UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, ~~2021~~2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

Commission File No. 1-10635

NIKE, Inc.

(Exact name of Registrant as specified in its charter)


Oregon						93-0584541
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Bowerman Drive, Beaverton, Oregon 97005-6453

(Address of principal executive offices and zip code)

(503) 671-6453

(Registrant's telephone number, including area code)


SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Class B Common Stock	NKE	New York Stock Exchange
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)

Indicate by check mark:

YES

•

whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☐

•

whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☐

•

whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

•

if an emerging growth company, if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

•

whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

☐


As of December ~~27, 2021,~~28, 2022, the number of shares of the Registrant's Common Stock outstanding were:
Class A			~~305,007,252~~304,897,252
Class B			~~1,276,288,021~~1,245,665,731
			~~1,581,295,273~~1,550,562,983

Table of Contents

NIKE, INC.

FORM 10-Q

TABLE OF CONTENTS

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME


		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,				THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(In millions, except per share data)	(In millions, except per share data)	2021		2020		2021		2020			(In millions, except per share data)	2022		2021			2022		2021
Revenues	Revenues	$	11,357	$	11,243	$	23,605	$	21,837		Revenues	$	13,315	$	11,357		$	26,002	$	23,605
Cost of sales	Cost of sales	6,144		6,396		12,696		12,249			Cost of sales	7,604		6,144			14,676		12,696
Gross profit	Gross profit	5,213		4,847		10,909		9,588			Gross profit	5,711		5,213			11,326		10,909
Demand creation expense	Demand creation expense	1,017		729		1,935		1,406			Demand creation expense	1,102		1,017			2,045		1,935
Operating overhead expense	Operating overhead expense	2,742		2,538		5,396		4,836			Operating overhead expense	3,022		2,742			5,999		5,396
Total selling and administrative expense	Total selling and administrative expense	3,759		3,267		7,331		6,242			Total selling and administrative expense	4,124		3,759			8,044		7,331
Interest expense (income), net	Interest expense (income), net	55		70		112		135			Interest expense (income), net	16		55			29		112
Other (income) expense, net	Other (income) expense, net	(102)		54		(141)		40			Other (income) expense, net	(79)		(102)			(225)		(141)
Income before income taxes	Income before income taxes	1,501		1,456		3,607		3,171			Income before income taxes	1,650		1,501			3,478		3,607
Income tax expense	Income tax expense	164		205		396		402			Income tax expense	319		164			679		396
NET INCOME	NET INCOME	$	1,337	$	1,251	$	3,211	$	2,769		NET INCOME	$	1,331	$	1,337		$	2,799	$	3,211
Earnings per common share:	Earnings per common share:										Earnings per common share:
Basic	Basic	$	0.84	$	0.80	$	2.03	$	1.77		Basic	$	0.85	$	0.84		$	1.79	$	2.03
Diluted	Diluted	$	0.83	$	0.78	$	1.98	$	1.73		Diluted	$	0.85	$	0.83		$	1.77	$	1.98
Weighted average common shares outstanding:	Weighted average common shares outstanding:										Weighted average common shares outstanding:
Basic	Basic	1,582.4		1,573.0		1,582.2		1,567.4			Basic	1,559.0		1,582.4			1,563.1		1,582.2
Diluted	Diluted	1,617.4		1,609.5		1,618.5		1,601.9			Diluted	1,572.4		1,617.4			1,579.1		1,618.5

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

Table of Contents

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,					THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021		2022		2021
Net income	Net income	$	1,337	$	1,251	$	3,211	$	2,769	Net income	$	1,331	$	1,337	$	2,799	$	3,211
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Change in net foreign currency translation adjustment	Change in net foreign currency translation adjustment	(155)		78		(283)		396		Change in net foreign currency translation adjustment	354		(155)		128		(283)
Change in net gains (losses) on cash flow hedges	Change in net gains (losses) on cash flow hedges	366		(103)		804		(761)		Change in net gains (losses) on cash flow hedges	(401)		366		154		804
Change in net gains (losses) on other	Change in net gains (losses) on other	1		(3)		4		(8)		Change in net gains (losses) on other	(30)		1		(41)		4
Total other comprehensive income (loss), net of tax	Total other comprehensive income (loss), net of tax	212		(28)		525		(373)		Total other comprehensive income (loss), net of tax	(77)		212		241		525
TOTAL COMPREHENSIVE INCOME	TOTAL COMPREHENSIVE INCOME	$	1,549	$	1,223	$	3,736	$	2,396	TOTAL COMPREHENSIVE INCOME	$	1,254	$	1,549	$	3,040	$	3,736

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

Table of Contents

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


		NOVEMBER 30,		MAY 31,			NOVEMBER 30,		MAY 31,
(In millions)	(In millions)	2021		2021		(In millions)	2022		2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and equivalents	Cash and equivalents	$	10,751	$	9,889	Cash and equivalents	$	6,490	$	8,574
Short-term investments	Short-term investments	4,352		3,587		Short-term investments	4,131		4,423
Accounts receivable, net	Accounts receivable, net	3,746		4,463		Accounts receivable, net	5,437		4,667
Inventories	Inventories	6,506		6,854		Inventories	9,326		8,420
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,822		1,498		Prepaid expenses and other current assets	2,063		2,129
Total current assets	Total current assets	27,177		26,291		Total current assets	27,447		28,213
Property, plant and equipment, net	Property, plant and equipment, net	4,812		4,904		Property, plant and equipment, net	4,854		4,791
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	3,017		3,113		Operating lease right-of-use assets, net	2,809		2,926
Identifiable intangible assets, net	Identifiable intangible assets, net	265		269		Identifiable intangible assets, net	280		286
Goodwill	Goodwill	242		242		Goodwill	281		284
Deferred income taxes and other assets	Deferred income taxes and other assets	3,404		2,921		Deferred income taxes and other assets	3,976		3,821
TOTAL ASSETS	TOTAL ASSETS	$	38,917	$	37,740	TOTAL ASSETS	$	39,647	$	40,321
LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	—	$	—	Current portion of long-term debt	$	500	$	500
Notes payable	Notes payable	9		2		Notes payable	7		10
Accounts payable	Accounts payable	2,795		2,836		Accounts payable	2,810		3,358
Current portion of operating lease liabilities	Current portion of operating lease liabilities	462		467		Current portion of operating lease liabilities	426		420
Accrued liabilities	Accrued liabilities	5,431		6,063		Accrued liabilities	6,020		6,220
Income taxes payable	Income taxes payable	160		306		Income taxes payable	436		222
Total current liabilities	Total current liabilities	8,857		9,674		Total current liabilities	10,199		10,730
Long-term debt	Long-term debt	9,417		9,413		Long-term debt	8,924		8,920
Operating lease liabilities	Operating lease liabilities	2,835		2,931		Operating lease liabilities	2,668		2,777
Deferred income taxes and other liabilities	Deferred income taxes and other liabilities	2,884		2,955		Deferred income taxes and other liabilities	2,584		2,613
Commitments and contingencies (Note 12)						Commitments and contingencies (Note 12)
Redeemable preferred stock	Redeemable preferred stock	—		—		Redeemable preferred stock	—		—
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:
Common stock at stated value:	Common stock at stated value:					Common stock at stated value:
Class A convertible — 305 and 305 shares outstanding	Class A convertible — 305 and 305 shares outstanding	—		—		Class A convertible — 305 and 305 shares outstanding	—		—
Class B — 1,278 and 1,273 shares outstanding		3		3
Class B — 1,245 and 1,266 shares outstanding						Class B — 1,245 and 1,266 shares outstanding	3		3
Capital in excess of stated value	Capital in excess of stated value	10,990		9,965		Capital in excess of stated value	11,851		11,484
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	145		(380)		Accumulated other comprehensive income (loss)	559		318
Retained earnings (deficit)		3,786		3,179
Retained earnings						Retained earnings	2,859		3,476
Total shareholders' equity	Total shareholders' equity	14,924		12,767		Total shareholders' equity	15,272		15,281
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	38,917	$	37,740	TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	39,647	$	40,321

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

Table of Contents

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


		SIX MONTHS ENDED NOVEMBER 30,					SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		(Dollars in millions)	2022		2021
Cash provided (used) by operations:	Cash provided (used) by operations:					Cash provided (used) by operations:
Net income	Net income	$	3,211	$	2,769	Net income	$	2,799	$	3,211
Adjustments to reconcile net income to net cash provided (used) by operations:	Adjustments to reconcile net income to net cash provided (used) by operations:					Adjustments to reconcile net income to net cash provided (used) by operations:
Depreciation	Depreciation	358		361		Depreciation	342		358
Deferred income taxes	Deferred income taxes	(222)		(177)		Deferred income taxes	(150)		(222)
Stock-based compensation	Stock-based compensation	306		325		Stock-based compensation	364		306
Amortization, impairment and other	Amortization, impairment and other	3		103		Amortization, impairment and other	137		3
Net foreign currency adjustments	Net foreign currency adjustments	48		(98)		Net foreign currency adjustments	(125)		48
Changes in certain working capital components and other assets and liabilities:	Changes in certain working capital components and other assets and liabilities:					Changes in certain working capital components and other assets and liabilities:
(Increase) decrease in accounts receivable	(Increase) decrease in accounts receivable	543		(921)		(Increase) decrease in accounts receivable	(878)		543
(Increase) decrease in inventories	(Increase) decrease in inventories	268		1,321		(Increase) decrease in inventories	(948)		268
(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets	(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets	(444)		(163)		(Increase) decrease in prepaid expenses, operating lease right-of-use assets and other current and non-current assets	(239)		(444)
Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities	Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities	(203)		(165)		Increase (decrease) in accounts payable, accrued liabilities, operating lease liabilities and other current and non-current liabilities	56		(203)
Cash provided (used) by operations	Cash provided (used) by operations	3,868		3,355		Cash provided (used) by operations	1,358		3,868
Cash provided (used) by investing activities:	Cash provided (used) by investing activities:					Cash provided (used) by investing activities:
Purchases of short-term investments	Purchases of short-term investments	(6,699)		(4,505)		Purchases of short-term investments	(3,500)		(6,699)
Maturities of short-term investments	Maturities of short-term investments	3,891		802		Maturities of short-term investments	1,951		3,891
Sales of short-term investments	Sales of short-term investments	2,032		914		Sales of short-term investments	1,972		2,032
Additions to property, plant and equipment	Additions to property, plant and equipment	(362)		(344)		Additions to property, plant and equipment	(500)		(362)
Other investing activities	Other investing activities	33		256		Other investing activities	54		33
Cash provided (used) by investing activities	Cash provided (used) by investing activities	(1,105)		(2,877)		Cash provided (used) by investing activities	(23)		(1,105)
Cash provided (used) by financing activities:	Cash provided (used) by financing activities:					Cash provided (used) by financing activities:
Increase (decrease) in notes payable	Increase (decrease) in notes payable	13		(37)		Increase (decrease) in notes payable	(3)		13
Repayment of borrowings		—		(173)
Proceeds from exercise of stock options and other stock issuances	Proceeds from exercise of stock options and other stock issuances	846		781		Proceeds from exercise of stock options and other stock issuances	260		846
Repurchase of common stock	Repurchase of common stock	(1,723)		—		Repurchase of common stock	(2,550)		(1,723)
Dividends — common and preferred	Dividends — common and preferred	(873)		(769)		Dividends — common and preferred	(960)		(873)
Other financing activities	Other financing activities	(109)		(94)		Other financing activities	(68)		(109)
Cash provided (used) by financing activities	Cash provided (used) by financing activities	(1,846)		(292)		Cash provided (used) by financing activities	(3,321)		(1,846)
Effect of exchange rate changes on cash and equivalents	Effect of exchange rate changes on cash and equivalents	(55)		101		Effect of exchange rate changes on cash and equivalents	(98)		(55)
Net increase (decrease) in cash and equivalents	Net increase (decrease) in cash and equivalents	862		287		Net increase (decrease) in cash and equivalents	(2,084)		862
Cash and equivalents, beginning of period	Cash and equivalents, beginning of period	9,889		8,348		Cash and equivalents, beginning of period	8,574		9,889
CASH AND EQUIVALENTS, END OF PERIOD	CASH AND EQUIVALENTS, END OF PERIOD	$	10,751	$	8,635	CASH AND EQUIVALENTS, END OF PERIOD	$	6,490	$	10,751
Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Non-cash additions to property, plant and equipment	Non-cash additions to property, plant and equipment	$	103	$	118	Non-cash additions to property, plant and equipment	$	124	$	103
Dividends declared and not paid	Dividends declared and not paid	481		435		Dividends declared and not paid	526		481

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

Table of Contents

NIKE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


		COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS (DEFICIT)		TOTAL			COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS		TOTAL
		CLASS A			CLASS B												CLASS A			CLASS B
(In millions, except per share data)	(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT										(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT
Balance at August 31, 2021		305	$	—	1,278	$	3	$	10,521	$	(67)	$	3,886	$	14,343
Balance at August 31, 2022																Balance at August 31, 2022	305	$	—	1,259	$	3	$	11,648	$	636	$	3,535	$	15,822
Stock options exercised	Stock options exercised				3			256						256		Stock options exercised				1			69						69
Repurchase of Class B common stock					(6)			(40)				(928)		(968)
Dividends on common stock ($0.305 per share)												(483)		(483)
Repurchase of Class B Common Stock																Repurchase of Class B Common Stock				(17)			(123)				(1,484)		(1,607)
Dividends on common stock ($0.340 per share)																Dividends on common stock ($0.340 per share)											(526)		(526)
Issuance of shares to employees, net of shares withheld for employee taxes	Issuance of shares to employees, net of shares withheld for employee taxes				3			83				(26)		57		Issuance of shares to employees, net of shares withheld for employee taxes				2			63				3		66
Stock-based compensation	Stock-based compensation							170						170		Stock-based compensation							194						194
Net income	Net income											1,337		1,337		Net income											1,331		1,331
Other comprehensive income (loss)	Other comprehensive income (loss)									212				212		Other comprehensive income (loss)									(77)				(77)
Balance at November 30, 2021		305	$	—	1,278	$	3	$	10,990	$	145	$	3,786	$	14,924
Balance at November 30, 2022																Balance at November 30, 2022	305	$	—	1,245	$	3	$	11,851	$	559	$	2,859	$	15,272


		COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS (DEFICIT)		TOTAL			COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS		TOTAL
		CLASS A			CLASS B												CLASS A			CLASS B
(In millions, except per share data)	(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT										(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT
Balance at August 31, 2020		315	$	—	1,250	$	3	$	8,695	$	(401)	$	927	$	9,224
Balance at August 31, 2021																Balance at August 31, 2021	305	$	—	1,278	$	3	$	10,521	$	(67)	$	3,886	$	14,343
Stock options exercised	Stock options exercised				8			366						366		Stock options exercised				3			256						256
Conversion to Class B Common Stock		(10)			10									—
Dividends on common stock ($0.275 per share)												(437)		(437)
Repurchase of Class B Common Stock																Repurchase of Class B Common Stock				(6)			(40)				(928)		(968)
Dividends on common stock ($0.305 per share)																Dividends on common stock ($0.305 per share)											(483)		(483)
Issuance of shares to employees, net of shares withheld for employee taxes	Issuance of shares to employees, net of shares withheld for employee taxes				2			86				(11)		75		Issuance of shares to employees, net of shares withheld for employee taxes				3			83				(26)		57
Stock-based compensation	Stock-based compensation							189						189		Stock-based compensation							170						170
Net income	Net income											1,251		1,251		Net income											1,337		1,337
Other comprehensive income (loss)	Other comprehensive income (loss)									(28)				(28)		Other comprehensive income (loss)									212				212
Balance at November 30, 2020		305	$	—	1,270	$	3	$	9,336	$	(429)	$	1,730	$	10,640
Balance at November 30, 2021																Balance at November 30, 2021	305	$	—	1,278	$	3	$	10,990	$	145	$	3,786	$	14,924


	COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS		TOTAL
	CLASS A			CLASS B
(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT
Balance at May 31, 2022	305	$	—	1,266	$	3	$	11,484	$	318	$	3,476	$	15,281
Stock options exercised				3			149						149
Repurchase of Class B Common Stock				(26)			(189)				(2,409)		(2,598)
Dividends on common stock ($0.645 per share) and preferred stock ($0.10 per share)											(1,008)		(1,008)
Issuance of shares to employees, net of shares withheld for employee taxes				2			43				1		44
Stock-based compensation							364						364
Net income											2,799		2,799
Other comprehensive income (loss)									241				241
Balance at November 30, 2022	305	$	—	1,245	$	3	$	11,851	$	559	$	2,859	$	15,272

Table of Contents

COMMON STOCK CAPITAL IN EXCESS OF STATED VALUE ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) RETAINED EARNINGS (DEFICIT) TOTAL
CLASS A CLASS B
(In millions, except per share data) SHARES AMOUNT SHARES AMOUNT
Balance at May 31, 2021 305 $ — 1,273 $ 3 $ 9,965 $ (380) $ 3,179 $ 12,767
Stock options exercised 13 725 725
Repurchase of Class B Common Stock (11) (69) (1,641) (1,710)
Dividends on common stock ($0.580 per share) and preferred stock ($0.10 per share) (918) (918)
Issuance of shares to employees, net of shares withheld for employee taxes 3 63 (45) 18
Stock-based compensation 306 306
Net income 3,211 3,211
Other comprehensive income (loss) 525 525
Balance at November 30, 2021 305 $ — 1,278 $ 3 $ 10,990 $ 145 $ 3,786 $ 14,924


		COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS (DEFICIT)		TOTAL			COMMON STOCK						CAPITAL IN EXCESS OF STATED VALUE		ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)		RETAINED EARNINGS		TOTAL
		CLASS A			CLASS B												CLASS A			CLASS B
(In millions, except per share data)	(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT										(In millions, except per share data)	SHARES	AMOUNT		SHARES	AMOUNT
Balance at May 31, 2020		315	$	—	1,243	$	3	$	8,299	$	(56)	$	(191)	$	8,055
Balance at May 31, 2021																Balance at May 31, 2021	305	$	—	1,273	$	3	$	9,965	$	(380)	$	3,179	$	12,767
Stock options exercised	Stock options exercised				15			657						657		Stock options exercised				13			725						725
Conversion to Class B Common Stock		(10)			10									—
Dividends on common stock ($0.520 per share) and preferred stock ($0.10 per share)												(820)		(820)
Repurchase of Class B Common Stock																Repurchase of Class B Common Stock				(11)			(69)				(1,641)		(1,710)
Dividends on common stock ($0.580 per share) and preferred stock ($0.10 per share)																Dividends on common stock ($0.580 per share) and preferred stock ($0.10 per share)											(918)		(918)
Issuance of shares to employees, net of shares withheld for employee taxes	Issuance of shares to employees, net of shares withheld for employee taxes				2			55				(28)		27		Issuance of shares to employees, net of shares withheld for employee taxes				3			63				(45)		18
Stock-based compensation	Stock-based compensation							325						325		Stock-based compensation							306						306
Net income	Net income											2,769		2,769		Net income											3,211		3,211
Other comprehensive income (loss)	Other comprehensive income (loss)									(373)				(373)		Other comprehensive income (loss)									525				525
Balance at November 30, 2020		305	$	—	1,270	$	3	$	9,336	$	(429)	$	1,730	$	10,640
Balance at November 30, 2021																Balance at November 30, 2021	305	$	—	1,278	$	3	$	10,990	$	145	$	3,786	$	14,924

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

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


~~Note~~NOTE 1	Summary of Significant Accounting Policies	8
~~Note~~NOTE 2	Inventories	8
~~Note~~NOTE 3	Accrued Liabilities	8
~~Note~~NOTE 4	Fair Value Measurements	8
~~Note~~NOTE 5	Income Taxes	10
~~Note~~NOTE 6	Stock-Based Compensation	11
~~Note~~NOTE 7	Earnings Per Share	12
~~Note~~NOTE 8	Risk Management and Derivatives	12
~~Note~~NOTE 9	Accumulated Other Comprehensive Income (Loss)	17
~~Note~~NOTE 10	Revenues	19
~~Note~~NOTE 11	Operating Segments	21
~~Note~~NOTE 12	~~Acquisitions and Divestitures~~Contingencies	23
~~Note~~NOTE 13	~~Restructuring~~Acquisitions and Divestitures	23

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NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The Unaudited Condensed Consolidated Financial Statements include the accounts of NIKE, Inc. and its subsidiaries (the “Company” or “NIKE”) and reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim period. The year-end Condensed Consolidated Balance Sheet data as of May 31, ~~2021,~~2022, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). 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, ~~2021.~~2022. The results of operations for the three and six months ended November 30, ~~2021,~~2022, are not necessarily indicative of results to be expected for the entire fiscal year.

The ~~extent to which the evolving COVID-19 pandemic impacts the Company's financial statements depends on a number of factors, including the magnitude and duration~~uncertain state of the ~~pandemic.~~global economy or worsening macroeconomic conditions could affect the Company’s business, including, among other things, higher inventory levels in various markets, higher inventory obsolescence reserves, higher promotional activity, reduced demand for product, reduced orders from wholesale customers for product and order cancellations. There ~~have been and may continue to~~could also be developments outside of the Company's control, including new COVID-19 variants, that require the Company to make adjustments to its operating plan, such as store operating hours and the timeline to return to normal production volumes in factories impacted by COVID-19. Such developments and other potential impacts of COVID-19, such as new or prolonged ~~factory closures, higher inventory levels~~COVID-19 related restrictions or ~~inventory shortages in various markets, other adverse impacts on the global supply chain, revised payment terms with certain~~disruptions. Any of ~~its wholesale customers, higher sales-related reserves, factory cancellation costs and a volatile effective tax rate driven by changes in the mix of earnings across its jurisdictions,~~these factors, among ~~other factors,~~others, could have material adverse impacts on the ~~Company's~~Company’s revenue growth as well as ~~its~~ overall profitability in future periods. As a result of these circumstances, COVID-19 related disruptions are making it more challenging to compare the Company's performance, including its revenue growth and overall profitability, across quarters and fiscal years, and the Company expects the operating environment will remain volatile as COVID-19 variants continue to cause disruption to operations.


NOTE 2 — INVENTORIES

Inventory balances of ~~$6,506~~$9,326 million and ~~$6,854~~$8,420 million at November 30, ~~2021~~2022 and May 31, ~~2021,~~2022, respectively, were substantially all finished goods.


NOTE 3 — ACCRUED LIABILITIES

Accrued liabilities included the following:


		NOVEMBER 30,		MAY 31,			NOVEMBER 30,		MAY 31,
(Dollars in millions)	(Dollars in millions)	2021		2021		(Dollars in millions)	2022		2022
Compensation and benefits, excluding taxes	Compensation and benefits, excluding taxes	$	1,178	$	1,472	Compensation and benefits, excluding taxes	$	1,220	$	1,297
Sales-related reserves	Sales-related reserves	903		1,077		Sales-related reserves	1,149		1,015
Import and logistics costs						Import and logistics costs	580		489
Dividends payable	Dividends payable	482		436		Dividends payable	534		485
Allowance for expected loss on sale(1)	Allowance for expected loss on sale(1)	344		358		Allowance for expected loss on sale(1)	—		397
Other	Other	2,524		2,720		Other	2,537		2,537
TOTAL ACCRUED LIABILITIES	TOTAL ACCRUED LIABILITIES	$	5,431	$	6,063	TOTAL ACCRUED LIABILITIES	$	6,020	$	6,220

(1)Refer to Note 1213 — Acquisitions and Divestitures for additional information.


