NIKE, Inc. ( NKE) today reported financial results for its fiscal
2010 third quarter ended February 28, 2010. Third quarter revenues
increased 7 percent, from $4.4 billion last year to $4.7 billion in the
current year. Excluding changes in currency exchange rates, net revenue
was up 2 percent compared to the same quarter last year.
Third quarter net income was $496 million or $1.01 per diluted share,
compared to $244 million or $0.50 per diluted share in the same period
last year. Results from last year included a $241 million, after-tax
non-cash charge related to the impairment of goodwill, intangible and
other assets of the Company’s Umbro subsidiary. Excluding this charge,
net income and diluted earnings per share both would have increased 2
percent.
“We had a great quarter,” said Mark Parker, NIKE, Inc. President and
Chief Executive Officer. “Today’s results reinforce our belief that when
we connect with consumers in deep and meaningful ways from product
concepts to how they experience our brands, we win in the marketplace
and drive sustainable, profitable growth.”
Futures Orders
The Company reported worldwide futures orders for NIKE Brand athletic
footwear and apparel, scheduled for delivery from March through July
2010, totaling $7.1 billion, 9 percent higher than orders reported for
the same period last year. Excluding currency changes, orders would have
increased 6 percent.*
By geography and in total for the NIKE Brand, futures orders were as
follows:
Geography | | Reported Futures Orders | | Excluding Currency Changes | |
North America
| |
4%
| |
4%
| |
Western Europe
| |
11%
| |
7%
| |
Central and Eastern Europe
| |
-4%
| |
-9%
| |
Greater China
| |
10%
| |
9%
| |
Japan
| |
-15%
| |
-16%
| |
Emerging Markets
| |
44%
| |
36%
| |
Total NIKE Brand
| |
9%
| |
6%
|
Geography Highlights North America
During the third quarter, revenue for North America increased 1 percent
to $1.7 billion. Footwear revenues of $1.2 billion were down 1 percent
compared to last year, apparel revenues grew 6 percent to $409 million
and equipment revenues increased 8 percent to $85 million. Earnings
before interest and taxes (EBIT) for North America improved 4 percent to
$402 million.
Western Europe
Third quarter revenue for Western Europe increased 4 percent to $929
million. Compared to the same period last year, footwear revenue
increased 8 percent to $577 million, apparel revenue declined 1 percent
to $300 million and equipment revenue decreased 4 percent to $52
million. Third quarter EBIT was flat to last year at $199 million.
Central and Eastern Europe
In the third quarter, revenue for Central and Eastern Europe declined 8
percent to $272 million. Footwear revenue decreased 2 percent to $159
million, apparel revenue was down 17 percent to $94 million and
equipment revenue dropped 15 percent to $19 million. Compared to the
same period last year, EBIT was down 47 percent to $50 million.
Greater China
Revenue for Greater China during the third quarter was up 10 percent to
$458 million. Footwear revenue grew 12 percent to $279 million, apparel
revenue increased 8 percent to $154 million, and equipment revenue was
up 13 percent to $26 million. Third quarter EBIT improved 21 percent to
$176 million.
Japan
Japan’s third quarter revenue was down 7 percent to $213 million.
Compared to the prior year, footwear revenue declined 6 percent to $103
million, apparel revenue dropped 9 percent to $87 million and equipment
revenue decreased 9 percent to $23 million. EBIT declined 16 percent in
the third quarter to $40 million.
Emerging Markets
In the Emerging Markets revenue was up 43 percent to $509 million for
the third quarter. Footwear revenue increased 53 percent to $352
million, apparel revenue rose 32 percent to $119 million and equipment
revenue increased 10 percent to $38 million. EBIT for the Emerging
Markets in the third quarter improved 72 percent to $122 million.
Other Businesses
Revenue in the third quarter for Other Businesses, which includes Cole
Haan, Converse Inc., Hurley International LLC, NIKE Golf, and Umbro Ltd.
increased 13 percent to $656 million. Third quarter EBIT was $105
million versus a loss of $343 million last year. Last year’s results
included a $401 million pre-tax non-cash impairment charge to reduce the
carrying value of Umbro’s goodwill, intangible and other assets.
