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Item 8. Financial Statements and Supplementary Data

2025-07-17 compared with 2024-07-25 · 234 added, 241 removed, 995 unchanged (32% of the section changed)

7 unchanged sentences

These systems are supplemented by the selection and training of qualified financial personnel and an organizational structure providing for appropriate segregation of duties.

An internal corporate audit department reviews the results of its work with the Audit & Finance Committee of the Board of Directors, presently comprised of four outside, independent directors.

An internal corporate audit department reviews the results of its work with the Audit & Finance Committee of the Board of Directors, presently comprised of three outside, independent directors.

The Audit & Finance Committee is responsible for the appointment of the independent registered public accounting firm and reviews, with the independent registered public accounting firm, management and the internal corporate audit staff, the scope and the results of the annual audit, the effectiveness of the accounting control system and other matters relating to the financial affairs of NIKE as the Audit & Finance Committee deems appropriate.

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PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited (1) the Consolidated Financial Statements and (2) the effectiveness of our internal control over financial reporting as of May 31, 2025, as stated in their report herein.

Donahoe II Matthew Friend

Matthew Friend

President and Chief Executive Officer Executive Vice President and Chief Financial Officer

4 unchanged sentences

We have audited the accompanying consolidated balance sheets of NIKE, Inc.

and its subsidiaries (the "Company") as of May 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended May 31, 2024, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements").

and its subsidiaries (the "Company") as of May 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended May 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of May 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Furthermore, as part of determining its provision for income taxes, management evaluates the probability a tax position will be effectively sustained and the appropriateness of the amount recognized for uncertain tax positions based on factors including changes in facts or circumstances, changes in tax law, settled audit issues and new audit activity.

The Company recognizes a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities.

The Company recognizes a tax benefit from uncertain tax positions in the consolidated financial statements only when it is more likely than not the position will be sustained upon examination by relevant tax authorities.

The majority of the total gross unrecognized tax benefits are long-term in nature and included within deferred income taxes and other liabilities on the consolidated balance sheets.

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Adjustments to reconcile net income to net cash provided (used) by operations:

Depreciation 796 703 717

Depreciation and amortization

Deferred income taxes ( 288 ) ( 497 ) ( 117 )

Stock-based compensation 709 804 755

Amortization, impairment and other 48 156 123

Impairment and other

Net foreign currency adjustments 37 ( 138 ) ( 213 )

49 unchanged sentences

Stock options exercised 7 432 432

Conversion to Class B Common Stock ( 7 ) 7 —

Repurchase of Class B Common Stock ( 41 ) ( 347 ) ( 3,907 ) ( 4,254 )

19 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 Summary of Significant Accounting Policies 63

Note 2 Property, Plant and Equipment 69

Note 3 Accrued Liabilities 69

Note 4 Fair Value Measurements 70

Note 5 Short-Term Borrowings and Credit Lines 72

Note 6 Long-Term Debt 73

Note 7 Income Taxes 74

Note 8 Redeemable Preferred Stock 76

Note 9 Common Stock and Stock-Based Compensation 77

Note 10 Earnings Per Share 79

Note 11 Benefit Plans 79

Note 12 Risk Management and Derivatives 79

Note 13 Accumulated Other Comprehensive Income (Loss) 83

Note 14 Revenues 84

Note 15 Operating Segments and Related Information 86

Note 16 Commitments and Contingencies 89

Note 17 Leases 89

Note 18 Divestitures 90

Note 19 Restructuring 91

Summary of Significant Accounting Policies

Property, Plant and Equipment

Accrued Liabilities

Fair Value Measurements

Short-Term Borrowings and Credit Lines

Long-Term Debt

Redeemable Preferred Stock

Common Stock and Stock-Based Compensation

Earnings Per Share

Benefit Plans

Risk Management and Derivatives

Accumulated Other Comprehensive Income (Loss)

Segment Information

Commitments and Contingencies

Restructuring

Supplier Finance Pr ograms

2025 FORM 10-K 61

20 unchanged sentences

A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product.

Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer.

Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the arrangement with the customer.

Control transfers to retail store customers at the time of sale and to substantially all digital commerce customers upon shipment.

The transaction price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers.

Payment terms for wholesale transactions depend on the country of sale or agreement with the customer and payment is generally required within 90 days or less of shipment to or receipt by the wholesale customer.

The transaction price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and claims from customers.

Payment terms for wholesale transactions depend on the agreement with the customer, which may be governed by the country of sale, and payment is generally required within 90 days or less of shipment to or receipt by the wholesale customer.

Payment is due at the time of sale for retail store and digital commerce transactions.

Consideration for trademark licensing contracts is earned through sales-based or usage-based royalty arrangements, and the associated revenues are recognized over the license period.

Consideration for trademark licensing contracts is earned through sales-based or usage-based royalty arrangements, and the associated revenues are recognized over the license period as earned.

Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from Revenues and Cost of sales in the Consolidated Statements of Income.

1 unchanged sentence

SALES-RELATED RESERVES

Consideration promised in the Company's contracts with customers is variable due to anticipated reductions, such as sales returns, discounts and miscellaneous claims from customers.

Consideration promised in the Company's contracts with customers is variable due to anticipated reductions, such as sales returns, discounts and claims from customers.

The Company estimates the most likely amount it will be entitled to receive and records an anticipated reduction against Revenues, with an offsetting increase to Accrued liabilities at the time revenues are recognized.

The estimated cost of inventory for product returns is recorded in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

The related estimated cost of inventory for product returns is recorded as a reduction to Cost of sales with an offsetting increase to Prepaid expenses and other current assets.

The provision for anticipated sales returns consists of both contractual return rights and discretionary authorized returns.

5 unchanged sentences

COST OF SALES

Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), third-party royalties, certain foreign currency hedge gains and losses and product design costs.

