Moving to another question will save this response Question 11 Calculate Nike's return on unsets ratio et income/total assets) for the last two reporting penods Round to two decimal places Based on the company's retums on assets rado, the company's management Oned its sets more efficiently to generate earnings Obused saets less efficerty to generale carings Ocused eanings more eficiently to generale asses Otel anings ss eficantly to generale anses Table of Contents NIKE, INC. CONSOLIDATED STATEMENTS OF INCOME (in milions, except per share data) 2021 Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest expense (income), net Other (income) expense, net Income before income taxes Income tax expense NET INCOME Earnings per common share Basic Diluted Weighted average common shares outstanding Basic Diluted The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 5 $ YEAR ENDED MAY 31, 2020 37,403 $ 21,162 16,241 3,592 9.534 13,126 89 139 2,887 348 2,539 44,536 S 24,576 19,962 3,114 9,911 13,025 262 14 6,061 934 6,727 $ 3.04 $ 3.56 $ 1.5730 1.0094 1.63 $ 1.00 S 2019 1.5588 1,5916 30.117 21,643 17,474 3,753 8,949 12,702 49 (78) 4,029 2.55 2.49 1,579.7 16184 2021 FORM 10-K 7 4,801 772 Table of Contents NIKE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED MAY 31, 2020 (Dollars in milions) 2021 S Net income 2,539 S Other comprehensive income (loss), net of tax Change in net foreign currency translation adjustment (148) Change in net gains (osses) on cash flow hedges (1:30) 95 Change in net gains (osses) on other (267) Total other comprehensive income (oss), net of tax TOTAL COMPREHENSIVE INCOME The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 2021 FORM 10-K 58 15 5,727 496 (825) 5 (324) 6,403 2,252 2015 4,029 (173) 503 520 323 4,362 NIKE, INC. CONSOLIDATED BALANCE SHEETS (in millions) ASSETS Current assets Cash and equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Operating lease right-of-use assets, net Identifiable intangible assets, ret Goodwil Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current lab Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease labines Accued labies Income taxes payable Total current abilities Long-term debe Operating lease tables Deferred income taxes and other labilities Commitments and contingencies (Note 16) Redeemable preferred stock Shareholders equity Common stock at stated value Class A convertible-305 and 315 shares outstanding Class -1,273 and 1,243 shares outstanding Capital in excess of stated value Accumulated other hensive income (0) Retained samnings (defic) Total shareholden' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 1 2021 MAY 31, 9.689 S 3,587 4,463 6.854 1.496 26,291 4.004 3,113 269 242 2.921 37,740 $ 2 2,830 467 6,063 300 9,674 9413 2001 2,055 9,000 (300) 3.179 12,767 37,740 S 2020 8,348 439 2,740 7,367 1,653 20,556 4,860 3,097 274 223 2.326 31,342 245 2248 445 5,184 156 8.254 9.400 2.913 2,684 8,299 (94) (191) 1055 31,342 NIKE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in millions) 2021 Cash provided (used) by operations: Net income Adjustments to reconcile net income to net cash provided (used) by operations Depreciation Deferred income taxes Stock-based compensation Amortization, impairment and other Net foreign cuency adjustments Changes in certain working capital components and other assets and liabilities: (ncrease) decrease in accounts receivable (increase) decrease in inventories (ncrease) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets Increase (decrease) in accounts payable, accrued liabies, operating lease labilities and other current and non-current labies Cash provided (used) by operations Cash provided (used) by Investing activities: Purchases of short team investments Matunities of short-term investments Sales of short-term westments Addisons to property, plant and equipment Other investing actives Cash provided (used) by investing activities Cash provided (used) by financing activities: Proceeds from borowings, net of debt is ance costs Increase (decrease) in notes payable, net Repayment of borrowings Proceeds from exercise of stock options and other stock issuances Repurchase of common stock Dividends-common and preferred Ober financing activities Cash provided (used) by financing activities Effect of exchange rate changes on cash and equivalents Net increase (decrease) in cash and valents Cash and equivalents, begining of year CASH AND EQUIVALENTS, END OF YEAR Supplemental disclosure of cash flow Information Cash paid during the year for terest, net of capitalized