Excluding this charge, EBIT increased 80 percent compared to the same
period last year.
Income Statement Review
In the third quarter of fiscal 2010 gross margins were 46.9 percent
compared to 43.9 percent for the same period last year. Gross margins
for the quarter were higher than the prior year primarily due to
improved in-line product margins, less discounted close-out sales and
favorable changes in product mix.
Third quarter selling and administrative expenses grew 16 percent to
$1.6 billion. Selling and administrative expenses for the quarter were
higher than the same period last year mainly due to the timing of demand
creation spending, investments in Company owned retail and higher costs
for performance-based compensation.
The effective tax rate for the third quarter was 25.0 percent compared
to a negative 3.6 percent for the same period last year. Excluding the
tax effect of the charge for the impairment of Umbro assets, the
effective tax rate for the third quarter of fiscal 2009 would have been
23.9 percent.
Balance Sheet Review
At the end of the third quarter, global inventories stood at $2.2
billion, down 13 percent from February 28, 2009. Cash and short-term
investments at February 28, 2010 were $4.0 billion, $1.4 billion or 55
percent higher than last year.
Share Repurchase
During the third quarter, the Company repurchased a total of 5,134,092
shares for approximately $329 million. These purchases concluded the
Company’s previous four-year, $3 billion share repurchase program,
approved by the Board of Directors in June 2006. During this program,
the Company purchased a total of 53.9 million shares.
Having completed the previous program, the Company began repurchases
under the four-year, $5 billion program approved in September 2008. Of
the total shares repurchased during the third quarter 3.7 million shares
for approximately $239 million were purchased under this program.
Conference Call
Nike management will host a conference call beginning at approximately
2:00 p.m. PT on March 17, 2010, to review third quarter results. The
conference call will be broadcast live over the Internet and can be
accessed at www.nikebiz.com/investors.
For those unable to listen to the live broadcast, an archived version
will be available at the same location through midnight, March 24, 2010.
About NIKE, Inc.
NIKE, Inc. based near Beaverton, Oregon, is the world's leading
designer, marketer and distributor of authentic athletic footwear,
apparel, equipment and accessories for a wide variety of sports and
fitness activities. Wholly-owned Nike subsidiaries include Cole Haan,
which designs, markets and distributes luxury shoes, handbags,
accessories and coats; Converse Inc., which designs, markets and
distributes athletic footwear, apparel and accessories; Hurley
International LLC, which designs, markets and distributes action sports
and youth lifestyle footwear, apparel and accessories; and Umbro Ltd., a
leading United Kingdom-based global football (soccer) brand. For more
information, Nike’s earnings releases and other financial information
are available on the Internet at www.nikebiz.com/investors.
* The marked paragraphs contain forward-looking statements that
involve risks and uncertainties that could cause actual results to
differ materially. These risks and uncertainties are detailed from time
to time in reports filed by NIKE, Inc. with the S.E.C., including Forms
8-K, 10-Q, and 10-K. Some forward-looking statements in this release
concern changes in futures orders that are not necessarily indicative of
changes in total revenues for subsequent periods due to the mix of
futures and “at once” orders, exchange rate fluctuations, order
cancellations and discounts, which may vary significantly from quarter
to quarter, and because a significant portion of the business does not
report futures orders.
