Nike NKE · USD

NOTE 15 — SEGMENT INFORMATIONThe Company's reportable operating segments reflect the structure of the Company's internal organization and the financial information the Chief Operating Decision Maker ("CODM"), the Company's Chief Executive Officer, regularly reviews to assess Company performance and allocate resources. The CODM evaluates the performance of the Company's segments and allocates resources based on earnings before interest and taxes ("EBIT"), which represents Net income before Interest expense (income), net and Income tax expense in the Consolidated Statements of Income.The Company's segments are defined as follows:NIKE BRAND The NIKE Brand reportable segments are: North America; Europe, Middle East & Africa ("EMEA"); Greater China; and Asia Pacific & Latin America ("APLA"), and include results for the NIKE and Jordan brands. Each NIKE Brand segment represents a geographic region operating predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel and equipment.Global Brand Divisions is included within the NIKE Brand for presentation purposes to align with the way management views the Company. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Global Brand Divisions primarily represents costs, 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. CONVERSE Converse operates in one industry: the design, marketing, licensing and selling of casual sneakers, apparel and accessories.CORPORATECorporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.As part of the Company's centrally managed foreign exchange risk management program, standard foreign currency rates are assigned twice per year to each NIKE Brand entity in the Company's geographic segments and to Converse.

NOTE 14 — REVENUESDISAGGREGATION OF REVENUESThe following tables present the Company's Revenues disaggregated by reportable operating segment, major product line and distribution channel:YEAR ENDED MAY 31, 2025(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.Revenues by:Footwear$12,684 $7,569 $4,805 $4,452 $— $29,510 $1,457 $— $30,967 Apparel5,837 3,971 1,616 1,541 — 12,965 80 — 13,045 Equipment1,051 717 165 258 — 2,191 32 — 2,223 Other— — — — 48 48 123 (97)74 TOTAL REVENUES$19,572 $12,257 $6,586 $6,251 $48 $44,714 $1,692 $(97)$46,309 Revenues by:Sales to Wholesale Customers$10,484 $8,022 $3,699 $3,678 $— $25,883 $875 $— $26,758 Sales through Direct to Consumer9,088 4,235 2,887 2,573 — 18,783 694 — 19,477 Other— — — — 48 48 123 (97)74 TOTAL REVENUES$19,572 $12,257 $6,586 $6,251 $48 $44,714 $1,692 $(97)$46,309 YEAR ENDED MAY 31, 2024(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.Revenues by:Footwear$14,537 $8,473 $5,552 $4,865 $— $33,427 $1,800 $— $35,227 Apparel5,953 4,380 1,828 1,614 — 13,775 93 — 13,868 Equipment906 754 165 250 — 2,075 37 — 2,112 Other— — — — 45 45 152 (42)155 TOTAL REVENUES$21,396 $13,607 $7,545 $6,729 $45 $49,322 $2,082 $(42)$51,362 Revenues by:Sales to Wholesale Customers$11,004 $8,562 $4,262 $3,930 $— $27,758 $1,098 $— $28,856 Sales through Direct to Consumer10,392 5,045 3,283 2,799 — 21,519 832 — 22,351 Other— — — — 45 45 152 (42)155 TOTAL REVENUES$21,396 $13,607 $7,545 $6,729 $45 $49,322 $2,082 $(42)$51,362 YEAR ENDED MAY 31, 2023(Dollars in millions)NORTH AMERICAEUROPE, MIDDLE EAST & AFRICAGREATER CHINAASIA PACIFIC & LATIN AMERICAGLOBAL BRAND DIVISIONSTOTAL NIKE BRANDCONVERSECORPORATETOTAL NIKE, INC.

NOTE 16 — COMMITMENTS AND CONTINGENCIESAs of May 31, 2025 and 2024, the Company had bank guarantees and letters of credit outstanding totaling $884 million and $768 million, respectively, issued primarily for real estate agreements, self-insurance programs, other general business obligations and legal matters.In connection with various contracts and agreements, the Company provides routine indemnification relating to the enforceability of intellectual property rights, coverage for legal issues that arise and other items where the Company is acting as the guarantor. Currently, the Company has several such agreements in place. However, based on the Company's historical experience and the estimated probability of future loss, the Company has determined the fair value of such indemnification is not material to the Company's financial position or results of operations.In the ordinary course of business, the Company is subject to various legal proceedings, claims and government investigations relating to its business, products and actions of its employees and representatives, including contractual and employment relationships, product liability, antitrust, customs, tax, intellectual property and other matters. The outcome of these legal matters is inherently uncertain, and the Company cannot predict the eventual outcome of currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences relating to those matters. When a loss related to a legal proceeding or claim is probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter. If one or more legal matters were to be resolved against the Company in a reporting period for amounts above management's expectations, the Company's financial position, operating results and cash flows for that reporting period could be materially adversely affected. In the opinion of management, based on its current knowledge and after consultation with counsel, the Company does not believe any currently pending legal matters will have a material adverse impact on the Company's results of operations, financial position or cash flows, except as described below.BELGIAN CUSTOMS CLAIMThe Company has received claims for certain years from Belgian Customs for alleged underpaid duties related to products imported beginning in fiscal 2018. The Company disputes these claims and has engaged in the appellate process.