interest income taxes Non cash additions to property, plant and equipment Dividends declared and not paid The accompanying Notes to the Consolidated Financial Statements are an integral part of this ser S 5,727 S 744 (305) 611 53 (138) (1806) 507 (182) YEAR ENDED MAY 31, 2020 2,539 S 1,326 6,057 (9.961) 4,230 2,449 (005) 171 (3.600) (52) (187) 1,172 (600) (1,038) (13) (1450) 143 1,541 4348 5,809 293 S 1.177 179 438 ***** 721 (300) 1,239 (1,854) (054) 2,485 (2,420) 2,379 (1,000) (1,020) 6,154 (6) 00 (2067) (1452) (52) 2,401 (68) 3,062 4.400 8,348 1 140 1,029 121 385 2019 4,029 705 34 325 15 233 (270) (490) (200) 1,525 5.903 (2.937) 1,715 2.072 (1.119) 6 (264) (328) (8) 700 (4200) (1.332) (44) (5,293) (129) 217 4249 4,466 153 767 140 347 NIKE, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN ACCUMULATED CLASS A CLASS B EXCESS OF STATED OTHER RETAINED COMPREHENSIVE EARNINGS INCOME (LOSS) VALUE (DEFICIT) TOTAL (in millions, except per share data) Balance at May 31, 2018 Stock options exercised SHARES AMOUNT SHARES AMOUNT 329-5 1,272 S 35 (92) S 9,812 6,384 539 18 539 Conversion to Class B Common Stock 14 (54) (4,056) (4,283) Repurchase of Class B Common Stock Dividends on common stock (50 86 per share) and preferred stock ($0.10 per share) (1,360) (1.360) Issuance of shares to employees, net of shares withheld for employee taxes (3) 139 Stock-based compensation 325 Net income 4,029 4,029 323 Other comprehensive income (loss) Adoption of ASU 2016-16 (Note 1) Adoption of ASC Topic 606 (Note 1) Balance at May 31, 2019 (507) 23 (507) 23 1,253 S 9,040 703 Stock options exercised 20 (34) (3,033) Repurchase of Class B Common Stock Dividends on common stock (10 955 per and preferred stock (50.10 per share) share) (1.491) Issuance of shares to employees, net of shares withheld for employee laxes 156 Stock-based compensation 429 Net income 2.539 (287) Other comprehensive income (loss) Adoption of ASC Topic 847 (Note 1) Balance at May 31, 2020 (3) 315 S 1,243 Shock options exercised 21 Conversion to Class Common Stock (10) 10 Repurchase of Class 8 Common Stock Dividends on common stock ($1,070 per share) and preferred stock (30 10 per share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net income Other comprehensive income (s) Balance at May 31, 2021 305 1,275 31 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 315 (5) 35 35 (227) 142 325 7,163 6 703 (161) 165 429 8,299 954 (28) 129 611 9,946 323 231 $ (287) (54) (324) (9380) 3,517 5 1,643 (2,872) (1491) (0) 2.530 (1) (191) (022) (1,692) (43) 5.727 3,179 S 8,056 954 (050) (1,092) 00 611 5.727 (324) 12,767 CASH AND EQUIVALENTS Cash and equivalents represent cash and short-term, highly liquid investments, that are both readily convertible to known amounts of cash, and so near their maturity they present insignificant risk of changes in value because of changes in interest rates, including commercial paper, U.S. Treasury, U.S. Agency, money market funds, time deposits and corporate debt securities with maturities of 90 days or less at the date of purchase. SHORT-TERM INVESTMENTS 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. At May 31, 2021 and 2020, Short-term investments consisted of available-for-sale debt securities, which are recorded at tair value with unrealized gains and losses reported, net of tax, in Accumulated other comprehensive income (loss), unless unrealized losses are determined to be unrecoverable Realized gains and losses on the sale of securities are determined by specific identification. The Company considers all available-for-sale debt securities, including those with maturity dates beyond 12 months, as available to support cument operational liquidity needs and, therefore, classifies all securities with maturity dates beyond 90 days at the date of purchase as current assets within Short-term investments on the Consolidated Balance Sheets. Refer to Note 6-Fair Value Measurements for more information on the Company's Short-term investments ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE Accounts receivable, net consist primarily of amounts due from customers. The Company makes ongoing estimates relating to the collectability of its accounts receivable and maintains an allowance for expected losses resulting from the inability of its customers to make required payments. In addition to judgments about the creditworthiness of significant customers based on ongoing credit evaluations, the Company considers historical levels of credit losses, as well as macroeconomic and industry trends, such as the impacts