(Additional Tables Follow)
| NIKE, Inc. | | CONSOLIDATED FINANCIAL STATEMENTS | | FOR THE PERIOD ENDED FEBRUARY 28, 2010 | | (In millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | QUARTER ENDED | | | | YEAR TO DATE ENDED | | | | INCOME STATEMENT | | 2/28/2010 | | | 2/28/2009 | | | % Chg | | 2/28/2010 | | | 2/28/2009 | | | % Chg | |
Revenues
| |
$4,733.0
| | |
$4,440.8
| | | 7 | % | |
$13,937.1
| | |
$14,463.1
| | | -4 | % | |
Cost of sales
| |
2,515.0
| | |
2,492.3
| | | 1 | % | |
7,542.9
| | |
7,902.5
| | | -5 | % | |
Gross margin
| |
2,218.0
| | |
1,948.5
| | | 14 | % | |
6,394.2
| | |
6,560.6
| | | -3 | % | | | 46.9 | % | | 43.9 | % | | | | 45.9 | % | | 45.4 | % | | | | | | | | | | | | | | | | |
Selling and administrative expense
| |
1,563.8
| | |
1,352.1
| | | 16 | % | |
4,588.5
| | |
4,755.3
| | | -4 | % | | | 33.0 | % | | 30.4 | % | | | | 32.9 | % | | 32.9 | % | | | | | | | | | | | | | | | | |
Goodwill impairment
| |
0.0
| | |
199.3
| | | -100 | % | |
0.0
| | |
199.3
| | | -100 | % | |
Intangible and other asset impairment
| |
0.0
| | |
202.0
| | | -100 | % | |
0.0
| | |
202.0
| | | -100 | % | |
Other (income), net
| |
(8.6
|
)
| |
(43.3
|
)
| | -80 | % | |
(32.2
|
)
| |
(54.1
|
)
| | -40 | % | |
Interest expense (income), net
| |
0.9
| | |
3.0
| | | -70 | % | |
3.8
| | |
(12.1
|
)
| | - | | | | | | | | | | | | | | | |
Income before income taxes
| |
661.9
| | |
235.4
| | | 181 | % | |
1,834.1
| | |
1,470.2
| | | 25 | % | | | | | | | | | | | | | | |
Income tax expense (benefit)
| |
165.5
| | |
(8.4
|
)
| | - | | |
449.3
| | |
324.9
| | | 38 | % | | | 25.0 | % | | -3.6 | % | | | | 24.5 | % | | 22.1 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income
| |
$496.4
| | |
$243.8
| | | 104 | % | |
$1,384.8
| | |
$1,145.3
| | | 21 | % | | | | | | | | | | | | | | |
Diluted EPS
| |
$1.01
| | |
$0.50
| | | 102 | % | |
$2.81
| | |
$2.33
| | | 21 | % | | | | | | | | | | | | | | |
Basic EPS
| |
$1.02
| | |
$0.50
| | | 104 | % | |
$2.85
| | |
$2.36
| | | 21 | % | | | | | | | | | | | | | | | Weighted Average Common Shares Outstanding: | | | | | | | | | | | | |
Diluted
| |
492.3
| | |
488.1
| | | | |
493.3
| | |
491.2
| | | | |
Basic
| |
484.4
| | |
484.0
| | | | |
485.8
| | |
485.0
| | | | |
Dividends declared
| |
$0.27
| | |
$0.25
| | | | |
$0.79
| | |
$0.73
| | | |
| | | | NIKE, Inc. | | | | | | | BALANCE SHEET 1 | 2/28/2010 | 2/28/2009 | | (In millions) | | ASSETS | | | |
Current assets:
| | | |
Cash and equivalents
|
$2,225.2
|
$1,892.1
| |
Short-term investments
|
1,813.7
|
712.1
| |
Accounts receivable, net
|
2,833.8
|
2,892.4
| |
Inventories
|
2,150.3
|
2,466.6
| |
Deferred income taxes
|
221.7
|
169.3
| |
Prepaid expenses and other current assets
|
843.3
|
970.9
| | Total current assets | 10,088.0 | 9,103.4 | | | | |
Property, plant and equipment
|
4,437.2
|
4,150.8
| |
Less accumulated depreciation
|
2,474.6
|
2,256.9
| |
Property, plant and equipment, net
|
1,962.6
|
1,893.9
| | | | |
Identifiable intangible assets, net
|
468.0
|
460.7
| |
Goodwill
|
190.7
|
187.2
| |
Deferred income taxes and other assets
|
867.0
|
1,087.3
| | Total assets | $13,576.3 | $12,732.5 | | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
Current liabilities:
| | | |
Current portion of long-term debt
|
$7.5
|
$32.0
| |
Notes payable
|
108.8
|
331.1
| |
Accounts payable
|
994.7
|
952.0
| |
Accrued liabilities
|
1,647.7
|
1,535.5
| |
Income taxes payable
|
88.0
|
112.4
| | Total current liabilities | 2,846.7 | 2,963.0 | | | | |
Long-term debt
|
451.9
|
437.8
| |
Deferred income taxes and other liabilities
|
848.5
|
774.6
| |
Redeemable preferred stock
|
0.3
|
0.3
| |
Shareholders' equity
|
9,428.9
|
8,556.8
| | Total liabilities and shareholders' equity | $13,576.3 | $12,732.5 | | | | | | | | | | | 1 Certain amounts have been revised in the NIKE, Inc.