NOTE 4 — 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 of the Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

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The following tables present information about the Company's financial assets measured at fair value on a recurring basis as of November 30, ~~2021~~2022 and May 31, ~~2021,~~2022, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:


		NOVEMBER 30, 2021							NOVEMBER 30, 2022
(Dollars in millions)	(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS		(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS
Cash	Cash	$	840	$	840	$	—	Cash	$	788	$	788	$	—
Level 1:	Level 1:							Level 1:
U.S. Treasury securities	U.S. Treasury securities	3,878		224		3,654		U.S. Treasury securities	3,417		4		3,413
Level 2:	Level 2:							Level 2:
Commercial paper and bonds	Commercial paper and bonds	738		44		694		Commercial paper and bonds	622		29		593
Money market funds	Money market funds	8,732		8,732		—		Money market funds	5,024		5,024		—
Time deposits	Time deposits	915		911		4		Time deposits	753		645		108

U.S. Agency securities								U.S. Agency securities	17		—		17
Total Level 2	Total Level 2	10,385		9,687		698		Total Level 2	6,416		5,698		718
TOTAL	TOTAL	$	15,103	$	10,751	$	4,352	TOTAL	$	10,621	$	6,490	$	4,131


		MAY 31, 2021							MAY 31, 2022
(Dollars in millions)	(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS		(Dollars in millions)	ASSETS AT FAIR VALUE		CASH AND EQUIVALENTS		SHORT-TERM INVESTMENTS
Cash	Cash	$	840	$	840	$	—	Cash	$	839	$	839	$	—
Level 1:	Level 1:							Level 1:
U.S. Treasury securities	U.S. Treasury securities	2,892		—		2,892		U.S. Treasury securities	3,801		8		3,793
Level 2:	Level 2:							Level 2:
Commercial paper and bonds	Commercial paper and bonds	748		57		691		Commercial paper and bonds	660		37		623
Money market funds	Money market funds	7,701		7,701		—		Money market funds	6,458		6,458		—
Time deposits	Time deposits	1,293		1,291		2		Time deposits	1,237		1,232		5
U.S. Agency securities	U.S. Agency securities	2		—		2		U.S. Agency securities	2		—		2
Total Level 2	Total Level 2	9,744		9,049		695		Total Level 2	8,357		7,727		630
TOTAL	TOTAL	$	13,476	$	9,889	$	3,587	TOTAL	$	12,997	$	8,574	$	4,423

As of November 30, ~~2021,~~2022, the Company held ~~$3,622~~$3,060 million of available-for-sale debt securities with maturity dates within one year and ~~$730~~$1,071 million with maturity dates ~~over~~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 ~~$18~~$49 million and $6$18 million for the three months ended November 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$35~~$114 million and ~~$13~~$35 million for the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, 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, 2021													NOVEMBER 30, 2022
		DERIVATIVE ASSETS						DERIVATIVE LIABILITIES							DERIVATIVE ASSETS						DERIVATIVE LIABILITIES
(Dollars in millions)	(Dollars in millions)	ASSETS AT FAIR VALUE		OTHER CURRENT ASSETS		OTHER LONG-TERM ASSETS		LIABILITIES AT FAIR VALUE		ACCRUED LIABILITIES		OTHER LONG-TERM 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:	Level 2:													Level 2:
Foreign exchange forwards and options(1)	Foreign exchange forwards and options(1)	$	546	$	444	$	102	$	75	$	71	$	4	Foreign exchange forwards and options(1)	$	953	$	759	$	194	$	134	$	93	$	41
Embedded derivatives	Embedded derivatives	1		1		—		4		4		—		Embedded derivatives	6		6		—		1		1		—
TOTAL	TOTAL	$	547	$	445	$	102	$	79	$	75	$	4	TOTAL	$	959	$	765	$	194	$	135	$	94	$	41

(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 ~~$75~~$133 million as of November 30, ~~2021.~~2022. As of that date, the Company received ~~$141~~$345 million of cash collateral from ~~various~~ counterparties related to ~~the~~ foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of November 30, ~~2021.~~2022.

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		MAY 31, 2021													MAY 31, 2022
		DERIVATIVE ASSETS						DERIVATIVE LIABILITIES							DERIVATIVE ASSETS						DERIVATIVE LIABILITIES
(Dollars in millions)	(Dollars in millions)	ASSETS AT FAIR VALUE		OTHER CURRENT ASSETS		OTHER LONG-TERM ASSETS		LIABILITIES AT FAIR VALUE		ACCRUED LIABILITIES		OTHER LONG-TERM 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:	Level 2:													Level 2:
Foreign exchange forwards and options(1)	Foreign exchange forwards and options(1)	$	92	$	76	$	16	$	456	$	415	$	41	Foreign exchange forwards and options(1)	$	875	$	669	$	206	$	76	$	65	$	11
Embedded derivatives	Embedded derivatives	—		—		—		1		1		—		Embedded derivatives	5		5		—		1		1		—
TOTAL	TOTAL	$	92	$	76	$	16	$	457	$	416	$	41	TOTAL	$	880	$	674	$	206	$	77	$	66	$	11

(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 ~~$93~~$76 million as of May 31, ~~2021.~~2022. As of that date, the Company ~~had posted $39~~received $486 million of cash collateral ~~to various~~from counterparties related to foreign exchange derivative instruments. No amount of collateral was ~~received~~posted on the ~~Company's~~ derivative ~~asset~~liability balance as of May 31, ~~2021.~~2022.

For additional information related to the Company's derivative financial instruments and credit risk, refer to Note 8 — 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 ~~$10,438~~$8,410 million at November 30, ~~2021~~2022 and ~~$10,275~~$8,933 million at May 31, ~~2021.~~2022.

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


NOTE 5 — INCOME TAXES

The effective tax rate was ~~11.0%~~19.5% and ~~12.7%~~11.0% for the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~decrease~~increase in the Company's effective tax rate was primarily due to a ~~more~~less favorable impact from stock-based compensation and ~~discrete items such as the recognition of~~ a ~~reserve in the first quarter of fiscal 2021 related to~~ ~~Altera Corp. v. Commissioner.~~ ~~The decrease in the Company's effective tax rate was partially offset by a change~~shift in the Company's earnings mix.

As of November 30, ~~2021,~~2022, total gross unrecognized tax benefits, excluding related interest and penalties, were ~~$926~~$867 million, ~~$651~~$652 million of which 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 Unaudited Condensed Consolidated Balance Sheets. As of May 31, ~~2021,~~2022, total gross unrecognized tax benefits, excluding related interest and penalties, were ~~$896~~$848 million. ~~The liability for payment of interest and penalties increased by $23 million during the six months ended November 30, 2021.~~ As of November 30, ~~2021~~2022 and May 31, ~~2021,~~2022, accrued interest and penalties related to uncertain tax positions were ~~$226~~$276 million and ~~$203~~$248 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 ~~United States,~~U.S., as well as various state and foreign jurisdictions. The Company is currently under audit by the U.S. ~~Internal Revenue Service ("IRS")~~IRS for fiscal years 2017 through 2019. The Company has closed all U.S. federal income tax matters through fiscal 2016, with the exception of certain transfer pricing adjustments.

Tax years after ~~2010~~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 $20 million within the next 12 months. 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. The Company believes the investigation is without merit. If this matter is adversely resolved, the Netherlands may be required to assess additional amounts with respect to prior periods, and the Company's income taxes related to prior periods in the Netherlands could increase.

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NOTE 6 — STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The NIKE, Inc. Stock Incentive Plan (the “Stock Incentive Plan”) provides for the issuance of up to 798 million previously unissued shares of Class B Common Stock in connection with equity awards granted under the Stock Incentive Plan. The Stock Incentive Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights and stock awards, including restricted stock and restricted stock units. Restricted stock units include both time-vesting restricted stock units ~~and~~(RSUs) as well as performance-based ~~awards.~~restricted stock units (PSUs). In addition to the Stock Incentive Plan, the Company gives employees the right to purchase shares at a discount from the market price under employee stock purchase plans (ESPPs). Refer to Note 11 — Common Stock and Stock-Based Compensation of the Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021~~2022 for further information.

The following table summarizes the Company's total stock-based compensation expense recognized in Cost of sales or Operating overhead expense, as applicable:


		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,				THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020			(Dollars in millions)	2022		2021			2022		2021
Stock options(1)	Stock options(1)	$	81	$	107	$	146	$	177		Stock options(1)	$	79	$	81		$	154	$	146
ESPPs	ESPPs	14		17		29		35			ESPPs	18		14			33		29
Restricted stock and restricted stock units(1)(2)	Restricted stock and restricted stock units(1)(2)	75		65		131		113			Restricted stock and restricted stock units(1)(2)	97		75			177		131
TOTAL STOCK-BASED COMPENSATION EXPENSE	TOTAL STOCK-BASED COMPENSATION EXPENSE	$	170��	$	189	$	306	$	325		TOTAL STOCK-BASED COMPENSATION EXPENSE	$	194	$	170		$	364	$	306

(1)Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is primarily recorded for employees meeting certain retirement eligibility ~~requirements and certain employees impacted by the Company's organizational realignment. For more information, see Note 13~~ — ~~Restructuring.~~requirements.

(2)~~Includes expense for performance-based restricted~~Restricted stock units ~~granted during the six months ended November 30, 2021.~~include RSUs and PSUs.

The income tax benefit related to stock-based compensation expense was ~~$87~~$2 million and ~~$108~~$87 million for the three months ended November 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~$273~~$22 million and ~~$189~~$273 million for the six months ended November 30, 2022 and 2021, respectively, and ~~2020, respectively.~~reported within Income tax expense.

STOCK OPTIONS

The weighted average fair value per share of ~~the~~ options granted during the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, computed as of the grant date using the Black-Scholes pricing model, was ~~$37.53~~$31.31 and ~~$26.75,~~$37.53, respectively. The weighted average assumptions used to estimate these fair values were as follows:


		SIX MONTHS ENDED NOVEMBER 30,					SIX MONTHS ENDED NOVEMBER 30,
		2021		2020			2022		2021
Dividend yield	Dividend yield	0.8	%	0.9	%	Dividend yield	0.9	%	0.8	%
Expected volatility	Expected volatility	24.9	%	27.3	%	Expected volatility	27.1	%	24.9	%
Weighted average expected life (in years)	Weighted average expected life (in years)	5.8		6.0		Weighted average expected life (in years)	5.8		5.8
Risk-free interest rate	Risk-free interest rate	0.9	%	0.4	%	Risk-free interest rate	3.3	%	0.9	%

Expected volatilities are based on an analysis of the historical volatility of the Company's common stock, the implied volatility in market-traded options on the Company's common stock with a term greater than one year, as well as other factors. The weighted average expected life of options is based on an analysis of historical and expected future exercise patterns. The interest rate is based on the U.S. Treasury (constant maturity) risk-free rate in effect at the date of grant for periods corresponding with the expected term of the options.

As of November 30, ~~2021,~~2022, the Company had ~~$570~~$584 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of 2.7 years.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

The weighted average fair value per share of restricted stock and ~~restricted stock units~~RSUs granted for the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, computed as of the grant date, was ~~$163.27~~$107.60 and ~~$109.36,~~$163.27, respectively.

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During the six months ended November 30, 2021, under the Stock Incentive Plan, the Company granted performance-based restricted stock units (PSUs), which were historically in the form of cash-based long-term incentive awards under the Company's Long-Term Incentive Plan. The Company estimates the fair value of these PSUs as of the grant date using a Monte Carlo simulation. The weighted average fair value per share of PSUs granted for the six months ended November 30, 2022 and 2021, computed as of the grant date, was ~~$250.52. The impact of granting PSUs during the six months ended November 30, 2021, was not material to the Company's Unaudited Condensed Consolidated Financial Statements.~~$134.71 and $250.52, respectively.

As of November 30, ~~2021,~~2022, the Company had ~~$624~~$760 million of unrecognized compensation costs from restricted stock and restricted stock units, ~~and PSUs,~~ net of estimated forfeitures, to be recognized in Cost of sales or Operating overhead expense, as applicable, over a weighted average remaining period of ~~2.7~~2.6 years.


NOTE 7 — 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 excluded restricted stock, restricted stock units and options, including shares under ESPPs, to purchase an estimated additional ~~9.2~~38.0 million and ~~12.6~~9.2 million shares of common stock outstanding for the three months ended November 30, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~9.1~~35.1 million and ~~13.5~~9.1 million shares of common stock outstanding for the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, respectively, because the awards were assumed to be anti-dilutive.


		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,				THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(In millions, except per share data)	(In millions, except per share data)	2021		2020		2021		2020			(In millions, except per share data)	2022		2021			2022		2021
Net income available to common stockholders	Net income available to common stockholders	$	1,337	$	1,251	$	3,211	$	2,769		Net income available to common stockholders	$	1,331	$	1,337		$	2,799	$	3,211
Determination of shares:	Determination of shares:										Determination of shares:
Weighted average common shares outstanding	Weighted average common shares outstanding	1,582.4		1,573.0		1,582.2		1,567.4			Weighted average common shares outstanding	1,559.0		1,582.4			1,563.1		1,582.2
Assumed conversion of dilutive stock options and awards	Assumed conversion of dilutive stock options and awards	35.0		36.5		36.3		34.5			Assumed conversion of dilutive stock options and awards	13.4		35.0			16.0		36.3
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	1,617.4		1,609.5		1,618.5		1,601.9			DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	1,572.4		1,617.4			1,579.1		1,618.5
Earnings per common share:	Earnings per common share:										Earnings per common share:
Basic	Basic	$	0.84	$	0.80	$	2.03	$	1.77		Basic	$	0.85	$	0.84		$	1.79	$	2.03
Diluted	Diluted	$	0.83	$	0.78	$	1.98	$	1.73		Diluted	$	0.85	$	0.83		$	1.77	$	1.98


NOTE 8 — RISK MANAGEMENT AND DERIVATIVES

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 six months ended November 30, ~~2021,~~2022, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K. For additional information about the Company's derivatives and hedging policies refer to Note 1 — Summary of Significant Accounting Policies and Note 14 — Risk Management and Derivatives of the Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

The majority of derivatives outstanding as of November 30, ~~2021,~~2022, are designated as foreign currency cash flow hedges, primarily for Euro/U.S. Dollar, British Pound/Euro, ~~Chinese Yuan/~~Japanese Yen/U.S. Dollar and ~~Japanese Yen/~~Chinese Yuan/U.S. Dollar currency pairs. All derivatives are recognized on the Unaudited Condensed Consolidated Balance Sheets at fair value and classified based on the instrument's maturity date.

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


		DERIVATIVE ASSETS						DERIVATIVE ASSETS
		BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,			BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,
(Dollars in millions)	(Dollars in millions)		2021		2021		(Dollars in millions)		2022		2022
Derivatives formally designated as hedging instruments:	Derivatives formally designated as hedging instruments:						Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Foreign exchange forwards and options	Prepaid expenses and other current assets	$	428	$	42	Foreign exchange forwards and options	Prepaid expenses and other current assets	$	745	$	639
Foreign exchange forwards and options	Foreign exchange forwards and options	Deferred income taxes and other assets	102		16		Foreign exchange forwards and options	Deferred income taxes and other assets	194		206
Total derivatives formally designated as hedging instruments	Total derivatives formally designated as hedging instruments		530		58		Total derivatives formally designated as hedging instruments		939		845
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Foreign exchange forwards and options	Prepaid expenses and other current assets	16		34		Foreign exchange forwards and options	Prepaid expenses and other current assets	14		30
Embedded derivatives	Embedded derivatives	Prepaid expenses and other current assets	1		—		Embedded derivatives	Prepaid expenses and other current assets	6		5

Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		17		34		Total derivatives not designated as hedging instruments		20		35
TOTAL DERIVATIVE ASSETS	TOTAL DERIVATIVE ASSETS		$	547	$	92	TOTAL DERIVATIVE ASSETS		$	959	$	880

		DERIVATIVE LIABILITIES						DERIVATIVE LIABILITIES
		BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,			BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,
(Dollars in millions)	(Dollars in millions)		2021		2021		(Dollars in millions)		2022		2022
Derivatives formally designated as hedging instruments:	Derivatives formally designated as hedging instruments:						Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Foreign exchange forwards and options	Accrued liabilities	$	56	$	385	Foreign exchange forwards and options	Accrued liabilities	$	58	$	37
Foreign exchange forwards and options	Foreign exchange forwards and options	Deferred income taxes and other liabilities	4		41		Foreign exchange forwards and options	Deferred income taxes and other liabilities	41		11
Total derivatives formally designated as hedging instruments	Total derivatives formally designated as hedging instruments		60		426		Total derivatives formally designated as hedging instruments		99		48
Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:						Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Foreign exchange forwards and options	Accrued liabilities	15		30		Foreign exchange forwards and options	Accrued liabilities	35		28
Embedded derivatives	Embedded derivatives	Accrued liabilities	4		1		Embedded derivatives	Accrued liabilities	1		1

Total derivatives not designated as hedging instruments	Total derivatives not designated as hedging instruments		19		31		Total derivatives not designated as hedging instruments		36		29
TOTAL DERIVATIVE LIABILITIES	TOTAL DERIVATIVE LIABILITIES		$	79	$	457	TOTAL DERIVATIVE LIABILITIES		$	135	$	77

The following tables present the amounts in the Unaudited Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items:


		THREE MONTHS ENDED NOVEMBER 30,									THREE MONTHS ENDED NOVEMBER 30,
		2021				2020					2022				2021
(Dollars in millions)	(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	Revenues	$	11,357	$	(20)	$	11,243	$	26	Revenues	$	13,315	$	4	$	11,357	$	(20)
Cost of sales	Cost of sales	6,144		(30)		6,396		31		Cost of sales	7,604		173		6,144		(30)
Demand creation expense	Demand creation expense	1,017		—		729		—		Demand creation expense	1,102		(2)		1,017		—
Other (income) expense, net	Other (income) expense, net	(102)		20		54		(13)		Other (income) expense, net	(79)		125		(102)		20
Interest expense (income), net	Interest expense (income), net	55		(1)		70		(1)		Interest expense (income), net	16		(2)		55		(1)

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		SIX MONTHS ENDED NOVEMBER 30,									SIX MONTHS ENDED NOVEMBER 30,
		2021				2020					2022				2021
(Dollars in millions)	(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	Revenues	$	23,605	$	(41)	$	21,837	$	40	Revenues	$	26,002	$	(5)	$	23,605	$	(41)
Cost of sales	Cost of sales	12,696		(96)		12,249		145		Cost of sales	14,676		282		12,696		(96)
Demand creation expense	Demand creation expense	1,935		1		1,406		1		Demand creation expense	2,045		(3)		1,935		1
Other (income) expense, net	Other (income) expense, net	(141)		11		40		(5)		Other (income) expense, net	(225)		207		(141)		11
Interest expense (income), net	Interest expense (income), net	112		(3)		135		(3)		Interest expense (income), net	29		(4)		112		(3)

The following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income:


(Dollars in millions)	(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)						(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)
		THREE MONTHS ENDED NOVEMBER 30,				LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		THREE MONTHS ENDED NOVEMBER 30,						THREE MONTHS ENDED NOVEMBER 30,						LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		THREE MONTHS ENDED NOVEMBER 30,
		2021		2020			2021	2020		2022				2021							2022	2021
Derivatives designated as cash flow hedges:	Derivatives designated as cash flow hedges:											Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	Foreign exchange forwards and options	$	(31)	$	6		Revenues			$	(20)	$	26		Foreign exchange forwards and options	$	(3)	$	(31)		Revenues			$	4	$	(20)
Foreign exchange forwards and options	Foreign exchange forwards and options	253		(69)		Cost of sales		(30)		31		Foreign exchange forwards and options		(101)		253				Cost of sales		173		(30)
Foreign exchange forwards and options	Foreign exchange forwards and options	(2)		2		Demand creation expense		—		—		Foreign exchange forwards and options		2		(2)				Demand creation expense		(2)		—
Foreign exchange forwards and options	Foreign exchange forwards and options	143		1		Other (income) expense, net		20		(13)		Foreign exchange forwards and options		(47)		143				Other (income) expense, net		125		20
Interest rate swaps(2)	Interest rate swaps(2)	—		—		Interest expense (income), net		(1)		(1)		Interest rate swaps(2)		—		—				Interest expense (income), net		(2)		(1)
TOTAL DESIGNATED CASH FLOW HEDGES	TOTAL DESIGNATED CASH FLOW HEDGES	$	363	$	(60)			$	(31)	$	43	TOTAL DESIGNATED CASH FLOW HEDGES		$	(149)	$	363					$	298	$	(31)

(1)For the three months ended November 30, ~~2021~~2022 and ~~2020,~~2021, 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.

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(Dollars in millions)	(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)						(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,						SIX MONTHS ENDED NOVEMBER 30,						LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		SIX MONTHS ENDED NOVEMBER 30,
		2021		2020			2021	2020		2022				2021							2022	2021
Derivatives designated as cash flow hedges:	Derivatives designated as cash flow hedges:											Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	Foreign exchange forwards and options	$	(37)	$	6		Revenues			$	(41)	$	40		Foreign exchange forwards and options	$	22	$	(37)		Revenues			$	(5)	$	(41)
Foreign exchange forwards and options	Foreign exchange forwards and options	518		(440)		Cost of sales		(96)		145		Foreign exchange forwards and options		386		518				Cost of sales		282		(96)
Foreign exchange forwards and options	Foreign exchange forwards and options	(3)		3		Demand creation expense		1		1		Foreign exchange forwards and options		(3)		(3)				Demand creation expense		(3)		1
Foreign exchange forwards and options	Foreign exchange forwards and options	273		(159)		Other (income) expense, net		11		(5)		Foreign exchange forwards and options		246		273				Other (income) expense, net		207		11
Interest rate swaps(2)	Interest rate swaps(2)	—		—		Interest expense (income), net		(3)		(3)		Interest rate swaps(2)		—		—				Interest expense (income), net		(4)		(3)
TOTAL DESIGNATED CASH FLOW HEDGES	TOTAL DESIGNATED CASH FLOW HEDGES	$	751	$	(590)			$	(128)	$	178	TOTAL DESIGNATED CASH FLOW HEDGES		$	651	$	751					$	477	$	(128)

(1)For the six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, 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.

AMOUNT OF GAIN (LOSS) RECOGNIZED
IN INCOME ON DERIVATIVES LOCATION OF GAIN (LOSS)
RECOGNIZED IN INCOME
ON DERIVATIVES
THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2021 2020 2021 2020
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options $ 9 $ (49) $ 32 $ (87) Other (income) expense, net
Embedded derivatives (4) (9) (9) (13) Other (income) expense, net


	AMOUNT OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES								LOCATION OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
	THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2022		2021		2022		2021


Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(6)	$	9	$	44	$	32	Other (income) expense, net
Embedded derivatives	23		(4)		34		(9)		Other (income) expense, net

CASH FLOW HEDGES

All changes in fair value of derivatives designated as cash flow hedge instruments are recorded in Accumulated other comprehensive income (loss) until Net income is affected by the variability of cash flows of the hedged transaction. Effective hedge results are classified in the Unaudited Condensed Consolidated Statements of Income in the same manner as the underlying exposure. When it is no longer probable the forecasted hedged transaction will occur in the initially identified time period, hedge accounting is discontinued and the Company accounts for the associated derivative as an undesignated instrument as discussed below. Additionally, the gains and losses associated with derivatives no longer designated as cash flow hedge instruments in Accumulated other comprehensive income (loss) are recognized immediately in Other (income) expense, net, if it is probable the forecasted hedged transaction will not occur by the end of the initially identified time period or within an additional two-month period thereafter. In rare circumstances, the additional period of time may exceed two months due to extenuating circumstances related to the nature of the forecasted transaction that are outside the control or influence of the Company.

The total notional amount of outstanding foreign currency derivatives designated as cash flow hedges was approximately ~~$13.1~~$17.4 billion as of November 30, ~~2021.~~2022. Approximately ~~$296~~$798 million of deferred net gains (net of tax) on both outstanding and matured derivatives in Accumulated other comprehensive income (loss) as of November 30, ~~2021,~~2022, 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 November 30, ~~2021,~~2022, the maximum term over which the Company hedges exposures to the variability of cash flows for its forecasted transactions was 2430 months.

