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Item 1. Financial Statements

2025-12-30 compared with 2025-10-01 · 231 added, 73 removed, 474 unchanged (39% of the section changed)

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(In millions, except per share data)

2025 2024 2025 2024

Revenues $ 12,427 $ 12,354 $ 24,147 $ 23,943

4 unchanged sentences

Total selling and administrative expense 4,039 4,005 8,055 8,053

Interest expense (income), net ( 18 ) ( 43 )

Interest (income) expense, net

( 9 ) ( 24 ) ( 27 ) ( 67 )

Other (income) expense, net 16 ( 8 ) 39 ( 63 )

Income before income taxes

999 1,416 1,921 2,723

Income tax expense

207 253 402 509

$ 792 $ 1,163 $ 1,519 $ 2,214

Earnings per common share:

6 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2025 2024 2025 2024

Net income $ 792 $ 1,163 $ 1,519 $ 2,214

7 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

AUGUST 31, MAY 31,

NOVEMBER 30, MAY 31,

(In millions)

14 unchanged sentences

Current liabilities:

Current portion of long-term debt $ 999 $ —

Notes payable — 5

21 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED AUGUST 31,

SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

11 unchanged sentences

(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets

( 165 ) ( 265 )

Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities ( 276 ) ( 31 )

5 unchanged sentences

Additions to property, plant and equipment ( 400 ) ( 249 )

Other investing activities ( 3 ) 10

Cash provided (used) by investing activities ( 108 ) ( 240 )

19 unchanged sentences

SHARES AMOUNT SHARES AMOUNT

Balance at August 31, 2025 289 $ — 1,188 $ 3 $ 14,473 $ ( 308 ) $ ( 700 ) $ 13,468

Stock options exercised — — 13 13

Repurchase of Class B Common Stock — —

Dividends on common stock ($ 0.41 per share)

( 611 ) ( 611 )

Issuance of shares to employees, net of shares withheld for employee taxes 3 — 43 43

Stock-based compensation 176 176

Net income 792 792

Other comprehensive income (loss) 204 204

Balance at November 30, 2025 289 $ — 1,191 $ 3 $ 14,705 $ ( 104 ) $ ( 519 ) $ 14,085

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

CLASS A CLASS B

(In millions, except per share data)

SHARES AMOUNT SHARES AMOUNT

Balance at August 31, 2024 298 $ — 1,193 $ 3 $ 13,557 $ ( 27 ) $ 411 $ 13,944

Stock options exercised 1 — 95 95

Repurchase of Class B Common Stock ( 13 ) — ( 119 ) ( 942 ) ( 1,061 )

Dividends on common stock ($ 0.40 per share)

( 597 ) ( 597 )

Issuance of shares to employees, net of shares withheld for employee taxes 3 — 53 19 72

Stock-based compensation 192 192

Net income 1,163 1,163

Other comprehensive income (loss) 229 229

Balance at November 30, 2024 298 $ — 1,184 $ 3 $ 13,778 $ 202 $ 54 $ 14,037

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

CLASS A CLASS B

(In millions, except per share data)

SHARES AMOUNT SHARES AMOUNT

Balance at May 31, 2025 290 $ — 1,186 $ 3 $ 14,195 $ ( 258 ) $ ( 727 ) $ 13,213

8 unchanged sentences

Other comprehensive income (loss) 154 154

Balance at August 31, 2025 289 $ — 1,188 $ 3 $ 14,473 $ ( 308 ) $ ( 700 ) $ 13,468

Balance at November 30, 2025 289 $ — 1,191 $ 3 $ 14,705 $ ( 104 ) $ ( 519 ) $ 14,085

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT)

11 unchanged sentences

Other comprehensive income (loss) 149 149

Balance at August 31, 2024 298 $ — 1,193 $ 3 $ 13,557 $ ( 27 ) $ 411 $ 13,944

Balance at November 30, 2024 298 $ — 1,184 $ 3 $ 13,778 $ 202 $ 54 $ 14,037

The accompanying Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.