02/28/2009 Balance Sheet to properly reflect current deferred income
tax assets and liabilities, long-term deferred income tax assets and
liabilities, and other comprehensive income. These revisions
resulted in an increase in current deferred income tax assets of
$104.8 million, an increase in accrued liabilities of $104.8
million, an increase in long-term deferred income taxes and other
assets of $372.0 million, an increase in long-term deferred income
taxes and other liabilities of $26.0 million and an increase in
shareholders’ equity of $346.0 million in NIKE, Inc.’s 02/28/2009
Balance Sheet. These revisions had no effect on the Company’s
liquidity or results of operations.
|
| NIKE, Inc. | | | | | | | | | | | | | | | | | | | QUARTER ENDED | | % Change | | % Change Excluding Currency Changes 2 | | YEAR TO DATE ENDED | | % Change | | % Change Excluding Currency Changes 2 | | DIVISIONAL REVENUES1 | | 2/28/2010 | | | 2/28/2009 | | | | 2/28/2010 | | | 2/28/2009 | | | | | (Amounts in millions) | | | | | | | | | | | | | | North America | | | | | | | | | | | | | | | | | |
Footwear
| |
$ 1,186.0
| | |
$ 1,198.2
| |
-1
|
%
| |
-2
|
%
| |
$ 3,385.8
| | |
$ 3,484.9
| |
-3
|
%
| |
-3
|
%
| |
Apparel
| |
408.6
| | |
386.5
| |
6
|
%
| |
5
|
%
| |
1,293.4
| | |
1,343.3
| |
-4
|
%
| |
-4
|
%
| |
Equipment
| |
84.5
| | |
77.9
| |
8
|
%
| |
8
|
%
| |
256.4
| | |
254.3
| |
1
|
%
| |
1
|
%
| |
Total
| |
1,679.1
| | |
1,662.6
| |
1
|
%
| |
0
|
%
| |
4,935.6
| | |
5,082.5
| |
-3
|
%
| |
-3
|
%
| | | | | | | | | | | | | | | | | | | Western Europe | | | | | | | | | | | | | | | | | |
Footwear
| |
577.0
| | |
532.5
| |
8
|
%
| |
-2
|
%
| |
1,727.2
| | |
1,794.8
| |
-4
|
%
| |
-3
|
%
| |
Apparel
| |
300.1
| | |
302.4
| |
-1
|
%
| |
-10
|
%
| |
1,016.1
| | |
1,177.0
| |
-14
|
%
| |
-12
|
%
| |
Equipment
| |
52.1
| | |
54.5
| |
-4
|
%
| |
-14
|
%
| |
192.7
| | |
230.5
| |
-16
|
%
| |
-15
|
%
| |
Total
| |
929.2
| | |
889.4
| |
4
|
%
| |
-5
|
%
| |
2,936.0
| | |
3,202.3
| |
-8
|
%
| |
-7
|
%
| | | | | | | | | | | | | | | | | | | Central and Eastern Europe | | | | | | | | | | | | | | | | | |
Footwear
| |
158.7
| | |
161.2
| |
-2
|
%
| |
-12
|
%
| |
461.6
| | |
569.7
| |
-19
|
%
| |
-17
|
%
| |
Apparel
| |
93.5
| | |
112.7
| |
-17
|
%
| |
-25
|
%
| |
290.3
| | |
409.4
| |
-29
|
%
| |
-27
|
%
| |
Equipment
| |
19.3
| | |
22.6
| |
-15
|
%
| |
-23
|
%
| |
66.1
| | |
89.5
| |
-26
|
%
| |
-21
|
%
| |
Total
| |
271.5
| | |
296.5
| |
-8
|
%
| |
-18
|
%
| |
818.0
| | |
1,068.6
| |
-23
|
%
| |
-21
|
%
| | | | | | | | | | | | | | | | | | | Greater China | | | | | | | | | | | | | | | | | |
Footwear
| |
279.0
| | |
249.8
| |
12
|
%
| |
11
|
%
| |
706.9
| | |
723.1
| |
-2
|
%
| |
-3
|
%
| |
Apparel
