Nike : Q322 Financial Schedules & Key Financial Metrics

NIKE, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	THREE MONTHS ENDED	%	NINE MONTHS ENDED	%
(In millions, except per share data)		2/28/2022		2/28/2021	Change	2/28/2022		2/28/2021	Change
Revenues	$	10,871	$	10,357	5% $	34,476	$	32,194	7%
Cost of sales		5,804		5,638	3%	18,500		17,887	3%
Gross profit		5,067		4,719	7%	15,976		14,307	12%
Gross margin		46.6 %		45.6 %		46.3 %		44.4 %
Demand creation expense		854		711	20%	2,789		2,117	32%
Operating overhead expense		2,584		2,330	11%	7,980		7,166	11%
Total selling and administrative expense		3,438		3,041	13%	10,769		9,283	16%
% of revenues		31.6 %		29.4 %		31.2 %		28.8 %
Interest expense (income), net		53		64	-	165		199	-
Other (income) expense, net		(94)		(22)	-	(235)		18	-
Income before income taxes		1,670		1,636	2%	5,277		4,807	10%
Income tax expense		274		187	47%	670		589	14%
Effective tax rate		16.4 %		11.4 %		12.7 %		12.3 %
NET INCOME	$	1,396	$	1,449	-4% $	4,607	$	4,218	9%
Earnings per common share:
Basic	$	0.88	$	0.92	-4% $	2.91	$	2.68	9%
Diluted	$	0.87	$	0.90	-3% $	2.85	$	2.62	9%
Weighted average common shares outstanding:
Basic		1,579.0		1,578.0		1,581.1		1,570.9
Diluted		1,610.7		1,616.9		1,615.8		1,607.3
Dividends declared per common share	$	0.305	$	0.275	$	0.885	$	0.795

NIKE, Inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	February 28,	February 28,
(Dollars in millions)		2022		2021	% Change
ASSETS
Current assets:
Cash and equivalents	$	8,704	$	8,516	2%
Short-term investments		4,763		4,012	19%
Accounts receivable, net		3,827		3,669	4%
Inventories		7,700		6,693	15%
Prepaid expenses and other current assets		1,968		1,810	9%
Total current assets		26,962		24,700	9%
Property, plant and equipment, net		4,806		4,958	-3%
Operating lease right-of-use assets, net		2,959		3,149	-6%
Identifiable intangible assets, net		291		271	7%
Goodwill		284		242	17%
Deferred income taxes and other assets		3,275		2,865	14%
TOTAL ASSETS	$	38,577	$	36,185	7%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	-	$	-	-
Notes payable		-		4	-100%
Accounts payable		2,770		2,257	23%
Current portion of operating lease liabilities		455		470	-3%
Accrued liabilities		5,391		5,907	-9%
Income taxes payable		202		256	-21%
Total current liabilities		8,818		8,894	-1%
Long-term debt		9,418		9,412	0%
Operating lease liabilities		2,784		2,964	-6%
Deferred income taxes and other liabilities		2,748		2,984	-8%
Redeemable preferred stock		-		-	-
Shareholders' equity		14,809		11,931	24%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	38,577	$	36,185	7%

NIKE, Inc.

DIVISIONAL REVENUES

(Unaudited)

						% Change						% Change
	THREE MONTHS ENDED	%	Excluding	NINE MONTHS ENDED	%	Excluding
(Dollars in millions)		2/28/2022		2/28/2021	Change	Currency	2/28/2022	2/28/2021	Change	Currency
		Changes1	Changes1
North America
Footwear	$	2,532	$	2,382	6%	6% $	8,648	$	7,851	10%	10%
Apparel		1,207		1,087	11%	11%		4,117		3,580	15%	15%
Equipment		143		95	51%	49%		473		364	30%	30%
Total		3,882		3,564	9%	9%		13,238		11,795	12%	12%
Europe, Middle East & Africa
Footwear		1,569		1,606	-2%	4%		5,358		5,139	4%	4%
Apparel		1,083		898	21%	28%		3,444		2,973	16%	16%
Equipment		127		105	21%	29%		426		365	17%	16%
Total		2,779		2,609	7%	13%		9,228		8,477	9%	9%
Greater China
Footwear		1,554		1,614	-4%	-6%		4,238		4,432	-4%	-9%
Apparel		548		616	-11%	-13%		1,588		1,775	-11%	-15%
Equipment		58		49	18%	15%		160		150	7%	1%
Total		2,160		2,279	-5%	-8%		5,986		6,357	-6%	-11%
Asia Pacific & Latin America
Footwear		1,005		903	11%	20%		2,914		2,652	10%	13%
Apparel		394		365	8%	16%		1,181		1,098	8%	10%
Equipment		62		47	32%	44%		178		135	32%	36%
Total		1,461		1,315	11%	19%		4,273		3,885	10%	13%
Global Brand Divisions2		41		6	583%	561%		54		18	200%	206%
TOTAL NIKE BRAND		10,323		9,773	6%	8%		32,779		30,532	7%	7%
Converse		567		570	-1%	2%		1,753		1,609	9%	8%
Corporate3		(19)		14	-	-		(56)		53	-	-
TOTAL NIKE, INC.	$	10,871	$	10,357	5%	8% $	34,476	$	32,194	7%	7%
REVENUES
TOTAL NIKE BRAND
Footwear	$	6,660	$	6,505	2%	5% $	21,158	$	20,074	5%	5%
Apparel		3,232		2,966	9%	12%		10,330		9,426	10%	9%
Equipment		390		296	32%	36%		1,237		1,014	22%	21%
Global Brand Divisions2		41		6	583%	561%		54		18	200%	206%
TOTAL NIKE BRAND	$	10,323	$	9,773	6%	8% $	32,779	$	30,532	7%	7%
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	%	NINE MONTHS ENDED	%
(Dollars in millions)		2/28/2022		2/28/2021	Change	2/28/2022		2/28/2021	Change
North America	$	967	$	970	0% $	3,636	$	3,295	10%
Europe, Middle East & Africa		713		533	34%	2,394		1,885	27%
Greater China		784		973	-19%	2,054		2,552	-20%
Asia Pacific & Latin America		478		408	17%	1,347		1,112	21%
Global Brand Divisions2		(975)		(852)	-14%	(3,033)		(2,546)	-19%
TOTAL NIKE BRAND1		1,967		2,032	-3%	6,398		6,298	2%
Converse		168		150	12%	504		405	24%
Corporate3		(412)		(482)	15%	(1,460)		(1,697)	14%
TOTAL NIKE, INC. EARNINGS BEFORE		1,723		1,700	1%	5,442		5,006	9%
INTEREST AND TAXES1
EBIT margin1		15.8 %		16.4 %		15.8 %		15.5 %
Interest expense (income), net		53		64	-	165		199	-
TOTAL NIKE, INC. INCOME BEFORE	$	1,670	$	1,636	2% $	5,277	$	4,807	10%
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)		2/28/2022		5/31/2021
Numerator
Net income	$	6,116	$	5,727
Add: Interest expense (income), net		228		262
Add: Income tax expense		1,015		934
Earnings before interest and taxes		7,359		6,923
Income tax adjustment2		(1,047)		(970)
Earnings before interest and after taxes	$	6,312	$	5,953
	AVERAGE FOR THE TRAILING
		FIVE QUARTERS ENDED
		2/28/2022		5/31/2021
Denominator
Total debt3	$	12,767	$	12,890
Add: Shareholders' equity		13,755		10,523
Less: Cash and equivalents and Short-term investments		13,654		11,217
Total invested capital	$	12,868	$	12,196
RETURN ON INVESTED CAPITAL		49.1 %		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.