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NOTE 9 Revenues

NOTE 10 S egment Informat ion

NOTE 10 Segment Information

NOTE 11 Commitments and Contingencies

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The interim financial information and notes thereto should be read in conjunction with the Company's latest Annual Report on Form 10-K for the fiscal year ended May 31, 2025 (the "Annual Report").

The results of operations for the three months ended August 31, 2025, are not necessarily indicative of results for the entire fiscal year.

The results of operations for the three and six months ended November 30, 2025, are not necessarily indicative of results for the entire fiscal year.

RECENT ACCOUNTING PRONOUNCEMENTS

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

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements, which includes amendments to more closely align hedge accounting with the economics of an entity’s risk management activities.

The amendments are effective for the Company’s annual periods beginning June 1, 2027 and interim periods within those fiscal years, with early adoption permitted, and should be applied prospectively.

The Company is currently evaluating the ASU to determine its impact on the Company’s financial statements and related disclosures.

NOTE 2 — ACCRUED LIABILITIES

Accrued liabilities included the following:

AUGUST 31, MAY 31,

NOVEMBER 30, MAY 31,

(Dollars in millions) 2025 2025

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The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivatives, equity securities and available-for-sale debt securities.

The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of August 31, 2025 and May 31, 2025, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

AUGUST 31, 2025

The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of November 30, 2025 and May 31, 2025, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

NOVEMBER 30, 2025

(Dollars in millions)

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TOTAL $ 9,151 $ 7,464 $ 1,687

As of August 31, 2025, the Company held $ 582 million of available-for-sale debt securities with maturity dates within one year and $ 969 million with maturity dates greater than one year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets.

As of November 30, 2025, the Company held $ 445 million of available-for-sale debt securities with maturity dates within one year and $ 926 million with maturity dates greater than one year and less than five years in Short-term investments on the Unaudited Condensed Consolidated Balance Sheets.

The fair value of the Company's available-for-sale debt securities approximates their amortized cost.

Included in Interest expense (income), net was interest income related to the Company's investment portfolio of $ 83 million and $ 120 million for the three months ended August 31, 2025 and 2024, respectively.

Included in Interest (income) expense, net was interest income related to the Company's investment portfolio of $ 62 million and $ 97 million for the three months ended November 30, 2025 and 2024, respectively, and $ 145 million and $ 217 million for the six months ended November 30, 2025 and 2024, respectively.

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:

AUGUST 31, 2025

NOVEMBER 30, 2025

DERIVATIVE ASSETS DERIVATIVE LIABILITIES

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TOTAL $ 288 $ 166 $ 122 $ 328 $ 259 $ 69

(1) If the foreign exchange and interest rate swap derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $ 188 million as of August 31, 2025.

As of that date, the Company posted $ 175 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.

As of that date, the Company received $ 41 million from various counterparties on the derivative asset balance and posted $ 40 million of cash collateral to counterparties on the derivative liability balance.

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 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.

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

For additional information related to the Company's derivative financial instruments and credit risk, refer to Note 7 — Risk Management and Derivatives.

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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, excluding interest rate swap fair value adjustments, was approximately $ 6,794 million at August 31, 2025 and $ 6,673 million at May 31, 2025.

The fair value of the Company's Long-term debt, excluding interest rate swap fair value adjustments, was approximately $ 6,913 million at November 30, 2025 and $ 6,673 million at May 31, 2025.

NOTE 4 — INCOME TAXES

The effective tax rate was 21.1 % and 19.6 % for the three months ended August 31, 2025 and 2024, respectively.

The increase in the Company's effective tax rate was primarily due to decreased benefits from stock-based compensation.

The effective tax rate was 20.9 % and 18.7 % for the six months ended November 30, 2025 and 2024, respectively.

