Notes to Financial Statements
May 31, 2016 and 2015
1.
|
Description of the Plan
|
The following description of the 401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc. (the Plan) provides only
general information. Participants should refer to the Plan document for a more complete description of the Plans provisions.
General
The Plan was established to provide for the retirement income
requirements of and sharing in NIKE, Inc. (the Company) profits by eligible employees of the Company and a retirement savings program for the employees of the Company not covered by a collective bargaining agreement. The Plan is subject
to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. Administration of the Plan is performed by the Administrative Subcommittee of the Retirement Committee. The Plan is amended from time to time
in order to comply with changes in applicable laws and to make changes in Plan administration.
The Northern Trust Company
(Northern Trust or the Trustee) is the trustee and Aon Hewitt Associates (Aon Hewitt or the Record keeper) is the record keeper of the Plans net assets. Self-directed brokerage account assets are
held in the custody of Charles Schwab & Co. Inc. (Charles Schwab or the Custodian) and are maintained by the Trustee. The Plans investment decisions are overseen by the Investment Subcommittee of the Retirement
Committee. Members of the Retirement Committee are appointed by the Board of Directors of the Company.
Eligibility
All employees, except those employees who are (1) covered by a collective bargaining agreement, (2) living
outside the United States and not covered by the Company expatriate program, (3) working at the Companys Memphis Apparel Distribution Center, whose employment is established pursuant to the Companys Seasonal On Call Casual Employee
Reserve (SOCCER) program, (4) not common-law employees, such as leased employees and individuals designated by NIKE as independent contractors, or (5) residing in Puerto Rico and working at the Puerto Rico facility, become
eligible to receive profit sharing contributions on the first day of the Plan fiscal year coinciding with or immediately preceding completion of one year of employment with at least 1,000 hours of service. Employees are eligible to participate in
the 401(k) portion of the Plan on the first day of employment.
Contributions
Participants may contribute up to 50% of their pre-tax annual compensation to the Plan, subject to annual individual deferral limitations
under the Internal Revenue Code (IRC). Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions, as defined by the IRC. Participants may also contribute amounts representing
distributions from other qualified defined contribution plans as well as after-tax contributions from their current compensation. Additionally, the Company will match participant pre-tax contributions at a rate of 100% of the first 5% of the
participants eligible pay that is contributed to their account.
4
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Prior to May 13, 2011, the Company match contributions
related to the Plans 401(k) feature were invested in the NIKE stock fund which is comprised of NIKE, Inc. Class B common stock and a small residual cash balance. As of June 1, 2001, these match contributions became subject to participant
self-direction after the initial investment in the company stock fund was made to the Plan. Participants could redeem their shares in the company stock fund and reinvest the cash into other managed funds. As of May 13, 2011, the Company match
followed participants fund selections and the NIKE stock fund became one of the investment choices. No more than 10% of a participants deferral and corresponding match can go into the NIKE stock fund and a participant can only transfer a
portion of his or her existing account balance to purchase the NIKE stock fund if the percentage of their account balance invested in the NIKE stock fund is less than or equal to 20%. Transfers out of the NIKE stock fund are permitted at any time.
Under the Plans profit sharing features, the Company may make discretionary annual contributions as designated by the
Companys Board of Directors. However, this amount cannot be greater than the amount allowable as a tax deduction under the IRC. The annual contributions will be funded no later than the date the Companys federal income tax return is
filed.
Profit sharing contributions are invested in various fixed income and equity funds similar to those offered under the
Plans 401(k) features. Investments held by the Plan on behalf of participants related to profit sharing contributions are nonparticipant-directed. In a nonparticipant-directed program, the Investment Subcommittee, under the guidance of
investment managers, directs the specific investments held by the Plan. See Note 7 for applicable disclosures. Investments held by the Plan on behalf of participants related to 401(k) contributions are participant-directed. In a
participant-directed program, the individual participant selects the investments for his or her individual account.
Participant Accounts
Separate individual 401(k) and profit sharing accounts are maintained for each participant. Each participants 401(k) account is credited with the participants contributions and rollovers, the
Companys matching contributions, Plan expenses and an allocation of the Plans investment income or losses based upon the participants election of investment options. Participants direct the investment of their contributions into
various investment options offered by the Plan.