| |
153.5
| | |
142.6
| |
8
|
%
| |
7
|
%
| |
491.4
| | |
524.5
| |
-6
|
%
| |
-7
|
%
| |
Equipment
| |
25.5
| | |
22.5
| |
13
|
%
| |
13
|
%
| |
79.1
| | |
82.0
| |
-4
|
%
| |
-4
|
%
| |
Total
| |
458.0
| | |
414.9
| |
10
|
%
| |
10
|
%
| |
1,277.4
| | |
1,329.6
| |
-4
|
%
| |
-4
|
%
| | | | | | | | | | | | | | | | | | | Japan | | | | | | | | | | | | | | | | | |
Footwear
| |
102.9
| | |
109.2
| |
-6
|
%
| |
-9
|
%
| |
304.2
| | |
300.6
| |
1
|
%
| |
-7
|
%
| |
Apparel
| |
86.8
| | |
95.4
| |
-9
|
%
| |
-12
|
%
| |
251.4
| | |
276.1
| |
-9
|
%
| |
-17
|
%
| |
Equipment
| |
23.3
| | |
25.5
| |
-9
|
%
| |
-11
|
%
| |
65.8
| | |
67.0
| |
-2
|
%
| |
-10
|
%
| |
Total
| |
213.0
| | |
230.1
| |
-7
|
%
| |
-10
|
%
| |
621.4
| | |
643.7
| |
-3
|
%
| |
-12
|
%
| | | | | | | | | | | | | | | | | | | Emerging Markets | | | | | | | | | | | | | | | | | |
Footwear
| |
352.4
| | |
230.9
| |
53
|
%
| |
34
|
%
| |
1,001.2
| | |
856.7
| |
17
|
%
| |
20
|
%
| |
Apparel
| |
119.2
| | |
90.1
| |
32
|
%
| |
15
|
%
| |
369.8
| | |
342.1
| |
8
|
%
| |
12
|
%
| |
Equipment
| |
37.6
| | |
34.1
| |
10
|
%
| |
-5
|
%
| |
114.6
| | |
125.6
| |
-9
|
%
| |
-6
|
%
| |
Total
| |
509.2
| | |
355.1
| |
43
|
%
| |
25
|
%
| |
1,485.6
| | |
1,324.4
| |
12
|
%
| |
15
|
%
| | | | | | | | | | | | | | | | | | | Global Brand Divisions3 | |
21.8
| | |
12.6
| |
73
|
%
| |
60
|
%
| |
77.5
| | |
50.8
| |
53
|
%
| |
58
|
%
| | | | | | | | | | | | | | | | | | | Total NIKE Brand | |
4,081.8
| | |
3,861.2
| |
6
|
%
| |
1
|
%
| |
12,151.5
| | |
12,701.9
| |
-4
|
%
| |
-4
|
%
| | | | | | | | | | | | | | | | | | | Other Businesses4 | |
656.0
| | |
579.6
| |
13
|
%
| |
11
|
%
| |
1,815.5
| | |
1,761.2
| |
3
|
%
| |
3
|
%
| | Corporate5 | |
(4.8
|
)
| |
-
| |
-
| | |
-
| | |
(29.9
|
)
| |
-
| |
-
| | |
-
| | | | | | | | | | | | | | | | | | | | Total NIKE, Inc. Revenues | |
$ 4,733.0
| | |
$ 4,440.8
| |
7
|
%
| |
2
|
%
| |
$ 13,937.1
| | |
$ 14,463.1
| |
-4
|
%
| |
-3
|
%
| | | | | | | | | | | | | | | | | | | Total NIKE Brand | | | | | | | | | | | | | | | | | |
Footwear
| |
$ 2,656.0
| | |
$ 2,481.8
| |
7
|
%
| |
2
|
%
| |
$ 7,586.9
| | |
$ 7,729.8
| |
-2
|
%
| |
-2
|
%
| |
Apparel
| |
1,161.7
| | |
1,129.7
| |
3
|
%
| |
-3
|
%
| |
3,712.4
| | |
4,072.4
| |
-9
|
%
| |
-8
|
%
| |
Equipment
| |
242.3
| | |
237.1
| |
2
|
%
| |
-3
|
%
| |
774.7
| | |
848.9
| |
-9
|
%
| |
-8
|
%
| |
Global Brand Divisions4 | |
21.8
| | |
12.6
| |
73
|
%
| |
60
|
%
| |
77.5
| | |
50.8
| |
53
|
%
| |
58
|
%
| | | | | | | | | | | | | | | | | | 1 Certain prior year amounts have been reclassified to
conform to fiscal year 2010 presentation. These changes had no
impact on previously reported results of operations or
shareholders' equity.