The increase in the Company's effective tax rate was primarily due to changes in earnings mix and decreased benefits from stock-based compensation.

On July 4, 2025, the U.S.

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however, the Company will continue to evaluate their impact as further information becomes available.

As of August 31, 2025, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 1,021 million, $ 748 million of which would affect the Company's effective tax rate if recognized in future periods.

As of November 30, 2025, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 1,029 million, $ 757 million of which would affect the Company's effective tax rate if recognized in future periods.

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

As of May 31, 2025, total gross unrecognized tax benefits, excluding related interest and penalties, were $ 1,026 million.

As of August 31, 2025 and May 31, 2025, accrued interest and penalties

related to uncertain tax positions were $ 392 million and $ 376 million, respectively, (excluding federal benefit) and included within Deferred income taxes and other liabilities on the Unaudited Condensed Consolidated Balance Sheets.

As of May 31, 2025, total gross unrecognized tax benefits, excluding

related interest and penalties, were $ 1,026 million.

As of November 30, 2025 and May 31, 2025, accrued interest and penalties related to uncertain tax positions were $ 417 million and $ 376 million, respectively, (excluding federal benefit) and included within Deferred income taxes and other liabilities on the Unaudited Condensed 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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The following table summarizes the Company's total stock-based compensation expense recognized within Cost of sales or Operating overhead expense, as applicable:

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2025 2024 2025 2024

Stock options (1)

$ 71 $ 82 $ 147 $ 153

ESPPs 11 23 26 36

Restricted stock and restricted stock units

94 87 188 186

TOTAL STOCK-BASED COMPENSATION EXPENSE $ 176 $ 192 $ 361 $ 375

(1) Expense for stock options includes the expense associated with stock appreciation rights.

(2) Expense for restricted stock units includes an immaterial amount of expense for PSUs.

STOCK OPTIONS

As of August 31, 2025, the Company had $ 309 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.4 years.

As of November 30, 2025, the Company had $ 478 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.6 years.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

As of August 31, 2025, the Company had $ 522 million of unrecognized compensation costs from restricted stock and restricted stock units, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.3 years.

As of November 30, 2025, the Company had $ 805 million of unrecognized compensation costs from restricted stock and restricted stock units, net of estimated forfeitures, to be recognized within Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.8 years.

NOTE 6 — EARNINGS PER SHARE

The following is a reconciliation from basic earnings per common share to diluted earnings per common share.

The computations of diluted earnings per common share exclude restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional 68.3 million and 61.1 million shares of common stock outstanding for the three months ended August 31, 2025 and 2024, respectively, because the awards were assumed to be anti-dilutive.

THREE MONTHS ENDED AUGUST 31,

The computations of diluted earnings per common share exclude restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional 84.1 million and 81.4 million shares of common stock outstanding for the three months ended November 30, 2025 and 2024, respectively, and 84.3 million and 77.9 million shares of common stock outstanding for the six months ended November 30, 2025 and 2024, respectively, because the awards were assumed to be anti-dilutive.

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(In millions, except per share data)

2025 2024 2025 2024

Net income available to common stockholders $ 792 $ 1,163 $ 1,519 $ 2,214

8 unchanged sentences

The Company is exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business.

As of and for the three months ended August 31, 2025, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report.

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

As of and for the three and six months ended November 30, 2025, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report.

The majority of derivatives outstanding as of November 30, 2025, are designated as foreign currency cash flow hedges, primarily for Euro/U.S.

Dollar, Chinese Yuan/U.S.

