Moving to another question will save this response. Question 15 Nike's earned revenue from both cash and credit sales for its most recent year end was (in millions): O a. $19,962 O b. $44,538. O c. $5,727 O d. $4,463. Table of Contents NIKE, INC. CONSOLIDATED STATEMENTS OF INCOME (In millions, 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 3,500 9.534 13,126 89 139 2,887 348 2,539 44.538 S 24,576 19,902 3,114 9,911 13,025 202 14 0.001 934 6,727 $ 3.64 $ 3.56 $ 1,573.0 1,000.4 1.63 $ 1.60 $ 2019 1.558.8 1,591.6 39,117 21,643 17,474 3,753 8,949 12,702 49 (78) 772 4,029 2.55 2.49 1.579.7 1,6184 2021 FORM 10-K 57 4,001 NIKE, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED MAY 31, (Dollars in millions) 2021 2020 Net Income 2.539 S Other comprehensive income (loss), net of tax: Change in net foreign currency translation adjustment Change in net gains (losses) on cash flow hedges i (148) (130) Change in net gains (losses) on other (9) Total other comprehensive income (loss), net of tax (287) TOTAL COMPREHENSIVE INCOME The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 2021 FORM 10-K 58 S $ 5,727 S 496 (825) 5 (324) 6,403 2,252 2019 4,029 (173) 503 (G) 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, net Goodwill Deferred income taxes and other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt Notes payable Accounts payable Current portion of operating lease labilities Accrued liabilities Income taxes payable Total current tablities Long-term debt Operating lease labilities Deferred income taxes and other labilities Commitments and contingencies (Note 18) Redeemable preferred stock Shareholders' equity Common stock at stated value: Class A convertible-305 and 315 shares outstanding Class B-1,273 and 1,243 shares outstanding Capital in excess of stated value Accumulated other comprehensive income (oss) Retained earnings (deficit) Total shareholden' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement $ $ 2021 MAY 31, 9,889 1 3,587 4,463 6,854 1,498 26,291 4,904 3,113 269 242 2,921 37,740 $ 2 2.836 467 6,083 306 9.674 9,413 2,931 2.955 9,965 (380) 3.179 12.767 37,740 $ 2020 8,348 439 2,749 7367 1,653 20,5506 4,860 3,097 274 223 2.320 31,342 3 248 2.248 445 5,184 156 8,284 9.406 2.913 2.684 3 8,299 (56) (191) 8,055 31,342 2021 FORM 10-K Table of Contents 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 currency adjustments Changes in certain working capital components and other assets and liabilities (Increase) decrease in accounts receivable (Increase) decrease in inventories (increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current labies Cash provided (used) by operations Cash provided (used) by Investing activities: Purchases of short-term investments Maturities of short-term investments Sales of short-term investments Additions to property, plant and equipment Other investing activities Cash provided (used) by investing activities Cash provided (used) by financing activities: Proceeds from borrowings, net of debt issuance 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 Other financing activities Cash provided (used) by financing activities Effect of exchange rate changes on cash and equivalents Net increase (decrease) in cash and equivalents Cash and equivalents, beginning of year CASH AND EQUIVALENTS, END OF YEAR Supplemental disclosure of cash flow Information: Cash paid during the year for Interest, 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 statement + S YEAR ENDED MAY 31, 2020 2,539 S 721 (380) 429 398 23 1,239 (1,854) (654) 24 5,727 $ 744 (385) 611 53 (138) (1,606) 507 (182) 1,326 6,657 (9,901) 4,236 2,449 (095) 171 (3,800) (52) (197) 1,172 (608) (1,638) (136) (1459) 143 1,541 8,348 9,889 $ 293 S 1,177 179 438 2,485 (2,426) 74 2.379 (1,088) 31 (1.028) 6,134 49 (6) 885 (3,067) (1,452) (52) 2.491 (66) 3,882 4,466 8,348 S 140 1,028 121 385 2019 4,029 705 34 325 15 233 (270) (400) (203) 1.525 5,903 (2,937) 1,715 2.072 (1.119) 5 (264) (325) (6) 700 (4,286) (1,332) (44) (5,293) (129) 217 4,249 4,466 153 757 160 347 NIKE, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY COMMON STOCK CAPITAL IN ACCUMULATED CLASS A CLASS B EXCESS OF STATED VALUE OTHER RETAINED COMPREHENSIVE EARNINGS INCOME (LOSS) (DEFICIT) TOTAL n millions, except per share data) Balance at May 31, 2018 SHARES AMOUNT 329 5 SHARES AMOUNT 1,272 35 6,384 (92) 3,517 9,812 Stock optoes exercised 18 539 530 Conversion to Class 8 Common Stock - (14) 14 Repurchase of Class 8 Common Stock (54) (227) (4,056) (4,283) Dividends on common stock (10.86 per share) and preferred stock (30.10 per share) (1,360) (1.300) Issuance of shares to employees, net of shares withheld for employee taxes 142 139 Stock-based compensation 325 325 Net Income 4,029 Other comprehensive income (los) Adoption of ASU 2016-16 (1) Adoption of ASC Topic 600 (Note 1) Balance at May 31, 2019 323 (507) 23 9,040 703 (3,033) 315 S 1,263 S 7,163 S Stock options exercised 20 703 (161) (34) Repurchase of Class B Common Stock Dividends on common stock (10 955 per share) and prefered stock (30.10 per