Shipping and handling costs are expensed as incurred and included in Cost of sales.

Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), shipping and handling costs, third-party royalties, certain foreign currency hedge gains and losses and product design costs.

DEMAND CREATION EXPENSE

Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, complimentary products, television, digital and print advertising as well as media costs, brand events and retail brand presentation.

Demand creation expense consists of brand marketing expense and sports marketing expense.

Brand marketing expense includes advertising and promotion costs such as production and media costs, digital marketing expense, brand events and retail brand presentation costs.

Advertising production costs are expensed the first time an advertisement is run.

2 unchanged sentences

Costs related to retail brand presentation are expensed when the presentation is complete and delivered.

Sports marketing expense includes expenses related to endorsement contracts, complimentary product and sports marketing events.

A significant amount of the Company's promotional expenses result from payments under endorsement contracts.

12 unchanged sentences

Total Demand creation expense was $ 4,689 million, $ 4,285 million and $ 4,060 million for the years ended May 31, 2025, 2024 and 2023, respectively.

Prepaid advertising and promotion expenses totaled $ 814 million and $ 755 million at May 31, 2024 and 2023, respectively, of which $ 420 million and $ 372 million, respectively, were recorded in Prepaid expenses and other current assets, and $ 394 million and $ 383 million, respectively, were recorded in Deferred income taxes and other assets, depending on the period to which the prepayment applied.

Prepaid demand creation expenses totaled $ 1,333 million and $ 814 million at May 31, 2025 and 2024, respectively, of which $ 498 million and $ 420 million, respectively, were recorded in Prepaid expenses and other current assets, and $ 835 million and $ 394 million, respectively, were recorded in Deferred income taxes and other assets.

OPERATING OVERHEAD EXPENSE

Operating overhead expense consists primarily of wage and benefit-related expenses, research and development costs, bad debt expense as well as other administrative expenses such as rent, depreciation and amortization, professional services, certain technology investments, meetings and travel.

Operating overhead expense consists primarily of wage and benefit-related expenses and other administrative expenses, such as research and development costs, bad debt expense, rent, depreciation and amortization and costs related to professional services, certain technology investments, meetings and travel.

2025 FORM 10-K 63

11 unchanged sentences

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 to determine the amount of the allowance.

The allowance for uncollectible accounts receivable was $ 35 million as of May 31, 2024 and 2023.

The allowance for uncollectible accounts receivable was $ 27 million and $ 35 million as of May 31, 2025 and 2024, respectively.

INVENTORY VALUATION

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.

Inventories, substantially all of which are finished goods, 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.

If the net realizable value of inventory is estimated to be less than the cost of the inventory, a reserve is recorded equal to the difference between the cost of the inventory and the estimated net realizable value.

This reserve is recorded as a charge to Cost of sales.

As of May 31, 2025, the Company's inventory reserve was $ 233 million compared to $ 155 million as of May 31, 2024.

PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION

1 unchanged sentence

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.

Depreciation of assets used in manufacturing, warehousing and product distribution are recorded in Cost of sales.

Depreciation 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 2 to 12 years on a straight-line basis.

Expenditures for major software purchases and software developed for internal use are capitalized and amortized over 2 to 12 years on a straight-line basis, once ready for their intended use.

The Company's policy provides for the capitalization of external direct costs associated with developing or obtaining internal use computer software.

2 unchanged sentences

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.

2025 FORM 10-K 64

12 unchanged sentences

If the carrying value of a reporting unit or indefinite-lived intangible asset exceeds its fair value, the goodwill of that reporting unit or indefinite-lived intangible asset is determined to be impaired and the Company will record an impairment charge equal to the excess of the carrying value over the related fair value.

There were immaterial impairment losses as of May 31, 2024, and no accumulated impairment losses as of May 31, 2023.

Additionally, the impact to Goodwill as a result of acquisitions and divestitures during fiscal 2024 and 2023, was immaterial.

There were no impairment losses for the year ended May 31, 2025, and an immaterial amount of accumulated impairment losses as of May 31, 2024.

OPERATING LEASES

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The Company classifies the cash flows at settlement from derivatives in the same category as the cash flows from the related hedged items.

For undesignated hedges and designated cash flow hedges, this is primarily within the Cash provided by operations component of the Consolidated Statements of Cash Flows.

For designated net investment hedges, this is within the Cash provided by investing activities component of the Consolidated Statements of Cash Flows.

For the Company's fair value hedges, which are interest rate swaps used to mitigate the change in fair value of its fixed-rate debt attributable to changes in interest rates, the related cash flows from periodic interest payments are reflected within the Cash provided by operations component of the Consolidated Statements of Cash Flows.

For undesignated hedges, designated cash flow hedges and fair value hedges, this is primarily within the Cash provided (used) by operations component of the Consolidated Statements of Cash Flows.

For designated net investment hedges, this is within the Cash provided (used) by investing activities component of the Consolidated Statements of Cash Flows.

Refer to Note 12 — Risk Management and Derivatives for additional information on the Company's risk management program and derivatives.

22 unchanged sentences

Refer to Note 10 — Earnings Per Share for further discussion.

RECENTLY ISSUED ACCOUNTING STANDARDS AND DISCLOSURE RULES

RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

1 unchanged sentence

The amendments will require public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss.

The amendments are effective for the Company's annual periods beginning June 1, 2024, and interim periods beginning June 1, 2025, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

The Company adopted this ASU for fiscal 2025 and the related disclosures are included in Note 15 — Segment Information.

The amendments were effective for the Company's annual periods beginning June 1, 2024, and interim periods beginning June 1, 2025 and have been applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

In March 2024, the U.S.

Securities and Exchange Commission ("SEC") adopted the final rule under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors.

This rule will require registrants to disclose certain climate-related information in registration statements and annual reports.

In April 2024, the SEC voluntarily stayed the final rule as a result of pending legal challenges.