An eligible profit sharing participant is entitled to an annual allocation of
the employer profit sharing contribution and former participant profit sharing forfeitures after restoration of previously forfeited accounts. Employer profit sharing contributions and former participant forfeitures are allocated in the proportion
of the participants annual compensation to compensation of all participants subject to the IRC Section 415 defined maximum limitations. Participants do not direct the investment of profit sharing contributions.
Profit sharing investment income or losses and Plan expenses are allocated daily based on a ratio of each participants profit
sharing account balance to the total profit sharing account balances.
The total benefit to which a participant is entitled is
the benefit that can be provided from the participants vested 401(k) and profit sharing accounts.
Vesting
Participants in the 401(k) portion of the Plan are immediately vested in their elective, rollover, and Company matching
contributions, plus actual earnings thereon. The Company contributions into the profit sharing portion of the Plan vest at 25% per year after completing two years of service, and vesting increases 25% for each additional year of service until
fully vested after five years. Participants in the profit sharing portion of the Plan become fully vested in the Companys contributions in the event of total and permanent disability, death, attainment of 65 years of age, or termination of the
Plan.
5
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Forfeitures
Upon a participants termination, the unvested portion of the participants profit sharing account is forfeited. Profit sharing
forfeitures may be used to reduce future employer contributions or be allocated back to active participants at the Companys discretion. During the year ended May 31, 2016, profit sharing forfeitures of $1,814,247 were used to reduce
employer contributions. At May 31, 2016 and 2015, accumulated profit sharing forfeitures totaled $1,751,213 and $1,814,247, respectively.
Notes Receivable From Participants
Participants may borrow a portion of
their elective and rollover contributions by applying to the Plans record keeper. Participants may borrow from their accounts amounts equal to the lesser of 50% of their vested account balance or $50,000 reduced by the balance of any
outstanding loans. The term of the loan repayments ranges up to five years for general purpose loans and up to ten years for the purchase of a primary residence. The loans are secured by the balance in the participants account and bear
interest at the prime rate plus one percentage point. Principal and interest are paid ratably through bi-weekly payroll deductions.
Benefit Payments
On termination of service due to death, disability,
hardship, resignation, discharge and retirement, a participant is eligible to receive payments in the amount equal to the value of the participants vested interest in his or her account.
Vested benefits are distributed to participants in a lump-sum payment upon termination or are transferred to another qualified account.
Participants with vested benefits greater than $1,000 can elect to receive a distribution or leave their balance in the Plan until reaching the age of 65. Participants may apply to the Plans record keeper to withdraw their voluntary 401(k)
contributions in the event the participant is over age 59-1/2, or the participant has a financial hardship as stipulated in the Plan provisions. No withdrawals may be made from the unvested portion of the Companys profit sharing contributions
or earnings thereon.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, the accounts of all participants would become fully vested. The net assets of the Plan would be distributed among the participants and beneficiaries of the Plan in proportion to their interests after proper allocation
of any Plan expenses incurred upon termination.
2.
|
Significant Accounting Policies
|
Basis of Accounting
The accompanying financial statements have been
prepared on the accrual basis of accounting.
Investment Valuation and Income Recognition
The Companys Retirement Committee determines the Plans valuation policies utilizing information provided by the Trustee and
collective trust funds.
Investments held by the Plan are stated at fair value. Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 4 for further discussion of fair value measurements.
6
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Investments are purchased and sold at the fair value of the
underlying investments and receive the interest and dividend earnings of the underlying investments. Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date. The Plan presents, in the Statement of Changes in Net Assets Available for Benefits, the net appreciation or depreciation in the fair value of its investments, which consists of the realized gains or losses and the unrealized
appreciation or depreciation on those investments.
Notes Receivable From Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is
recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of May 31, 2016 or 2015. If a participant ceases to make loan
repayments and the plan administrator deems the participant loan to be in default, the participant loan balance is reduced and a benefit payment is recorded.