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UNDESIGNATED DERIVATIVE INSTRUMENTS

The Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities on the Unaudited Condensed Consolidated Balance Sheets and/or embedded derivative contracts. These undesignated instruments are recorded at fair value as a derivative asset or liability on the Unaudited Condensed Consolidated Balance Sheets with their corresponding change in fair value recognized in Other (income) expense, net, together with the remeasurement gain or loss from the hedged balance sheet position and/or embedded derivative contract. The total notional amount of outstanding undesignated derivative instruments was ~~$3.3~~$4.6 billion as of November 30, ~~2021.~~2022.

EMBEDDED DERIVATIVES

Embedded derivative contracts are treated as foreign currency forward contracts that are bifurcated from the related contract and recorded at fair value as a derivative asset or liability on the Unaudited Condensed Consolidated Balance Sheets with their corresponding change in fair value recognized in Other (income) expense, net, through the date the foreign currency fluctuations cease to exist.

As of November 30, ~~2021,~~2022, the total notional amount of embedded derivatives outstanding was approximately ~~$634~~$360 million.

CREDIT RISK

The Company's bilateral credit-related contingent features generally require the owing entity, either the Company or the derivative counterparty, to post collateral for the portion of the fair value in excess of $50 million should the fair value of outstanding derivatives per counterparty be greater than $50 million. Additionally, a certain level of decline in credit rating of either the Company or the counterparty could trigger collateral requirements. As of November 30, ~~2021,~~2022, the Company was in compliance with all credit risk-related contingent features, and derivative instruments with such features were in a net asset position of approximately ~~$471~~$820 million. Accordingly, the Company was not required to post cash collateral as a result of these contingent features. Further, ~~$141~~$345 million of collateral was received on the Company's derivative asset balance as of November 30, ~~2021.~~2022. The Company 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 4 — Fair Value Measurements.

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NOTE 9 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in Accumulated other comprehensive income (loss), net of tax, were as follows:


(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL
Balance at August 31, 2022	$	(746)	$	1,334	$	115	$	(67)	$	636
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	45		(138)		—		(24)		(117)
Reclassifications to net income of previously deferred (gains) losses(3)	309		(263)		—		(6)		40
Total other comprehensive income (loss)	354		(401)		—		(30)		(77)
Balance at November 30, 2022	$	(392)	$	933	$	115	$	(97)	$	559

(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 tax benefit (expense) of $0 million, $11 million, $0 million, $6 million and $17 million, respectively.

(3)Net of tax (benefit) expense of $(16) million, $35 million, $0 million, $3 million and $22 million, respectively.


(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL
Balance at August 31, 2021	$	(126)	$	3	$	115	$	(59)	$	(67)
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	(155)		336		—		6		187
Reclassifications to net income of previously deferred (gains) losses(3)	—		30		—		(5)		25
Total other comprehensive income (loss)	(155)		366		—		1		212
Balance at November 30, 2021	$	(281)	$	369	$	115	$	(58)	$	145

(2)Net of tax benefit (expense) of $0 million, $(27) million, $0 million, $(2) million and $(29) million, respectively.

(3)Net of tax (benefit) expense of $0 million, $(1) million, $0 million, $3 million and $2 million, respectively.


(Dollars in millions)	(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL		(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL
Balance at August 31, 2020		$	(176)	$	(268)	$	115	$	(72)	$	(401)
Balance at May 31, 2022												Balance at May 31, 2022	$	(520)	$	779	$	115	$	(56)	$	318
Other comprehensive income (loss):	Other comprehensive income (loss):											Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	Other comprehensive gains (losses) before reclassifications(2)	79		(64)		—		(2)		13		Other comprehensive gains (losses) before reclassifications(2)	(227)		578		—		(27)		324
Reclassifications to net income of previously deferred (gains) losses(3)	Reclassifications to net income of previously deferred (gains) losses(3)	(1)		(39)		—		(1)		(41)		Reclassifications to net income of previously deferred (gains) losses(3)	355		(424)		—		(14)		(83)
Total other comprehensive income (loss)	Total other comprehensive income (loss)	78		(103)		—		(3)		(28)		Total other comprehensive income (loss)	128		154		—		(41)		241
Balance at November 30, 2020		$	(98)	$	(371)	$	115	$	(75)	$	(429)
Balance at November 30, 2022												Balance at November 30, 2022	$	(392)	$	933	$	115	$	(97)	$	559

(2)Net of tax benefit (expense) of $0 million, ~~$(4)~~$(73) million, $0 million, $0$7 million and ~~$(4)~~$(66) million, respectively.

(3)Net of tax (benefit) expense of $0$(16) million, $4$53 million, $0 million, $0$6 million and $4$43 million, respectively.

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(Dollars in millions)	FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)		CASH FLOW HEDGES		NET INVESTMENT HEDGES(1)		OTHER		TOTAL
Balance at May 31, 2021	$	2	$	(435)	$	115	$	(62)	$	(380)
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)	(283)		685		—		14		416
Reclassifications to net income of previously deferred (gains) losses(3)	—		119		—		(10)		109
Total other comprehensive income (loss)	(283)		804		—		4		525
Balance at November 30, 2021	$	(281)	$	369	$	115	$	(58)	$	145

(2)Net of tax benefit (expense) of $0 million, $(66) million, $0 million, $(4) million and $(70) million, respectively.

(3)Net of tax (benefit) expense of $0 million, $(9) million, $0 million, $4 million and $(5) million, respectively.

~~Table of Contents~~

(Dollars in millions)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT(1)
CASH FLOW HEDGES
NET INVESTMENT HEDGES(1)
OTHER TOTAL
Balance at May 31, 2020 $ (494) $ 390 $ 115 $ (67) $ (56)
Other comprehensive income (loss):
Other comprehensive gains (losses) before reclassifications(2)
397 (590) — (15) (208)
Reclassifications to net income of previously deferred (gains) losses(3)
(1) (171) — 7 (165)
Total other comprehensive income (loss) 396 (761) — (8) (373)
Balance at November 30, 2020 $ (98) $ (371) $ 115 $ (75) $ (429)

~~(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 tax benefit (expense) of $0 million, $0 million, $0 million, $1 million and $1 million, respectively.~~

~~(3)Net of tax (benefit) expense of $0 million, $7 million, $0 million, $0 million and $7 million, respectively.~~

The following table summarizes the reclassifications from Accumulated other comprehensive income (loss) to the Unaudited Condensed Consolidated Statements of Income:


		AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME								LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		AMOUNT OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME								LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME
		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,						THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020			(Dollars in millions)	2022		2021		2022		2021
Gains (losses) on foreign currency translation adjustment	Gains (losses) on foreign currency translation adjustment	$	—	$	1	$	—	$	1	Other expense (income), net	Gains (losses) on foreign currency translation adjustment	$	(325)	$	—	$	(371)	$	—	Other (income) expense, net
Total before tax	Total before tax	—		1		—		1			Total before tax	(325)		—		(371)		—
Tax (expense) benefit	Tax (expense) benefit	—		—		—		—			Tax (expense) benefit	16		—		16		—
Gain (loss) net of tax	Gain (loss) net of tax	—		1		—		1			Gain (loss) net of tax	(309)		—		(355)		—
Gains (losses) on cash flow hedges:	Gains (losses) on cash flow hedges:										Gains (losses) on cash flow hedges:
Foreign exchange forwards and options	Foreign exchange forwards and options	$	(20)	$	26	$	(41)	$	40	Revenues	Foreign exchange forwards and options	$	4	$	(20)	$	(5)	$	(41)	Revenues
Foreign exchange forwards and options	Foreign exchange forwards and options	(30)		31		(96)		145		Cost of sales	Foreign exchange forwards and options	173		(30)		282		(96)		Cost of sales
Foreign exchange forwards and options	Foreign exchange forwards and options	—		—		1		1		Demand creation expense	Foreign exchange forwards and options	(2)		—		(3)		1		Demand creation expense
Foreign exchange forwards and options	Foreign exchange forwards and options	20		(13)		11		(5)		Other (income) expense, net	Foreign exchange forwards and options	125		20		207		11		Other (income) expense, net
Interest rate swaps	Interest rate swaps	(1)		(1)		(3)		(3)		Interest expense (income), net	Interest rate swaps	(2)		(1)		(4)		(3)		Interest expense (income), net
Total before tax	Total before tax	(31)		43		(128)		178			Total before tax	298		(31)		477		(128)
Tax (expense) benefit	Tax (expense) benefit	1		(4)		9		(7)			Tax (expense) benefit	(35)		1		(53)		9
Gain (loss) net of tax	Gain (loss) net of tax	(30)		39		(119)		171			Gain (loss) net of tax	263		(30)		424		(119)
Gains (losses) on other	Gains (losses) on other	8		1		14		(7)		Other (income) expense, net	Gains (losses) on other	9		8		20		14		Other (income) expense, net
Total before tax	Total before tax	8		1		14		(7)			Total before tax	9		8		20		14
Tax (expense) benefit	Tax (expense) benefit	(3)		—		(4)		—			Tax (expense) benefit	(3)		(3)		(6)		(4)
Gain (loss) net of tax	Gain (loss) net of tax	5		1		10		(7)			Gain (loss) net of tax	6		5		14		10
Total net gain (loss) reclassified for the period	Total net gain (loss) reclassified for the period	$	(25)	$	41	$	(109)	$	165		Total net gain (loss) reclassified for the period	$	(40)	$	(25)	$	83	$	(109)

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NOTE 10 — REVENUES

DISAGGREGATION OF REVENUES

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

THREE MONTHS ENDED NOVEMBER 30, 2021
(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.
Revenues by:
Footwear $ 2,852 $ 1,806 $ 1,235 $ 887 $ — $ 6,780 $ 485 $ — $ 7,265
Apparel 1,480 1,202 564 402 — 3,648 34 — 3,682
Equipment 145 134 45 58 — 382 5 — 387
Other — — — — 6 6 33 (16) 23
TOTAL REVENUES $ 4,477 $ 3,142 $ 1,844 $ 1,347 $ 6 $ 10,816 $ 557 $ (16) $ 11,357
Revenues by:
Sales to Wholesale Customers $ 2,327 $ 2,112 $ 896 $ 784 $ — $ 6,119 $ 303 $ — $ 6,422
Sales through Direct to Consumer 2,150 1,030 948 563 — 4,691 221 — 4,912
Other — — — — 6 6 33 (16) 23
TOTAL REVENUES $ 4,477 $ 3,142 $ 1,844 $ 1,347 $ 6 $ 10,816 $ 557 $ (16) $ 11,357


		THREE MONTHS ENDED NOVEMBER 30, 2020																			THREE MONTHS ENDED NOVEMBER 30, 2022
(Dollars in millions)	(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.		(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.
Revenues by:	Revenues by:																			Revenues by:
Footwear	Footwear	$	2,512	$	1,731	$	1,567	$	991	$	—	$	6,801	$	416	$	—	$	7,217	Footwear	$	3,963	$	2,063	$	1,370	$	1,108	$	—	$	8,504	$	517	$	—	$	9,021
Apparel	Apparel	1,368		1,104		681		432		—		3,585		32		—		3,617		Apparel	1,685		1,281		393		435		—		3,794		21		—		3,815
Equipment	Equipment	126		123		50		48		—		347		7		—		354		Equipment	182		145		25		56		—		408		6		—		414
Other	Other	—		—		—		—		8		8		21		26		55		Other	—		—		—		—		18		18		42		5		65
TOTAL REVENUES	TOTAL REVENUES	$	4,006	$	2,958	$	2,298	$	1,471	$	8	$	10,741	$	476	$	26	$	11,243	TOTAL REVENUES	$	5,830	$	3,489	$	1,788	$	1,599	$	18	$	12,724	$	586	$	5	$	13,315
Revenues by:	Revenues by:																			Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	2,354	$	1,985	$	1,159	$	925	$	—	$	6,423	$	259	$	—	$	6,682	Sales to Wholesale Customers	$	3,183	$	2,242	$	897	$	965	$	—	$	7,287	$	304	$	—	$	7,591
Sales through Direct to Consumer	Sales through Direct to Consumer	1,652		973		1,139		546		—		4,310		196		—		4,506		Sales through Direct to Consumer	2,647		1,247		891		634		—		5,419		240		—		5,659
Other	Other	—		—		—		—		8		8		21		26		55		Other	—		—		—		—		18		18		42		5		65
TOTAL REVENUES	TOTAL REVENUES	$	4,006	$	2,958	$	2,298	$	1,471	$	8	$	10,741	$	476	$	26	$	11,243	TOTAL REVENUES	$	5,830	$	3,489	$	1,788	$	1,599	$	18	$	12,724	$	586	$	5	$	13,315


	THREE MONTHS ENDED NOVEMBER 30, 2021
(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.
Revenues by:
Footwear	$	2,852	$	1,806	$	1,235	$	887	$	—	$	6,780	$	485	$	—	$	7,265
Apparel	1,480		1,202		564		402		—		3,648		34		—		3,682
Equipment	145		134		45		58		—		382		5		—		387
Other	—		—		—		—		6		6		33		(16)		23
TOTAL REVENUES	$	4,477	$	3,142	$	1,844	$	1,347	$	6	$	10,816	$	557	$	(16)	$	11,357
Revenues by:
Sales to Wholesale Customers	$	2,327	$	2,112	$	896	$	784	$	—	$	6,119	$	303	$	—	$	6,422
Sales through Direct to Consumer	2,150		1,030		948		563		—		4,691		221		—		4,912
Other	—		—		—		—		6		6		33		(16)		23
TOTAL REVENUES	$	4,477	$	3,142	$	1,844	$	1,347	$	6	$	10,816	$	557	$	(16)	$	11,357

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		SIX MONTHS ENDED NOVEMBER 30, 2021																			SIX MONTHS ENDED NOVEMBER 30, 2022
(Dollars in millions)	(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.		(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.
Revenues by:	Revenues by:																			Revenues by:
Footwear	Footwear	$	6,116	$	3,789	$	2,684	$	1,909	$	—	$	14,498	$	1,052	$	—	$	15,550	Footwear	$	7,768	$	4,075	$	2,603	$	2,172	$	—	$	16,618	$	1,093	$	—	$	17,711
Apparel	Apparel	2,910		2,361		1,040		787		—		7,098		58		—		7,156		Apparel	3,179		2,434		767		848		—		7,228		42		—		7,270
Equipment	Equipment	330		299		102		116		—		847		14		—		861		Equipment	393		313		74		114		—		894		14		—		908
Other	Other	—		—		—		—		13		13		62		(37)		38		Other	—		—		—		—		32		32		80		1		113
TOTAL REVENUES	TOTAL REVENUES	$	9,356	$	6,449	$	3,826	$	2,812	$	13	$	22,456	$	1,186	$	(37)	$	23,605	TOTAL REVENUES	$	11,340	$	6,822	$	3,444	$	3,134	$	32	$	24,772	$	1,229	$	1	$	26,002
Revenues by:	Revenues by:																			Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	5,005	$	4,336	$	2,010	$	1,711	$	—	$	13,062	$	672	$	—	$	13,734	Sales to Wholesale Customers	$	6,210	$	4,445	$	1,736	$	1,879	$	—	$	14,270	$	647	$	—	$	14,917
Sales through Direct to Consumer	Sales through Direct to Consumer	4,351		2,113		1,816		1,101		—		9,381		452		—		9,833		Sales through Direct to Consumer	5,130		2,377		1,708		1,255		—		10,470		502		—		10,972
Other	Other	—		—		—		—		13		13		62		(37)		38		Other	—		—		—		—		32		32		80		1		113
TOTAL REVENUES	TOTAL REVENUES	$	9,356	$	6,449	$	3,826	$	2,812	$	13	$	22,456	$	1,186	$	(37)	$	23,605	TOTAL REVENUES	$	11,340	$	6,822	$	3,444	$	3,134	$	32	$	24,772	$	1,229	$	1	$	26,002


		SIX MONTHS ENDED NOVEMBER 30, 2020																			SIX MONTHS ENDED NOVEMBER 30, 2021
(Dollars in millions)	(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.		(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.
Revenues by:	Revenues by:																			Revenues by:
Footwear	Footwear	$	5,469	$	3,533	$	2,818	$	1,749	$	—	$	13,569	$	929	$	—	$	14,498	Footwear	$	6,116	$	3,789	$	2,684	$	1,909	$	—	$	14,498	$	1,052	$	—	$	15,550
Apparel	Apparel	2,493		2,075		1,159		733		—		6,460		54		—		6,514		Apparel	2,910		2,361		1,040		787		—		7,098		58		—		7,156
Equipment	Equipment	269		260		101		88		—		718		16		—		734		Equipment	330		299		102		116		—		847		14		—		861
Other	Other	—		—		—		—		12		12		40		39		91		Other	—		—		—		—		13		13		62		(37)		38
TOTAL REVENUES	TOTAL REVENUES	$	8,231	$	5,868	$	4,078	$	2,570	$	12	$	20,759	$	1,039	$	39	$	21,837	TOTAL REVENUES	$	9,356	$	6,449	$	3,826	$	2,812	$	13	$	22,456	$	1,186	$	(37)	$	23,605
Revenues by:	Revenues by:																			Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	5,073	$	3,958	$	2,123	$	1,633	$	—	$	12,787	$	632	$	—	$	13,419	Sales to Wholesale Customers	$	5,005	$	4,336	$	2,010	$	1,711	$	—	$	13,062	$	672	$	—	$	13,734
Sales through Direct to Consumer	Sales through Direct to Consumer	3,158		1,910		1,955		937		—		7,960		367		—		8,327		Sales through Direct to Consumer	4,351		2,113		1,816		1,101		—		9,381		452		—		9,833
Other	Other	—		—		—		—		12		12		40		39		91		Other	—		—		—		—		13		13		62		(37)		38
TOTAL REVENUES	TOTAL REVENUES	$	8,231	$	5,868	$	4,078	$	2,570	$	12	$	20,759	$	1,039	$	39	$	21,837	TOTAL REVENUES	$	9,356	$	6,449	$	3,826	$	2,812	$	13	$	22,456	$	1,186	$	(37)	$	23,605

For the three and six months ended November 30, ~~2021~~2022 and ~~2020,~~2021, Global Brand Divisions revenues ~~include~~included NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Converse Other revenues were primarily attributable to licensing businesses. 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 November 30, ~~2021~~2022 and May 31, ~~2021,~~2022, 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.

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NOTE 11 — OPERATING SEGMENTS

The Company's operating segments are evidence of 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.

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.

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.

Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to the Company's headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.

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 Unaudited Condensed 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.

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		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,					THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020		(Dollars in millions)	2022		2021		2022		2021
REVENUES	REVENUES									REVENUES
North America	North America	$	4,477	$	4,006	$	9,356	$	8,231	North America	$	5,830	$	4,477	$	11,340	$	9,356
Europe, Middle East & Africa	Europe, Middle East & Africa	3,142		2,958		6,449		5,868		Europe, Middle East & Africa	3,489		3,142		6,822		6,449
Greater China	Greater China	1,844		2,298		3,826		4,078		Greater China	1,788		1,844		3,444		3,826
Asia Pacific & Latin America	Asia Pacific & Latin America	1,347		1,471		2,812		2,570		Asia Pacific & Latin America	1,599		1,347		3,134		2,812
Global Brand Divisions	Global Brand Divisions	6		8		13		12		Global Brand Divisions	18		6		32		13
Total NIKE Brand	Total NIKE Brand	10,816		10,741		22,456		20,759		Total NIKE Brand	12,724		10,816		24,772		22,456
Converse	Converse	557		476		1,186		1,039		Converse	586		557		1,229		1,186
Corporate	Corporate	(16)		26		(37)		39		Corporate	5		(16)		1		(37)
TOTAL NIKE, INC. REVENUES	TOTAL NIKE, INC. REVENUES	$	11,357	$	11,243	$	23,605	$	21,837	TOTAL NIKE, INC. REVENUES	$	13,315	$	11,357	$	26,002	$	23,605
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES									EARNINGS BEFORE INTEREST AND TAXES
North America	North America	$	1,235	$	1,023	$	2,669	$	2,325	North America	$	1,497	$	1,235	$	2,874	$	2,669
Europe, Middle East & Africa	Europe, Middle East & Africa	806		660		1,681		1,352		Europe, Middle East & Africa	990		806		1,965		1,681
Greater China	Greater China	569		891		1,270		1,579		Greater China	511		569		1,052		1,270
Asia Pacific & Latin America	Asia Pacific & Latin America	388		424		869		704		Asia Pacific & Latin America	485		388		985		869
Global Brand Divisions	Global Brand Divisions	(1,071)		(841)		(2,058)		(1,694)		Global Brand Divisions	(1,226)		(1,071)		(2,413)		(2,058)
Converse	Converse	132		87		336		255		Converse	153		132		362		336
Corporate	Corporate	(503)		(718)		(1,048)		(1,215)		Corporate	(744)		(503)		(1,318)		(1,048)
Interest expense (income), net	Interest expense (income), net	55		70		112		135		Interest expense (income), net	16		55		29		112
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,501	$	1,456	$	3,607	$	3,171	TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,650	$	1,501	$	3,478	$	3,607


		NOVEMBER 30,		MAY 31,			NOVEMBER 30,		MAY 31,
(Dollars in millions)	(Dollars in millions)	2021		2021		(Dollars in millions)	2022		2022
ACCOUNTS RECEIVABLE, NET	ACCOUNTS RECEIVABLE, NET					ACCOUNTS RECEIVABLE, NET
North America	North America	$	1,469	$	1,777	North America	$	2,365	$	1,850
Europe, Middle East & Africa	Europe, Middle East & Africa	1,176		1,349		Europe, Middle East & Africa	1,647		1,351
Greater China	Greater China	217		288		Greater China	225		406
Asia Pacific & Latin America(1)	Asia Pacific & Latin America(1)	532		643		Asia Pacific & Latin America(1)	804		664
Global Brand Divisions	Global Brand Divisions	76		128		Global Brand Divisions	87		113
Total NIKE Brand	Total NIKE Brand	3,470		4,185		Total NIKE Brand	5,128		4,384
Converse	Converse	218		225		Converse	244		230
Corporate	Corporate	58		53		Corporate	65		53
TOTAL ACCOUNTS RECEIVABLE, NET	TOTAL ACCOUNTS RECEIVABLE, NET	$	3,746	$	4,463	TOTAL ACCOUNTS RECEIVABLE, NET	$	5,437	$	4,667
INVENTORIES	INVENTORIES					INVENTORIES
North America	North America	$	2,796	$	2,851	North America	$	4,299	$	4,098
Europe, Middle East & Africa	Europe, Middle East & Africa	1,426		1,821		Europe, Middle East & Africa	2,112		1,887
Greater China	Greater China	1,120		1,247		Greater China	1,083		1,044
Asia Pacific & Latin America(1)	Asia Pacific & Latin America(1)	636		667		Asia Pacific & Latin America(1)	890		686
Global Brand Divisions	Global Brand Divisions	236		153		Global Brand Divisions	214		197
Total NIKE Brand	Total NIKE Brand	6,214		6,739		Total NIKE Brand	8,598		7,912
Converse	Converse	256		290		Converse	353		279
Corporate	Corporate	36		(175)		Corporate	375		229
TOTAL INVENTORIES	TOTAL INVENTORIES	$	6,506	$	6,854	TOTAL INVENTORIES	$	9,326	$	8,420

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		NOVEMBER 30,		MAY 31,			NOVEMBER 30,		MAY 31,
(Dollars in millions)	(Dollars in millions)	2021		2021		(Dollars in millions)	2022		2022
PROPERTY, PLANT AND EQUIPMENT, NET	PROPERTY, PLANT AND EQUIPMENT, NET					PROPERTY, PLANT AND EQUIPMENT, NET
North America	North America	$	616	$	617	North America	$	720	$	639
Europe, Middle East & Africa	Europe, Middle East & Africa	935		982		Europe, Middle East & Africa	902		920
Greater China	Greater China	302		288		Greater China	284		303
Asia Pacific & Latin America(1)	Asia Pacific & Latin America(1)	295		304		Asia Pacific & Latin America(1)	269		274
Global Brand Divisions	Global Brand Divisions	791		780		Global Brand Divisions	794		789
Total NIKE Brand	Total NIKE Brand	2,939		2,971		Total NIKE Brand	2,969		2,925
Converse	Converse	55		63		Converse	41		49
Corporate	Corporate	1,818		1,870		Corporate	1,844		1,817
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	4,812	$	4,904	TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	4,854	$	4,791

(1)Excludes assets held-for-sale as of ~~November 30, 2021 and~~ May 31, ~~2021.~~2022. See Note 1213 — Acquisitions and Divestitures for additional information.