The disclosure requirements will apply to the Company's fiscal year beginning June 1, 2025, pending resolution of the stay.

The Company is currently evaluating the final rule to determine its impact on the Company's disclosures.

RECENTLY ADOPTED ACCOUNTING STANDARDS

In September 2022, the FASB issued ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations.

The new guidance requires qualitative and quantitative disclosure sufficient to enable users of the financial statements to understand the nature, activity during the period, changes from period to period and potential magnitude of such programs.

The Company adopted the required guidance in the first quarter of fiscal 2024.

Certain financial institutions offer voluntary supplier finance programs facilitated through a third-party platform that provide participating suppliers the option to finance valid payment obligations from the Company.

The Company is not a party to agreements negotiated between participating suppliers and third-party financial institutions.

The Company's obligations to its suppliers, including amounts due and payment terms, are not affected by a supplier's decision to participate in these programs and the Company does not provide guarantees to third parties in connection with these programs.

As of May 31, 2024 and May 31, 2023, the Company had $ 840 million and $ 834 million, respectively, of outstanding supplier obligations confirmed as

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement.

The new disclosure requirements are effective for the Company's annual periods beginning June 1, 2027, and interim periods beginning June 1, 2028, with early adoption permitted, and may be applied either prospectively or retrospectively.

The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

2025 FORM 10-K 67

valid under these programs.

These amounts are included within Accounts payable on the Consolidated Balance Sheets.

NOTE 2 — PROPERTY, PLANT AND EQUIPMENT

8 unchanged sentences

Total property, plant and equipment, gross 10,932 10,914

Less accumulated depreciation 5,914 5,634

Less accumulated depreciation and amortization

TOTAL PROPERTY, PLANT AND EQUIPMENT, NET $ 4,828 $ 5,000

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(Dollars in millions)

Compensation and benefits, excluding taxes $ 1,291 $ 1,737

Sales-related reserves $ 1,834 $ 1,282

Endorsement compensation 578 552

Compensation and benefits, excluding taxes 1,245 1,291

Dividends payable 598 563

Endorsement compensation 481 578

Other 1,753 2,011

30 unchanged sentences

Any amounts of cash collateral posted related to these instruments associated with the Company's credit-related contingent features are recorded in Prepaid expenses and other current assets, which would further offset against the Company's derivative liability balance.

Cash collateral received or posted related to the Company's credit-related contingent features is presented in the Cash provided by operations component of the Consolidated Statements of Cash Flows.

Cash collateral received or posted related to the Company's credit-related contingent features is presented in the Cash provided (used) by operations component of the Consolidated Statements of Cash Flows.

The Company does not recognize amounts of non-cash collateral received, such as securities, on the Consolidated Balance Sheets.

For additional information related to credit risk, refer to Note 12 — Risk Management and Derivatives.

2024 FORM 10-K 70

The following tables present information about the Company's derivative assets and liabilities measured at fair value on a recurring basis and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

2025 FORM 10-K 69

DERIVATIVE ASSETS DERIVATIVE LIABILITIES

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(1) If the foreign exchange and interest rate swap derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 131 million as of May 31, 2025.

As of that date, the Company received $ 112 million of cash collateral from various counterparties on the derivative asset balance and posted $ 10 million cash collateral on the derivative liability balance.

As of that date, the Company posted $ 166 million cash collateral to various counterparties on the derivative liability balance and no amount of collateral was received from counterparties on the derivative asset balance.

DERIVATIVE ASSETS DERIVATIVE LIABILITIES

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$ 343 $ 299 $ 44 $ 120 $ 115 $ 5

(1) If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 178 million as of May 31, 2023.

As of that date, the Company had received $ 36 million of cash collateral from various counterparties related to foreign exchange derivative instruments.

No amount of collateral was posted on the Company's derivative liability balance as of May 31, 2023.

Interest rate swaps (1)

— — — 31 — 31

$ 343 $ 299 $ 44 $ 151 $ 115 $ 36

For additional information related to the Company's derivative financial instruments, refer to Note 12 — Risk Management and Derivatives.

1 unchanged sentence

The carrying amounts of other current financial assets and other current financial liabilities approximate fair value.

2024 FORM 10-K 71

NOTE 5 — SHORT-TERM BORROWINGS AND CREDIT LINES

The carrying amounts reflected on the Consolidated Balance Sheets for Notes payable approximate fair value.

On March 11, 2022, the Company entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $ 2 billion of borrowings, with the option to increase borrowings up to $ 3 billion in total with lender approval.

The facility matures on March 11, 2027, with options to extend the maturity date up to an additional two years .

Based on the Company's current long-term senior unsecured debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term Secured Overnight Financing Rate ("Term SOFR") for the applicable interest period plus 0.60 %.

The facility fee is 0.04 % of the total undrawn commitment.

On March 7, 2025, the Company entered into a 364-day committed credit facility agreement with a syndicate of banks, which provides for up to $ 1 billion of borrowings, with an option to increase borrowings up to $ 1.5 billion in total with lender approval.

1 unchanged sentence

This facility replaces the prior $ 1 billion 364-day credit facility agreement entered into on March 8, 2024, which matured on March 7, 2025.

Based on the Company's current long-term senior unsecured debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term SOFR for the applicable interest period plus 0.60 %.

In July 2025, Standard and Poor's Corporation downgraded the Company's senior unsecured debt rating from AA- to A+.

Based on the Company's current long-term senior unsecured debt ratings of A+ and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term Secured Overnight Financing Rate ("Term SOFR") for the applicable interest period plus 0.725 %.

The facility fee is 0.04 % of the total undrawn commitment.

On March 7, 2025, the Company entered into a five-year committed credit facility agreement with a syndicate of banks which provides for up to $ 2 billion of borrowings, with the option to increase borrowings up to $ 3 billion in total with lender approval.

