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Nike Income Statement

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					NIKE Case.
Income Statements and Balance Sheets as Originally Reported
                                                                                       Year ended May 31
Income statements:                                                 1999        1998        1997
Revenues............................................            8,776.9     9,553.1     9,186.5
Costs and expenses:
  Costs of sales....................................            5,493.5     6,065.5     5,503.0
  Selling and administrative........................            2,426.6     2,623.8     2,303.7
  Interest expense (Notes 4 and 5)..................               44.1        60.0        52.3
  Other income/expense, net (Notes 1, 10 and 11)....               21.5        20.9        32.3
  Restructuring charge, net (Note 13)...............               45.1       129.9
Total costs and expenses                                        8,030.8     8,900.1     7,891.3
pretax income                                                     746.1       653.0     1,295.2
Income taxes                                                      294.7       253.4       499.4
Net income                                                        451.4       399.6       795.8

Balance Sheets                                                31-May-99   31-May-98   31-May-97
Current Assets:
Cash and equivalents.....................................        198.1       108.6       445.4
Accounts receivable, less allowance for doubtful accounts
  of $73.2, 71.4, 57.2, 43.4, 32.7 and 28.3                     1,540.1     1,674.4     1,754.1
Inventories (Note 2).....................................       1,199.3     1,396.6     1,338.6
Deferred income taxes (Notes 1 and 6)....................         120.6       156.8       135.7
Income taxes receivable..................................          15.9
Prepaid expenses (Note 1)................................         190.9       196.2       157.1
Total current assets...................................         3,264.9     3,532.6     3,830.9

Property, plant and equipment, net (Note 3)................     1,265.8     1,153.1      922.4
Identifiable intangible assets and goodwill (Note 1).......       426.6       435.8      464.2
Deferred income taxes and other assets (Notes 1 and 6).....       290.4       275.9      143.7

Total assets...........................................         5,247.7     5,397.4     5,361.2

Current portion of long-term debt (Note 5)...............          1.0          1.6         2.2
Notes payable (Note 4)...................................        419.1        480.2       553.2
Accounts payable (Note 4)................................        373.2        584.6       687.1
Accrued liabilities......................................        653.6        608.5       570.5
Income taxes payable.....................................                      28.9        53.9
Total current liabilities..............................         1,446.9     1,703.8     1,866.9
Long-term debt (Notes 5 and 14)............................       386.1       379.4       296.0
Deferred income taxes and other liabilities (Notes 1 and 6)        79.8        52.3        42.1
Other non-current liabilities (Note 1)
Redeemable Preferred Stock (Note 7)........................         0.3         0.3         0.3
Common shareholders' equity:
Common Stock at stated value (Note 8):
 Class A convertible--100.7 shares outstanding at 5/31/1999          0.2        0.2        0.2
 Class B--181.6 shares outstanding at 5/31/1999                      2.7        2.7        2.7
Capital in excess of stated value........................          334.1      262.5      210.7
Accumulated other comprehensive income...................          (68.9)     (47.2)     (31.3)
Retained earnings........................................        3,066.5    3,043.4    2,973.7
Total common shareholders' equity.............................   3,334.6    3,261.6    3,155.8

Total liabilities and shareholders' equity...............        5,247.7    5,397.4    5,361.2

check                                                                -          -          -
Year ended May 31
                1996        1995        1994
             6,470.6     4,760.8     3,789.7

             3,906.7     2,865.3     2,301.4
             1,588.6     1,209.8       974.1
                39.5        24.2        15.3
                36.7        11.7         8.3

             5,571.5     4,111.0     3,299.1
               899.1       649.9       490.6
               345.9       250.2       191.8
               553.2       399.7       298.8

          31-May-96    31-May-95   31-May-94

              262.1       216.1       518.8

             1,346.1     1,053.2      703.7
               931.2       629.7      470.0
                93.1        72.7       37.6

                94.4        74.2        40.3
             2,726.9     2,045.9     1,770.4

              643.5       554.9       405.8
              474.8       495.9       163.0
              106.4        46.0        34.5

             3,951.6     3,142.7     2,373.8

                 7.3        31.9        3.9
               445.1       397.1      127.4
               455.0       297.7      210.6
               480.4       345.2      181.9
                79.3        35.6       38.3
             1,467.1     1,107.5      562.0
                 9.6        10.6       12.4
                43.3        17.8       18.2
                            41.9       40.0
                 0.3         0.3        0.3
    0.2        0.2       0.2
    2.7        2.7       2.7
  154.8      122.4     108.3
  (16.5)       1.6     (15.1)
2,290.2    1,837.8   1,644.9
2,431.4    1,964.7   1,740.9

3,951.6    3,142.7   2,373.8

    -         -          -
Information relevant for balance sheet and income statement reformulation
from financial statement footnotes:
                                                           1999      1998
          Advertising and Promotion (from Note 1)         978.6   1,130.0
          Marginal tax rate (from Note 6)                38.3%     38.4%
          NIAC payable (from Note 4)                        98.0    280.1
          Capitalized interest expense (from Note 3)         6.9       6.5
          Interest income (from Note 11)                    13.0      16.5
  1997      1996      1995      1994
 978.3     642.5     495.0     373.1
38.5%     37.6%     38.2%     38.2%
 414.1     237.4     129.5     118.3
    2.8       0.9       0.3       0.3
   20.1      16.1      26.1      19.1
NIKE Case.
Reformulated income statements and balance sheets
                                                                         Year ended May 31
                                                   1999          1998        1997      1996       1995
Revenues                                        8,776.9       9,553.1     9,186.5   6,470.6    4,760.8
Cost of sales                                   5,493.5       6,065.5     5,503.0   3,906.7    2,865.3
Gross margin                                    3,283.4       3,487.6     3,683.5   2,563.9    1,895.6
Advertising                                       978.6       1,130.0       978.3     642.5      495.0
Other selling and administrative expenses       1,441.1       1,487.3     1,322.6     945.3      714.5
Core operating income before tax                  863.7         870.3     1,382.6     976.1      686.1
Tax on core operating income                      339.7         336.8       533.0     374.9      264.0
Core operating income after tax                   524.0         533.5       849.6     601.3      422.0