NOTE 6 — LONG-TERM DEBTLong-term debt, net of unamortized premiums, discounts, debt issuance costs, and interest rate swap fair value adjustments comprises the following: BOOK VALUE OUTSTANDING AS OF MAY 31,Scheduled Maturity (Dollars in millions)ORIGINAL PRINCIPALINTEREST RATEINTEREST PAYMENTS20252024Corporate Term Debt:(1)(2)March 27, 20251,000 2.40 %Semi-Annually$— $999 November 1, 20261,000 2.38 %Semi-Annually999 998 March 27, 20271,000 2.75 %Semi-Annually999 998 March 27, 20301,500 2.85 %Semi-Annually1,495 1,494 March 27, 2040(3)1,000 3.25 %Semi-Annually993 966 May 1, 2043(3)500 3.63 %Semi-Annually502 488 November 1, 2045(3)1,000 3.88 %Semi-Annually997 986 November 1, 2046500 3.38 %Semi-Annually493 492 March 27, 20501,500 3.38 %Semi-Annually1,483 1,482 Total7,961 8,903 Less Current Portion of Long-Term Debt— 1,000 TOTAL LONG-TERM DEBT$7,961 $7,903 (1)These senior unsecured obligations rank equally with the Company's other unsecured and unsubordinated indebtedness.(2)The bonds are redeemable at the Company's option at a price equal to the greater of (i) 100% of the aggregate principal amount of the notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments, plus in each case, accrued and unpaid interest. However, the bonds also feature a par call provision, which allows for the bonds to be redeemed at a price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest on or after the Par Call Date, which can range from one to six months prior to the scheduled maturity, as defined in the respective notes.(3)The Company entered into interest rate swap agreements pursuant to which the Company receives fixed interest payments at the same rate as the term debt and pays variable interest payments based on SOFR plus a fixed spread. At May 31, 2025, the notional amount outstanding of these swaps was $2.4 billion and had interest rates payable that ranged from 3.6% to 4.5%. These swaps mature during fiscal 2034 and 2035.The scheduled maturity of Long-term debt in each of the years ending May 31, 2026 through 2030, is $0 million, $2,000 million, $0 million, $0 million and $1,500 million, respectively, at face value.The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts, debt issuance costs, and interest rate swap fair value adjustments.

NOTE 7 — INCOME TAXESIncome before income taxes is as follows:YEAR ENDED MAY 31,(Dollars in millions)202520242023Income before income taxes:United States$3,220 $5,588 $4,663 Foreign665 1,112 1,538 TOTAL INCOME BEFORE INCOME TAXES$3,885 $6,700 $6,201 The provision for income taxes is as follows:YEAR ENDED MAY 31,(Dollars in millions)202520242023Current:United StatesFederal$358 $782 $430 State121 201 184 Foreign475 514 634 Total Current954 1,497 1,248 Deferred:United StatesFederal(135)(422)(162)State(12)(61)(25)Foreign(141)(14)70 Total Deferred(288)(497)(117)TOTAL INCOME TAX EXPENSE$666 $1,000 $1,131 A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows: YEAR ENDED MAY 31,202520242023Federal income tax rate21.0 %21.0 %21.0 %State taxes, net of federal benefit2.0 %1.4 %1.5 %Foreign earnings1.1 %-2.5 %1.7 %U.S. tax regulations - foreign currency losses-3.4 %0.0 %0.0 %Foreign-derived intangible income benefit-5.3 %-4.8 %-6.1 %Stock-based compensation1.5 %-0.5 %-1.1 %Income tax audits and contingency reserves2.7 %1.8 %1.0 %U.S. research and development tax credit-2.1 %-2.1 %-1.2 %Other, net-0.4 %0.6 %1.4 %EFFECTIVE INCOME TAX RATE17.1 %14.9 %18.2 %The increase in the Company's effective tax rate for the fiscal year ended May 31, 2025 compared to the fiscal year ended May 31, 2024 was primarily due to changes in the Company's earnings mix, decreased benefits from stock-based compensation and one-time benefits recognized in fiscal 2024 including the impact of temporary relief provided by the Internal Revenue Service ("IRS") relating to U.S. foreign tax credit regulations. These impacts were partially offset by a one-time, non-cash deferred tax benefit recognized in the third quarter of fiscal 2025 provided by U.S. tax regulations. On December 10, 2024, the U.S. Department of Treasury published final regulations related to Internal Revenue Code (IRC) Section 987 foreign currency gains and losses derived from translation of the operations, assets and liabilities of non-US qualified business units. While these regulations are effective for the Company beginning June 1, 2025, they require computation of a pre-transition foreign currency gain or loss to be included in the determination of future taxable income or loss. Based on the Company’s analysis of the regulations and recognition of temporary differences impacting U.S.