The facility matures on March 7, 2030, with options to extend the maturity date up to an additional two years .

This facility replaces the prior $ 2 billion five-year credit facility agreement entered into on March 11, 2022, which would have matured on March 11, 2027.

In July 2025, Standard and Poor's Corporation downgraded the Company's senior unsecured debt rating from AA- to A+.

Based on the Company's current long-term senior unsecured debt ratings of A+ and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing Term SOFR for the applicable interest period plus 0.725 %.

The facility fee is 0.05 % of the total undrawn commitment.

As of and for the periods ended May 31, 2025 and 2024, no amounts were outstanding under any of the Company's committed credit facilities.

1 unchanged sentence

NOTE 6 — LONG-TERM DEBT

Long-term debt, net of unamortized premiums, discounts, and debt issuance costs, and swap fair value adjustments comprises the following:

Long-term debt, net of unamortized premiums, discounts, debt issuance costs, and interest rate swap fair value adjustments comprises the following:

BOOK VALUE OUTSTANDING

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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.

The scheduled maturity of Long-term debt in each of the years ending May 31, 2025 through 2029, are $ 1,000 million, $ 0 million, $ 2,000 million, $ 0 million and $ 0 million, respectively, at face value.

The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts, and debt issuance costs, and swap fair value adjustments.

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.

The fair value of long-term debt is estimated based upon quoted prices for similar instruments or quoted prices for identical instruments in inactive markets (Level 2).

The fair value of the Company's Long-term debt, including the current portion, was approximately $ 7,631 million and $ 7,889 million as of May 31, 2024 and 2023, respectively.

The fair value of the Company's Long-term debt, including the current portion but excluding interest rate swap fair value adjustments, was approximately $ 6,673 million and $ 7,631 million as of May 31, 2025 and 2024, respectively.

2025 FORM 10-K 71

30 unchanged sentences

Foreign earnings 1.1 % - 2.5 % 1.7 %

Subpart F deferred tax benefit 0.0 % 0.0 % - 4.7 %

tax regulations - foreign currency losses

- 3.4 % 0.0 % 0.0 %

Foreign-derived intangible income benefit - 5.3 % - 4.8 % - 6.1 %

Excess tax benefits from stock-based compensation - 0.5 % - 1.1 % - 4.9 %

Stock-based compensation

1.5 % - 0.5 % - 1.1 %

Income tax audits and contingency reserves 2.7 % 1.8 % 1.0 %

2 unchanged sentences

EFFECTIVE INCOME TAX RATE 17.1 % 14.9 % 18.2 %

The effective tax rate for the fiscal year ended May 31, 2024 was lower than the effective tax rate for the fiscal year ended May 31, 2023.

The decrease in the Company's effective tax rate was primarily due to changes in the Company's earning mix and one-time benefits including the impact of temporary relief provided by the Internal Revenue Service ("IRS") relating to U.S.

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.

taxation of foreign earnings under Subpart F of the Internal

2025 FORM 10-K 72

Revenue Code, the Company recognized a non-cash deferred income tax benefit of $ 133 million in the third quarter of fiscal 2025 related to pre-transition foreign currency losses.

The decrease in the Company's effective tax rate for the fiscal year ended May 31, 2024 compared to the fiscal year ended May 31, 2023 was primarily due to changes in the Company's earning mix and one-time benefits including the impact of temporary relief provided by the IRS relating to U.S.

foreign tax credit regulations.

On July 21, 2023, the IRS issued Notice 2023-55 which specifically delayed the application of certain U.S.

foreign tax credit regulations that had previously limited the Company's ability to claim credits on certain foreign taxes for the fiscal year ended May 31, 2023.

As a result of this new guidance, the Company recognized a one-time tax benefit related to prior year tax positions in the first three months of fiscal 2024.

The effective tax rate for the fiscal year ended May 31, 2023 was higher than the effective tax rate for the fiscal year ended May 31, 2022.

The increase was primarily due to decreased benefits from stock-based compensation and the recognition of a non-cash, one-time benefit related to the onshoring of the Company's non-U.S.

intangible property in fiscal 2022.

During the fourth quarter of fiscal 2022, the Company onshored certain non-U.S.

intangible property ownership rights and implemented

2024 FORM 10-K 74

changes in the Company's legal entity structure.

The tax restructuring increases the possibility that foreign earnings in future periods will be subject to tax in the U.S.

due to Subpart F of the Internal Revenue Code.

The Company recognized a deferred tax asset and corresponding non-cash deferred income tax benefit of 4.7 %, to establish the deferred tax deduction that is expected to reduce taxable income in future periods.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022 that included, among other provisions, changes to the U.S.

corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income," which was effective for the Company beginning June 1, 2023.

Based on the Company's current analysis of the provisions, these tax law changes did not have a material impact on the Company's Consolidated Financial Statements for fiscal 2024.

As a result of this new guidance, the Company recognized a one-time tax benefit related to fiscal 2023 tax positions in the first three months of fiscal 2024.

The Organization for Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the "Inclusive Framework") have put forth Pillar Two proposals that ensure a minimal level of taxation.

Several countries in which the Company operates, including several European Union member states, have adopted domestic legislation to implement the Inclusive Framework's global corporate minimum tax rate of fifteen percent.

This legislation became effective for the Company beginning June 1, 2024.

Based on the Company's analysis of Pillar Two provisions, these tax law changes did not have a material impact on the Company's financial statements for fiscal 2025.

Deferred income tax assets and liabilities comprise the following as of:

23 unchanged sentences

Of the total $ 2,320 million net deferred tax asset for the period ended May 31, 2024, $ 2,465 million was included within Deferred income taxes and other assets and $( 145 ) million was included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

Deferred tax assets as of May 31, 2024 and 2023, were reduced by a valuation allowance.