| | 2 Fiscal 2010 results have been restated using fiscal
2009 exchange rates for the comparative period to enhance the
visibility of the underlying business trends excluding the impact
of foreign currency exchange rate fluctuations.
| | 3 Global Brand Divisions primarily represent NIKE Brand
licensing businesses that are not part of a geographic operating
segment.
| | 4 Other businesses represent activities of Cole Haan,
Converse, Hurley, NIKE Golf and Umbro.
| | 5 Corporate primarily consists of results from our
centrally managed foreign currency hedging program and foreign
currency gains and losses resulting from the difference between
actual foreign currency rates and standard rates assigned to our
geographic operating segments. In fiscal 2010, foreign currency
gains and losses generated by all our geographic operating
segments are included in Corporate, with the exception of those
generated by Other Businesses which are reported within their
respective operating results.
|
| NIKE, Inc. | | | | | | | | | | | | | | | | QUARTER ENDED | | % | | | | YEAR TO DATE ENDED | | % | | | EARNINGS BEFORE INTEREST AND TAXES1,2 | | 2/28/2010 | | 2/28/2009 | | Chg | | | 2/28/2010 | | 2/28/2009 | | Chg | | | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | |
North America
| |
$ 402.4
| | |
$ 388.1
| | |
4
|
%
| | |
$ 1,103.5
| | |
$ 1,027.4
| | |
7
|
%
| |
Western Europe
| |
199.2
| | |
199.6
| | |
0
|
%
| | |
663.1
| | |
706.3
| | |
-6
|
%
| |
Central and Eastern Europe
| |
50.3
| | |
95.0
| | |
-47
|
%
| | |
196.9
| | |
322.1
| | |
-39
|
%
| |
Greater China
| |
175.7
| | |
145.3
| | |
21
|
%
| | |
450.1
| | |
419.6
| | |
7
|
%
| |
Japan
| |
39.7
| | |
47.3
| | |
-16
|
%
| | |
119.5
| | |
140.4
| | |
-15
|
%
| |
Emerging Markets
| |
121.9
| | |
70.7
| | |
72
|
%
| | |
379.0
| | |
264.8
| | |
43
|
%
| |
Global Brand Divisions3 | |
(232.7
|
)
| |
(224.2
|
)
| |
-4
|
%
| | |
(589.2
|
)
| |
(600.2
|
)
| |
2
|
%
| | | | | | | | | | | | | | | |
Total NIKE Brand
| |
756.5
| | |
721.8
| | |
5
|
%
| | |
2,322.9
| | |
2,280.4
| | |
2
|
%
| | | | | | | | | | | | | | | |
Other Businesses4 | |
105.1
| | |
(342.9
|
)
| |
-
| | | |
226.9
| | |
(235.0
|
)
| |
-
| | |
Corporate5 | |
(198.8
|
)
| |
(140.5
|
)
| |
-41
|
%
| | |
(711.9
|
)
| |
(587.3
|
)
| |
-21
|
%
| | | | | | | | | | | | | | | |
Total earnings before interest and taxes1,2 | |
$ 662.8
| | |
$ 238.4
| | |
178
|
%
| | |
$ 1,837.9
| | |
$ 1,458.1
| | |
26
|
%
| | | | | | | | | | | | | | | | 1 The Company evaluates performance of individual
operating segments based on earnings before interest and taxes (also
commonly referred to as “EBIT”), which represents net income before
interest expense (income), net, and income taxes.