NOTE 12 — CONTINGENCIES

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, intellectual property and other matters. The outcome of these legal matters is inherently uncertain, and the Company cannot predict the eventual outcome of currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences relating to those matters. When a loss related to a legal proceeding or claim is probable and reasonably estimable, the Company accrues its best estimate for the ultimate resolution of the matter. If one or more legal matters were to be resolved against the Company in a reporting period for amounts above management's expectations, the Company's financial position, operating results and cash flows for that reporting period could be materially adversely affected. In the opinion of management, based on its current knowledge and after consultation with counsel, the Company does not believe any currently pending legal matters will have a material adverse impact on the Company's results of operations, financial position or cash flows, except as described below.

BELGIAN CUSTOMS CLAIM

The Company has received claims for certain years from the 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. At this time, the Company is unable to estimate the range of loss and cannot predict the final outcome as it could take several years to reach a resolution on this matter. If this matter is ultimately resolved against the Company, the amounts owed, including fines, penalties and other consequences relating to the matter, could have a material adverse effect on the Company's results of operations, financial position and cash flows.


NOTE 1213 — ACQUISITIONS AND DIVESTITURES

~~As previously disclosed in~~During the ~~Annual Report on Form 10-K for the~~fourth quarter of fiscal ~~year ended May 31, 2021,~~2022, the Company ~~remains committed~~entered into separate definitive agreements to ~~selling~~sell its ~~legal~~ entities in Argentina ~~Chile~~ and Uruguay, ~~and granting distribution rights~~as well as its entity in Chile, to third-party distributors. ~~As such, the~~The related assets and liabilities of these entities within the ~~entities have remained~~Company’s APLA operating segment were classified as held-for-sale on the ~~Unaudited Condensed~~ Consolidated Balance ~~Sheets.~~

~~As of November 30, 2021, held-for-sale~~Sheets within Prepaid expenses and other current assets ~~were $209 million, primarily consisting of $86 million of Accounts receivable, net~~ and ~~$61 million of Inventories; held-for-sale liabilities were $76 million, primarily consisting of $29 million of~~ Accrued liabilities, ~~and $26 million of Accounts payable.~~

respectively, until the transactions closed. As of May 31, ~~2021,~~2022, held-for-sale assets were ~~$175~~$182 million ~~primarily consisting of $76 million of Inventories~~ and ~~$59 million of Accounts receivable, net;~~ held-for-sale liabilities were ~~$72~~$58 million.

The sale of the Company’s entity in Chile to a third-party distributor was completed during the first quarter of fiscal 2023. The impacts from the transaction were not material to the Company’s Unaudited Condensed Consolidated Financial Statements.

During the second quarter of fiscal 2023, the Company completed the sale of its entities in Argentina and Uruguay to a third-party distributor. The net loss on the sale of these entities totaled approximately $550 million, ~~primarily consisting of $25~~$389 million of ~~Accounts payable and $22 million of Accrued liabilities.~~

~~As of November 30, 2021,~~which was recognized by the Company ~~has recognized a total expected net loss related to the Argentina, Chile and Uruguay transaction of $344 million within Other (income) expense, net, classified within Corporate,~~in prior periods and a corresponding allowance within in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. The ~~initial expected~~previously recognized loss ~~of $405 million recognized in fiscal 2020 and the subsequent adjustments for changes in fair value are largely~~was primarily due to the anticipated release of the cumulative foreign currency translation losses. ~~These~~Upon completion of the sale, these foreign currency translation losses ~~will be~~were reclassified from Accumulated other comprehensive income (loss) to Net income ~~upon sale~~within Other (income) expense, net, classified within Corporate, and were largely offset by the release of the ~~legal entities.~~


~~NOTE 13 — RESTRUCTURING~~

~~In fiscal 2021,~~valuation allowance recognized within Accrued liabilities. The remaining loss, primarily due to the ~~Company announced a new digitally empowered phase of its Consumer Direct Offense strategy: Consumer Direct Acceleration.~~ ~~During fiscal 2021, the Company substantially completed a series of leadership and operating model changes to streamline and speed up strategic execution~~devaluation of the ~~Consumer Direct Acceleration. For~~local currency and cash equivalents included in the ~~three and six months ended November 30, 2021~~,transfer of assets, was recognized upon completion of the Co~~mpany recognized an immaterial amount of related employee termination costs and, to a lesser extent, stock-based compensation expense.~~

~~During the three months ended November 30, 2020, the Company recognized employee termination costs of $107 million and $30 million~~sale within ~~Operating overhead~~Other (income) expense, and Cost of sales, respectively, and made cash payments of $67 million. For the six months ended November 30, 2020, the Company recognized employee termination costs of $145 million and $30 million within Operating overhead expense and Cost of sales, respectively, and made cash payments of $71 million. For all periods presented these costs werenet, classified within ~~Corporate.~~

~~Additionally,~~Corporate on the ~~related stock-based compensation expense recorded~~Unaudited Condensed Consolidated Statements of Income. Cash proceeds received, net of cash and cash equivalents transferred, are reflected within ~~Operating overhead expense and Cost~~Other investing activities on the Unaudited Condensed Consolidated Statements of ~~sales was $30 million and $4 million, respectively, for the three months ended November 30, 2020, and $39 million and $4 million, respectively, for the six months ended November 30, 2020.~~Cash Flows.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

NIKE designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and services worldwide. We are the largest seller of athletic footwear and apparel in the world. We sell our products through NIKE Direct operations, which is comprised of both NIKE-owned retail stores and sales through our digital platforms ~~(which we refer~~(also referred to ~~collectively~~ as ~~our “NIKE Direct” operations)~~"NIKE Brand Digital"), to retail accounts and to a mix of independent distributors, licensees and sales representatives in virtually all countries around the world. Our goal is to deliver value to our shareholders by building a profitable global portfolio of branded footwear, apparel, equipment and accessories businesses. Our strategy is to achieve long-term revenue growth by creating innovative, “must-have” products, building deep personal consumer connections with our brands and delivering compelling consumer experiences through digital platforms and at retail.

Through the Consumer Direct Acceleration, we are focusing on creating the marketplace of the future through more premium, consistent and seamless consumer experiences, leading with ~~NIKE Digital~~digital and our owned stores, as well as select ~~strategic~~wholesale partners ~~who~~that share our marketplace vision. WeOver the last several years, as we have executed against the Consumer Direct Acceleration, we have grown our NIKE Direct revenues to be approximately 43% and 42% of total NIKE Brand revenues for the second quarter and first six months of fiscal 2023, respectively, and we have reduced the number of wholesale accounts globally. Additionally, we have aligned our product creation and category organizations around a new consumer construct focused on Men’s, ~~Women's, Kids'~~Women’s and ~~the Jordan Brand~~Kids’ and continue to invest in data and analytics, demand sensing, insight gathering, inventory management and other areas to create an end-to-end technology foundation, which we expect will further accelerate our digital transformation. We believe this unified approach will accelerate growth and unlock more efficiency for our business, while driving speed and responsiveness as we serve consumers globally.

~~During fiscal 2021, we substantially completed a series of leadership~~CURRENT ECONOMIC CONDITIONS AND MARKET DYNAMICS

Ongoing supply chain challenges, macroeconomic conditions and ~~operating model changes to streamline and speed up strategic execution of~~ the ~~Consumer Direct Acceleration. For the~~ ~~three and six months ended November 30, 2021, we recognized an immaterial amount of related employee termination costs and, to a lesser extent, stock-based compensation expense~~. During the three months ended November 30, 2020, we recognized employee termination costs of $107 million and $30 million within Operating overhead expense and Cost of sales, respectively, and made cash payments of $67 million. For the six months ended November 30, 2020, we recognized employee termination costs of $145 million and $30 million within Operating overhead expense and Cost of sales, respectively, and made cash payments of $71 million. For all periods presented these costs were classified within Corporate. Additionally, the related stock-based compensation expense recorded within Operating overhead expense and Cost of sales was $30 million and $4 million, respectively, for the three months ended November 30, 2020, and $39 million and $4 million, respectively, for the six months ended November 30, 2~~020.~~

~~For more information, see Note 13 — Restructuring within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.~~

~~COVID-19 UPDATE~~

~~The~~ COVID-19 pandemic ~~continues~~continue to create volatility in our business results and operations ~~globally, causing us to transform the way we operate in order to better serve our consumers.~~ globally.

Our second quarter and first six months of fiscal ~~2022~~2023 Revenues ~~grew 1%~~increased 17% and 8%10%, respectively, ~~as we continued~~due to ~~manage~~strong demand for our product and more product available to meet this demand compared to the ~~ongoing impacts of supply chain challenges across each of our geographies~~prior fiscal year,which was impacted by temporary factory closures due to COVID-19 and ~~Converse.~~extended inventory transit times.

During the first quarter of fiscal 2023, inventory transit times rapidly improved compared to fiscal 2022, and seasonal inventory that was ordered based on the ~~majority~~extended transit times, arrived earlier than planned leading to elevated levels of ~~NIKE Brand and Converse contract manufacturers in Vietnam and Indonesia were subject~~inventory at the end of the first quarter of fiscal 2023.

During the second quarter of fiscal 2023 we made progress on normalizing our inventory levels, as Inventories decreased 3% compared to government mandated shutdowns due to COVID-19. These closures have significantly impacted, and are expected to continue to significantly impact, our previously planned inventory production. As a resultthe first quarter of ~~these closures, we have lost approximately three months of production, impacting available product supply for this~~ fiscal year. All impacted factories began re-opening in October and are currently operational. We expect it will take several months from re-opening for the factories to return to pre-closure production volumes, and there could be further impacts, including additional closures or employee absences, 2023as a result of the emergence and spread of COVID-19 variants, as well as other factors outside of our control that could continue to cause further disruption to our planned inventory production. For fiscal 2021, 51% of NIKE Brand footwear and 30% of NIKE Brand apparel was manufactured in Vietnam, and 24% of NIKE Brand footwear and less than 12% of NIKE Brand apparel was manufactured in Indonesia.

~~In addition,~~strong demand for our product ~~availability was also impacted by extended inventory transit times~~across our wholesale and direct to consumer channels, and increased promotional activity, specifically in apparel in North America.

The marketplace remains promotional, and gross margin for the second quarter and first six months of fiscal ~~2022, due primarily~~2023 was negatively impacted by high levels of promotional activity to ~~port congestion, transportation delays~~sell excess inventory and create capacity in the marketplace for new seasonally relevant product. We have also adjusted our inventory purchases for the remainder of fiscal 2023 as we continue to prioritize reducing excess inventory in the marketplace across our geographies.

Additionally, gross margin continues to be negatively impacted by unfavorable fluctuations in net foreign currency exchange rates, elevated freight and logistics costs as well as ~~labor~~higher product input costs, including materials and container shortages. Our product availability was impacted most significantly in our wholesale channel. We also experienced higher transportation, logistics and fulfillment costs as a result of this dynamic environment, whichlabor. Strategic pricing increases partially offset the negative impacts on gross margin ~~expansion in~~for the second quarter and first six months of fiscal ~~2022.~~2023 which decreased 300 basis points and 260 basis points, respectively.

~~The combined impact~~Most of ~~factory~~our geographies are currently operating with little to no COVID-19 related disruptions. In Greater China however, we continue to experience a higher level of store closures and ~~extended inventory transit times disproportionately impacted~~reduced traffic in our ~~geographies during~~retail stores due to COVID-19 related disruptions. During the second quarter of fiscal ~~2022. North America and EMEA, located further away from our sourcing base with longer transit times, entered the second quarter with elevated levels~~2023, we managed through a higher number of ~~inventory available to meet consumer demand as revenues grew 12% and 6% on a currency-neutral basis, respectively. By contrast,~~temporary store closures in Greater China ~~and APLA, located closer~~primarily due to local government restrictions. Although these restrictions were lifted In December 2022, we expect the operating environment will remain volatile which could continue to cause disruptions to our ~~sourcing base~~operations.

We expect net unfavorable changes in foreign currency exchange rates, including hedges, will have a material negative impact on reported Revenues, gross margin and Income before income taxes for the remainder of fiscal 2023. Additionally, we expect the continued combination of elevated freight and logistics costs, increased product input costs and increased promotional activity, partially offset by strategic pricing increases, will have a negative impact on gross margin for the remainder of the fiscal year.

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with shorter transit times, entered the second quarter with a lower supply of available inventory, negatively impacting revenues during the second quarter of fiscal 2022 with revenues declining by 24% and 6% on a currency-neutral basis, respectively.

We ~~expect the combination of factory closures and elevated transit times will~~also continue to ~~impact product availability, leading to inventory supply significantly lagging~~closely monitor macroeconomic conditions, including consumer behavior and the potential impacts inflation could have on consumer demand for ~~the remainder of the fiscal year. In addition,~~our product. While we expect transportation, logistics and fulfillment costs will continue to increase as we navigate these supply chain constraints. We also expect product costs to increase in the second half of fiscal 2022 due to higher input costs. To mitigate the impact across our business, our teams are continuing to leverage our operational playbook and taking actions where we can, including shifting production capacity to other countries, strategic use of air freight and employing a seasonless approach to products. Despite these short-term dynamics,believe our Consumer Direct Acceleration ~~strategy~~Strategy continues to drive our business ~~towards~~toward our long-term ~~fiscal 2025~~ financial goals, ~~shared in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021.~~

Our NIKE Direct business has continued its momentum in the second quarter, fueling our growth as we continue to navigate through the pandemic by leveraging our digital platforms with our store footprint to connect directly with our consumers. Despite continued inventory constraints and supply chain challenges, NIKE Direct grew 8% and 16% on a currency-neutral basis, for the second quarter and first six months of fiscal 2022, respectively. NIKE Brand Digital revenues grew 11% and 17% on a currency-neutral basis for the second quarter and first six months of fiscal 2022, respectively. During the second quarter of fiscal 2022, we experienced an increase in comparable store sales in North America and EMEA, partially offset by declines in Greater China and APLA due to supply chain challenges as well as ongoing marketplace dynamics and a COVID-19 resurgence in Greater China. As of January 3, 2022, approximately 98% of our owned stores were open with some operating on reduced hours.

During the quarter, we continued to invest in our digital transformation and brand campaigns as the world continues its return to sport. For the remainder of fiscal 2022, we will maintain our multi-year investment plans in order to transformworsening macroeconomic conditions could affect our business, including, among other things, higher inventory levels in various markets, higher inventory obsolescence reserves, higher promotional activity, reduced demand for ~~the future.~~

~~We continue to monitor the ongoing~~our products, reduced orders from our wholesale customers for our products and dynamic impacts of COVID-19, as well as guidance from international and domestic authorities, including federal, state and local public health authorities and may take additional actions based on their recommendations.order cancellations. There ~~have been and may continue to~~could also be developments outside of our control, including new COVID-19 variants, that require us to make adjustments to our operating plan, such as store operating hours and the timeline to return to normal production volumes in factories impacted by COVID-19. Such developments and other potential impacts of COVID-19, such as new or prolonged ~~factory closures, higher inventory levels~~COVID-19 related restrictions or inventory shortages in various markets, other adverse impacts on the global supply chain, revised payment terms with certain of our wholesale customers, higher sales-related reserves, factory cancellation costs and a volatile effective tax rate driven by changes in the mix of earningsdisruptions across our ~~jurisdictions,~~geographies. Any of these factors, among ~~other factors,~~others, could have material adverse impacts on our revenue growth as well as ~~our~~ overall profitability in future periods. As a result of these circumstances, COVID-19 related disruptions are making it more challenging to compare our performance, including our revenue growth and overall profitability, across quarters and fiscal years, and we expect the operating environment will remain volatile as COVID-19 variants continue to cause disruptions to our operations.

SECOND QUARTER OVERVIEW

For the second quarter of fiscal ~~2022,~~2023, NIKE, Inc. Revenues increased 1%17% to ~~$11.4~~$13.3 billion compared to the second quarter of fiscal ~~2021~~2022 and ~~were flat~~increased 27% on a currency-neutral basis. Net income was $1,331 million and diluted earnings per common share was $0.85 for the second quarter of fiscal 2023, compared to Net income of $1,337 million and diluted earnings per common share ~~was~~of $0.83 for the second quarter of fiscal ~~2022, compared to Net income of $1,251 million and diluted earnings per common share of $0.78 for the second quarter of fiscal 2021.~~2022.

Income before income taxes increased 3%10% compared to the second quarter of fiscal ~~2021,~~2022 due to ~~gross margin expansion and~~ higher revenues, partially offset by gross margin contraction and higher ~~selling~~Selling and administrative expense. ~~The~~ NIKE Brand revenues, which ~~represents~~represent over 90% of NIKE, Inc. Revenues, increased 1%18% compared to the second quarter of fiscal ~~2021.~~2022. On a currency-neutral basis, NIKE Brand revenues ~~were flat, as~~increased 28%, driven by higher revenues across all geographies, led by increases in North America and ~~EMEA were offset by declines in Greater China and APLA.~~EMEA. Additionally, NIKE Brand currency-neutral ~~revenue growth in~~revenues were higher across footwear and apparel, ~~was offset by a decline in footwear primarily due to lower available inventory supply resulting from COVID-19 related factory closures~~as well as Men's, the Jordan Brand, Women's and ~~extended inventory transit times.~~Kids'. Revenues for Converse increased ~~17%~~5% and ~~16%~~12% compared to the second quarter of fiscal ~~2021,~~2022, on a reported and currency-neutral basis, respectively, led by strong performance in ~~Direct to consumer in both~~North America, licensee markets and Western Europe, ~~and North America.~~partially offset by declines in Asia.

Our effective tax rate was 19.3% for the second quarter of fiscal 2023, compared to 10.9% for the second quarter of fiscal 2022, ~~compared~~due to ~~14.1%~~decreased benefits from stock-based compensation and a shift in our earnings mix.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, 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 is effective for NIKE beginning June 1, 2023, and a one percent excise tax on net repurchases of stock after December 31, 2022. Based on our current analysis of the provisions, we do not expect these tax law changes to have a material impact on our financial statements; however, we will continue to evaluate their impact as further information becomes available.

During the second quarter of fiscal ~~2021, primarily due~~2023, we completed the sale of our entities in Argentina and Uruguay to a ~~change in our earnings mix, partially offset by a less favorable impact from stock-based compensation.~~

Consumer protection and data privacy laws have been coming into effect across the world, including recently introduced laws that became effective during the second quarter of fiscal 2022 in China, that provide for the comprehensive regulation of data and personal data processing activities across all industries and operations such as collecting, utilizing, processing, sharing and transferring data and personal information in and out of China. Uncertainty regarding the interpretation and application of these laws in practice may impact us and could impair our ability to execute on our operating plan and have adverse effects on our business and results of operations. Further, any non-compliance could subject us to, among other things, fines, legal proceedings, regulatory orders or damage to our reputation.

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During fiscal 2021, the transaction with Grupo SBF S.A. to purchase substantially all of our NIKE Brand operations in Brazil closed. We remain committed to selling our Argentina, Chile and Uruguay legal entities and granting distribution rights to third-party distributors. As such, the assets and liabilities of these entities have remained classified as held-for-sale on the Unaudited Condensed Consolidated Balance Sheets.third party distributor. For more information see Note 1213 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. Now that we have completed the shift from a wholesale and direct to consumer operating model within our Central and South America (CASA) territory to a distributor model, we expect consolidated NIKE, Inc. and APLA revenue growth will be reduced due to different commercial terms. However, over time we expect the future operating model to have a favorable impact on our overall profitability as we reduce selling and administrative expenses, as well as lessen exposure to foreign exchange rate volatility.

USE OF NON-GAAP FINANCIAL MEASURES

Throughout this Quarterly Report on Form 10-Q, we discuss non-GAAP financial measures, including references to wholesale equivalent revenues, currency-neutral revenues, as well as Total NIKE Brand earnings before interest and taxes (EBIT), Total NIKE, Inc. EBIT and EBIT Margin, which should be considered in addition to, and not in lieu of, the financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). References to wholesale equivalent revenues are intended to provide context as to the total size of our NIKE Brand market footprint if we had no NIKE Direct operations. NIKE Brand wholesale equivalent revenues consist of (1) sales to external wholesale customers and (2) internal sales from our wholesale operations to our NIKE Direct operations, which are charged at prices comparable to those charged to external wholesale customers. Additionally, currency-neutral revenues are calculated using actual exchange rates in use during the comparative prior year period to enhance the visibility of the underlying business trends excluding the impact of translation arising from foreign currency exchange rate fluctuations. EBIT is calculated as Net ~~Income~~income before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. EBIT Margin is calculated as EBIT divided by total NIKE, Inc. Revenues.

Management uses these non-GAAP financial measures when evaluating the Company's performance, including when making financial and operating decisions. Additionally, management believes these non-GAAP financial measures provide investors with additional financial information that should be considered when assessing our underlying business performance and trends. However, references to wholesale equivalent revenues, currency-neutral revenues, EBIT and EBIT margin should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with U.S. GAAP and may not be comparable to similarly titled non-GAAP measures used by other companies.