For the fiscal years ended May 31, 2024 and 2023, a valuation allowance was provided for U.S.

Deferred tax assets as of May 31, 2025 and 2024, were reduced by a valuation allowance provided for U.S.

capital loss carryforwards and on tax benefits generated by certain entities with operating losses.

The Company has available pre-tax effected domestic and foreign loss carry-forwards of $ 261 million as of May 31, 2025.

If not utilized, $ 135 million of losses will expire in the periods between fiscal 2028 and 2044.

Approximately $ 126 million of losses do not expire.

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On July 4, 2025, the U.S.

government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S.

corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act.

Certain provisions are effective for the Company beginning fiscal 2026.

The Company is evaluating the future impact of these tax law changes on its financial statements.

The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits as of:

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Gross decreases related to prior period tax positions

( 10 ) ( 13 ) ( 17 )

Gross increases related to current period tax positions

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As of May 31, 2025, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 1,026 million, of which $ 738 million would affect the Company's effective tax rate if recognized in future periods.

The majority of the total gross unrecognized tax benefits are long-term in nature and included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

The majority of the total gross unrecognized tax benefits were long-term in nature and were included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

The Company recognizes interest and penalties related to income tax matters in Income tax expense.

As of May 31, 2025 and 2024, accrued interest and penalties related to uncertain tax positions were $ 376 million and $ 332 million, respectively (excluding federal benefit) and were included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

As of May 31, 2024 and 2023, long-term income taxes payable unrelated to unrecognized tax benefits were $ 266 million and $ 373 million, respectively, and were included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

As of May 31, 2024, long-term income taxes payable unrelated to unrecognized tax benefits were $ 266 million and were included within Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

As of May 31, 2025 these amounts were included within Income taxes payable on the Consolidated Balance Sheets.

The Company is subject to taxation in the U.S., as well as various state and foreign jurisdictions.

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federal income tax matters through fiscal 2016, with the exception of certain transfer pricing adjustments.

Tax years after 2011 remain open in certain major foreign jurisdictions.

Although the timing of resolution of audits is not certain, the Company evaluates all domestic and foreign audit issues in the aggregate, along with the expiration of applicable statutes of limitations, and estimates that it is reasonably possible the total gross unrecognized tax benefits could decrease by up to $ 35 million within the next 12 months.

In certain major foreign jurisdictions, tax years after 2011 remain subject to examination.

federal income tax matters for fiscal years 2017 through 2019 related to transfer pricing adjustments, research and development credits and other items.

In January 2019, the European Commission opened a formal investigation to examine whether the Netherlands has breached State Aid rules when granting certain tax rulings to the Company.

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indirect tax provisions, was $ 0.18 , $ 0.22 and $ 0.17 for the fiscal years ended May 31, 2025, 2024 and 2023, respectively.

2025 FORM 10-K 74

NOTE 8 — REDEEMABLE PREFERRED STOCK

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The Company's articles of incorporation do not permit the issuance of additional preferred stock.

2024 FORM 10-K 76

NOTE 9 — COMMON STOCK AND STOCK-BASED COMPENSATION

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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.

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 COMPENSATION

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(2) For the fiscal years ended May 31, 2025, 2024 and 2023, expense for restricted stock units includes an immaterial amount of expense for PSUs.

The income tax benefit related to stock-based compensation expense was $ 35 million, $ 71 million and $ 327 million for the fiscal years ended May 31, 2024, 2023 and 2022, respectively, and reported within Income tax expense.

2025 FORM 10-K 75

STOCK OPTIONS

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Treasury (constant maturity) risk-free rate in effect at the date of grant for periods corresponding with the expected term of the options.

2024 FORM 10-K 77

The following summarizes the stock option transactions under the plan discussed above:

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The following summarizes the restricted stock and restricted stock units transactions under the plan discussed above:

2025 FORM 10-K 76

WEIGHTED AVERAGE GRANT DATE

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As of May 31, 2025, the Company had $ 631 million of unrecognized compensation costs from restricted stock and restricted stock units, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.5 years.

2024 FORM 10-K 78

NOTE 10 — EARNINGS PER SHARE

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Deferred compensation plan liabilities were $ 1,102 million and $ 1,063 million as of May 31, 2025 and 2024, respectively, and primarily classified in Deferred income taxes and other liabilities on the Consolidated Balance Sheets.

2025 FORM 10-K 77

NOTE 12 — RISK MANAGEMENT AND DERIVATIVES

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The majority of derivatives outstanding as of May 31, 2025, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.

Dollar, British Pound/Euro, Chinese Yuan/U.S.

Dollar and Japanese Yen/U.S.

Dollar, Chinese Yuan/U.S.

Dollar, British Pound/Euro, and Japanese Yen/U.S.

Dollar currency pairs.

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The following tables present the fair values of derivative instruments included within the Consolidated Balance Sheets:

2024 FORM 10-K 79

DERIVATIVE ASSETS

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Foreign exchange forwards and options Deferred income taxes and other assets 22 44

Interest rate swaps Deferred income taxes and other assets

Total derivatives formally designated as hedging instruments 121 313

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— — — Interest expense (income), net ( 8 ) ( 8 ) ( 8 )

Total designated cash

TOTAL DESIGNATED CASH FLOW HEDGES

$ ( 127 ) $ 270 $ 527 $ 340 $ 468 $ 932

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The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was $ 18.4 billion and $ 16.2 billion as of May 31, 2025 and 2024, respectively.

As of May 31, 2024, approximately $ 231 million of deferred net gains (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Net income.

As of May 31, 2025, approximately $ 24 million of deferred net losses (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) are expected to be reclassified to Net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in Net income.

Actual amounts ultimately reclassified to Net income are dependent on the exchange rates in effect when derivative contracts currently outstanding mature.

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Changes in the fair values of the interest rate swaps are recorded in Long-term debt or Current portion of long-term debt.