| | | | | | | | | | | | | | | | 2 Certain prior year amounts have been reclassified to
conform to fiscal year 2010 presentation. These changes had no
impact on previously reported NIKE, Inc. results of operations or
shareholders' equity.
| | | | | | | | | | | | | | | | 3 Global Brand Divisions primarily represent NIKE Brand
licensing businesses that are not part of a geographic operating
segment and selling and administrative expenses that are centrally
managed for the NIKE Brand.
| | | 4 Other businesses represent activities of Cole Haan,
Converse, Hurley, NIKE Golf and Umbro.
| | 5 Corporate expense consists of unallocated general and
administrative expenses, which includes expenses associated with
centrally managed departments, depreciation and amortization
related to the Company’s corporate headquarters, unallocated
insurance and benefit programs, foreign currency gains and losses,
including hedge gains and losses, corporate eliminations and other
items.
|
| NIKE, Inc. | | | | | | | | | | | | | | NET INCOME AND DILUTED EPS RECONCILIATION | | QUARTER ENDED | | % | | YEAR TO DATE ENDED | | % | | EXCLUDING NON COMPARABLE ITEMS1 | | 2/28/2010 | | 2/28/2009 | | Chg | | 2/28/2010 | | 2/28/2009 | | Chg | | | (In millions, except per share data) | | | | | | | | | | | | | | | | |
Net income, as reported
| |
$
|
496.4
| |
$
|
243.8
| |
104%
| |
$
|
1,384.8
| |
$
|
1,145.3
| |
21%
| |
Add:
| | | | | | | | | | | | |
Umbro impairment of goodwill, intangible and other assets, net of
tax2 | | |
-
| | |
240.7
| | | | |
-
| | |
240.7
| | | | | | | | | | | | | | | | |
Net income, excluding non comparable items
| |
$
|
496.4
| |
$
|
484.5
| |
2%
| |
$
|
1,384.8
| |
$
|
1,386.0
| |
0%
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted EPS, as reported
| |
$
|
1.01
| |
$
|
0.50
| |
102%
| |
$
|
2.81
| |
$
|
2.33
| |
21%
| |
Add:
| | | | | | | | | | | | |
Umbro impairment of goodwill, intangible and other assets, net of
tax2 | | |
-
| | |
0.49
| | | | |
-
| | |
0.49
| | | | | | | | | | | | | | | | |
Diluted EPS, excluding non comparable items
| |
$
|
1.01
| |
$
|
0.99
| |
2%
| |
$
|
2.81
| |
$
|
2.82
| |
0%
| | | | | | | | | | | | | | |
Diluted weighted average common shares outstanding
| | |
492.3
| | |
488.1
| | | | |
493.3
| | |
491.2
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Effective tax rate, as reported
| | |
25.0%
| | |
-3.6%
| |
2,860bps
| | |
24.5%
| | |
22.1%
| |
240bps
| |
Add:
| | | | | | | | | | | | |
Tax rate benefit from Umbro impairment of goodwill, intangible and
other assets2 | | |
-
| | |
27.5%
| | | | |
-
| | |
3.8%
| | | | | | | | | | | | | | | | |
Effective tax rate, excluding non comparable items
| | |
25.0%
| | |
23.9%
| |
110bps
| | |
24.5%
| | |
25.9%
| |
-140bps
| | | | | | | | | | | | | | | 1 This schedule is intended to satisfy the quantitative
reconciliation for non-GAAP financial measures in accordance with
Regulation G of the Securities and Exchange Commission. In addition,
this schedule is provided to enhance the visibility of the
underlying business trends excluding non comparable items for the
three and nine-month periods ended February 28, 2009.
| | | | | | | | | | | | | | | 2 During the third quarter of fiscal 2009, the Company
recorded a one-time non-cash impairment charge to reduce the
carrying value of Umbro’s goodwill, indefinite-lived trademark and
other assets.
|
|
|
|