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RESULTS OF OPERATIONS


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions, except per share data)	(Dollars in millions, except per share data)	2021			2020			% CHANGE		2021			2020			% CHANGE			(Dollars in millions, except per share data)	2022			2021			% CHANGE		2022			2021			% CHANGE
Revenues	Revenues	$	11,357		$	11,243		1	%	$	23,605		$	21,837		8	%		Revenues	$	13,315		$	11,357		17	%	$	26,002		$	23,605		10	%
Cost of sales	Cost of sales	6,144			6,396			-4	%	12,696			12,249			4	%		Cost of sales	7,604			6,144			24	%	14,676			12,696			16	%
Gross profit	Gross profit	5,213			4,847			8	%	10,909			9,588			14	%		Gross profit	5,711			5,213			10	%	11,326			10,909			4	%
Gross margin	Gross margin	45.9		%	43.1		%			46.2		%	43.9		%				Gross margin	42.9		%	45.9		%			43.6		%	46.2		%
Demand creation expense	Demand creation expense	1,017			729			40	%	1,935			1,406			38	%		Demand creation expense	1,102			1,017			8	%	2,045			1,935			6	%
Operating overhead expense	Operating overhead expense	2,742			2,538			8	%	5,396			4,836			12	%		Operating overhead expense	3,022			2,742			10	%	5,999			5,396			11	%
Total selling and administrative expense	Total selling and administrative expense	3,759			3,267			15	%	7,331			6,242			17	%		Total selling and administrative expense	4,124			3,759			10	%	8,044			7,331			10	%
% of revenues	% of revenues	33.1		%	29.1		%			31.1		%	28.6		%				% of revenues	31.0		%	33.1		%			30.9		%	31.1		%
Interest expense (income), net	Interest expense (income), net	55			70			—		112			135			—			Interest expense (income), net	16			55			—		29			112			—
Other (income) expense, net	Other (income) expense, net	(102)			54			—		(141)			40			—			Other (income) expense, net	(79)			(102)			—		(225)			(141)			—
Income before income taxes	Income before income taxes	1,501			1,456			3	%	3,607			3,171			14	%		Income before income taxes	1,650			1,501			10	%	3,478			3,607			-4	%
Income tax expense	Income tax expense	164			205			-20	%	396			402			-1	%		Income tax expense	319			164			95	%	679			396			71	%
Effective tax rate	Effective tax rate	10.9		%	14.1		%			11.0		%	12.7		%				Effective tax rate	19.3		%	10.9		%			19.5		%	11.0		%
NET INCOME	NET INCOME	$	1,337		$	1,251		7	%	$	3,211		$	2,769		16	%		NET INCOME	$	1,331		$	1,337		0	%	$	2,799		$	3,211		-13	%
Diluted earnings per common share	Diluted earnings per common share	$	0.83		$	0.78		6	%	$	1.98		$	1.73		14	%		Diluted earnings per common share	$	0.85		$	0.83		2	%	$	1.77		$	1.98		-11	%

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CONSOLIDATED OPERATING RESULTS

REVENUES


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,									THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)		2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)		(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)
NIKE, Inc. Revenues:	NIKE, Inc. Revenues:																	NIKE, Inc. Revenues:
NIKE Brand Revenues by:	NIKE Brand Revenues by:																	NIKE Brand Revenues by:
Footwear	Footwear	$	6,780	$	6,801	0	%	-1	%	$	14,498	$	13,569	7	%	5	%	Footwear	$	8,504	$	6,780	25	%	36	%	$	16,618	$	14,498	15	%	23	%
Apparel	Apparel	3,648		3,585		2	%	1	%	7,098		6,460		10	%	8	%	Apparel	3,794		3,648		4	%	14	%	7,228		7,098		2	%	10	%
Equipment	Equipment	382		347		10	%	9	%	847		718		18	%	15	%	Equipment	408		382		7	%	17	%	894		847		6	%	14	%
Global Brand Divisions(2)	Global Brand Divisions(2)	6		8		-25	%	-5	%	13		12		8	%	13	%	Global Brand Divisions(2)	18		6		200	%	200	%	32		13		146	%	149	%
Total NIKE Brand Revenues	Total NIKE Brand Revenues	10,816		10,741		1	%	0	%	22,456		20,759		8	%	6	%	Total NIKE Brand Revenues	12,724		10,816		18	%	28	%	24,772		22,456		10	%	19	%
Converse	Converse	557		476		17	%	16	%	1,186		1,039		14	%	11	%	Converse	586		557		5	%	12	%	1,229		1,186		4	%	10	%
Corporate(3)	Corporate(3)	(16)		26		—		—		(37)		39		—		—		Corporate(3)	5		(16)		—		—		1		(37)		—		—
TOTAL NIKE, INC. REVENUES	TOTAL NIKE, INC. REVENUES	$	11,357	$	11,243	1	%	0	%	$	23,605	$	21,837	8	%	6	%	TOTAL NIKE, INC. REVENUES	$	13,315	$	11,357	17	%	27	%	$	26,002	$	23,605	10	%	18	%
Supplemental NIKE Brand Revenues Details:	Supplemental NIKE Brand Revenues Details:																	Supplemental NIKE Brand Revenues Details:
NIKE Brand Revenues by:	NIKE Brand Revenues by:																	NIKE Brand Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	6,119	$	6,423	-5	%	-6	%	$	13,062	$	12,787	2	%	0	%	Sales to Wholesale Customers	$	7,287	$	6,119	19	%	30	%	$	14,270	$	13,062	9	%	18	%
Sales through NIKE Direct	Sales through NIKE Direct	4,691		4,310		9	%	8	%	9,381		7,960		18	%	16	%	Sales through NIKE Direct	5,419		4,691		16	%	25	%	10,470		9,381		12	%	19	%
Global Brand Divisions(2)	Global Brand Divisions(2)	6		8		-25	%	-5	%	13		12		8	%	13	%	Global Brand Divisions(2)	18		6		200	%	200	%	32		13		146	%	149	%
TOTAL NIKE BRAND REVENUES	TOTAL NIKE BRAND REVENUES	$	10,816	$	10,741	1	%	0	%	$	22,456	$	20,759	8	%	6	%	TOTAL NIKE BRAND REVENUES	$	12,724	$	10,816	18	%	28	%	$	24,772	$	22,456	10	%	19	%

(1)The percent change excluding currency changes represents a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" for further information.

(2)Global Brand Divisions revenues ~~are primarily attributable to~~include NIKE Brand licensing ~~businesses~~and other miscellaneous revenues that are not part of a geographic operating segment.

(3)Corporate revenues primarily consist 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 our central foreign exchange risk management program.

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SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

On a currency-neutral basis, NIKE, Inc. Revenues ~~were flat~~increased 27% for the second quarter of fiscal ~~2022, as~~2023, driven by higher revenues in ~~North America, EMEA~~both the NIKE Brand and ~~Converse were offset by lower revenues in Greater China and APLA.~~Converse. Higher revenues in North America, EMEA and ~~Converse~~APLA contributed approximately ~~4, 1~~12, 9 and 14 percentage points to NIKE, Inc. Revenues, ~~respectively, while lower revenues in~~with Greater China and ~~APLA reduced NIKE, Inc. Revenues by~~Converse each contributing approximately ~~5 and~~ 1 percentage ~~points, respectively.~~point of growth.

On a currency-neutral basis, NIKE Brand footwear revenues ~~decreased 1%~~increased 36% in the second quarter of fiscal ~~2022,~~2023, driven ~~primarily~~ by ~~lower~~higher revenues in ~~Men's.~~Men's, the Jordan Brand and Women's. Unit sales of footwear ~~decreased 7%~~increased 28%, while higher average selling price (ASP) per pair contributed approximately 68 percentage points of footwear revenue growth, primarily due to higher ~~NIKE Direct~~full-price ASP, ~~as well as a higher mix~~net of ~~full-price sales, partially offset by lower full-price ASP,~~discounts, on a wholesale equivalent basis.

Currency-neutral NIKE Brand apparel revenues, for the second quarter of fiscal ~~2022,~~2023, increased 1%14%, driven primarily by growth in ~~NIKE Direct, partially offset by declines in our wholesale business.~~Men's. Unit sales of apparel ~~decreased 6%~~increased 10%, and higher ASP per unit contributed approximately 74 percentage points of apparel revenue ~~growth. Higher ASP per unit was~~growth, primarily due to higher full-price ASP.

NIKE ~~Direct ASP,~~Brand wholesale revenues increased 19% and 30% compared to the second quarter of fiscal 2022, on a ~~higher mix of full-price sales~~reported and ~~higher full-price ASP,~~currency-neutral basis, respectively, primarily due to ~~lower discounts, as well as higher off-price ASP.~~

increased product availability to meet demand. On a reported basis, NIKE Direct revenues represented approximately 43% of our total NIKE Brand revenues for both the second quarter of fiscal ~~2022 compared to 40%~~2023 and the second quarter of fiscal 2022. NIKE Brand Digital sales were $3.4 billion for the second quarter of fiscal ~~2021. Digital commerce sales were~~2023 compared to $2.7 billion for the second quarter of fiscal ~~2022 compared to $2.4 billion for the second quarter of fiscal 2021.~~2022. On a currency-neutral basis, NIKE Direct revenues increased 8%25%, driven by ~~digital commerce~~NIKE Brand Digital sales growth of ~~11%~~34%, comparable store sales growth of ~~3%, in part due to improved physical retail traffic in some of our geographies,~~11% and the addition of new stores. Comparable store sales, which exclude ~~digital commerce~~NIKE Brand Digital sales, comprises revenues from NIKE-owned in-line and factory stores for which all three of the following requirements have been met: (1) the store has been open at least one year, (2) square footage has not changed by more than 15% within the past year and (3) the store has not been permanently repositioned within the past year. Comparable store sales includes revenues from stores that were temporarily closed during the period as a result of COVID-19. Comparable store sales represents a performance measure that we believe is useful information for management and investors in understanding the performance of our established NIKE-owned in-line and factory stores. Management considers this metric when making financial and operating decisions. The

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method of calculating comparable store sales varies across the retail industry. As a result, our calculation of this metric may not be comparable to similarly titled measures used by other companies.

FIRST SIX MONTHS OF FISCAL ~~2022~~2023 COMPARED TO FIRST SIX MONTHS OF FISCAL ~~2021~~2022

On a currency-neutral basis, NIKE, Inc. Revenues increased 6%18% for the first six months of fiscal ~~2022,~~2023, driven by higher revenues in North America, EMEA ~~APLA~~ and ~~Converse,~~APLA, partially offset by lower revenues in Greater China. Higher revenues in North America, EMEA ~~APLA~~ and ~~Converse~~APLA contributed approximately ~~5, 2, 1~~9, 7 and 13 percentage points to NIKE, Inc. Revenues, respectively, while lower revenues in Greater China reduced NIKE, Inc. Revenues by approximately 31 percentage ~~points.~~point.

On a currency-neutral basis, NIKE Brand footwear revenues increased 5%23%, driven ~~primarily~~ by growth in ~~NIKE Direct.~~Men's and the Jordan Brand. Unit sales of footwear ~~decreased 1%~~increased 14%, while higher ASP per pair contributed approximately 69 percentage points of footwear revenue growth, primarily due to higher ~~NIKE Direct~~full-price ASP, as well as athe favorable impact of growth in our NIKE Direct business and higher ~~mix of full-price sales, partially offset by lower full-price~~NIKE Direct ASP.

Currency-neutral NIKE Brand apparel revenues increased 8%10%, driven by growth in Men's. Unit sales of apparel increased 1%7% and higher ASP per unit contributed approximately 73 percentage points of apparel revenue growth. Higher ASP per unit was primarily due to higher full-price ASP, partially offset by lower NIKE Direct ASP.

NIKE Brand wholesale revenues increased 9% and ~~full-price ASPs, as well as~~18% compared to the first six months of fiscal 2022, on a ~~higher mix of full-price sales.~~

reported and currency-neutral basis, respectively, primarily due to increased product availability to meet demand. On a reported basis, NIKE Direct revenues represented approximately 42% of our total NIKE Brand revenues for the first six months of fiscal ~~2022 compared to 38%~~2023 and the first six months of fiscal 2022. NIKE Brand Digital sales were $6.3 billion for the first six months of fiscal ~~2021. Digital commerce sales were~~2023 compared to $5.2 billion for the first six months of fiscal ~~2022 compared to $4.4 billion for the first six months of fiscal 2021.~~2022. On a currency-neutral basis, NIKE Direct revenues increased ~~16%~~19%, driven by ~~digital commerce~~NIKE Brand Digital sales growth of ~~17%~~29%, comparable store sales growth of ~~12%~~7%, ~~in part due to improved physical retail traffic,~~ and the addition of new stores.

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GROSS MARGIN


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021			2020			% CHANGE		2021			2020			% CHANGE			(Dollars in millions)	2022			2021			% CHANGE		2022			2021			% CHANGE
Gross profit	Gross profit	$	5,213		$	4,847		8	%	$	10,909		$	9,588		14	%		Gross profit	$	5,711		$	5,213		10	%	$	11,326		$	10,909		4	%
Gross margin	Gross margin	45.9		%	43.1		%	280 bps		46.2		%	43.9		%	230 bps			Gross margin	42.9		%	45.9		%	(300) bps		43.6		%	46.2		%	(260) bps

For the second quarter of fiscal ~~2022,~~2023, our consolidated gross margin was ~~280~~300 basis points ~~higher~~lower than the prior year ~~period~~ and primarily reflected the following factors:

•~~Higher~~Lower margin in our NIKE Direct business, ~~primarily~~ driven by ~~low~~higher promotional activity in the current period, ~~reflecting limited available for sale~~largely in North America to liquidate excess inventory ~~due to supply chain constraints compared to higher promotional activity in the prior year as we managed the impacts from COVID-19 (increasing gross~~(decreasing margin approximately ~~170~~160 basis points);

•~~Higher mix of full-price sales, on a wholesale equivalent basis, (increasing gross margin approximately 110 basis points);~~

•Lower other costs, in part due to higher restructuring-related costs related to our organizational realignment in the prior year, among other factors, (increasing gross margin approximately 50 basis points);

•~~Favorable~~Unfavorable changes in net foreign currency exchange rates, including hedges, ~~(increasing~~(decreasing gross margin approximately 4090 basis points); and

•Lower NIKE Brand full-price product margins, on a wholesale equivalent ~~basis. Specifically, higher product costs~~basis, (decreasing gross margin approximately 6020 basis points) ~~largely~~reflecting:

◦Higher NIKE Brand product costs, (decreasing margin approximately 430 basis points) primarily due to ~~increased~~product mix, elevated inbound freight and logistics costs, and product input costs such as ~~well as lower~~materials and labor; and

◦Higher full-price ASP, net of discounts, ~~(decreasing~~(increasing gross margin approximately 40410 basis points) due primarily ~~due~~ to ~~a lower~~product mix ~~of Greater China sales.~~and strategic pricing actions.

For the first six months of fiscal ~~2022,~~2023, our consolidated gross margin was ~~230~~260 basis points ~~higher~~lower than the prior year period and primarily reflected the following factors:

•~~Higher~~Lower margin in our NIKE Direct business, ~~primarily~~ driven by ~~low~~higher promotional activity in the current period, ~~reflecting limited available for sale~~largely in North America to liquidate excess inventory ~~due to supply chain constraints compared to higher promotional activity~~(decreasing margin approximately 120 basis points);

•Unfavorable changes in ~~the prior year as we managed the impacts from COVID-19 (increasing~~net foreign currency exchange rates, including hedges, (decreasing gross margin approximately ~~170~~80 basis points);

•Higher ~~mix of full-price sales, on a wholesale equivalent basis, (increasing~~other costs (decreasing gross margin approximately ~~90 basis points);~~

•~~Lower other costs, in part due to higher restructuring-related costs related to our organizational realignment in the prior year, (increasing gross margin approximately 40~~60 basis points); and

•NIKE Brand full-price product margins, on a wholesale equivalent basis, were flat, reflecting:

◦Higher full-price ASP, net of discounts, (increasing gross margin approximately 320 basis points) due primarily to strategic pricing actions and product mix; and

◦Higher NIKE Brand product costs, ~~on a wholesale equivalent~~(decreasing margin approximately 320 basis points) primarily due to ~~increased~~product mix, elevated inbound freight and logistics costs, ~~(decreasing gross margin approximately 80 basis points).~~

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TOTAL SELLING AND ADMINISTRATIVE EXPENSE


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021			2020			% CHANGE		2021			2020			% CHANGE			(Dollars in millions)	2022			2021			% CHANGE		2022			2021			% CHANGE
Demand creation expense(1)	Demand creation expense(1)	$	1,017		$	729		40	%	$	1,935		$	1,406		38	%		Demand creation expense(1)	$	1,102		$	1,017		8	%	$	2,045		$	1,935		6	%
Operating overhead expense	Operating overhead expense	2,742			2,538			8	%	5,396			4,836			12	%		Operating overhead expense	3,022			2,742			10	%	5,999			5,396			11	%
Total selling and administrative expense	Total selling and administrative expense	$	3,759		$	3,267		15	%	$	7,331		$	6,242		17	%		Total selling and administrative expense	$	4,124		$	3,759		10	%	$	8,044		$	7,331		10	%
% of revenues	% of revenues	33.1		%	29.1		%	400 bps		31.1		%	28.6		%	250 bps			% of revenues	31.0		%	33.1		%	(210) bps		30.9		%	31.1		%	(20) bps

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

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

Demand creation expense increased ~~40%~~8% for the second quarter of fiscal 2023 primarily due to an increase in advertising and marketing expenses. Changes in foreign currency exchange rates decreased Demand creation expense by approximately 7 percentage points.

Operating overhead expense increased 10% primarily due to higher wage-related expenses, higher strategic technology investments and higher NIKE Direct costs. Changes in foreign currency exchange rates decreased Operating overhead expense by approximately 5 percentage points.

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FIRST SIX MONTHS OF FISCAL 2023 COMPARED TO FIRST SIX MONTHS OF FISCAL 2022

Demand creation expense increased 6% for the first six months of fiscal 2023 primarily due to higher advertising and marketing spend against brand campaigns as we experienced marketplace closures in the prior year due to COVID-19, as well as continued investments in digital marketing to support heightened digital demand. Changes in foreign currency exchange rates increased Demand creation expense by approximately 1 percentage point.

~~Operating overhead expense increased 8% primarily due to higher strategic technology investments and an increase in wage-related~~ expenses. Changes in foreign currency exchange rates ~~had an insignificant impact on Operating overhead expense.~~

~~FIRST SIX MONTHS OF FISCAL 2022 COMPARED TO FIRST SIX MONTHS OF FISCAL 2021~~

Demand creation expense increased 38% for the first six months of fiscal 2022 primarily due to higher advertising and marketing spend against brand campaigns as we experienced marketplace closures in the prior year due to COVID-19, as well as continued investments in digital marketing to support heightened digital demand. Changes in foreign currency exchange rates increaseddecreased Demand creation expense by approximately 26 percentage points.

Operating overhead expense increased ~~12%~~11% primarily due to an increase in wage-related expenses, ~~and~~ higher strategic technology ~~investments.~~investments and higher NIKE Direct costs. Changes in foreign currency exchange rates ~~increased~~decreased Operating overhead expense by approximately 14 percentage ~~point.~~points.

OTHER (INCOME) EXPENSE, NET


		THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,				THREE MONTHS ENDED NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		2021		2020			(Dollars in millions)	2022		2021		2022		2021
Other (income) expense, net	Other (income) expense, net	$	(102)	$	54	$	(141)	$	40		Other (income) expense, net	$	(79)	$	(102)	$	(225)	$	(141)

Other (income) expense, net comprises 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, as well as unusual or non-operating transactions that are outside the normal course of business.

For the second quarter of fiscal ~~2022,~~2023, Other (income) expense, net ~~changed~~decreased from ~~$54 million of other expense to~~ $102 million of other income to $79 million in the current year, largely due to the loss recognized upon the completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, partially offset by a favorable change in foreign currency conversion gains and losses, including hedges.

For the first six months of fiscal 2023, Other (income) expense, net increased from $141 million of other income to $225 million in the current year, primarily due to a favorable change in foreign currency conversion gains and losses, including hedges, ~~as well as incremental charges,~~and settlements of legal matters, partially offset by the loss recognized upon the completion of the sale of our entities in Argentina and Uruguay to a third-party distributor and favorable activity in the prior year related to our ~~planned,~~ strategic distributor partnership transition within APLA.

For the first six months of fiscal 2022, Other (income) expense, net changed from $40 million of other expense to $141 million of other income in the current year, primarily due to incremental charges, in the prior year, related to our planned, strategic distributor partnership transition within APLA, coupled with a net favorable change in foreign currency conversion gains and losses, including hedges.

For more information related to our distributor partnership transition within APLA, see Note 1213 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

We estimate the combination of the translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency-related gains and losses included in Other (income) expense, net had ~~favorable~~unfavorable impacts of approximately ~~$63~~$174 million and ~~$167~~$361 million on our Income before income taxes for the second quarter and first six months of fiscal ~~2022,~~2023, respectively.

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INCOME TAXES

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
2021 2020 % CHANGE 2021 2020 % CHANGE
Effective tax rate 10.9 % 14.1 % (320) bps 11.0 % 12.7 % (170) bps


	THREE MONTHS ENDED NOVEMBER 30,					SIX MONTHS ENDED NOVEMBER 30,
	2022		2021		% CHANGE	2022		2021		% CHANGE
Effective tax rate	19.3	%	10.9	%	840 bps	19.5	%	11.0	%	850 bps

Our effective tax rate was 19.3% for the second quarter of fiscal 2023, compared to 10.9% for the second quarter of fiscal 2022, ~~compared to 14.1% for the second quarter of fiscal 2021,~~ primarily due to decreased benefits from stock-based compensation and a ~~change~~shift in our earnings ~~mix, partially offset by a less favorable impact from stock-based compensation.~~mix.

Our effective tax rate was 19.5% for the first six months of fiscal 2023, compared to 11.0% for the first six months of fiscal 2022, ~~compared to 12.7% for the first six months of fiscal 2021,~~ primarily due to ~~a more favorable impact~~decreased benefits from stock-based compensation and ~~discrete items, such as the recognition of~~ a ~~reserve in the first quarter of fiscal 2021 related to~~ ~~Altera Corp. v. Commissioner, partially offset by a change~~shift in our earnings mix.

Refer to Note 5 — Income Taxes within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional information.

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OPERATING SEGMENTS

Our operating segments are evidence of 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: North America; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA), and include results for the NIKE and Jordan brands. The Company's NIKE Direct operations are managed within each geographic operating segment. Converse is also a reportable operating segment for the Company and operates predominately in one industry: the design, marketing, licensing and selling of athletic lifestyle sneakers, apparel and accessories.

As part of our centrally managed foreign exchange risk management program, standard foreign currency exchange rates are assigned twice per year to each NIKE Brand entity in our geographic operating segments and 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 into the entity's functional currency. Differences between assigned standard foreign currency exchange rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses generated from our centrally managed foreign exchange risk management program and other conversion gains and losses.

The breakdown of Revenues is as follows:


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)		2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)			(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES(1)
North America	North America	$	4,477	$	4,006	12	%	12	%	$	9,356	$	8,231	14	%	13	%		North America	$	5,830	$	4,477	30	%	31	%	$	11,340	$	9,356	21	%	21	%
Europe, Middle East & Africa	Europe, Middle East & Africa	3,142		2,958		6	%	6	%	6,449		5,868		10	%	7	%		Europe, Middle East & Africa	3,489		3,142		11	%	33	%	6,822		6,449		6	%	25	%
Greater China	Greater China	1,844		2,298		-20	%	-24	%	3,826		4,078		-6	%	-13	%		Greater China	1,788		1,844		-3	%	6	%	3,444		3,826		-10	%	-4	%
Asia Pacific & Latin America	Asia Pacific & Latin America	1,347		1,471		-8	%	-6	%	2,812		2,570		9	%	10	%		Asia Pacific & Latin America	1,599		1,347		19	%	34	%	3,134		2,812		11	%	25	%
Global Brand Divisions(2)	Global Brand Divisions(2)	6		8		-25	%	-5	%	13		12		8	%	13	%		Global Brand Divisions(2)	18		6		200	%	200	%	32		13		146	%	149	%
TOTAL NIKE BRAND	TOTAL NIKE BRAND	10,816		10,741		1	%	0	%	22,456		20,759		8	%	6	%		TOTAL NIKE BRAND	12,724		10,816		18	%	28	%	24,772		22,456		10	%	19	%
Converse	Converse	557		476		17	%	16	%	1,186		1,039		14	%	11	%		Converse	586		557		5	%	12	%	1,229		1,186		4	%	10	%
Corporate(3)	Corporate(3)	(16)		26		—		—		(37)		39		—		—			Corporate(3)	5		(16)		—		—		1		(37)		—		—
TOTAL NIKE, INC. REVENUES	TOTAL NIKE, INC. REVENUES	$	11,357	$	11,243	1	%	0	%	$	23,605	$	21,837	8	%	6	%		TOTAL NIKE, INC. REVENUES	$	13,315	$	11,357	17	%	27	%	$	26,002	$	23,605	10	%	18	%

(1) The percent change excluding currency changes represents a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" for further information.

(2) Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

(3) Corporate revenues primarily consist 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 our central foreign exchange risk management program.