The total notional amount of outstanding interest rate swaps designated as fair value hedges was $ 1.8 billion as of May 31, 2024.

The Company had no outstanding fair value hedges as of May 31, 2023.

NET INVESTMENT HEDGES

The Company has, in the past, hedged and may, in the future, hedge the risk of variability in foreign currency-denominated net investments in wholly-owned international operations.

All changes in fair value of the derivatives designated as net investment hedges are reported in Accumulated other comprehensive income (loss) along with the foreign currency translation adjustments on those investments.

The Company had no outstanding net investment hedges as of May 31, 2024 and 2023.

The total notional amount of outstanding interest rate swaps designated as fair value hedges was $ 2.4 billion and $ 1.8 billion as of May 31, 2025 and 2024, respectively.

UNDESIGNATED DERIVATIVE INSTRUMENTS

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(1) The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or upon complete or substantially complete liquidation of the respective entity.

(2) Net of immaterial tax impact.

(2) Reclassifications to net income of previously deferred (gains) losses are recorded within Other (income) expense, net for foreign currency translation adjustment, net investment hedges, and other.

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(2) Net of immaterial tax impact.

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TOTAL REVENUES $ 21,396 $ 13,607 $ 7,545 $ 6,729 $ 45 $ 49,322 $ 2,082 $ ( 42 ) $ 51,362

(1) Refer to Note 18 — Divestitures for additional information on the transition of the Company's NIKE Brand businesses in its CASA territory to third-party distributors.

2025 FORM 10-K 82

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SALES-RELATED RESERVES

As of May 31, 2024 and 2023, the Company's sales-related reserve balance, which includes returns, post-invoice sales discounts and miscellaneous claims, was $ 1,282 million and $ 994 million, respectively, recorded in Accrued liabilities on the Consolidated Balance Sheets.

The estimated cost of inventory for expected product returns was $ 331 million and $ 226 million as of May 31, 2024 and 2023, respectively, and was recorded in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

As of May 31, 2025 and 2024, the Company's sales-related reserve balance, which includes returns, post-invoice sales discounts and claims, was $ 1,834 million and $ 1,282 million, respectively, recorded in Accrued liabilities on the Consolidated Balance Sheets.

As of May 31, 2025 and 2024, the Company's sales returns reserve balance, included within sales-related reserves, was $ 1,277 million and $ 799 million, respectively.

The related estimated cost of inventory for expected product returns was $ 528 million and $ 331 million as of May 31, 2025 and 2024, respectively, and was recorded in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

2025 FORM 10-K 83

NOTE 15 — OPERATING SEGMENTS AND RELATED INFORMATION

The Company's operating segments reflect the structure of the Company's internal organization.

The NIKE Brand segments are defined by geographic regions for operations participating in NIKE Brand sales activity.

Each NIKE Brand geographic segment operates predominantly in one industry:

the design, development, marketing and selling of athletic footwear, apparel and equipment.

The Company's reportable operating segments for the NIKE Brand are:

NOTE 15 — SEGMENT INFORMATION

The 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:

The NIKE Brand reportable segments are:

North America;

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and Asia Pacific & Latin America ("APLA"), and include results for the NIKE and Jordan brands.

Refer to Note 18 — Divestitures for information regarding the transition of NIKE Brand businesses in certain countries within APLA to third-party distributors.

The Company's NIKE Direct operations are managed within each NIKE Brand geographic operating segment.

Converse is also a reportable segment for the Company and operates in one industry:

the design, marketing, licensing and selling of athletic lifestyle sneakers, apparel and accessories.

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 costs represent demand creation and operating overhead expense that include product creation and design expenses centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology.

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 operates in one industry:

the design, marketing, licensing and selling of casual sneakers, apparel and accessories.

Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments;

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and certain foreign currency gains and losses, including certain hedge gains and losses.

The primary financial measure used by the Company to evaluate performance of individual operating segments is 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.

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 operating segments and to Converse.

These rates are set approximately nine and twelve months in advance of the future selling seasons to which they relate (specifically, for each currency, one standard rate applies to the fall and holiday selling seasons, and one standard rate applies to the spring and summer selling seasons) based on average market spot rates in the calendar month preceding the date they are established.

Inventories and Cost of sales for geographic operating segments and Converse reflect the use of these standard rates to record non-functional currency product purchases in the entity's functional currency.

Differences between assigned standard foreign currency rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses generated from the Company's centrally managed foreign exchange risk management program and other conversion gains and losses.

Accounts receivable, net, Inventories and Property, plant and equipment, net for operating segments are regularly reviewed by management and are therefore provided below.

Inventories and Cost of sales for geographic segments and Converse reflect the use of these standard rates to recognize non-functional currency product purchases in the entity's functional currency.

Differences between these standard rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses and other conversion gains and losses.

2025 FORM 10-K 84

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(Dollars in millions)

2024 2023 2022

NORTH AMERICA

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TOTAL NIKE BRAND

Converse 2,082 2,427 2,346

Corporate ( 42 ) 27 ( 72 )

TOTAL NIKE, INC.

