NIKE Inc
For the period ended Nov 30, 2023. Filed Jan 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2023 · Filed Jan 5, 2024
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Fair Value Measurements
NOTE 3 — FAIR VALUE MEASUREMENTS
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. For additional information about the Company's fair value policies, refer to Note 1 — Summary of Significant Accounting Policies within the Annual Report.
The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of November 30, 2023 and May 31, 2023, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:
| NOVEMBER 30, 2023 | |||
|---|---|---|---|
| (Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS |
| Cash | $1,603 | $1,603 | $— |
| Level 1: | |||
| U.S. Treasury securities | 1,420 | — | 1,420 |
| Level 2: | |||
| Commercial paper and bonds | 550 | 18 | 532 |
| Money market funds | 5,653 | 5,653 | — |
| Time deposits | 652 | 645 | 7 |
| U.S. Agency securities | 49 | — | 49 |
| Total Level 2 | 6,904 | 6,316 | 588 |
| TOTAL | $9,927 | $7,919 | $2,008 |
| MAY 31, 2023 | |||
|---|---|---|---|
| (Dollars in millions) | ASSETS AT FAIR VALUE | CASH AND EQUIVALENTS | SHORT-TERM INVESTMENTS |
| Cash | $1,767 | $1,767 | $— |
| Level 1: | |||
| U.S. Treasury securities | 2,655 | — | 2,655 |
| Level 2: | |||
| Commercial paper and bonds | 543 | 15 | 528 |
| Money market funds | 5,157 | 5,157 | — |
| Time deposits | 507 | 502 | 5 |
| U.S. Agency securities | 46 | — | 46 |
| Total Level 2 | 6,253 | 5,674 | 579 |
| TOTAL | $10,675 | $7,441 | $3,234 |
As of November 30, 2023, the Company held $1,316 million of available-for-sale debt securities with maturity dates within one year and $692 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 $92 million and $49 million for the three months ended November 30, 2023 and 2022, respectively, and $191 million and $114 million for the six months ended November 30, 2023 and 2022, 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:
| NOVEMBER 30, 2023 | ||||||
|---|---|---|---|---|---|---|
| DERIVATIVE ASSETS · DERIVATIVE LIABILITIES | ||||||
| (Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES |
| Level 2: | ||||||
| Foreign exchange forwards and options(1) | $371 | $322 | $49 | $202 | $162 | $40 |
(1)If the foreign exchange derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $180 million as of November 30, 2023. As of that date, no amount of cash collateral had been received or posted on the derivative asset and liability balances related to these foreign exchange derivative instruments.
| MAY 31, 2023 | ||||||
|---|---|---|---|---|---|---|
| DERIVATIVE ASSETS · DERIVATIVE LIABILITIES | ||||||
| (Dollars in millions) | ASSETS AT FAIR VALUE | OTHER CURRENT ASSETS | OTHER LONG-TERM ASSETS | LIABILITIES AT FAIR VALUE | ACCRUED LIABILITIES | OTHER LONG-TERM LIABILITIES |
| Level 2: | ||||||
| Foreign exchange forwards and options(1) | $557 | $493 | $64 | $180 | $128 | $52 |
(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 received $36 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of May 31, 2023.
For additional information related to the Company's derivative financial instruments and credit risk, refer to Note 7 — Risk Management and Derivatives.
The carrying amounts of other current financial assets and other current financial liabilities approximate fair value.
FINANCIAL ASSETS AND LIABILITIES NOT RECORDED AT FAIR VALUE
The Company's Long-term debt is recorded at adjusted cost, net of unamortized premiums, discounts and debt issuance costs. 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 $7,744 million at November 30, 2023 and $7,889 million at May 31, 2023.
The carrying amounts reflected on the Unaudited Condensed Consolidated Balance Sheets for Notes payable approximate fair value.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.