4 unchanged sentences

DERIVATIVE ASSETS

BALANCE SHEET LOCATION AUGUST 31, MAY 31,

BALANCE SHEET LOCATION NOVEMBER 30, MAY 31,

(Dollars in millions)

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DERIVATIVE LIABILITIES

BALANCE SHEET LOCATION AUGUST 31, MAY 31,

BALANCE SHEET LOCATION NOVEMBER 30, MAY 31,

(Dollars in millions)

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INCOME (LOSS) INTO INCOME (1)

THREE MONTHS ENDED AUGUST 31, LOCATION OF GAIN (LOSS)

THREE MONTHS ENDED NOVEMBER 30, LOCATION OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE INCOME

(LOSS) INTO INCOME THREE MONTHS ENDED AUGUST 31,

(LOSS) INTO INCOME THREE MONTHS ENDED NOVEMBER 30,

2025 2024 2025 2024

4 unchanged sentences

Interest rate swaps (2)

— — Interest expense (income), net ( 2 ) ( 2 )

— — Interest (income) expense, net ( 1 ) ( 2 )

TOTAL DESIGNATED CASH FLOW HEDGES $ 251 $ 524 $ ( 17 ) $ 39

(1) For the three months ended August 31, 2025 and 2024, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

(2) Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest expense (income), net over the term of the issued debt.

(1) For the three months ended November 30, 2025 and 2024, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

(2) Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest (income) expense, net over the term of the issued debt.

(Dollars in millions) AMOUNT OF GAIN (LOSS) RECOGNIZED IN OTHER

COMPREHENSIVE INCOME (LOSS) ON DERIVATIVES (1)

AMOUNT OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE

INCOME (LOSS) INTO INCOME (1)

SIX MONTHS ENDED NOVEMBER 30, LOCATION OF GAIN (LOSS)

RECLASSIFIED FROM ACCUMULATED

OTHER COMPREHENSIVE INCOME

(LOSS) INTO INCOME SIX MONTHS ENDED NOVEMBER 30,

2025 2024 2025 2024

Derivatives designated as cash flow hedges:

Foreign exchange forwards and options $ 47 $ ( 73 ) Revenues $ ( 4 ) $ ( 45 )

Foreign exchange forwards and options 39 298 Cost of sales 50 120

Foreign exchange forwards and options 7 128 Other (income) expense, net ( 33 ) 45

Interest rate swaps (2)

— — Interest (income) expense, net ( 3 ) ( 4 )

TOTAL DESIGNATED CASH FLOW HEDGES $ 93 $ 353 $ 10 $ 116

(1) For the six months ended November 30, 2025 and 2024, the amounts recorded in Other (income) expense, net as a result of the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

(2) Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income (loss), will be released through Interest (income) expense, net over the term of the issued debt.

AMOUNT OF GAIN (LOSS) RECOGNIZED

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ON DERIVATIVES

THREE MONTHS ENDED AUGUST 31,

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,

(Dollars in millions)

2025 2024 2025 2024

Derivatives not designated as hedging instruments:

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CASH FLOW HEDGES

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately $ 18.5 billion and $ 18.4 billion as of August 31, 2025 and May 31, 2025, respectively.

Approximately $ 183 million of deferred net losses (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of August 31, 2025, 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.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately $ 16.8 billion and $ 18.4 billion as of November 30, 2025 and May 31, 2025, respectively.

Approximately $ 68 million of deferred net losses (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of November 30, 2025, 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.

As of August 31, 2025, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 33 months.

As of November 30, 2025, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 33 months.

FAIR VALUE HEDGES

The total notional amount of outstanding interest rate swap contracts designated as fair value hedges was $ 2.4 billion as of August 31, 2025 and May 31, 2025.

The total notional amount of outstanding interest rate swap contracts designated as fair value hedges was $ 2.4 billion as of November 30, 2025 and May 31, 2025.

UNDESIGNATED DERIVATIVE INSTRUMENTS

The total notional amount of outstanding undesignated derivative instruments was $ 4.1 billion and $ 4.0 billion as of August 31, 2025 and May 31, 2025, respectively.

As of August 31, 2025, the Company was in compliance with all credit risk-related contingent features and considers the impact of the risk of counterparty default to be immaterial.

The total notional amount of outstanding undesignated derivative instruments was $ 4.6 billion and $ 4.0 billion as of November 30, 2025 and May 31, 2025, respectively.