REVENUES $ 51,362 $ 51,217 $ 46,710

EARNINGS BEFORE INTEREST AND TAXES

North America $ 5,822 $ 5,454 $ 5,114

Europe, Middle East & Africa 3,388 3,531 3,293

Greater China 2,309 2,283 2,365

Asia Pacific & Latin America 1,885 1,932 1,896

Global Brand Divisions ( 4,720 ) ( 4,841 ) ( 4,262 )

Converse 474 676 669

Corporate ( 2,619 ) ( 2,840 ) ( 2,219 )

$ 19,572 $ 12,257 $ 6,586 $ 6,251 $ 48 $ 44,714 $ 1,692 $ ( 97 ) $ 46,309

Cost of Sales

11,056 6,967 3,558 3,502 634 25,717 868 ( 66 ) 26,519

8,516 5,290 3,028 2,749 ( 586 ) 18,997 824 ( 31 ) 19,790

Demand creation expense

1,633 1,222 529 421 716 4,521 156 12 4,689

Operating overhead expense

2,150 1,479 973 804 3,401 8,807 430 2,162 11,399

Total selling and administrative expense

3,783 2,701 1,502 1,225 4,117 13,328 586 2,174 16,088

Other segment items (1)

( 2 ) 14 ( 76 ) ( 3 ) ( 4 ) ( 71 ) ( 2 ) ( 3 ) ( 76 )

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 4,735 $ 2,575 $ 1,602 $ 1,527 $ ( 4,699 ) $ 5,740 $ 240 $ ( 2,202 )

Interest expense (income), net

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INCOME BEFORE INCOME TAXES

ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT

North America $ 102 $ 283 $ 146

Europe, Middle East & Africa 206 215 197

Greater China 27 56 78

Asia Pacific & Latin America 75 64 56

Global Brand Divisions 233 271 222

Total NIKE Brand 643 889 699

Converse 7 7 9

Corporate 72 140 103

TOTAL ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT $ 722 $ 1,036 $ 811

North America $ 152 $ 128 $ 124

Europe, Middle East & Africa 146 120 134

Greater China 56 54 41

Asia Pacific & Latin America 51 42 42

Global Brand Divisions 236 211 220

Total NIKE Brand 641 555 561

Converse 17 17 22

Corporate 138 131 134

TOTAL DEPRECIATION $ 796 $ 703 $ 717

2024 FORM 10-K 87

AS OF MAY 31,

Supplemental information:

Depreciation and amortization (2)

$ 157 143 49 50 237 636 14 125 $ 775

$ 3,198 2,042 951 905 148 7,244 272 ( 27 ) $ 7,489

(1) At the NIKE Brand segments and Converse, other segment items consist of unusual or non-operating transactions that occur outside the normal course of business.

At Corporate, this also includes foreign currency conversion gains and losses from the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments.

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

YEAR ENDED MAY 31, 2024

(Dollars in millions)

ACCOUNTS RECEIVABLE, NET

NORTH AMERICA

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TOTAL NIKE BRAND

Converse 201 235

Corporate 42 88

TOTAL ACCOUNTS RECEIVABLE, NET $ 4,427 $ 4,131

North America $ 3,134 $ 3,806

Europe, Middle East & Africa 2,028 2,167

Greater China 1,070 973

Asia Pacific & Latin America

Global Brand Divisions 166 232

Total NIKE Brand 7,208 8,072

Converse 296 305

Corporate 15 77

TOTAL INVENTORIES $ 7,519 $ 8,454

PROPERTY, PLANT AND EQUIPMENT, NET

North America $ 744 $ 794

Europe, Middle East & Africa 1,089 1,009

Greater China 258 292

Asia Pacific & Latin America

Global Brand Divisions 842 840

TOTAL NIKE, INC.

$ 21,396 $ 13,607 $ 7,545 $ 6,729 $ 45 $ 49,322 $ 2,082 $ ( 42 ) $ 51,362

Cost of Sales

11,899 7,589 3,761 3,639 602 27,490 989 ( 4 ) 28,475

9,497 6,018 3,784 3,090 ( 557 ) 21,832 1,093 ( 38 ) 22,887

Demand creation expense

1,495 1,114 519 407 596 4,131 140 14 4,285

Operating overhead expense

2,189 1,517 1,019 801 3,534 9,060 485 2,746 12,291

Total selling and administrative expense

3,684 2,631 1,538 1,208 4,130 13,191 625 2,760 16,576

Other segment items (1)

( 9 ) ( 1 ) ( 63 ) ( 3 ) 33 ( 43 ) ( 6 ) ( 179 ) ( 228 )

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 5,822 $ 3,388 $ 2,309 $ 1,885 $ ( 4,720 ) $ 8,684 $ 474 $ ( 2,619 )

Interest expense (income), net

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES

Supplemental information:

Depreciation and amortization (2)

$ 152 146 56 51 236 641 17 138 $ 796

Inventories $ 3,134 2,028 1,070 810 166 7,208 296 15 $ 7,519

(1) At the NIKE Brand segments and Converse, other segment items consist of unusual or non-operating transactions that occur outside the normal course of business.

(2) The amounts of depreciation and amortization disclosed by segment are included within Cost of sales and Operating overhead expense, as applicable.

2025 FORM 10-K 85

YEAR ENDED MAY 31, 2023

(Dollars in millions) NORTH AMERICA

EUROPE, MIDDLE EAST & AFRICA GREATER CHINA

ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS

TOTAL NIKE BRAND

Converse 27 38

Corporate 1,758 1,829

TOTAL PROPERTY, PLANT AND EQUIPMENT, NET $ 5,000 $ 5,081

TOTAL NIKE, INC.

Revenues $ 21,608 $ 13,418 $ 7,248 $ 6,431 $ 58 $ 48,763 $ 2,427 $ 27 $ 51,217

Cost of Sales 12,497 7,340 3,552 3,337 516 27,242 1,121 562 28,925

Gross profit 9,111 6,078 3,696 3,094 ( 458 ) 21,521 1,306 ( 535 ) 22,292

Demand creation expense 1,455 1,050 499 373 511 3,888 138 34 4,060

Operating overhead expense 2,207 1,500 1,012 789 3,881 9,389 499 2,429 12,317

Total selling and administrative expense 3,662 2,550 1,511 1,162 4,392 13,277 637 2,463 16,377

Other segment items (1)

( 5 ) ( 3 ) ( 98 ) — ( 9 ) ( 115 ) ( 7 ) ( 158 ) ( 280 )

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 5,454 $ 3,531 $ 2,283 $ 1,932 $ ( 4,841 ) $ 8,359 $ 676 $ ( 2,840 )

Interest expense (income), net ( 6 )

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES $ 6,201

Supplemental information:

Depreciation and amortization (2)

$ 128 120 54 42 211 555 17 131 $ 703

$ 3,806 2,167 973 894 232 8,072 305 77 $ 8,454

(1) At the NIKE Brand segments and Converse, other segment items consist of unusual or non-operating transactions that occur outside the normal course of business.