Benefits Payable
Benefits are recorded when paid. Accordingly, benefits
payable to persons that have elected to withdraw from the Plan but not yet paid have not been accrued. At May 31, 2016 and 2015, there were $390,384 and $1,359,155, respectively, payable to participants.
Expenses
Expenses of administering the Plan and those which are directly related to investment transactions are paid out of the assets of the Plan.
Certain administrative expenses are paid for by the Company.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and
deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan offers investments in securities that are
exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities, and thus the
net asset value (NAV) of the funds, will occur in the near term and that such changes could materially affect participants account balances and the amount reported in the Statements of Net Assets Available for Benefits and the Statement of
Changes in Net Assets Available for Benefits. Market values of investments may decline for a number of reasons, including changes in prevailing market and interest rates, increases in defaults and credit rating downgrades. The fair values assigned
to the investments by the Plan are based upon available information believed to be reliable, which may be affected by conditions in the financial markets. The Plan may not be able to sell its investments when it desires to do so or to realize what
it perceives to be its fair value in the event of a sale.
New Accounting Pronouncements
During 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-07,
Disclosures for
Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)
, and ASU No. 2015-12,
Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and
Welfare Benefit Plans (Topic 965) - I. Fully Benefit-Responsive Investment Contracts, II. Plan Investment Disclosures, and III. Measurement Date Practical Expedient
. ASU No. 2015-07 amended ASC 820
, Fair Value Measurements
, and
removed the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share as a practical expedient. Part II of ASU No. 2015-12 is applicable to the Plan and would
modify the investment disclosures under ASC 820 and 962. The disclosure requirements under ASU 2015-07 and ASU 2015-12 are effective for fiscal years beginning after December 15, 2015 and are required to be adopted retrospectively for all
comparative periods presented. Management does not expect the adoption of these standards to have a significant impact on the Plans financial statements.
7
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Pending Accounting Pronouncement
In January 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-01,
Recognition and
Measurement of Financial Assets and Financial Liabilities
. This ASU amends various aspects of Accounting Standard Codification (ASC) Subtopic 825-10,
Financial Instruments Overall
. Among other changes, this ASU eliminated the
fair value of financial instrument disclosure requirements for all benefit plans. This ASU is effective for fiscal years beginning after December 15, 2018, however earlier adoption is permitted. Management does not expect the adoption of
this update to have a significant impact on the Plans financial statements.
Change in Presentation
The presentation of the Morley Stable Value Fund, a stable value common collective trust fund, for 2015 has been changed to be consistent
with the 2016 presentation. The fund is presented using net asset value (NAV) per unit as a practical expedient for the fair value of the investment without presentation of contract value or the difference between fair value and contract value.
This change in presentation resulted from a recent clarification from the Financial Accounting Standards Board (FASB) and had no effect on total net assets available for benefits or the change in net assets available for benefits.
The
following presents investments that represent 5% or more of the Plans net assets at May 31, 2016:
|
|
|
|
|
Participant-directed
|
|
|
|
|
NIKE, Inc. Class B Common Stock
|
|
$
|
792,318,317
|
|
Collective trust funds
|
|
|
|
|
NT Collective S&P 500 Equity Index Fund
|
|
|
673,075,006
|
|
NT Collective Russell 2000 Equity Index Fund
|
|
|
294,666,713
|
|
NT Collective All Country World Ex-US Index Fund
|
|
|
279,942,078
|
|
NT Collective Aggregate Bond Index Fund *
|
|
|
276,966,419
|
|
Morley Stable Value Fund
|
|
|
213,591,274
|
|
|
|
Nonparticipant-directed
|
|
|
|
|
Collective trust funds
|
|
|
|
|
NT Collective Russell 3000 Equity Index Fund
|
|
|
245,769,533
|
|
*
|
The Plan has additional non participant-directed investments in this fund which do not exceed 5% or more of the Plans net assets.
