Nike : Q420 Financial Schedules & Key Financial Metrics

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Revenues

$ 6,313

$ 10,184

-38%

$ 37,403

$ 39,117

-4%

Cost of sales

(In millions, except per share data)

Gross profit

2,353

4,633

-49%

16,241

17,474

-7%

Gross margin

Demand creation expense

Operating overhead expense

2,368

2,392

-1%

9,534

8,949

7%

THREE MONTHS ENDED

5/31/2020 5/31/2019

3,960

37.3%

823

Total selling and administrative expense% of revenues

3,19150.5%

%	TWELVE MONTHS ENDED	%
Change	5/31/2020 5/31/2019	Change
5,551	-29%	21,162 21,643	-2%
45.5%	43.4% 44.7%
1,014	-19%	-4%
3,406

3,592

3,753

-6%

33.4%

13,126

12,702

3%

35.1% 32.5%

Interest expense (income), net Other (income) expense, net

50 (84)

12 - 89 49 -

(28) - 139 (78) -

(Loss) income before income taxes

(804)

1,243

-165%

2,887

4,801

-40%

Income tax (benefit) expense

(14)

254

-106%

348

772

-55%

Effective tax rate

1.7%

20.4%

12.1%

16.1%

NET (LOSS) INCOME

$ (790)

$ 989

-180%

$ 2,539

$ 4,029

-37%

(Loss) earnings per common share: Basic

• $ (0.51) $

  Diluted

• $ (0.51) $

• 0.63 -181% $

• 0.62 -182% $

1.63 1.60

$ $

• 2.55 -36%

• 2.49 -36%

Weighted average common shares outstanding:Basic

1,555.7 1,555.7

1,570.2 1,607.5

• 1,558.8 1,579.7

  Diluted

• 1,591.6 1,618.4

Dividends declared per common share

$ 0.245

$ 0.22

$ 0.955

$ 0.86

CONSOLIDATED BALANCE SHEETS

(Unaudited)

May 31,	May 31,
(Dollars in millions)	2020	2019	% Change
ASSETS
Current assets:
Cash and equivalents	$	8,348 $	4,466	87%
Short-term investments	439	197	123%
Accounts receivable, net	2,749	4,272	-36%
Inventories	7,367	5,622	31%
Prepaid expenses and other current assets	1,653	1,968	-16%
Total current assets	20,556	16,525	24%
Property, plant and equipment, net	4,866	4,744	3%
Operating lease right-of-use assets, net	3,097	-	-
Identifiable intangible assets, net	274	283	-3%
Goodwill	223	154	45%
Deferred income taxes and other assets	2,326	2,011	16%
TOTAL ASSETS	$	31,342 $	23,717	32%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	3 $	6	-50%
Notes payable	248	9	2,656%
Accounts payable	2,248	2,612	-14%
Current portion of operating lease liabilities	445	-	-
Accrued liabilities	5,184	5,010	3%
Income taxes payable	156	229	-32%
Total current liabilities	8,284	7,866	5%
Long-term debt	9,406	3,464	172%
Operating lease liabilities	2,913	-	-
Deferred income taxes and other liabilities	2,684	3,347	-20%
Redeemable preferred stock	-	-	-
Shareholders' equity	8,055	9,040	-11%
TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY	$	31,342 $	23,717	32%

DIVISIONAL REVENUES

(Unaudited)

THREE MONTHS

ENDED

%

% Change Excluding Currency

TWELVE MONTHS

(Dollars in millions)

5/31/2020

5/31/2019

Change Changes1

ENDED 5/31/2020 5/31/2019

%

% Change Excluding Currency

Change Changes1

North America

Footwear Apparel Equipment

$

1,606 $ 56361

2,736 1,275154

• -41% -41% $

-56% -60%

-56% -60%

9,329 $ 4,639516

10,045 5,260597

-7% -7% -12% -12%-14% -14%

Total

2,230

4,165

-46%

-46%

14,484

15,902

-9%

-9%

-46% -44%

Europe, Middle East & Africa

Footwear

Apparel

887 398

1,643 713

-44% -42%

5,892 3,053

6,293 3,087

-6% -1%

-3% 2%

Equipment

43

101

-57%

-55%

402

432

-7%

-3%

Total 1,328

2,457

-46%

-44%

9,347

9,812

-5%

-1%

Greater China

Footwear Apparel Equipment

Total

1,647

1,697

-3%

1%

6,679

6,208

8%

11%

Asia Pacific & Latin America

Footwear

Apparel

1,149	1,167	-2%	3%	4,635	4,262	9%	12%
468	494	-5%	-1%	1,896	1,808	5%	8%
30	36	-17%	-9%	148	138	7%	11%
559	953	-41%	-38%	3,449	3,622	-5%	0%
211	363	-42%	-38%	1,365	1,395	-2%	3%

Equipment

31

63

-51%

-47%

214

237

-10%

-4%

1,379

Total 801

-42%

-39%

5,028

5,254

-4%

1%

Global Brand Divisions2

6

9

-33%

-27%

30

42

-29%

-26%

Converse

305

491

-38%

-36%

1,846

1,906

-3%

-1%

Corporate3

TOTAL NIKE, INC. REVENUES

$ 6,313

$ 10,184

-38%

-36%

$ 37,403

$ 39,117

-4%

-2%

TOTAL NIKE BRAND

Global Brand Divisions2

6

9

-33%

-27%

30

42

-29%

-26%

6,012 $

TOTAL NIKE BRAND 6,012

35,568	37,218	-4%	-2%
(11)	(7)	-	-
23,305 $	24,222	-4%	-2%
10,953	11,550	-5%	-3%
1,280	1,404	-9%	-6%
-36% $	35,568 $	37,218	-4%	-2%

9,707	-38%	-36%
(14)	-	-
6,499	-35%	-34%	$
2,845	-42%	-41%
354	-53%	-51%
9,707	-38%

(4)

Footwear

$

Apparel Equipment

4,201 $ 1,640 165

TOTAL NIKE BRANDREVENUES

$

1The percent change has been calculated using actual exchange rates in use during the comparative prior year period 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.

2Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.

3Corporate revenues consist primarily 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.

SUPPLEMENTAL NIKE BRAND REVENUE DETAILS

(Unaudited)

(Dollars in millions)

TWELVE MONTHS ENDED 5/31/2020 5/31/2019

% Change

% Change Excluding Currency Changes1

NIKE Brand Revenues by:

Sales to Wholesale Customers

$

Sales through NIKE Direct

Global Brand Divisions2

23,156 $ 12,382 30

25,423 11,753

-9% -7% 5% 8%

42 -29% -26%

TOTAL NIKE BRAND REVENUES

$

35,568 $

37,218

-4% -2%

NIKE Brand Revenues on a Wholesale Equivalent Basis:3

Sales to Wholesale Customers

$

Sales from our Wholesale Operations to NIKE Direct Operations

23,156 $ 7,452

25,423 7,127

TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES

$

30,608 $

32,550

-9% -7% 5% 7%-6% -4%

NIKE Brand Wholesale Equivalent Revenues by:3

Men's

$

Women's

NIKE Kids'

Others4

16,694 $ 6,999 5,033 1,882

17,737 7,380 5,283 2,150

TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES

$

30,608 $

32,550

-6% -4% -5% -3% -5% -3% -12% -10%-6% -4%

NIKE Brand Wholesale Equivalent Revenues by:3

Running

$

3,830 $

4,488

-15% -12%

NIKE Basketball

1,508

1,597

-6% -4%

Jordan Brand

3,609

3,138

15% 16%

Football (Soccer)

1,575

1,894

-17% -14%

Training

2,688

3,137

-14% -13%

Sportswear

12,285

12,442

-1% 1%

Others5

5,113

5,854

TOTAL NIKE BRAND WHOLESALE EQUIVALENT REVENUES

$

30,608 $

32,550

-13% -10%-6% -4%

1The percent change has been calculated using actual exchange rates in use during the comparative prior year period 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.

2Global Brand Divisions revenues are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.

3References to NIKE Brand wholesale equivalent revenues, which are considered non-GAAP financial measures, are intended to provide context as to the total size of the Company's NIKE Brand market footprint if it had no NIKE Direct operations. NIKE Brand wholesale equivalent revenues consist of 1) sales to external wholesale customers and 2) internal sales from the Company's wholesale operations to its NIKE Direct operations which are charged at prices that are comparable to prices charged to external wholesale customers.

4Others include all unisex products, equipment and other products not allocated to Men's, Women's and NIKE Kids', as well as certain adjustments that are not allocated to products designated by gender or age.

5Others include all other categories and certain adjustments that are not allocated at the category level.

EARNINGS BEFORE INTEREST AND TAXES1

(Unaudited)

THREE MONTHS

TWELVE MONTHS

ENDED %

ENDED

%

North America

$ (13)

$ 1,048

-101%

$ 2,899

$ 3,925

-26%

Global Brand Divisions2

(844)

(830)

-2%

(3,468)

(3,262)

-6%

Converse

(27)

82

-133%

297

303

-2%

TOTAL NIKE, INC. (LOSS) EARNINGS BEFORE INTEREST AND TAXES1

(754)

1,255

-160%

2,976

4,850

-39%

(Dollars in millions)	5/31/2020	5/31/2019	Change	5/31/2020	5/31/2019	Change
Europe, Middle East & Africa	(153)	506	-130%	1,541	1,995	-23%
Greater China	571	674	-15%	2,490	2,376	5%
Asia Pacific & Latin America	79	340	-77%	1,184	1,323	-11%
TOTAL NIKE BRAND1	(360)	1,738	-121%	4,646	6,357	-27%
Corporate3	(367)	(565)	35%	(1,967)	(1,810)	-9%
Interest expense (income), net	50	12	-	89	49	-

TOTAL NIKE, INC. (LOSS) INCOME BEFORE INCOME TAXES

$ (804)

$ 1,243

-165%

$ 2,887

$ 4,801

-40%

1The 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 and Total NIKE, Inc. EBIT 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. References to EBIT 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.

2Global Brand Divisions primarily represent demand creation, operating overhead and product creation and design expenses that are centrally managed for the NIKE Brand. Revenues for Global Brand Divisions are primarily attributable to NIKE Brand licensing businesses that are not part of a geographic operating segment.

3Corporate 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. Corporate includes the non-recurring charge, recognized in fiscal 2020, as a result of the Company's decision to transition its operations in Brazil, Argentina, Chile and Uruguay to third-party distributors. This charge primarily reflects the anticipated release of associated non-cash cumulative foreign currency translation losses.