(2) The amounts of depreciation and amortization by segment are included within Cost of sales and Operating overhead expense, as applicable.

REVENUES AND LONG-LIVED ASSETS BY GEOGRAPHIC AREA

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Revenues derived in the United States were $ 19,725 million, $ 21,551 million and $ 22,007 million for the fiscal years ended May 31, 2025, 2024 and 2023, respectively.

The Company's largest concentrations of long-lived assets primarily consist of the Company's corporate headquarters, retail locations and distribution facilities in the United States and China, as well as distribution facilities in Belgium.

The Company's largest concentrations of long-lived assets primarily consist of the Company's corporate headquarters, retail locations and distribution facilities in the United States, China and the United Kingdom, as well as distribution facilities in Belgium.

Long-lived assets attributable to operations in these countries, which consist of property, plant and equipment, net and operating lease ROU assets, net, were as follows:

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China 488 501

United Kingdom

TOTAL LONG-LIVED ASSETS

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BELGIAN CUSTOMS CLAIM

The Company has received claims for certain years from Belgian Customs and other government authorities for alleged underpaid duties related to products imported beginning in fiscal 2018.

The 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.

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Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 607 $ 458 $ 602

NOTE 18 — DIVESTITURES

During the second quarter of fiscal 2023, the sale of the Company's entities in Argentina and Uruguay to a third-party distributor was completed and the net loss on the sale of these entities totaled approximately $ 550 million.

This loss included $ 389 million, recognized primarily in fiscal 2020, largely due to the anticipated release of the cumulative foreign currency translation losses.

The remaining loss recognized in fiscal 2023 was due to the devaluation of local currency and cash equivalents included in the transferred assets.

Upon completion of the sale, the foreign currency translation losses recorded in Accumulated other comprehensive income (loss) were reclassified to Net income within Other (income) expense, net, on the Company's Consolidated Statements of Comprehensive Income along with the allowance for previously recognized losses recorded in Accrued liabilities.

The net loss was classified within Corporate.

The net cash proceeds received are reflected within Other investing activities on the Company's Consolidated Statements of Cash Flows.

2024 FORM 10-K 90

NOTE 18 — RESTRUCTURING

During the third quarter of fiscal 2024, the Company announced a multi-year enterprise initiative designed to accelerate its future growth.

As part of this initiative, management has taken steps to streamline the organization which resulted in a net reduction in the Company's global workforce.

As of May 31, 2024, the Company expects to recognize pre-tax restructuring charges of approximately $ 450 million, primarily associated with employee severance costs and accelerated stock-based compensation expense, the majority of which were recognized in fiscal 2024.

The related cash payments are expected to be substantially complete by the end of the first half of fiscal 2025.

The expected pre-tax charges are estimates and are subject to a number of assumptions and actual results may vary from the estimates provided.

Pre-tax restructuring charges were classified within Corporate as follows:

TWELVE MONTHS ENDED MAY 31, 2024

(Dollars in millions)

OPERATING OVERHEAD EXPENSE

COST OF SALES

Employee severance and related costs (1)

$ 336 $ 56 $ 392

Stock-based compensation expense (2)

Total pre-tax restructuring charges $ 379 $ 64 $ 443

(1) Employee severance costs are recognized when a future related expense is considered probable and reasonably estimable.

(2) Non-cash restructuring related stock-based compensation expense is accelerated over the requisite service period, which for certain impacted employees will extend through the first half of fiscal 2025.

As of May 31, 2024, the majority of the remaining employee severance and related costs are reflected within Accrued liabilities on the Consolidated Balance Sheets, classified within Other in Note 3 — Accrued Liabilities.

The related activity is as follows:

During the third quarter of fiscal 2024, management streamlined the organization which resulted in a net reduction in the Company's global workforce.

In fiscal 2024, the Company recognized pre-tax restructuring charges of $ 443 million, primarily associated with $ 392 million related to employee severance costs and $ 51 million related to accelerated stock-based compensation expense.

Of the $ 443 million pre-tax restructuring charges, $ 379 million was classified in Operating overhead expense and $ 64 million was classified in Cost of sales .

The related cash payments during fiscal 2024 were $ 123 million.

As of May 31, 2024, restructuring charges of $ 267 million were reflected within Accrued liabilities on the Consolidated Balance Sheets.

As of the second quarter of fiscal 2025, the fiscal 2024 restructuring was substantially complete and there was an immaterial amount of restructuring charges recognized in fiscal 2025.

The Company made cash payments of $ 247 million during fiscal 2025, and the remaining immaterial amounts are to be settled in fiscal 2026.

NOTE 19 — SUPPLIER FINANCE PROGRAMS

The Company is not a party to agreements negotiated between participating suppliers and third-party financial institutions.

As of May 31, 2025 and May 31, 2024, the Company had $ 1,101 million and $ 840 million, respectively, of outstanding supplier obligations confirmed as valid under these programs.

These amounts are included within Accounts payable on the Consolidated Balance Sheets.

(Dollars in millions)

Balance at May 31, 2023 $ —

Employee severance and related costs

Cash payments ( 123 )

Foreign currency translation and other ( 2 )

Balance at May 31, 2024 $ 267

Confirmed obligations outstanding as of May 31, 2024

Invoices confirmed during the year

Confirmed invoices paid during the year

Confirmed obligations outstanding as of May 31, 2025

2025 FORM 10-K 88

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data