The primary financial measure used by the Company to evaluate performance of individual operating segments is EBIT, which represents Net income before Interest expense (income), net and Income tax expense in the Unaudited Condensed Consolidated Statements of Income. As discussed in Note 11 — Operating Segments in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements, certain corporate costs are not included in EBIT of our operating segments.

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The breakdown of earnings before interest and taxes is as follows:


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,					SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021			2020			% CHANGE		2021			2020			% CHANGE			(Dollars in millions)	2022			2021			% CHANGE		2022			2021			% CHANGE
North America	North America	$	1,235		$	1,023		21	%	$	2,669		$	2,325		15	%		North America	$	1,497		$	1,235		21	%	$	2,874		$	2,669		8	%
Europe, Middle East & Africa	Europe, Middle East & Africa	806			660			22	%	1,681			1,352			24	%		Europe, Middle East & Africa	990			806			23	%	1,965			1,681			17	%
Greater China	Greater China	569			891			-36	%	1,270			1,579			-20	%		Greater China	511			569			-10	%	1,052			1,270			-17	%
Asia Pacific & Latin America	Asia Pacific & Latin America	388			424			-8	%	869			704			23	%		Asia Pacific & Latin America	485			388			25	%	985			869			13	%
Global Brand Divisions	Global Brand Divisions	(1,071)			(841)			-27	%	(2,058)			(1,694)			-21	%		Global Brand Divisions	(1,226)			(1,071)			-14	%	(2,413)			(2,058)			-17	%
TOTAL NIKE BRAND(1)	TOTAL NIKE BRAND(1)	1,927			2,157			-11	%	4,431			4,266			4	%		TOTAL NIKE BRAND(1)	2,257			1,927			17	%	4,463			4,431			1	%
Converse	Converse	132			87			52	%	336			255			32	%		Converse	153			132			16	%	362			336			8	%
Corporate	Corporate	(503)			(718)			30	%	(1,048)			(1,215)			14	%		Corporate	(744)			(503)			-48	%	(1,318)			(1,048)			-26	%
TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)	TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)	1,556			1,526			2	%	3,719			3,306			12	%		TOTAL NIKE, INC. EARNINGS BEFORE INTEREST AND TAXES(1)	1,666			1,556			7	%	3,507			3,719			-6	%
EBIT margin(1)	EBIT margin(1)	13.7		%	13.6		%			15.8		%	15.1		%				EBIT margin(1)	12.5		%	13.7		%			13.5		%	15.8		%
Interest expense (income), net	Interest expense (income), net	55			70			—		112			135			—			Interest expense (income), net	16			55			—		29			112			—
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,501		$	1,456		3	%	$	3,607		$	3,171		14	%		TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,650		$	1,501		10	%	$	3,478		$	3,607		-4	%

(1) Total NIKE Brand EBIT, Total NIKE, Inc. EBIT and EBIT margin represent non-GAAP financial measures. See "Use of Non-GAAP Financial Measures" for further information.

NORTH AMERICA

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 2,852 $ 2,512 14 % 13 % $ 6,116 $ 5,469 12 % 12 %
Apparel 1,480 1,368 8 % 8 % 2,910 2,493 17 % 16 %
Equipment 145 126 15 % 16 % 330 269 23 % 23 %
TOTAL REVENUES $ 4,477 $ 4,006 12 % 12 % $ 9,356 $ 8,231 14 % 13 %
Revenues by:
Sales to Wholesale Customers $ 2,327 $ 2,354 -1 % -1 % $ 5,005 $ 5,073 -1 % -2 %
Sales through NIKE Direct 2,150 1,652 30 % 30 % 4,351 3,158 38 % 38 %
TOTAL REVENUES $ 4,477 $ 4,006 12 % 12 % $ 9,356 $ 8,231 14 % 13 %
EARNINGS BEFORE INTEREST AND TAXES $ 1,235 $ 1,023 21 % $ 2,669 $ 2,325 15 %

We believe there continues to be a meaningful shift in the way consumers shop for product and make purchasing decisions across each of our geographies. Consumers are demanding a constant flow of fresh and innovative product, and have an expectation for superior service and rapid delivery, all fueled by the shift toward digital and mono-brand experiences in NIKE Direct. We anticipate continued evolution within the retail landscape, driven by shifting consumer traffic patterns across digital and physical channels. Specifically in North America, we remain focused on building long-term momentum with our strategic wholesale customers, which offer a differentiated retail experience. Additionally, over the last three years we have significantly reduced the number of undifferentiated wholesale accounts. During fiscal 2021 and the first six months of fiscal 2022, we took further steps towards account and channel consolidation by reprioritizing product allocation to benefit NIKE Direct and our differentiated strategic wholesale customers. We expect we will continue to aggressively accelerate these changes over the next several fiscal years as we work to reprofile the shape of the marketplace and recapture wholesale revenue declines over time.


	THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear	$	3,963	$	2,852	39	%	39	%	$	7,768	$	6,116	27	%	27	%
Apparel	1,685		1,480		14	%	14	%	3,179		2,910		9	%	10	%
Equipment	182		145		26	%	26	%	393		330		19	%	19	%
TOTAL REVENUES	$	5,830	$	4,477	30	%	31	%	$	11,340	$	9,356	21	%	21	%
Revenues by:
Sales to Wholesale Customers	$	3,183	$	2,327	37	%	37	%	$	6,210	$	5,005	24	%	24	%
Sales through NIKE Direct	2,647		2,150		23	%	23	%	5,130		4,351		18	%	18	%
TOTAL REVENUES	$	5,830	$	4,477	30	%	31	%	$	11,340	$	9,356	21	%	21	%
EARNINGS BEFORE INTEREST AND TAXES	$	1,497	$	1,235	21	%			$	2,874	$	2,669	8	%

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

On a currency-neutral basis, North America revenues for the second quarter of fiscal ~~2022~~2023 increased ~~12%~~31%, due primarily to higher revenues in ~~Women's and the Jordan Brand, partially offset by a decline in~~ Men's. NIKE Direct revenues increased ~~30%~~23%, driven by strong digital sales growth of ~~40%~~31%, comparable store sales growth of ~~16%, in part due to improved physical retail traffic,~~9% and the addition of new stores.

~~Table of Contents~~

Footwear revenues increased ~~13%~~39% on a currency-neutral basis, ~~largely~~ driven by higher revenues in ~~Women's, partially offset by a decline in Men's.~~Men's and the Jordan Brand. Unit sales of footwear increased 7%37%, while higher ASP per pair contributed approximately 62 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher ~~NIKE Direct~~full-price ASP, ~~the favorable impact of growth in our NIKE Direct business and a higher mix of full-price sales,~~ partially offset by lower NIKE Direct ASP, reflecting higher promotional activity, and a lower mix of full-price ~~ASP.~~sales.

Table of Contents

On a currency-neutral basis, apparel revenues increased 8%14%, driven ~~primarily~~ by ~~growth~~higher revenues in ~~NIKE Direct.~~Men's. Unit sales of apparel ~~decreased 5%~~increased 15%, while ~~higher~~lower ASP per unit ~~contributed~~reduced apparel revenues by approximately 131 percentage ~~points of apparel revenue growth. The increase in~~point. Lower ASP ~~per unit~~ was ~~primarily driven by higher NIKE Direct ASP, as well as higher full-price ASP,~~ primarily due to lower ~~discounts,~~NIKE Direct ASP, reflecting higher promotional activity, and a ~~higher~~lower mix of full-price ~~sales.~~sales, partially offset by higher full-price ASP.

Reported EBIT increased 21% asprimarily due to higher revenues, ~~and~~partially offset by gross margin ~~expansion more than offset~~contraction and higher selling and administrative expense. Gross margin ~~increased~~decreased approximately ~~280~~320 basis points ~~primarily due to higher margins and the favorable impact of growth~~largely driven by lower margin in our NIKE Direct business ~~as well as~~due to higher promotional activity, higher product costs reflecting input costs and inbound freight and logistics costs, and a ~~higher~~lower mix of full-price ~~sales and~~sales. This was partially offset by higher full-price ASP, net of ~~discounts. This activity was partially offset~~discounts, driven by ~~higher~~strategic pricing actions and product ~~costs primarily due to increased freight and logistics costs.~~mix. Selling and administrative expense increased due to higher operating overhead and demand creation ~~and operating~~expense. Operating overhead ~~expense. Demand creation~~ expense increased primarily ~~as a result of higher advertising~~due to an increase in wage-related expenses and ~~marketing expense as well as digital marketing investments, partially offset by lower sports marketing~~increased NIKE Direct costs. The increase in ~~operating overhead~~demand creation expense reflected higher ~~wage-related costs as well as~~sports marketing expenses and an increase in ~~strategic technology~~digital marketing investments.

FIRST SIX MONTHS OF FISCAL ~~2022~~2023 COMPARED TO FIRST SIX MONTHS OF FISCAL ~~2021~~2022

On a currency-neutral basis, North America revenues for the first six months of fiscal ~~2022~~2023 increased ~~13%~~21%, due primarily to higher revenues in ~~Women's.~~Men's and the Jordan Brand. NIKE Direct revenues increased ~~38%~~18%, driven by strong digital sales growth of ~~41%~~25%, comparable store sales growth of ~~31%, in part due to improved physical retail traffic,~~6% and the addition of new stores.

Footwear revenues increased ~~12%~~27% on a currency-neutral basis, largely driven by higher revenues in ~~Women's~~Men's and the Jordan ~~Brand, partially offset by a decline in Men's.~~Brand. Unit sales of footwear increased 5%, while higher ASP per pair contributed approximately 7 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher NIKE Direct ASP, the favorable impact of growth in our NIKE Direct business and a higher mix of full-prices sales, partially offset by lower full-price ASP.

On a currency-neutral basis, apparel revenues increased 16%, driven primarily by higher revenues in Men's. Unit sales of apparel increased 4%, while higher ASP per unit contributed approximately 12 percentage points of apparel revenue growth. The increase in ASP per unit was primarily driven by higher NIKE Direct ASP, the favorable impact of growth in our NIKE Direct business and higher full-price ASP, as well as a higher mix of full-price sales.

Reported EBIT increased 15% as higher revenues and gross margin expansion more than offset higher selling and administrative expense. Gross margin increased approximately 170 basis points primarily due to higher margins and the favorable impact of growth in our NIKE Direct business, as well as a higher mix of full-price sales. This activity was partially offset by higher product costs primarily due to increased freight and logistics costs. Selling and administrative expense increased due to higher demand creation and operating overhead expense. Demand creation expense increased primarily as a result of higher advertising and marketing expense, as well as higher digital marketing investments. The increase in operating overhead expense reflected higher wage-related costs as well as an increase in NIKE Direct strategic technology investments.

~~EUROPE, MIDDLE EAST & AFRICA~~

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 1,806 $ 1,731 4 % 4 % $ 3,789 $ 3,533 7 % 4 %
Apparel 1,202 1,104 9 % 8 % 2,361 2,075 14 % 11 %
Equipment 134 123 9 % 7 % 299 260 15 % 11 %
TOTAL REVENUES $ 3,142 $ 2,958 6 % 6 % $ 6,449 $ 5,868 10 % 7 %
Revenues by:
Sales to Wholesale Customers $ 2,112 $ 1,985 6 % 6 % $ 4,336 $ 3,958 10 % 6 %
Sales through NIKE Direct 1,030 973 6 % 6 % 2,113 1,910 11 % 8 %
TOTAL REVENUES $ 3,142 $ 2,958 6 % 6 % $ 6,449 $ 5,868 10 % 7 %
EARNINGS BEFORE INTEREST AND TAXES $ 806 $ 660 22 % $ 1,681 $ 1,352 24 %

~~Table of Contents~~

~~SECOND QUARTER OF FISCAL 2022 COMPARED TO SECOND QUARTER OF FISCAL 2021~~

On a currency-neutral basis, EMEA revenues for the second quarter of fiscal 2022 increased 6%, driven by growth in our wholesale business and NIKE Direct. NIKE Direct revenues increased 6% primarily due to comparable store sales growth of 14%, in part due to improved physical retail traffic, and the addition of new stores, partially offset by a decline in digital sales of 1%.

Currency-neutral footwear revenues increased 4%, driven by growth in wholesale and NIKE Direct. Unit sales of footwear decreased 4%, while higher ASP per pair contributed approximately 8 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher NIKE Direct and full-price ASPs, as well as a higher mix of full-price sales.

Currency-neutral apparel revenues increased 8% due primarily to higher revenues in Men's. Unit sales of apparel increased 3%, while higher ASP per unit contributed approximately 5 percentage points of apparel revenue growth, primarily due to higher NIKE Direct ASP, a higher mix of full-price sales and higher full-price ASP.

~~Reported EBIT increased~~ 22% as gross margin expansion and higher revenues more than offset higher selling and administrative expense. Gross margin increased approximately 670 basis points primarily due to higher NIKE Direct margins, favorable changes in standard foreign currency exchange rates, a higher mix of full-price sales and lower other costs. Selling and administrative expense increased due to higher demand creation and operating overhead expense. Higher demand creation expense was driven by higher advertising and marketing expenses as well as higher sports marketing costs. Higher operating overhead expense was primarily due to higher wage-related expenses.

~~FIRST SIX MONTHS OF FISCAL 2022 COMPARED TO FIRST SIX MONTHS OF FISCAL 2021~~

On a currency-neutral basis, EMEA revenues for the first six months of fiscal 2022 increased 7%, due primarily to higher revenues in Men’s. NIKE Direct revenues increased 8% primarily due to comparable store sales growth of 15%, in part due to improved physical retail traffic, and the addition of new stores, while digital sales was relatively flat compared to prior year.

~~Currency-neutral footwear revenues increased 4%, driven by growth in NIKE Direct and our wholesale business. Unit sales of footwear decreased 1%~~, while higher ASP per pair contributed approximately 5 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, partially offset by lower NIKE Direct ASP, reflecting higher promotional activity.

On a currency-neutral basis, apparel revenues increased 10%, driven primarily by higher revenues in Men's. Unit sales of apparel increased 10%, while ASP per unit remained flat, as higher full-price ASP was offset by lower NIKE Direct ASP, reflecting higher promotional activity.

Reported EBIT increased 8% primarily due to higher revenues, partially offset by gross margin contraction and higher selling and administrative expense. Gross margin decreased approximately 390 basis points primarily due to higher product costs, reflecting higher input costs and increased inbound freight and logistics costs, lower margins in our NIKE Direct business due to higher promotional activity, a lower mix of full-price ~~ASPs,~~sales and higher other costs, in part due to inventory obsolescence. This was partially offset by higher full-price ASP, net of discounts, largely due to product mix and strategic pricing actions. Selling and administrative expense increased due to higher operating overhead and demand creation expense. Operating overhead expense increased primarily as a result of higher wage-related costs, lower bad debt recoveries and increased NIKE Direct costs. The increase in demand creation expense reflected higher sports marketing expenses and an increase in digital marketing investments, partially offset by lower advertising and marketing expense.

EUROPE, MIDDLE EAST & AFRICA


	THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear	$	2,063	$	1,806	14	%	37	%	$	4,075	$	3,789	8	%	27	%
Apparel	1,281		1,202		7	%	28	%	2,434		2,361		3	%	22	%
Equipment	145		134		8	%	30	%	313		299		5	%	23	%
TOTAL REVENUES	$	3,489	$	3,142	11	%	33	%	$	6,822	$	6,449	6	%	25	%
Revenues by:
Sales to Wholesale Customers	$	2,242	$	2,112	6	%	28	%	$	4,445	$	4,336	3	%	21	%
Sales through NIKE Direct	1,247		1,030		21	%	44	%	2,377		2,113		12	%	32	%
TOTAL REVENUES	$	3,489	$	3,142	11	%	33	%	$	6,822	$	6,449	6	%	25	%
EARNINGS BEFORE INTEREST AND TAXES	$	990	$	806	23	%			$	1,965	$	1,681	17	%

SECOND QUARTER OF FISCAL 2023 COMPARED TO SECOND QUARTER OF FISCAL 2022

On a currency-neutral basis, EMEA revenues for the second quarter of fiscal 2023 increased 33%, primarily driven by growth in Men's. NIKE Direct revenues increased 44%, driven by strong digital sales growth of 62% and comparable store sales growth of 24%, partially offset by store closures.

Table of Contents

Currency-neutral footwear revenues increased 37%, driven by higher revenues in Men's, the Jordan Brand and Women's. Unit sales of footwear increased 18%, while higher ASP per pair contributed approximately 19 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price ASP, as well as ~~a higher mix~~the favorable impact of ~~full-price sales.~~growth in our NIKE Direct business.

Currency-neutral apparel revenues increased ~~11%~~28% due primarily to higher revenues in Men's. Unit sales of apparel increased 5%11%, while higher ASP per unit contributed approximately 617 percentage points of apparel revenue growth, primarily due to higher full-price ASP.

Reported EBIT increased 23% primarily due to higher revenues and lower selling and administrative expenses, partially offset by gross margin contraction. Gross margin decreased approximately 70 basis points primarily due to higher product costs reflecting input costs and increased inbound freight and logistics costs, higher other costs including inventory obsolescence, lower margins in our NIKE Direct business reflecting higher promotional activity and lower mix of full-price sales. This activity was partially offset by higher full-price ASP, net of discounts, in part due to strategic pricing actions, and higher off-price margin. Selling and administrative expense decreased due to lower demand creation and operating overhead expense. Lower demand creation expense was driven by favorable changes in foreign currency exchange rates and lower sports marketing expenses, partially offset by higher advertising and marketing expenses. Operating overhead expense decreased primarily due to favorable changes in foreign currency exchange rates, partially offset by increased wage-related expenses, increased travel and related expense and lower bad debt recoveries.

FIRST SIX MONTHS OF FISCAL 2023 COMPARED TO FIRST SIX MONTHS OF FISCAL 2022

On a currency-neutral basis, EMEA revenues for the first six months of fiscal 2023 increased 25%, due primarily to higher revenues in Men’s. NIKE Direct revenues increased 32% primarily due to strong digital sales growth of 55% as well as comparable store sales growth of 12%, partially offset by store closures.

Currency-neutral footwear revenues increased 27%, driven by higher revenues led by Men's and the Jordan Brand. Unit sales of footwear increased 9%, while higher ASP per pair contributed approximately 18 percentage points of footwear revenue growth. Higher ASP per pair was primarily due to higher full-price and NIKE Direct ASPs, as well as the favorable impact of growth in our NIKE Direct business.

Currency-neutral apparel revenues increased 22% due primarily to higher revenues in Men's. Unit sales of apparel increased 9%, while higher ASP per unit contributed approximately 13 percentage points of apparel revenue growth, primarily due to higher full-price ASP, partially offset by lower NIKE Direct ASP.

Reported EBIT increased 17% due to higher revenues and gross margin expansion as well as lower selling and administrative expense. Gross margin increased approximately 160 basis points primarily due to higher full-price ASP, net of discounts, in part due to strategic pricing actions and higher off-price margin. This activity was partially offset by higher product costs reflecting increased inbound freight and logistics costs and higher other costs including inventory obsolescence. Selling and administrative expense decreased due to lower operating overhead expense, partially offset by higher demand creation expense. Operating overhead expense decreased primarily due to favorable changes in foreign currency exchange rates, partially offset by increased wage-related expenses, increased travel and related expense and lower bad debt recoveries. Higher demand creation expense was primarily due to higher advertising and marketing expense, partially offset by favorable changes in foreign currency exchange rates.

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GREATER CHINA


	THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear	$	1,370	$	1,235	11	%	21	%	$	2,603	$	2,684	-3	%	4	%
Apparel	393		564		-30	%	-24	%	767		1,040		-26	%	-21	%
Equipment	25		45		-44	%	-39	%	74		102		-27	%	-23	%
TOTAL REVENUES	$	1,788	$	1,844	-3	%	6	%	$	3,444	$	3,826	-10	%	-4	%
Revenues by:
Sales to Wholesale Customers	$	897	$	896	0	%	8	%	$	1,736	$	2,010	-14	%	-8	%
Sales through NIKE Direct	891		948		-6	%	4	%	1,708		1,816		-6	%	1	%
TOTAL REVENUES	$	1,788	$	1,844	-3	%	6	%	$	3,444	$	3,826	-10	%	-4	%
EARNINGS BEFORE INTEREST AND TAXES	$	511	$	569	-10	%			$	1,052	$	1,270	-17	%

SECOND QUARTER OF FISCAL 2023 COMPARED TO SECOND QUARTER OF FISCAL 2022

On a currency-neutral basis, Greater China revenues for the second quarter of fiscal 2023 increased 6%.The increase in revenues was primarily due to higher revenues in the Jordan Brand. NIKE Direct revenues increased 4% due to digital sales growth of 9% and the addition of new stores, partially offset by comparable store sales declines of 4%, in part due to reduced physical traffic as a result of COVID-19 related disruptions.

Currency-neutral footwear revenues increased 21%, driven primarily by higher revenues in the Jordan Brand and Men's. Unit sales of footwear increased 15%, while higher ASP per pair contributed approximately 6 percentage points of footwear revenue growth, driven by higher full-price and NIKE Direct ASPs, as well as a higher mix of full-price sales.

Currency-neutral apparel revenues decreased 24%, due primarily to lower revenues in Men's and the Jordan Brand. Unit sales of apparel decreased 28%, while higher ASP per unit contributed approximately 4 percentage points of apparel revenue growth, primarily due to higher full-price ASP and a higher mix of full-price sales, partially offset by lower NIKE Direct and off-price ASPs.

Reported EBIT ~~increased 24%~~decreased 10% as ~~higher~~lower revenues and gross margin ~~expansion~~contraction more than offset ~~higher~~lower selling and administrative expense. Gross margin ~~increased~~decreased approximately ~~460~~110 basis points, primarily due to higher product costs reflecting product mix and higher input costs, lower margins in our NIKE Direct ~~margins,~~business, partially offset by higher full-price ASP, net of discounts, favorable changes in standard foreign currency exchange rates and a higher mix of full-price ~~sales, partially offset by higher product costs primarily due to increased freight and logistics costs.~~sales. Selling and administrative expense ~~increased~~decreased due to ~~higher~~lower demand creation and operating overhead expense. ~~Higher demand creation expense was driven by higher advertising and marketing expenses. Higher operating overhead expense was primarily due to higher wage-related expenses.~~

~~GREATER CHINA~~

THREE MONTHS ENDED NOVEMBER 30, SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions) 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES 2021 2020 % CHANGE % CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:
Footwear $ 1,235 $ 1,567 -21 % -25 % $ 2,684 $ 2,818 -5 % -11 %
Apparel 564 681 -17 % -21 % 1,040 1,159 -10 % -16 %
Equipment 45 50 -10 % -15 % 102 101 1 % -6 %
TOTAL REVENUES $ 1,844 $ 2,298 -20 % -24 % $ 3,826 $ 4,078 -6 % -13 %
Revenues by:
Sales to Wholesale Customers $ 896 $ 1,159 -23 % -27 % $ 2,010 $ 2,123 -5 % -12 %
Sales through NIKE Direct 948 1,139 -17 % -21 % 1,816 1,955 -7 % -13 %
TOTAL REVENUES $ 1,844 $ 2,298 -20 % -24 % $ 3,826 $ 4,078 -6 % -13 %
EARNINGS BEFORE INTEREST AND TAXES $ 569 $ 891 -36 % $ 1,270 $ 1,579 -20 %

~~Table of Contents~~

~~SECOND QUARTER OF FISCAL 2022 COMPARED TO SECOND QUARTER OF FISCAL 2021~~

On a currency-neutral basis, Greater China revenues for the second quarter of fiscal 2022 decreased 24%, reflecting impacts from lack of available inventory supply and product launch timing due to factory closures and mandated store closures due to COVID-19, as well as ongoing marketplace dynamics. The decrease in revenues was primarily due to lower revenues in Men’s and Women's. NIKE Direct revenues decreased 21% due to digital sales declines of 27%, comparable store sales declines of 18%, in part due to reduced physical retail traffic and mandated store closures due to COVID-19, partially offset by the addition of new stores.