|
The following presents investments that represent 5% or more of the Plans net assets at May 31, 2015:
|
|
|
|
|
Participant-directed
|
|
|
|
|
NIKE, Inc. Class B Common Stock
|
|
$
|
797,649,342
|
|
Collective trust funds
|
|
|
|
|
NT Collective Daily S&P 500 Equity Index Fund
|
|
|
629,845,122
|
|
NT Collective Daily Russell 2000 Equity Index Fund
|
|
|
298,028,090
|
|
NT Collective All Country World Ex-US Index Fund
|
|
|
276,159,178
|
|
NT Collective Aggregate Bond Index Fund *
|
|
|
238,176,036
|
|
Morley Stable Value Fund
|
|
|
182,066,145
|
|
|
|
Nonparticipant-directed
|
|
|
|
|
Collective trust funds
|
|
|
|
|
NT Collective Russell 3000 Equity Index Fund
|
|
|
242,279,977
|
|
NT Collective All Country World Ex-US Investable Market Index Fund
|
|
|
166,064,569
|
|
*
|
The Plan has additional non participant-directed investments in this fund which do not exceed 5% or more of the Plans net assets.
|
8
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
During the year ended May 31, 2016, all of the Plans investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows:
|
|
|
|
|
NIKE, Inc. Class B common stock
|
|
$
|
75,108,189
|
|
Collective trust funds
|
|
|
(31,422,862
|
)
|
Registered investment companies *
|
|
|
(8,976,809
|
)
|
Common stocks
|
|
|
(29,006
|
)
|
|
|
|
|
|
|
|
$
|
34,679,512
|
|
|
|
|
|
|
*
|
Included in this total are gains related to the self-directed brokerage accounts of $737,148.
|
4.
|
Fair Value Measurement
|
In determining fair value, the Plan uses a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the
fair value hierarchy are described below:
|
Level l
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.
|
|
Level 2
|
Inputs to the valuation methodology include:
|
|
|
|
Quoted price for similar assets or liabilities in active markets;
|
|
|
|
Quoted price for identical or similar assets or liabilities in inactive markets;
|
|
|
|
Inputs, other than quoted prices, that are observable for the asset or liability;
|
|
|
|
Inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.
|
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the
asset or liability.
|
Level 3
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
The assets or liabilitys fair value measurement level within the fair value hierarchy is based on the most conservative level
of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The valuation methods described below may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its
valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in different fair value measurement at the
reporting date.
Following is a description of the valuation methodologies used for assets measured at fair value. There have
been no changes in the methodologies used at May 31, 2016 and 2015.
Common Stock
: Investments in common stock
listed on a national securities exchange and over-the-counter securities are valued at the last reported sale price on the valuation date or, if no sales are reported for that day, the last published sale price.
9
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Registered Investment Companies:
Registered investment
companies (or mutual funds) are valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish
their daily NAV and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.
Collective trust funds:
Collective trust funds represent investments held in pooled funds. The Plans interests in the
collective trust funds are valued based on the NAV provided by Northern Trust. The accuracy of the NAV is verified using the audited financial statements of the collective trust funds. The NAV, as provided by the trustee, is used as a practical
expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the
investment for an amount different than the reported NAV. Participant transactions (purchases and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trust, the investment advisor reserves the right to temporarily
delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner.
Stable Value Fund:
The Plan invests in the Union Bond & Trust Company Morley Stable Value Fund (Morley Stable Value Fund), a collective trust fund. This fund can be redeemed
daily by participants subject to limitations on noncompeting options. The Morley Stable Value Funds trustee reserves the right to delay plan sponsor-initiated redemptions for up to 365 days and therefore is categorized as level 3 in the fair
value hierarchy. There are no unfunded commitments to the fund. The Investment Subcommittee reviews the reasonableness of managements use of the annual Morley Stable Value Fund audited financial statement fair value, adjusted to the
Plans year-end, to determine the fair value of this fund.
Interest-bearing Cash:
These investments are valued at
fair value based on quoted market prices.
The Plans policy is to recognize transfers between levels of the fair value
hierarchy as of the actual date of the event of change in circumstances that caused the transfer. There were no significant transfers between levels of the fair value hierarchy during the year ending May 31, 2016.