As of November 30, 2025, the Company was in compliance with all credit risk-related contingent features and considers the impact of the risk of counterparty default to be immaterial.

For additional information related to the Company's derivative financial instruments and collateral, refer to Note 3 — Fair Value Measurements.

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CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at August 31, 2025 $ 20 $ ( 393 ) $ 115 $ ( 50 ) $ ( 308 )

Other comprehensive income (loss):

Other comprehensive gains (losses) before reclassifications (2)

( 55 ) 247 — 1 193

Reclassifications to net income of previously deferred (gains) losses (2)(3)

Total other comprehensive income (loss) ( 55 ) 258 — 1 204

Balance at November 30, 2025 $ ( 35 ) $ ( 135 ) $ 115 $ ( 49 ) $ ( 104 )

(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.

(3) 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.

(Dollars in millions)

FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1)

CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at August 31, 2024 $ ( 118 ) $ 20 $ 115 $ ( 44 ) $ ( 27 )

Other comprehensive income (loss):

Other comprehensive gains (losses) before reclassifications (2)

( 223 ) 492 — 3 272

Reclassifications to net income of previously deferred (gains) losses (2)(3)

( 1 ) ( 42 ) — — ( 43 )

Total other comprehensive income (loss) ( 224 ) 450 — 3 229

Balance at November 30, 2024 $ ( 342 ) $ 470 $ 115 $ ( 41 ) $ 202

(2) Net of immaterial tax impact.

(Dollars in millions) FOREIGN CURRENCY TRANSLATION ADJUSTMENT (1)

CASH FLOW HEDGES NET INVESTMENT HEDGES (1)

Balance at May 31, 2025 $ ( 114 ) $ ( 207 ) $ 115 $ ( 52 ) $ ( 258 )

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Total other comprehensive income (loss) 79 72 — 3 154

Balance at August 31, 2025 $ 20 $ ( 393 ) $ 115 $ ( 50 ) $ ( 308 )

Balance at November 30, 2025 $ ( 35 ) $ ( 135 ) $ 115 $ ( 49 ) $ ( 104 )

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Total other comprehensive income (loss) ( 86 ) 223 — 12 149

Balance at August 31, 2024 $ ( 118 ) $ 20 $ 115 $ ( 44 ) $ ( 27 )

Balance at November 30, 2024 $ ( 342 ) $ 470 $ 115 $ ( 41 ) $ 202

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The following tables present the Company's Revenues by reportable operating segment, disaggregated by major product line and distribution channel:

THREE MONTHS ENDED AUGUST 31, 2025

THREE MONTHS ENDED NOVEMBER 30, 2025

(Dollars in millions)

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TOTAL REVENUES $ 5,633 $ 3,392 $ 1,423 $ 1,667 $ 9 $ 12,124 $ 300 $ 3 $ 12,427

THREE MONTHS ENDED AUGUST 31, 2024

THREE MONTHS ENDED NOVEMBER 30, 2024

(Dollars in millions)

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TOTAL REVENUES $ 5,179 $ 3,303 $ 1,711 $ 1,744 $ 13 $ 11,950 $ 429 $ ( 25 ) $ 12,354

SIX MONTHS ENDED NOVEMBER 30, 2025

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

Footwear $ 6,761 $ 4,033 $ 2,063 $ 2,212 $ — $ 15,069 $ 574 $ — $ 15,643

Apparel 3,285 2,302 804 828 — 7,219 27 — 7,246

Equipment 607 388 68 117 — 1,180 13 — 1,193

Other — — — — 18 18 52 ( 5 ) 65

TOTAL REVENUES $ 10,653 $ 6,723 $ 2,935 $ 3,157 $ 18 $ 23,486 $ 666 $ ( 5 ) $ 24,147

Sales to Wholesale Customers $ 6,286 $ 4,449 $ 1,660 $ 1,943 $ — $ 14,338 $ 337 $ — $ 14,675