Currency-neutral footwear revenues decreased 25%, driven primarily by lower revenues in Men's. Unit sales of footwear decreased 20%, while lower ASP per pair reduced footwear revenues by approximately 5 percentage points, driven by lower NIKE Direct and full-price ASPs.

Currency-neutral apparel revenues decreased 21%, due primarily to lower revenues in Men's and Women's. Unit sales of apparel decreased 17%, while lower ASP per unit reduced apparel revenues by approximately 4 percentage points, primarily due to lower NIKE Direct ASP, as well as lower full-price ASPs, primarily due to higher discounts.

Reported EBIT decreased 36% due to lower revenues, gross margin contraction and higher selling and administrative expense. Gross margin decreased approximately 310 basis points reflecting lower full-price ASP, net of discounts, lower NIKE Direct margins, higher other costs and a lower mix of full-price sales, partially offset by lower product costs. Higher other costs were primarily due to higher inventory obsolescence and the unfavorable rate impact of fixed supply chain costs on a lower volume of shipments. Selling and administrative expense increased due to higher demand creation and operating overhead expense. Growth in demand creation expense was primarily due to lower retail brand presentation expense, favorable changes in foreign currency exchange rates and lower investments in digital marketing, partially offset by higher advertising and marketing ~~costs as well as higher digital marketing investments.~~expense. Operating overhead expense ~~increased largely~~decreased primarily due to ~~higher wage-related costs,~~favorable changes in foreign currency exchange rates, partially offset by ~~lower~~higher wage-related expenses and other administrative costs.

FIRST SIX MONTHS OF FISCAL ~~2022~~2023 COMPARED TO FIRST SIX MONTHS OF FISCAL ~~2021~~2022

On a currency-neutral basis, Greater China revenues for the first six months of fiscal ~~2022~~2023 decreased ~~13%~~4%, reflecting impacts from ~~lack of available inventory supply and product launch timing due to factory closures, mandated store closures due to~~ COVID-19 ~~and ongoing marketplace dynamics.~~related disruptions. The decrease in revenues was primarily due to lower revenues in ~~the~~ Men’s and ~~Women's.~~Women's, partially offset by growth in the Jordan Brand. NIKE Direct revenues ~~decreased 13%~~increased 1% due to the addition of new stores and a 3% increase in digital ~~sales declines of 19%,~~sales. This increase was partially offset by comparable store sales declines of ~~12%,~~4% in part due to ~~reduced~~lower physical retail traffic ~~partially offset by the addition~~as a result of ~~new stores.~~COVID-19 related disruptions.

Currency-neutral footwear revenues ~~decreased 11%~~increased 4%, driven primarily by higher revenues in the Jordan Brand. Unit sales of footwear increased 1%, while higher ASP per pair contributed approximately 3 percentage points of footwear revenue growth, primarily due to higher NIKE Direct and full-price ASPs and a higher mix of full-price sales, partially offset by lower off-price ASP.

Currency-neutral apparel revenues decreased 21%, due primarily to lower revenues in Men's. Unit sales of ~~footwear decreased 8%, while lower ASP per pair reduced footwear revenues by approximately 3 percentage points, driven by lower NIKE Direct and full-price ASPs, primarily due to higher discounts.~~

~~Currency-neutral apparel revenues decreased 16%, due primarily to lower revenues in Women's. Unit sales of~~ apparel decreased ~~10%~~16%, while lower ASP per unit reduced apparel revenues by approximately 65 percentage points, primarily due to lower NIKE Direct and ~~full-price ASPs, primarily due to higher discounts.~~off-price ASPs.

Reported EBIT decreased ~~20%~~17% due to lower revenues and gross margin contraction, ~~and higher~~partially offset by lower selling and administrative expense. Gross margin decreased approximately ~~220~~80 basis points, ~~reflecting lower full-price ASP,~~ primarily due to higher ~~discounts,~~product costs reflecting product mix and higher ~~other~~input costs and lower margins in our NIKE Direct ~~margins,~~business. This activity was partially offset by ~~lower product costs. Higher other costs was primarily due to~~ higher ~~inventory obsolescence.~~full-price ASP, net of discounts and favorable changes in standard foreign currency exchange rates. Selling and administrative expense increased due to higher demand creation and operating overhead expense. Growth in demand creation expense was primarily due to higher advertising and marketing costs as well as digital marketing investments. Operating overhead expense increased largely due to higher wage-related costs.

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expense decreased due to lower demand creation expense, partially offset by higher operating overhead expense. The decrease in demand creation expense was primarily due to lower retail brand presentation costs, lower investments in digital marketing and favorable changes in foreign currency exchange rates, partially offset by higher advertising and marketing expense. Operating overhead expense increased largely due to higher wage-related expenses and other administrative costs, partially offset by favorable changes in foreign currency exchange rates.

ASIA PACIFIC & LATIN AMERICA


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES			(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:	Revenues by:																		Revenues by:
Footwear	Footwear	$	887	$	991	-10	%	-8	%	$	1,909	$	1,749	9	%	9	%		Footwear	$	1,108	$	887	25	%	40	%	$	2,172	$	1,909	14	%	27	%
Apparel	Apparel	402		432		-7	%	-5	%	787		733		7	%	8	%		Apparel	435		402		8	%	24	%	848		787		8	%	22	%
Equipment	Equipment	58		48		21	%	22	%	116		88		32	%	32	%		Equipment	56		58		-3	%	8	%	114		116		-2	%	10	%
TOTAL REVENUES	TOTAL REVENUES	$	1,347	$	1,471	-8	%	-6	%	$	2,812	$	2,570	9	%	10	%		TOTAL REVENUES	$	1,599	$	1,347	19	%	34	%	$	3,134	$	2,812	11	%	25	%
Revenues by:	Revenues by:																		Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	784	$	925	-15	%	-13	%	$	1,711	$	1,633	5	%	5	%		Sales to Wholesale Customers	$	965	$	784	23	%	37	%	$	1,879	$	1,711	10	%	21	%
Sales through NIKE Direct	Sales through NIKE Direct	563		546		3	%	6	%	1,101		937		18	%	19	%		Sales through NIKE Direct	634		563		13	%	30	%	1,255		1,101		14	%	30	%
TOTAL REVENUES	TOTAL REVENUES	$	1,347	$	1,471	-8	%	-6	%	$	2,812	$	2,570	9	%	10	%		TOTAL REVENUES	$	1,599	$	1,347	19	%	34	%	$	3,134	$	2,812	11	%	25	%
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	$	388	$	424	-8	%			$	869	$	704	23	%				EARNINGS BEFORE INTEREST AND TAXES	$	485	$	388	25	%			$	985	$	869	13	%

As discussed previously, our NIKE Brand business in Brazil transitioned to a distributor operating model during fiscal ~~2021~~2021. We completed the sale of our entity in Chile and our ~~NIKE Brand businesses~~entities in Argentina ~~Chile~~ and Uruguay ~~have remained classified as held-for-sale. The~~to third-party distributors in the first and second quarters of fiscal 2023, respectively, and the impacts offrom closing ~~the Brazil transaction as well as classifying the Argentina, Chile, and Uruguay entities as held-for-sale in fiscal 2020~~these transactions are included within Corporate and are not reflected in the APLA operating segment results. This completes the transition of our NIKE Brand businesses in these markets to a distributor operating model. Our CASA marketplace now reflects a full distributor operating model. For more information see Note 1213 — Acquisitions and Divestitures within the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

On a currency-neutral basis, APLA revenues ~~decreased 6%~~increased 34% for the second quarter of fiscal ~~2022.~~2023. The ~~decline~~increase was due to ~~lower~~higher revenues across nearly all territories, led by ~~a decline~~Japan, Korea and Southeast Asia & India, which increased 42%, 37% and 61%, respectively. The transition of ~~67% due to~~ our ~~business model shift in Brazil~~Chile, Argentina and Uruguay entities to a third-party distributor operating model ~~in fiscal 2021, partially offset~~reduced APLA revenue growth by ~~higher revenues in SOCO (which comprises Argentina, Chile and Uruguay), which~~approximately 7 percentage points. Revenues increased ~~33%. Revenues decreased~~ primarily due to ~~lower revenues~~growth in ~~Men’s.~~Men's, Women's and the Jordan Brand. NIKE Direct revenues increased 6%30%, primarily due to digital sales growth of ~~25%, partially offset by store closures~~35% and comparable store sales ~~contraction~~growth of ~~1%,~~33% in part due to ~~reduced~~improved physical retail ~~traffic.~~traffic, partially offset by stores included in the sale of our Chile, Argentina and Uruguay entities.

Currency-neutral footwear revenues ~~decreased 8%~~increased 40%, due primarily to ~~lower~~higher revenues in ~~Men's.~~Men's, Women's and the Jordan Brand. Unit sales of footwear ~~decreased 25%~~increased 38%, while higher ASP per pair contributed approximately 172 percentage points of footwear revenue growth. Higher ASP per pair was largely driven by higher ~~NIKE Direct,~~ full-price ~~and off-price ASPs, as well as a higher mix of full-price sales. Higher ASPs, in part, reflect inflationary conditions in our SOCO territory.~~ASP.

Currency-neutral apparel revenues ~~decreased 5%~~increased 24%, due primarily to ~~lower~~higher revenues in Men's, Women's and ~~Women's.~~the Jordan Brand. Unit sales of apparel ~~decreased 20%~~increased 22%, while higher ASP per unit contributed approximately 152 percentage points of apparel revenue growth, driven by higher full-price ASP, partially offset by lower NIKE Direct ~~full-price and off-price ASPs, as well as a higher mix of full-price sales. Higher ASPs, in part, reflect inflationary conditions in our SOCO territory.~~ASP.

Reported EBIT ~~decreased 8%~~increased 25% for the second quarter of fiscal ~~2022,~~2023, as ~~lower~~higher revenues and ~~higher~~lower selling and administrative ~~expenses~~expense more than offset gross margin ~~expansion.~~contraction. Gross margin ~~increased~~decreased approximately ~~460~~190 basis points ~~primarily~~ due to ~~lower~~higher product costs ~~higher margins~~reflecting increased inbound freight and ~~the favorable impact of growth in our NIKE Direct business,~~logistics costs. This was partially offset by higher full-price ASP, ~~primarily reflecting~~net of discounts, in part due to strategic pricing actions, lower ~~discounts,~~other costs including warehousing and ~~a higher mix of full-price sales.~~favorable changes in standard foreign currency exchange rates. Selling and administrative expense ~~increased~~decreased due to ~~higher~~lower demand creation ~~and~~expense, partially offset by higher operating overhead expense. ~~Higher~~The decrease in demand creation expense was primarily due to ~~higher~~favorable changes in foreign currency exchange rates and lower investments in digital marketing, ~~investments to support heightened digital demand. The increase in operating~~partially offset by higher advertising and marketing expense. Operating overhead expense ~~was primarily~~increased largely due to ~~an increase~~higher wage-related costs and higher professional services expenses, partially offset by favorable changes in ~~NIKE Direct strategic technology investments and lower bad debt recoveries.~~foreign currency exchange rates.

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FIRST SIX MONTHS OF FISCAL ~~2022~~2023 COMPARED TO FIRST SIX MONTHS OF FISCAL ~~2021~~2022

On a currency-neutral basis, APLA revenues increased ~~10%~~25% for the first six months of fiscal ~~2022. Territory revenue growth~~2023. The increase was due to higher revenues across nearly all territories, led by ~~a 72% increase in SOCO, an 11% increase in~~Korea, Southeast Asia & India, Japan and ~~a 23% increase in Mexico, partially offset by a decline~~Pacific, which increased 30%, 63%, 18% and 39%, respectively. Additionally, the transition of ~~56% due to~~ our ~~business model shift in Brazil~~Chile, Argentina and Uruguay entities to a third-party distributor operating model ~~in fiscal 2021.~~reduced APLA growth by approximately 4 percentage points. Revenues increased primarily due to higher revenues in ~~Men’s.~~Men’s, Women's and the Jordan Brand. NIKE Direct revenues increased ~~19%~~30%, primarily due to digital sales growth of ~~41% and~~32%, comparable store sales growth of 7%28%, ~~partially offset by store closures.~~in part due to improved physical retail traffic, and the addition of new stores.

Currency-neutral footwear revenues increased 9%27%, due primarily to higher revenues in ~~Kids'~~Men's, Women's and the Jordan ~~Brand, partially offset by declines in Men's.~~Brand. Unit sales of footwear ~~decreased 6%~~increased 18%, while higher ASP per pair contributed approximately 159 percentage points of footwear revenue growth. Higher ASP per pair was driven by higher full-price and NIKE Direct ~~ASP~~ASPs, as well as ~~higher full-price ASPs, primarily due to lower discounts, higher off-price ASP and a higher mix~~the favorable impact of ~~full-price sales. Higher ASPs, in part, reflect inflationary conditions~~growth in our ~~SOCO territory.~~NIKE Direct business.

Currency-neutral apparel revenues increased 8%22%, due primarily to higher revenues in Men's. Unit sales of apparel ~~decreased 6%~~increased 20%, while higher ASP per unit contributed approximately 142 percentage points of apparel revenue growth, driven by higher full-price ASP, ~~reflecting~~partially offset by lower ~~discounts, higher~~ NIKE Direct ~~ASP, as well as higher off-price ASP and a higher mix of full-price sales. Higher ASPs, in part, reflect inflationary conditions in our SOCO territory.~~ASP.

Reported EBIT increased ~~23%~~13% for the first six months of fiscal ~~2022,~~2023 as a result of higher revenues, ~~and gross margin expansion more than~~partially offset higher selling and administrative ~~expense.~~expense as well as gross margin contraction. Gross margin ~~increased~~decreased approximately ~~510~~50 basis points primarily due to higher ~~margins~~product costs, reflecting inbound freight and ~~the favorable impact of growth in our NIKE Direct business, lower other~~logistics costs, partially offset by higher full-price ASP, ~~primarily~~net of discounts, in part due to ~~lower discounts as well as lower product costs~~strategic pricing actions, and ~~a higher mix of full-price sales. The decrease~~favorable changes in ~~other costs was primarily due to the favorable rate impact of fixed supply chain costs on a higher volume of wholesale shipments, as well as lower inventory obsolescence.~~standard foreign currency exchange rates. Selling and administrative expense increased due to higher operating overhead expense, partially offset by lower demand creation ~~and operating overhead~~ expense. ~~Higher demand creation expense was primarily due to higher digital marketing investments to support heightened digital demand.~~ The increase in operating overhead expense was primarily due to ~~an increase~~higher wage-related expenses and professional services costs, partially offset by favorable changes in ~~NIKE Direct strategic technology investments,~~foreign currency exchange rates. Demand creation expense decreased primarily due to favorable changes in foreign currency exchange rates and lower ~~bad debt recoveries.~~investments in digital marketing, partially offset by higher sports marketing expenses.

GLOBAL BRAND DIVISIONS


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,								THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES			(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues	Revenues	$	6	$	8	-25	%	-5	%	$	13	$	12	8	%	13	%		Revenues	$	18	$	6	200	%	200	%	$	32	$	13	146	%	149	%
Earnings (Loss) Before Interest and Taxes	Earnings (Loss) Before Interest and Taxes	$	(1,071)	$	(841)	-27	%			$	(2,058)	$	(1,694)	-21	%				Earnings (Loss) Before Interest and Taxes	$	(1,226)	$	(1,071)	-14	%			$	(2,413)	$	(2,058)	-17	%

Global Brand Divisions primarily represent demand creation and operating overhead expense, 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. Global Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment.

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

Global Brand Divisions' loss before interest and taxes increased ~~27%~~14% for the second quarter of fiscal ~~2022~~2023 driven primarily by higher operating overhead and ~~higher~~ demand creation expense. Higher operating overhead expense was primarily due to an increase in ~~strategic technology investments and higher wage-related costs. Higher demand creation expense was primarily due to higher sports marketing costs as well as higher advertising and marketing expense.~~

~~FIRST SIX MONTHS OF FISCAL 2022 COMPARED TO FIRST SIX MONTHS OF FISCAL 2021~~

Global Brand Divisions' loss before interest and taxes increased 21% for the first six months of fiscal 2022 driven by higher operating overhead and higher demand creation expense. Higher operating overhead expense was primarily due to an increase in strategic technology investments and wage-related costs. Higher demand creation expense was primarily due to higher advertising and marketing expense and increased sports marketing expenses.

FIRST SIX MONTHS OF FISCAL 2023 COMPARED TO FIRST SIX MONTHS OF FISCAL 2022

Global Brand Divisions' loss before interest and taxes increased 17% for the first six months of fiscal 2023 driven by higher operating overhead and higher demand creation expense. The increase in operating overhead expense was primarily due to higher wage-related costs and strategic technology investments. The increase in demand creation expense reflected higher sports marketing expenses and an increase in digital marketing investments.

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CONVERSE


		THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,									THREE MONTHS ENDED NOVEMBER 30,								SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2021		2020		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		(Dollars in millions)	2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES		2022		2021		% CHANGE		% CHANGE EXCLUDING CURRENCY CHANGES
Revenues by:	Revenues by:																	Revenues by:
Footwear	Footwear	$	485	$	416	17	%	16	%	$	1,052	$	929	13	%	11	%	Footwear	$	517	$	485	7	%	14	%	$	1,093	$	1,052	4	%	11	%
Apparel	Apparel	34		32		6	%	5	%	58		54		7	%	3	%	Apparel	21		34		-38	%	-33	%	42		58		-28	%	-23	%
Equipment	Equipment	5		7		-29	%	-30	%	14		16		-13	%	-17	%	Equipment	6		5		20	%	19	%	14		14		0	%	8	%
Other(1)	Other(1)	33		21		57	%	54	%	62		40		55	%	54	%	Other(1)	42		33		27	%	27	%	80		62		29	%	29	%
TOTAL REVENUES	TOTAL REVENUES	$	557	$	476	17	%	16	%	$	1,186	$	1,039	14	%	11	%	TOTAL REVENUES	$	586	$	557	5	%	12	%	$	1,229	$	1,186	4	%	10	%
Revenues by:	Revenues by:																	Revenues by:
Sales to Wholesale Customers	Sales to Wholesale Customers	$	303	$	259	17	%	17	%	$	672	$	632	6	%	3	%	Sales to Wholesale Customers	$	304	$	303	0	%	10	%	$	647	$	672	-4	%	4	%
Sales through Direct to Consumer	Sales through Direct to Consumer	221		196		13	%	12	%	452		367		23	%	21	%	Sales through Direct to Consumer	240		221		9	%	14	%	502		452		11	%	15	%
Other(1)	Other(1)	33		21		57	%	53	%	62		40		55	%	54	%	Other(1)	42		33		27	%	27	%	80		62		29	%	29	%
TOTAL REVENUES	TOTAL REVENUES	$	557	$	476	17	%	16	%	$	1,186	$	1,039	14	%	11	%	TOTAL REVENUES	$	586	$	557	5	%	12	%	$	1,229	$	1,186	4	%	10	%
EARNINGS BEFORE INTEREST AND TAXES	EARNINGS BEFORE INTEREST AND TAXES	$	132	$	87	52	%			$	336	$	255	32	%			EARNINGS BEFORE INTEREST AND TAXES	$	153	$	132	16	%			$	362	$	336	8	%

(1)Other revenues consist of territories serviced by third-party licensees who pay royalties to Converse for the use of its registered trademarks and other intellectual property rights. We do not own the Converse trademarks in Japan and accordingly do not earn revenues in Japan.

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

On a currency-neutral basis, Converse revenues increased ~~16%~~12% for the second quarter of fiscal ~~2022 driven by~~2023 as revenue growth in North America, licensee markets and Western Europe ~~and North America,~~was partially offset by declines in Asia. ~~Wholesale revenues increased 17%, while direct~~Direct to consumer revenues increased ~~12%~~14%, driven ~~primarily~~ by strong digital sales growth in North ~~America and Western Europe, partially offset by declines in Asia.~~America. Combined unit sales within the wholesale and direct to consumer channels increased ~~5% and~~6%, primarily driven by growth in North America wholesale, while ASP increased 9%5%, ~~primarily due to higher full-price ASP,~~ driven by ~~lower discounts and~~ growth in direct to consumer.

Reported EBIT increased ~~52%~~16%, driven by ~~higher revenues and~~ gross margin expansion and higher revenues, partially offset by higher selling and administrative expense. Gross margin increased approximately ~~250~~300 basis points, ~~primarily due to~~driven by higher margins in ~~our~~ direct to consumer, ~~business~~lower product and ~~a higher mix of full price sales, partially offset by higher product~~other costs ~~primarily due to increased freight charges.~~and growth in licensee revenues. Selling and administrative expense increased ~~primarily~~ due to higher demand creation and operating overhead expense. Demand creation expense ~~driven by~~increased as a result of increased marketing and advertising costs. Operating overhead expense increased as a result of higher ~~advertising and marketing expense.~~wage-related expenses.

FIRST SIX MONTHS OF FISCAL ~~2022~~2023 COMPARED TO FIRST SIX MONTHS OF FISCAL ~~2021~~2022

On a currency-neutral basis, Converse revenues increased ~~11%~~10% for the first six months of fiscal ~~2022 driven by~~2023 as revenue growth in North America, ~~and~~ Western Europe and licensee markets was partially offset by declines in Asia. ~~Wholesale revenues increased 3%, while direct~~Direct to consumer revenues increased ~~21%~~15%, driven by strong digital sales growth in North ~~America and Western Europe, partially offset by declines in Asia.~~America. Combined unit sales within the wholesale and direct to consumer channels ~~decreased 2%,~~were flat, while ASP increased ~~12%~~9%, ~~primarily due to higher full-price ASP,~~ driven by ~~lower discounts and~~ growth in direct to consumer.

Reported EBIT increased ~~32%~~8%, driven by ~~higher revenues and~~ gross margin expansion and higher revenues, partially offset by higher selling and administrative expense. Gross margin increased approximately ~~290~~260 basis points ~~primarily due to~~driven by higher ASP, net of discounts, higher margins in ~~our~~ direct to consumer, ~~business,~~higher mix of full-price sales and growth in licensee ~~revenues and lower other costs, partially offset by higher product costs due to increased freight and duty charges.~~revenues. Selling and administrative expense increased ~~primarily~~ due to higher operating overhead and demand creation expense. Operating overhead expense ~~driven~~increased as a result of higher professional services costs, higher wage-related expenses and lower bad debt recoveries. Demand creation expense increased due to higher marketing and advertising costs, partially offset by ~~higher advertising and marketing expense.~~lower retail brand presentation costs.

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CORPORATE


		THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,						THREE MONTHS ENDED NOVEMBER 30,						SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	(Dollars in millions)	2021		2020		% CHANGE		2021		2020		% CHANGE			(Dollars in millions)	2022		2021		% CHANGE		2022		2021		% CHANGE
Revenues	Revenues	$	(16)	$	26	—		$	(37)	$	39	—			Revenues	$	5	$	(16)	—		$	1	$	(37)	—
Earnings (Loss) Before Interest and Taxes	Earnings (Loss) Before Interest and Taxes	$	(503)	$	(718)	30	%	$	(1,048)	$	(1,215)	14	%		Earnings (Loss) Before Interest and Taxes	$	(744)	$	(503)	-48	%	$	(1,318)	$	(1,048)	-26	%

Corporate revenues primarily consist 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 our central foreign exchange risk management program.

The Corporate loss before interest and taxes primarily consists of unallocated general and administrative expenses, including expenses associated with centrally managed departments; depreciation and amortization related to our corporate headquarters; unallocated insurance, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses.