Other operating income (expense):
   Restructuring charge, net                         (45.1)   (129.9)         0.0       0.0        0.0
   Other, net                                        (34.5)    (37.4)       (52.4)    (52.8)     (37.8)
Other operating income before tax                    (79.6)   (167.3)       (52.4)    (52.8)     (37.8)
Tax on other operating income                         30.5      64.2         20.2      19.8       14.4
Other operating income after tax                     (49.1)   (103.1)       (32.2)    (32.9)     (23.4)

Operating income (after tax)                         474.8     430.4        817.3     568.3     398.7

Net financing expense (income):
Interest expense                                      51.0       66.5        55.1      40.4       24.5
Interest income                                      (13.0)     (16.5)      (20.1)    (16.1)     (26.1)
Tax shield                                           (14.6)     (19.2)      (13.5)     (9.1)       0.6
Net financing expense                                 23.4       30.8        21.5      15.1       (1.0)

Earnings available to common shareholders            451.4     399.6        795.8     553.2     399.7


Reformulated balance sheets:
                                              5/31/1999 5/31/1998 5/31/1997 5/31/1996 5/31/1995
Operating assets:
Accounts receivable, net                            1,540.1   1,674.4      1,754.1   1,346.1   1,053.2
Inventories                                         1,199.3   1,396.6      1,338.6     931.2     629.7
Deferred tax assets                                   120.6     156.8        135.7      93.1      72.7
Income tax receivable                                  15.9       0.0          0.0       0.0       0.0
Prepaid expenses                                      190.9     196.2        157.1      94.4      74.2
PP&E, net                                           1,265.8   1,153.1        922.4     643.5     554.9
Intangibles                                           426.6     435.8        464.2     474.8     495.9
Non-current deferred taxes and other assets           290.4     275.9        143.7     106.4      46.0
Total operating assets                              5,049.6   5,288.8      4,915.8   3,689.5   2,926.7

Operating liabilitites:
Accounts payable                                      275.2     304.5       273.0     217.6      168.2
Accrued liabilities                                   653.6     608.5       570.5     480.4      345.2
Income tax payable                                      0.0      28.9        53.9      79.3       35.6
Deferred taxes and other liabilities                   79.8      52.3        42.1      43.3       17.8
Other non-current liabilities                           0.0       0.0         0.0       0.0       41.9
Total operating liabilities                         1,008.6     994.2       939.5     820.6      608.7
Net operating assets                     4,041.0   4,294.6   3,976.2   2,868.9   2,318.0

Net financial obligations:
Current portion of long-term debt            1.0       1.6       2.2       7.3      31.9
Payable to NIAC                             98.0     280.1     414.1     237.4     129.5
Notes payable                              419.1     480.2     553.2     445.1     397.1
Long term debt                             386.1     379.4     296.0       9.6      10.6
Redeemable preferred stock                   0.3       0.3       0.3       0.3       0.3
Cash and cash equivalents                 -198.1    -108.6    -445.4    -262.1    -216.1
Net financial obligations                  706.4   1,033.0     820.4     437.5     353.3

Class A convertible common stock             0.2       0.2       0.2       0.2       0.2
Class B common stock                         2.7       2.7       2.7       2.7       2.7
Capital in excess of stated value          334.1     262.5     210.7     154.8     122.4
Accumulated other comprehensive income     -68.9     -47.2     -31.3     -16.5       1.6
Retained earnings                        3,066.5   3,043.4   2,973.7   2,290.2   1,837.8
Total common shareholders' equity        3,334.6   3,261.6   3,155.8   2,431.4   1,964.7

check                                       -         -         -         -         -
    1994
 3,789.7
 2,301.4
 1,488.2
   373.1
   600.7
   514.4
   200.9 Assume other operating income and financing income/expense are taxed at marginal rates. Reclassify interest expe
   313.5


     0.0
   (27.3)
   (27.3)
    10.4
   (16.9)

   296.6


    15.6
   (19.1)
     1.3
    (2.2)

   298.8



5/31/1994

    703.7
    470.0
     37.6
      0.0
     40.3
    405.8
    163.0
     34.5
  1,855.0


    92.3
   181.9
    38.3
    18.2
    40.0
   370.7
1,484.3


    3.9
  118.3
  127.4
   12.4
    0.3
 -518.8 Assume all cash and equivalents are financial assets
 -256.6

    0.2
    2.7
  108.3
  -15.1
1,644.9
1,740.9

   -
arginal rates. Reclassify interest expense component of depreciation (assume depreciation mainly affects administrative expense as the com
ts administrative expense as the company owns few factories, and assume the amount capitalized each year equals the amount included in
year equals the amount included in depreciation)

				
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