share) (1,491) Issuance of shares to employees, net of shares withheld for employee taxes 165 150 Stock-based compensation 429 429 Net Income 2,539 Other comprehensive income poss) Adoption of ASC Topic 842 (Note 1) Balance at May 31, 2020 316 S 1,243 Stock options exercised 21 10 (10) Conversion to Class B Common Stock Repurchase of Class 8 Common Stock Dividends on common slock ($1.070 per and preferred stock (10.10 per share share) Issuance of shares to employees, net of shares withheld for employee taxes Stock-based compensation Net Income Other comprehensive income (os) Balance at May 31, 2021 306 1,273 31 The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement 35 35 8,299 954 (28) 129 011 9,966 323 231 S (287) (56) (324) (380) 6 (3) 4,029 (507) 23 1,643 S (2872) (1,491) (9) 2,530 (1) (191) 8,056 954 (1,002) (650) (1.002) 86 611 (43) 5,727 5,727 (324) 3,179 $ 12,767 (287) (1) 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 debit securities, which are recorded at fair 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 current operational liquidity needs and, therefore, classifies all securities with maturity dates beyond 90 days at the date of purchase as current assets within Short-termi 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 anticipated 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 handling fees PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION Property, plant and equipment are recorded at cost. Depreciation is determined on a straight line basis for land improvements, buildings and leasehold improvements over 2 to 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 basis. The Company's policy provides for the capitalization of external direct costs associated with developing or obtaining internal use computer software. The Company also capitalizes certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred. 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 product's technological feasibility 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 generally, most software development costs have been expensed as incurred Table of Contents 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 3,023 2,751 Machinery and equipment Internal-use software 1,301 1,483 Leasehold improvements 1,008 1,554 311 1,000 Construction in process Total property, plant and equipment, gross 10,001 0,001 5.157 4,795 Less accumulated depreciation TOTAL PROPERTY, PLANT AND EQUIPMENT, NET 4,904 4,866 Capitalized interest was not material for the years ended May 31, 2021, 2020 and 2019 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, 2021 2020 NET NET (Dollars in milions) GROSS CARRYING AMOUNT 240 1 GROSS ACCUMULATED CARRYING CARRYING ACCUMULATED AMORTIZATION AMOUNT AMOUNT AMORTIZATION 246 $ 240 S 23 269 $ CARRYING AMOUNT 240 Indefinite-lived trademarks S Acquired trademarks and other 19 28 IDENTIFIABLE INTANGIBLE ASSETS, NET 50 296 27 27 S 47 293 S $ 19 $ 274 Goodwill was $242 milion and $223 milion as of May 31, 2021 and 2020, respectively, and there were no accumulated impairment losses as of May 31, 2021 and 2020 Additionally, the impact to Goodwill during fiscal 2021 and 2020 as a result of acquisitions and divestitures was not material 2021 FORM 10-K69 $ 2021 2020 Table of Contents NOTE 5- ACCRUED LIABILITIES Accrued abilities included the following: (Dollars in millions) Compensation and benefits, excluding taxes Sales-related reserves Allowance for expected loss on sale 3,156 2,353 Other 6,063 $ 5,184 TOTAL ACCRUED LIABILITIES (1) Refer to Note 20-Acquations and Ovestures for an information NOTE 6 FAIR VALUE MEASUREMENTS The following tables present information about the Company's financial assets measured at fair value on a recuring basis as of May 31, 2021 and 2020, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement. Refer to Note 1- Summary of Significant Accounting Policies for additional detal regarding the Company's fair value measurement methodology MAY 31, 2021 (Dollars in millions) ASSETS AT FAIR VALUE CASH AND EQUIVALENTS SHORT-TERM INVESTMENTS Cash 640 $ 840 S Level1. US Treasury securities 2.892 Level 2 2,092 601 Commercial paper and bonds 748 57 Money market funds 7,701 7,701 Time deposits 1,293 1,291 2 US Agency securites Total Level 2 9,049 9,744 13,476 695 3,687 TOTAL 9,889 MAY 31, 2020 (Dollars in millions) ASSETS AT FAIR VALUE CASH AND EQUIVALENTS SHORT-TERM INVESTMENTS Cash 500 $ 500 $ Level1 US Treasury securities 1,204 800 404 Level 2 Commercial paper and bonds 32 Money market funds 5.973 5,973 Time deposits 981 979 1 U.S. Agency secuntes Total Level 2 TOTAL 6.987 6,787 6.952 8,348 $ $ 439 As of May 31, 2021, the Company held $2,993 milion of available-for-sale debit securites with maturity dates within one year and $504 million with maturity dates over one year and less than five years in Short-term investments on the Consolidated Balance Sheets. The fair value of the Company's available-for-sale debt securities approximates their amortized cost $ 2021 MAY 31, 1,472 $ 1,077 358 2020 1,248 1,178 405 32 2 1 35