of COVID-19, to determine the amount of the allowance Accounts receivable with articipated collection dates greater than 12 months from the balance sheet date and related allowances are considered non-current and recorded in Deferred income taxes and other assets. The allowance for uncollectible accounts receivable was $93 million and $214 million as of May 31, 2021 and 2020, respectively INVENTORY VALUATION Inventories are stated at lower of cost and net realizable value, and valued on either an average or a specific identification cost basis. In some instances, the Company ships products directly from its suppliers to the customer, with the related inventory and cost of sales recognized on a specific identification basis inventory costs primarily consist of product cost from the Company's suppliers, as well as inbound freight, import duties, taxes, insurance, logistics and other handing fees PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION improvements, buildings and leasehold improvements over 2 Property, plant and equipment are recorded at cost Depreciation is determined on a straight line basis for 40 years and for machinery and equipment over 2 to 15 years Depreciation and amortization of assets used in manufacturing, warehousing and product distribution are recorded in Cost of sales. Depreciation and amortization of all other assets are recorded in Operating overhead expense. SOFTWARE DEVELOPMENT COSTS Expenditures for major software purchases and software developed for internal use are capitalized and amortized over a 2-to 12-year period on a straight line bass. The Company's policy provides for the capitalization of extemal direct costs associated with developing or obtaining internal use computer software The Company also capitales certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payrol costs with respect to these employees is limited to the time directly spent on such projects. Costs associated with preminary project stage activities, training, maintenance and all other post-implementation stage activities are experised as incuned. Development costs of computer software to be sold, leased or otherwise marketed as an integral part of a product are subject to capitalization beginning when a products technological feasibety has been established and ending when a product is available for general release to customers in most instances, the Company's products are released soon after technological feasibility has been established, therefore, software development costs incurred subsequent to achievement of technological feasibility are usually not significant, and generaly, most software development costs have been expensed as incurred expenses and other current assets of $507 million, $422 million and $45 million, respectively, and an increase in Deferred income taxes and other liabilities of $40 million on the Consolidated Balance Sheets NOTE 2-INVENTORIES Inventory balances of $6,854 million and $7.367 million as of May 31, 2021 and 2020, respectively, were substantially all finished goods NOTE 3 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment, net included the following: MAY 31, (Dollars in millions) 363 $ 345 Land and improvements Buildings 3.365 2,442 Machinery and equipment Internal-use software 3,023 2.751 1,391 1483 Leasehold improvements 1,005 1,554 Construction in process 311 1,000 Total property, plant and equipment, gross 10.061 9,661 Less accumulated depreciation 5,157 4,795 TOTAL PROPERTY, PLANT AND EQUIPMENT, NET 4,904 4,866 Capitalized interest was not material for the years ended May 31, 2021, 2020 and 2010 NOTE 4-IDENTIFIABLE INTANGIBLE ASSETS AND GOODWILL Identifiable intangible assets, net consist of indefinite-lived trademarks, acquired trademarks and other intangible assets. The following table summarizes the Company's Identifiable intangible assets, net balances as of May 31, 2021 and 2020 MAY 31, 20:20 NET (Dollars in milions) 2021 GROSS NET GROSS CARRYING ACCUMULATED CARRYING CARRYING ACCUMULATED CARRYING AMOUNT AMORTIZATION AMOUNT AMOUNT AMORTIZATION AMOUNT 246 $ 240 S 246 $ S 50 23 47 296 $ 269 $ 293 S Indefinite-lived trademarks 5 246 20 Acquired trademarks and other 27 27 5 19 19 $ IDENTIFIABLE INTANGIBLE ASSETS, NET 274 $ Goodwill was $242 million and $223 million as of May 31, 2021 and 2020, respectively, and there were no accumulated impairment losses as of May 31 2021 and 2000 Additionally, the impact to Goodwill during fiscal 2021 and 2020 as a result of acquisitions and divestres was not material 2021 FORM 10-K 2021 2020