Sales through Direct to Consumer 4,367 2,274 1,275 1,214 — 9,130 277 — 9,407

Other — — — — 18 18 52 ( 5 ) 65

TOTAL REVENUES $ 10,653 $ 6,723 $ 2,935 $ 3,157 $ 18 $ 23,486 $ 666 $ ( 5 ) $ 24,147

SIX MONTHS ENDED NOVEMBER 30, 2024

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

Footwear $ 6,448 $ 3,934 $ 2,449 $ 2,286 $ — $ 15,117 $ 800 $ — $ 15,917

Apparel 3,024 2,129 832 785 — 6,770 43 — 6,813

Equipment 533 383 96 135 — 1,147 18 — 1,165

Other — — — — 27 27 69 ( 48 ) 48

TOTAL REVENUES $ 10,005 $ 6,446 $ 3,377 $ 3,206 $ 27 $ 23,061 $ 930 $ ( 48 ) $ 23,943

Sales to Wholesale Customers $ 5,341 $ 4,194 $ 1,875 $ 1,920 $ — $ 13,330 $ 488 $ — $ 13,818

Sales through Direct to Consumer 4,664 2,252 1,502 1,286 — 9,704 373 — 10,077

Other — — — — 27 27 69 ( 48 ) 48

TOTAL REVENUES $ 10,005 $ 6,446 $ 3,377 $ 3,206 $ 27 $ 23,061 $ 930 $ ( 48 ) $ 23,943

Global Brand Divisions revenues included NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

1 unchanged sentence

Corporate revenues primarily consisted of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse, but managed through the Company's central foreign exchange risk management program.

As of August 31, 2025 and May 31, 2025, the Company did no t have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets.

As of November 30, 2025 and May 31, 2025, the Company did not have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets.

NOTE 10 — 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 Unaudited Condensed Consolidated Statements of Income.

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 (income) expense, net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income.

The Company's segments are defined as follows:

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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;

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

depreciation and amortization related to the Company's headquarters;

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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.

THREE MONTHS ENDED AUGUST 31, 2025

THREE MONTHS ENDED NOVEMBER 30, 2025

(Dollars in millions)

NORTH AMERICA

EUROPE, MIDDLE EAST & AFRICA

GREATER CHINA

ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS

TOTAL NIKE BRAND

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 5,633 $ 3,392 $ 1,423 $ 1,667 $ 9 $ 12,124 $ 300 $ 3 $ 12,427

Cost of Sales

3,335 1,925 836 964 152 7,212 176 ( 6 ) 7,382

2,298 1,467 587 703 ( 143 ) 4,912 124 9 5,045

Demand creation expense

473 334 145 109 185 1,246 24 3 1,273

Operating overhead expense

565 399 252 206 744 2,166 104 496 2,766

Total selling and administrative expense

1,038 733 397 315 929 3,412 128 499 4,039

Other segment items (1)

( 1 ) 1 ( 1 ) ( 1 ) — ( 2 ) — 18 16

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 1,261 $ 733 $ 191 $ 389 $ ( 1,072 ) $ 1,502 $ ( 4 ) $ ( 508 )

Interest (income) expense, net

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES

Supplemental information:

Depreciation and amortization (2)

$ 33 37 10 13 55 148 2 29 $ 179

(1) At 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.

THREE MONTHS ENDED NOVEMBER 30, 2024

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 5,179 $ 3,303 $ 1,711 $ 1,744 $ 13 $ 11,950 $ 429 $ ( 25 ) $ 12,354

Cost of Sales

11 unchanged sentences

$ 1,371 $ 831 $ 375 $ 460 $ ( 1,133 ) $ 1,904 $ 53 $ ( 565 )

Interest expense (income), net

Interest (income) expense, net

TOTAL NIKE, INC.