NOTE 9 — COMMON STOCK AND STOCK-BASED COMPENSATIONCOMMON STOCKThe authorized number of shares of Class A Common Stock, no par value, and Class B Common Stock, no par value, are 400 million and 2,400 million, respectively. Each share of Class A Common Stock is convertible into one share of Class B Common Stock. Voting rights of Class B Common Stock are limited in certain circumstances with respect to the election of directors. There are no differences in the dividend and liquidation preferences or participation rights of the holders of Class A and Class B Common Stock. From time to time, the Company's Board of Directors authorizes share repurchase programs for the repurchase of Class B Common Stock. The value of repurchased shares is deducted from Total shareholders' equity through allocation to Capital in excess of stated value and Retained earnings (deficit).STOCK-BASED COMPENSATIONThe NIKE, Inc. Stock Incentive Plan (the "Stock Incentive Plan") provides for the issuance of up to 798 million previously unissued shares of Class B Common Stock in connection with equity awards granted under the Stock Incentive Plan. The Stock Incentive Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights, and stock awards, including restricted stock and restricted stock units. Restricted stock units include both time-vesting restricted stock units ("RSUs") as well as performance-based restricted stock units ("PSUs"). A committee of the Board of Directors administers the Stock Incentive Plan and has the authority to determine the employees to whom awards will be made, the amount of the awards and the other terms and conditions of the awards. The Company generally grants stock options, restricted stock and restricted stock units on an annual basis. The exercise price for stock options and stock appreciation rights may not be less than the fair market value of the underlying shares on the date of grant. Substantially all awards under the Stock Incentive Plan vest ratably over 4 years of continued employment, with stock options expiring 10 years from the date of grant.

NOTE 17 — LEASESLease expense is recognized in Cost of sales or Operating overhead expense within the Consolidated Statements of Income, based on the underlying nature of the leased asset. For the fiscal years ended May 31, 2025, 2024 and 2023, lease expense primarily consisted of operating lease costs of $663 million, $618 million and $585 million, respectively, as well as $432 million, $433 million and $403 million, respectively, primarily related to variable lease costs. As of and for the fiscal years ended May 31, 2025 and 2024 and 2023, finance leases were not a material component of the Company's lease portfolio.The undiscounted cash flows for future maturities of the Company's operating lease liabilities and the reconciliation to the Operating lease liabilities recognized in the Company's Consolidated Balance Sheets are as follows:(Dollars in millions)AS OF MAY 31, 2025(1)Fiscal 2026$565 Fiscal 2027575 Fiscal 2028487 Fiscal 2029437 Fiscal 2030389 Thereafter885 Total undiscounted future cash flows related to lease payments$3,338 Less interest 286 PRESENT VALUE OF LEASE LIABILITIES$3,052 (1)Excludes $482 million as of May 31, 2025, of future operating lease payments for lease agreements signed but not yet commenced. The following table includes supplemental information used to calculate the present value of Operating lease liabilities:AS OF MAY 31,20252024Weighted-average remaining lease term (in years)6.66.9Weighted-average discount rate3.1 %2.

At NIKE, cybersecurity risk management is an important part of our overall risk management efforts. We have cybersecurity processes, technologies and controls in place to aid in our efforts to assess, identify and manage material risks associated with cybersecurity threats. We assess cybersecurity risk at both the board and management levels.Management’s Role in Managing RiskAt the management level, primary responsibility for assessing and managing material risks from cybersecurity threats rests with our Vice President, Corporate Information Security, Risk & Compliance ("VP, CIS"). Our VP, CIS has over two decades of experience in information technology and cybersecurity. The VP, CIS reports to our Chief Information Officer (“CIO”) who has significant experience leading technology teams at large public companies and our CIO reports to our Chief Technology Officer.Our approach to managing cybersecurity risk is informed by the industry-standard National Institute for Standards and Technology Cybersecurity Framework. The VP, CIS has primary responsibility for implementing and overseeing our enterprise-wide cybersecurity strategy, policy, architecture and processes. We use various tools and methodologies to identify and manage cybersecurity risk, including risk assessments and a vulnerability management program that includes periodic penetration testing. We have a third-party cyber risk management program that conducts assessments on third parties who integrate with our data, network, systems and applications. These tools and methodologies inform our remediation activities, which are tracked and reported to senior management.In addition, our internal audit function periodically conducts independent testing of the overall operations of our cybersecurity program and supporting control frameworks, and reports the results to the Audit & Finance Committee. We also engage third parties to assess our cybersecurity program maturity and to perform audits of portions of our cybersecurity control environment based on risk or where necessary to ensure regulatory compliance.Our cybersecurity team meets frequently to monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents. In the event of a cybersecurity incident, we have an incident response plan that governs our immediate response including detection, escalation, assessment, management and remediation.