business performance and trends. References to this measure should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

• Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

• Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through the Company's central foreign exchange risk management program.

NIKE, Inc.

EARNINGS BEFORE INTEREST AND TAXES1

(Unaudited)

	THREE MONTHS ENDED	%	SIX MONTHS ENDED	%
(Dollars in millions)	11/30/2021	11/30/2020	Change 11/30/2021	11/30/2020	Change
North America	$	1,235	$	1,023	21% $	2,669	$	2,325	15%
Europe, Middle East & Africa		806		660	22%	1,681		1,352	24%
Greater China		569		891	-36%	1,270		1,579	-20%
Asia Pacific & Latin America		388		424	-8%	869		704	23%
Global Brand Divisions2		(1,071)		(841)	-27%	(2,058)		(1,694)	-21%
TOTAL NIKE BRAND1		1,927		2,157	-11%	4,431		4,266	4%
Converse		132		87	52%	336		255	32%
Corporate3		(503)		(718)	30%	(1,048)		(1,215)	14%
TOTAL NIKE, INC. EARNINGS BEFORE		1,556		1,526	2%	3,719		3,306	12%
INTEREST AND TAXES1
EBIT margin1		13.7 %		13.6 %		15.8 %		15.1 %
Interest expense (income), net		55		70	-	112		135	-
TOTAL NIKE, INC. INCOME BEFORE	$	1,501	$	1,456	3% $	3,607	$	3,171	14%
INCOME TAXES

• The Company evaluates the performance of individual operating segments based on earnings before interest and taxes (commonly referred to as "EBIT"), which represents net income before interest expense (income), net and income tax expense. Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin are considered non-GAAP financial measures and are being provided as management believes this additional information should be considered when assessing the Company's underlying business performance and trends. EBIT margin is calculated as EBIT divided by total NIKE, Inc. Revenues. References to EBIT and EBIT margin should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

• Global Brand Divisions primarily represent demand creation and operating overhead expense, including product creation and design expenses that are centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

• Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.

NIKE, Inc.

RETURN ON INVESTED CAPITAL1

(Unaudited)

		FOR THE TRAILING FOUR
		QUARTERS ENDED
(Dollars in millions)		11/30/2021		5/31/2021
Numerator
Net income	$	6,169	$	5,727
Add: Interest expense (income), net		239		262
Add: Income tax expense		928		934
Earnings before interest and taxes		7,336		6,923
Income tax adjustment2		(958)		(970)
Earnings before interest and after taxes	$	6,378	$	5,953
	AVERAGE FOR THE TRAILING
		FIVE QUARTERS ENDED
		11/30/2021		5/31/2021
Denominator
Total debt3	$	12,796	$	12,890
Add: Shareholders' equity		12,921		10,523
Less: Cash and equivalents and Short-term investments		13,323		11,217
Total invested capital	$	12,394	$	12,196
RETURN ON INVESTED CAPITAL		51.5 %		48.8 %

• Return on invested capital ("ROIC") represents a performance measure that management believes is useful information in understanding the Company's ability to effectively manage invested capital. ROIC is considered a non-GAAP financial measure and should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

• Equals Earnings before interest and taxes multiplied by the effective tax rate as of the respective quarter end.

• Total debt includes the following: 1) Current portion of long-term debt, 2) Notes Payable, 3) Current portion of operating lease liabilities, 4) Long-term debt and 5) Operating lease liabilities.