6 unchanged sentences

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

THREE MONTHS ENDED AUGUST 31, 2024

SIX MONTHS ENDED NOVEMBER 30, 2025

(Dollars in millions)

NORTH AMERICA

EUROPE, MIDDLE EAST & AFRICA

GREATER CHINA

ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS

TOTAL NIKE BRAND

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 10,653 $ 6,723 $ 2,935 $ 3,157 $ 18 $ 23,486 $ 666 $ ( 5 ) $ 24,147

Cost of Sales

6,232 3,825 1,634 1,802 320 13,813 369 ( 23 ) 14,159

4,421 2,898 1,301 1,355 ( 302 ) 9,673 297 18 9,988

Demand creation expense

915 647 244 206 388 2,400 57 4 2,461

Operating overhead expense

1,112 781 490 414 1,575 4,372 206 1,016 5,594

Total selling and administrative expense

2,027 1,428 734 620 1,963 6,772 263 1,020 8,055

Other segment items (1)

( 1 ) 2 ( 1 ) ( 4 ) ( 1 ) ( 5 ) ( 1 ) 45 39

EARNINGS (LOSS) BEFORE INTEREST AND TAXES

$ 2,395 $ 1,468 $ 568 $ 739 $ ( 2,264 ) $ 2,906 $ 35 $ ( 1,047 )

Interest (income) expense, net

TOTAL NIKE, INC.

INCOME BEFORE INCOME TAXES

Supplemental information:

Depreciation and amortization (2)

$ 71 76 22 29 109 307 4 58 $ 369

(1) At 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.

SIX MONTHS ENDED NOVEMBER 30, 2024

(Dollars in millions)

NORTH AMERICA EUROPE, MIDDLE EAST & AFRICA GREATER CHINA ASIA PACIFIC & LATIN AMERICA GLOBAL BRAND DIVISIONS TOTAL NIKE BRAND CONVERSE CORPORATE TOTAL NIKE, INC.

$ 10,005 $ 6,446 $ 3,377 $ 3,206 $ 27 $ 23,061 $ 930 $ ( 48 ) $ 23,943

Cost of Sales

11 unchanged sentences

$ 2,587 $ 1,623 $ 877 $ 862 $ ( 2,360 ) $ 3,589 $ 174 $ ( 1,107 )

Interest expense (income), net

Interest (income) expense, net

TOTAL NIKE, INC.

6 unchanged sentences

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

AUGUST 31, MAY 31,

NOVEMBER 30, MAY 31,

(Dollars in millions)

10 unchanged sentences

$ 7,726 $ 7,489

(1) Inventories as of August 31, 2025 and May 31, 2025 were substantially all finished goods.

(1) Inventories as of November 30, 2025 and May 31, 2025 were substantially all finished goods.

NOTE 11 — COMMITMENTS AND CONTINGENCIES

The Company issues bank guarantees and letters of credit primarily for real estate agreements, self-insurance programs, other general business obligations and legal matters.

As of November 30, 2025 and May 31, 2025, the Company had outstanding bank guarantees and letters of credit of approximately $ 0.9 billion.

Subsequent to November 30, 2025, the Company issued approximately $ 0.3 billion in additional guarantees resulting in total guarantees and letters of credit of approximately $ 1.2 billion as of the date of this report.

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.

4 unchanged sentences

BELGIAN CUSTOMS CLAIM

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 has received claims for certain years from Belgian Customs Authorities for alleged underpaid duties related to products imported beginning in fiscal 2018.

The Company disputes these claims and has engaged in the appellate process.

6 unchanged sentences

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 August 31, 2025 and May 31, 2025, the Company had $ 1,314 million and $ 1,101 million, respectively, of outstanding supplier obligations confirmed as valid under these programs.

As of November 30, 2025 and May 31, 2025, the Company had $ 1,164 million and $ 1,101 million, respectively, of outstanding supplier obligations confirmed as valid under these programs.

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

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-Q

Item 1. Financial Statements