In addition to the foreign currency gains and losses recognized in Corporate revenues, foreign currency results in Corporate include gains and losses resulting from the difference between actual foreign currency exchange rates and standard rates used to record non-functional currency denominated product purchases within the NIKE Brand geographic operating segments and Converse; related foreign currency hedge results; conversion gains and losses arising from remeasurement of monetary assets and liabilities in non-functional currencies; and certain other foreign currency derivative instruments.

SECOND QUARTER OF FISCAL ~~2022~~2023 COMPARED TO SECOND QUARTER OF FISCAL ~~2021~~2022

Corporate's loss before interest and taxes ~~decreased $215~~increased $241 million for the second quarter of fiscal ~~2022,~~2023, primarily due to the following:

•~~a favorable change of $198 million, primarily due to higher restructuring-related costs related to our organizational realignment in the prior year;~~

•a favorable change in net foreign currency gains and losses of $51 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net; and

•an unfavorable change of ~~$34~~$149 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross ~~margin.~~margin;

~~FIRST SIX MONTHS OF FISCAL 2022 COMPARED TO FIRST SIX MONTHS OF FISCAL 2021~~

~~Corporate's loss before interest and taxes decreased $167 million for the first six months of fiscal 2022, primarily due to the following:~~

•~~a favorable~~an unfavorable change of ~~$165~~$149 million primarily ~~due to higher restructuring-related costs~~ related to the loss recognized upon the sale of our ~~organizational realignment,~~entities in Argentina and Uruguay to a third-party distributor; these results are reported as ~~well as charges related to our planned, strategic distributor partnership transition within APLA, both~~a component of ~~which occurred in the prior year;~~consolidated Other (income) expense, net;

•a favorable change in net foreign currency gains and losses of ~~$38~~$141 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net; and

•an unfavorable change of ~~$36~~$84 million primarily related to increased wage-related expenses, reported as a component of consolidated Operating overhead expense.

FIRST SIX MONTHS OF FISCAL 2023 COMPARED TO FIRST SIX MONTHS OF FISCAL 2022

Corporate's loss before interest and taxes increased $270 million for the first six months of fiscal 2023, primarily due to the following:

•an unfavorable change of $289 million related to the difference between actual foreign currency exchange rates and standard foreign currency exchange rates assigned to the NIKE Brand geographic operating segments and Converse, net of hedge gains and losses; these results are reported as a component of consolidated gross ~~margin.~~margin;

•a favorable change in net foreign currency gains and losses of $208 million related to the remeasurement of monetary assets and liabilities denominated in non-functional currencies and the impact of certain foreign currency derivative instruments, reported as a component of consolidated Other (income) expense, net;

•an unfavorable change of $106 million primarily related to the loss recognized upon the completion of the sale of our entities in Argentina and Uruguay to a third-party distributor, partially offset by settlements of legal matters, reported as a component of consolidated Other (income) expense, net; and

•an unfavorable change of $83 million primarily related to increased wage and other professional service related expenses, reported as a component of consolidated Operating overhead expense.

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FOREIGN CURRENCY EXPOSURES AND HEDGING PRACTICES

OVERVIEW

As a global company with significant operations outside the United States, in the normal course of business we are exposed to risk arising from changes in currency exchange rates. Our primary foreign currency exposures arise from the recording of transactions denominated in non-functional currencies and the translation of foreign currency denominated results of operations, financial position and cash flows into U.S. Dollars.

Our foreign exchange risk management program is intended to lessen both the positive and negative effects of currency fluctuations on our consolidated results of operations, financial position and cash flows. We manage global foreign exchange risk

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centrally on a portfolio basis to address those risks material to NIKE, Inc. Our hedging policy is designed to partially or entirely offset the impact of exchange rate changes on the underlying net exposures being hedged. Where exposures are hedged, our program has the effect of delaying the impact of exchange rate movements on our Unaudited Condensed Consolidated Financial Statements; the length of the delay is dependent upon hedge horizons. We do not hold or issue derivative instruments for trading or speculative purposes. As of and for the three and six months ended November 30, ~~2021,~~2022, there have been no material changes to the Company's hedging program or strategy from what was disclosed within the Annual Report on Form 10-K.

Refer to Note 4 — Fair Value Measurements and Note 8 — Risk Management and Derivatives in the accompanying Notes to the Unaudited Condensed Consolidated Financial Statements for additional description of outstanding derivatives at each reported period end. For additional information about our Foreign Currency Exposures and Hedging Practices refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

TRANSACTIONAL EXPOSURES

We conduct business in various currencies and have transactions which subject us to foreign currency risk. Our most significant transactional foreign currency exposures are:

•Product Costs — Product purchases denominated in currencies other than the functional currency of the transacting entity and factory input costs from the foreign currency adjustments program with certain factories.

•Non-Functional Currency Denominated External Sales — A portion of our NIKE Brand and Converse revenues associated with European operations are earned in currencies other than the Euro (e.g., the British Pound) but are recognized at a subsidiary that uses the Euro as its functional currency. These sales generate a foreign currency exposure.

•Other Costs — Non-functional currency denominated costs, such as endorsement contracts, also generate foreign currency risk, though to a lesser extent.

•Non-Functional Currency Denominated Monetary Assets and Liabilities — Our global subsidiaries have various monetary assets and liabilities, primarily receivables and payables, including intercompany receivables and payables, denominated in currencies other than their functional currencies. These balance sheet items are subject to remeasurement which may create fluctuations in Other (income) expense, net within our consolidated results of operations.

MANAGING TRANSACTIONAL EXPOSURES

Transactional exposures are managed on a portfolio basis within our foreign currency risk management program. We manage these exposures by taking advantage of natural offsets and currency correlations that exist within the portfolio and may also elect to use currency forward and option contracts to hedge the remaining effect of exchange rate fluctuations on probable forecasted future cash flows, including certain product cost exposures, non-functional currency denominated external sales and other costs described above. Generally, these are accounted for as cash flow hedges, except for hedges of the embedded derivative components of the product cost exposures and other contractual agreements.

Certain currency forward contracts used to manage the foreign exchange exposure of non-functional currency denominated monetary assets and liabilities subject to remeasurement and embedded derivative contracts are not formally designated as hedging instruments and are recognized in Other (income) expense, net.

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TRANSLATIONAL EXPOSURES

Many of our foreign subsidiaries operate in functional currencies other than the U.S. Dollar. Fluctuations in currency exchange rates create volatility in our reported results as we are required to translate the balance sheets, operational results and cash flows of these subsidiaries into U.S. Dollars for consolidated reporting. The translation of foreign subsidiaries' non-U.S. Dollar denominated balance sheets into U.S. Dollars for consolidated reporting results in a cumulative translation adjustment to Accumulated other comprehensive income (loss) within Shareholders' equity. The impact of foreign exchange rate fluctuations on the translation of our consolidated Revenues was a detriment of approximately $1.1 billion and $2.0 billion for the three and six months ended November 30, 2022, respectively, and a benefit of approximately $63 million and $445 million for the three and six months ended November 30, 2021, ~~respectively, and a benefit of approximately $184 million and $73 million for the three and six months ended November 30, 2020,~~ respectively. The impact of foreign exchange rate fluctuations on the translation of our Income before income taxes was a detriment of approximately $316 million and $569 million for the three and six months ended November 30, 2022, respectively, and a benefit of approximately $12 million and $129 million for the three and six months ended November 30, 2021, ~~respectively, and a benefit of approximately $63 million and $34 million for the three and six months ended November 30, 2020,~~ respectively.

Management generally identifies hyper-inflationary markets as those markets whose cumulative inflation rate over a three-year period exceeds 100%. Management has concluded our Turkey subsidiary within our EMEA operating segment is operating in a hyper-inflationary markets. As a result, beginning in the first quarter of fiscal 2023, the functional currency of our Turkey subsidiary, changed from the local currency to the U.S. Dollar. As of and for the three and six months ended November 30, 2022, this change did not have a material impact on our results of operations or financial condition, and we do not anticipate it will have a material impact in future periods based on current rates.

Prior to the completion of the sale of our Argentina ~~subsidiary~~entity within our APLA operating segment isduring the second quarter of fiscal 2023, Management concluded this subsidiary was operating in a hyper-inflationary market. As a result, beginning in the second quarter of fiscal 2019, the functional currency of our Argentina subsidiary changed from the local currency to the U.S. Dollar. As of and for the three and six months ended November 30, ~~2021,~~2022, this change did not have a material impact on our results of operations or financial ~~condition, and we do not anticipate it will have a material impact in future periods based on current rates.~~

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condition.

MANAGING TRANSLATIONAL EXPOSURES

To minimize the impact of translating foreign currency denominated revenues and expenses into U.S. Dollars for consolidated reporting, certain foreign subsidiaries use excess cash to purchase U.S. Dollar denominated available-for-sale investments. The variable future cash flows associated with the purchase and subsequent sale of these U.S. Dollar denominated investments at non-U.S. Dollar functional currency subsidiaries creates a foreign currency exposure that qualifies for hedge accounting under U.S. GAAP. We utilize forward contracts and/or options to mitigate the variability of the forecasted future purchases and sales of these U.S. Dollar investments. The combination of the purchase and sale of the U.S. Dollar investment and the hedging instrument has the effect of partially offsetting the year-over-year foreign currency translation impact on net earnings in the period the investments are sold. Hedges of the purchase of U.S. Dollar denominated available-for-sale investments are accounted for as cash flow hedges.

We estimate the combination of translation of foreign currency-denominated profits from our international businesses and the year-over-year change in foreign currency related gains and losses included in Other (income) expense, net had ~~a favorable~~an unfavorable impact of approximately ~~$63~~$174 million and ~~$167~~$361 million on our Income before income taxes for the three and six months ended November 30, ~~2021, respectively.~~2022.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW ACTIVITY

Cash provided (used) by operations was an inflow of $1,358 million for the first six months of fiscal 2023, compared to $3,868 million for the first six months of fiscal ~~2022, compared to $3,355 million for the first six months of fiscal 2021.~~2022. Net income, adjusted for non-cash items, generated ~~$3,704~~$3,367 million of operating cash inflow for the first six months of fiscal ~~2022,~~2023, compared to ~~$3,283~~$3,704 million for the first six months of fiscal ~~2021.~~2022. The net change in working capital and other assets and liabilities resulted in ~~an increase~~a decrease to Cash provided (used) by operations of $2,009 million for the first six months of fiscal 2023 compared to an increase of $164 million for the first six months of fiscal ~~2022 compared to an increase of $72 million for the first six months of fiscal 2021.~~2022. The net change in working capital compared to the prior year was ~~primarily~~ driven by ~~favorable impacts to Cash provided (used) by operations from~~higher Accounts ~~receivable~~Receivable of ~~$1,464~~$1,421 million ~~partially offset by unfavorable impacts from~~and Inventories of ~~$1,053 million for~~$1,216 million. Higher Accounts Receivable primarily resulted from an increase in sales to wholesale customers and the timing of when those sales were recognized compared to the prior year. Increased Inventories was the result of higher units, mix and input costs in the first six months of fiscal ~~2022, in part due~~2023 compared to ~~supply chain constraints which caused~~ a lower supply of available inventory to meet consumer demand ~~during~~in the first six months of fiscal ~~2022.~~2022 as a result of supply chain constraints.

Cash provided (used) by investing activities was an outflow of $23 million for the first six months of fiscal 2023, compared to $1,105 million for the first six months of fiscal 2022, ~~compared to $2,877 million for the first six months of fiscal 2021,~~ primarily driven by the net change in short-term investments. For the first six months of fiscal ~~2022,~~2023, the net change in short-term investments (including sales, maturities and purchases) resulted in a cash ~~outflow~~inflow of ~~$776~~$423 million compared to a cash outflow of ~~$2,789~~$776 million for the first six months of fiscal ~~2021.~~2022.

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Cash provided (used) by financing activities was an outflow of $3,321 million for the first six months of fiscal 2023 compared to $1,846 million for the first six months of fiscal ~~2022 compared to $292 million for the first six months of fiscal 2021.~~2022. The increased outflow in the first six months of fiscal ~~2022~~2023 was driven by ~~our resumption~~higher share repurchases of ~~the share repurchase program in the fourth quarter of fiscal 2021, resulting in $1,723~~$2,550 million ~~of share repurchases~~ for the first six months of fiscal ~~2022~~2023 compared to ~~no share repurchases~~$1,723 million in the first six months of fiscal ~~2021.~~2022, as well as lower proceeds from stock option exercises, which resulted in a cash inflow of $260 million in the first six months of fiscal 2023 compared to $846 million in the first six months of fiscal 2022.

During the first six months of fiscal ~~2022,~~2023, we repurchased ~~10.8~~a total of 25.5 million shares of NIKE's Class B Common Stock for ~~$1.7~~$2.6 billion (an average price of ~~$158.45~~$101.96 per share) ~~under~~. In August 2022, we terminated the previous four-year, $15 billion share repurchase program approved by the Board of Directors in June 2018. Under this program, we repurchased 6.5 million shares for a total approximate cost of $710.0 million (an average price of $109.85 per share) during the first quarter of fiscal 2023 and 83.8 million shares for a total approximate cost of $9.4 billion (an average price of $111.82 per share) during the term of the program. Upon termination of the four-year, $15 billion program, we began purchasing shares under the new four-year, $18 billion share repurchase plan authorized by the Board of Directors in June 2022. As of November 30, ~~2021,~~2022, we had repurchased ~~60.8~~19.0 million shares at a cost of approximately ~~$6.4~~$1.9 billion (an average price of ~~$104.89~~$99.28 per share) under this new program. We continue to expect funding of share repurchases will come from operating cash flows and excess cash. The timing and the amount of share repurchases will be dictated by our capital needs and stock market conditions.

CAPITAL RESOURCES

On July ~~23, 2019,~~21, 2022, we filed a shelf registration statement (the “Shelf”) with the U.S. Securities and Exchange Commission (SEC) which permits us to issue an unlimited amount of debt securities from time to time. The Shelf expires on July ~~23, 2022.~~21, 2025.

As of November 30, ~~2021,~~2022, our committed credit facilities were unchanged from the information previously reported on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022. We currently have long-term debt ratings of AA- and A1 from Standard and Poor's Corporation and Moody's Investor Services, respectively. Any changes to these ratings could result in interest rate and facility fee changes. As of November 30, ~~2021,~~2022, we were in full compliance with the covenants under our facilities and believe it is unlikely we will fail to meet any of the covenants in the foreseeable future. As of November 30, ~~2021~~2022 and May 31, ~~2021,~~2022, no amounts were outstanding under our committed credit facilities.

Liquidity was also provided by our $3 billion commercial paper program. As of and for the three months ended November 30, ~~2021,~~2022, we did not have any borrowings outstanding under our $3 billion program. We may ~~continue to~~ issue commercial paper or

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other debt securities depending on general corporate needs. We currently have short-term debt ratings of A1+ and P1 from Standard and Poor's Corporation and Moody's Investor Services, respectively.

To date, in fiscal ~~2022,~~2023, we have not experienced difficulty accessing the credit markets; however, future volatility in the capital markets may increase costs associated with issuing commercial paper or other debt instruments or affect our ability to access those markets.

As of November 30, ~~2021,~~2022, we had cash, cash equivalents and short-term investments totaling ~~$15.1~~$10.6 billion, primarily consisting of commercial paper, corporate notes, deposits held at major banks, money market funds, ~~U.S. government sponsored enterprise obligations,~~ U.S. Treasury obligations and other investment grade fixed-income securities. Our fixed-income investments are exposed to both credit and interest rate risk. All of our investments are investment grade to minimize our credit risk. While individual securities have varying durations, as of November 30, ~~2021,~~2022, the weighted average days to maturity of our cash equivalents and short-term investments portfolio was 62117 days.

We believe that existing cash, cash equivalents, short-term investments and cash generated by operations, together with access to external sources of funds as described above, will be sufficient to meet our domestic and foreign capital needs in the foreseeable future.

~~We utilize a variety of tax planning and financing strategies~~There have been no significant changes to ~~manage~~the material cash requirements reported in our worldwide cash and deploy funds to locations where they are needed. We indefinitely reinvest a significant portion of our foreign earnings, and our current plans do not demonstrate a need to repatriate these earnings. Should we require additional capital inAnnual Report on Form 10-K for the United States, we may determine to repatriate indefinitely reinvested foreign funds or raise capital in the United States through debt. Given our existing structure, if we were to repatriate indefinitely reinvested foreign earnings, we would be required to accrue and pay withholding taxes in certain foreign jurisdictions.fiscal year ended May 31, 2022.

OFF-BALANCE SHEET ARRANGEMENTS

As of November 30, ~~2021,~~2022, we did not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources.

~~CONTRACTUAL OBLIGATIONS~~

~~There have been no significant changes to the contractual obligations reported in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021.~~

NEW ACCOUNTING PRONOUNCEMENTS

There have been no material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

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CRITICAL ACCOUNTING ~~POLICIES~~ESTIMATES

Our discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

We believe ~~that~~ the ~~estimates,~~ assumptions and judgments involved in the accounting ~~policies~~estimates described in the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section of our most recent Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting ~~policies.~~estimates. Actual results could differ from ~~the estimates we use in applying our critical accounting policies.~~these estimates. We are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the information previously reported under Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Securities Exchange Act of 1934, as amended ("the Exchange Act") reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carry out a variety of ongoing procedures, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of November 30, ~~2021.~~2022.

We are continuing several transformation initiatives to centralize and simplify our business processes and systems. These are long-term initiatives, which we believe will enhance our internal control over financial reporting due to increased automation and further integration of related processes. We will continue to monitor our internal control over financial reporting for effectiveness throughout these transformation initiatives.

There have not been any changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND ANALYST REPORTS

Certain written and oral statements, other than purely historic information, including estimates, projections, statements relating to NIKE’s business plans, objectives and expected operating or financial results and the assumptions upon which those statements are based, made or incorporated by reference from time to time by NIKE or its representatives in this report, other reports, filings with the SEC, press releases, conferences or otherwise, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “project,” “will be,” “will continue,” “will likely result” or words or phrases of similar meaning. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by NIKE with the SEC, including reports filed on Forms 8-K, 10-Q and 10-K, and include, among others, the following: health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic; international, national and local political, civil, economic and market conditions; the size and growth of the overall athletic or leisure footwear, apparel and equipment markets; intense competition among designers, marketers, distributors and sellers of athletic or leisure footwear, apparel and equipment for consumers and endorsers; demographic changes; changes in consumer preferences; popularity of particular designs, categories of products and sports; seasonal and geographic demand for NIKE products; difficulties in anticipating or forecasting changes in consumer preferences, consumer demand for NIKE products and the various market factors described above; our ability to execute on our sustainability strategy and achieve our sustainability-related goals and targets, including sustainable product offerings; difficulties in implementing, operating and maintaining NIKE’s increasingly complex information technology systems and controls, including, without limitation, the systems related to demand and supply planning and inventory control; interruptions in data and information technology systems; consumer data security; fluctuations and difficulty in forecasting operating results, including, without limitation, the fact that advance orders may not be indicative of future revenues due to changes in shipment timing, the changing mix of orders with shorter lead times, and discounts, order cancellations and returns; the ability of NIKE to sustain, manage or forecast its growth and inventories; the size, timing and mix of purchases of NIKE’s products; increases in the cost of materials, labor and energy used to manufacture products; new product development and introduction; the ability to secure and protect trademarks, patents and other intellectual property; product performance and quality; customer service; adverse publicity and an inability to maintain NIKE's reputation and brand image, including without limitation, through social media or in connection with brand damaging events; the loss of significant customers or suppliers; dependence on distributors and licensees; business disruptions; increased costs of freight and transportation to meet delivery deadlines; increases in borrowing costs due to any decline in NIKE’s debt ratings; changes in business strategy or development plans; general risks associated with doing business outside of the United States, including, without limitation, exchange rate fluctuations, inflation, import duties, tariffs, quotas, sanctions, political and economic instability, conflicts and terrorism; the potential impact of new and existing laws, regulations or policy, including, without limitation, tariffs, import/export, trade, wage and hour or labor and immigration regulations or policies; changes in government regulations; the impact of, including business and legal developments relating to, climate change, extreme weather conditions and natural disasters; ~~our ability to execute on our sustainability strategy and achieve our sustainability-related goals and targets, including sustainable product offerings;~~ litigation, regulatory proceedings, sanctions or any other claims asserted against NIKE; the ability to attract and retain qualified employees, and any negative public perception with respect to key personnel or our corporate culture, values or purpose; the effects of NIKE’s decision to invest in or divest of businesses or capabilities and other factors referenced or incorporated by reference in this report and other reports.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material developments with respect to the information previously reported under Part I, Item 3 of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 31, ~~2021.~~2022.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In June ~~2018,~~2022, the Board of Directors approved a four-year, ~~$15~~$18 billion share repurchase program. As of November 30, ~~2021,~~2022, the Company had repurchased ~~60.8~~19.0 million shares at an average price of ~~$104.89~~$99.28 per share for a total approximate cost of ~~$6.4~~$1.9 billion under ~~this~~the program.

All share repurchases were made under NIKE's publicly announced program, and there are no other programs under which the Company repurchases shares. The following table presents a summary of share repurchases made during the quarter ended November 30, ~~2021:~~2022:

PERIOD TOTAL NUMBER OF SHARES PURCHASED AVERAGE PRICE
PAID PER SHARE APPROXIMATE DOLLAR
VALUE OF SHARES THAT
MAY YET BE PURCHASED
UNDER THE PLANS
OR PROGRAMS
(IN MILLIONS)
September 1 — September 30, 2021 2,145,173 $ 156.78 $ 9,252
October 1 — October 31, 2021 2,054,002 $ 156.20 $ 8,932
November 1 — November 30, 2021 1,814,713 $ 171.26 $ 8,621
6,013,888 $ 160.95


PERIOD	TOTAL NUMBER OF SHARES PURCHASED	AVERAGE PRICE PAID PER SHARE		APPROXIMATE DOLLAR VALUE OF SHARES THAT MAY YET BE PURCHASED UNDER THE PLAN OR PROGRAM (IN MILLIONS)
September 1 - September 30, 2022	3,280,909	$	102.26	$	17,383
October 1 - October 31, 2022	5,602,879	$	89.77	$	16,880
November 1 - November 30, 2022	7,631,068	$	100.65	$	16,112
	16,514,856	$	97.28

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ITEM 6. EXHIBITS

(a) EXHIBITS:



3.			Exhibits:
3.1			Restated Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2015).
3.2			Fifth Restated Bylaws, as amended (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed June 19, 2020).
4.1			Restated Articles of Incorporation, as amended (see Exhibit 3.1).
4.2			Fifth Restated Bylaws, as amended (see Exhibit 3.2).
10.1			NIKE, Inc. Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 14, 2022).
31.1			Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2			Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1†			Section 1350 Certificate of Chief Executive Officer.
32.2†			Section 1350 Certificate of Chief Financial Officer.
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			Inline XBRL Taxonomy Extension Schema
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF			Inline XBRL Taxonomy Extension Definition Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase
104			Cover Page Interactive Data File - formatted in Inline XBRL and included in Exhibit 101

† Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


NIKE, INC. an Oregon Corporation
By:						/s/ MATTHEW FRIEND Matthew Friend Chief Financial Officer and Authorized Officer
Date:						January ~~6, 2022~~5, 2023

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		PAGE
PART I - FINANCIAL INFORMATION		1
ITEM 1.	Financial Statements	1
	Unaudited Condensed Consolidated Statements of Income	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income	2
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Unaudited Condensed Consolidated Statements of Shareholders' Equity	5
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	4443
ITEM 4.	Controls and Procedures	4443
PART II - OTHER INFORMATION		4645
ITEM 1.	Legal Proceedings	4645
ITEM 1A.	Risk Factors	4645
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4746
ITEM 6.	Exhibits	4847
	Signatures	4948