The Plan also holds other assets and liabilities not measured at fair value on a recurring basis, including employer and employee
contributions receivable, cash, accrued income, accrued liabilities and unsettled trades. The fair value of these assets and liabilities approximates the carrying amounts in the accompanying financial statements due to the short maturity of the
instruments.
10
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
The following tables set forth by level, within the fair
value hierarchy, the Plans assets at fair value as of May 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets at Fair Value at May 31, 2016
|
|
|
|
Level l
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Collective trust funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity index funds
|
|
$
|
|
|
|
$
|
1,654,798,996
|
|
|
$
|
|
|
|
$
|
1,654,798,996
|
|
Other fixed income funds
|
|
|
|
|
|
|
434,697,966
|
|
|
|
|
|
|
|
434,697,966
|
|
Real estate funds
|
|
|
|
|
|
|
37,473,044
|
|
|
|
|
|
|
|
37,473,044
|
|
Stable value funds
|
|
|
|
|
|
|
|
|
|
|
213,591,274
|
|
|
|
213,591,274
|
|
Other short term investment funds
|
|
|
|
|
|
|
4,419,148
|
|
|
|
|
|
|
|
4,419,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total collective trust funds
|
|
|
|
|
|
|
2,131,389,154
|
|
|
|
213,591,274
|
|
|
|
2,344,980,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer discretionary
|
|
|
792,319,719
|
|
|
|
|
|
|
|
|
|
|
|
792,319,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity funds
|
|
|
42,747,320
|
|
|
|
|
|
|
|
|
|
|
|
42,747,320
|
|
Bond funds
|
|
|
43,704,047
|
|
|
|
|
|
|
|
|
|
|
|
43,704,047
|
|
Commodity funds
|
|
|
29,136,820
|
|
|
|
|
|
|
|
|
|
|
|
29,136,820
|
|
Short term funds
|
|
|
5,537,861
|
|
|
|
|
|
|
|
|
|
|
|
5,537,861
|
|
Real estate funds
|
|
|
1,527,619
|
|
|
|
|
|
|
|
|
|
|
|
1,527,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total registered investment companies *
|
|
|
122,653,667
|
|
|
|
|
|
|
|
|
|
|
|
122,653,667
|
|
Interest bearing cash
|
|
|
10,031
|
|
|
|
|
|
|
|
|
|
|
|
10,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
914,983,417
|
|
|
$
|
2,131,389,154
|
|
|
$
|
213,591,274
|
|
|
$
|
3,259,963,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Included within the total registered investment companies of $122,653,667 is $60,357,338 of self-directed brokerage accounts.
|
11
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets at Fair Value at May 31, 2015
|
|
|
|
Level l
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Collective trust funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity index funds
|
|
$
|
|
|
|
$
|
1,612,376,936
|
|
|
$
|
|
|
|
$
|
1,612,376,936
|
|
Other fixed income funds
|
|
|
|
|
|
|
391,226,258
|
|
|
|
|
|
|
|
391,226,258
|
|
Real estate funds
|
|
|
|
|
|
|
32,661,095
|
|
|
|
|
|
|
|
32,661,095
|
|
Stable value funds
|
|
|
|
|
|
|
|
|
|
|
182,066,145
|
|
|
|
182,066,145
|
|
Other short term investment funds
|
|
|
|
|
|
|
6,861,438
|
|
|
|
|
|
|
|
6,861,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total collective trust funds
|
|
|
|
|
|
|
2,043,125,727
|
|
|
|
182,066,145
|
|
|
|
2,225,191,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common and foreign stocks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer discretionary
|
|
|
797,649,342
|
|
|
|
|
|
|
|
|
|
|
|
797,649,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registered investment companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity funds
|
|
|
43,864,297
|
|
|
|
|
|
|
|
|
|
|
|
43,864,297
|
|
Bond funds
|
|
|
41,678,260
|
|
|
|
|
|
|
|
|
|
|
|
41,678,260
|
|
Commodity funds
|
|
|
34,440,805
|
|
|
|
|
|
|
|
|
|
|
|
34,440,805
|
|
Short term funds
|
|
|
4,634,475
|
|
|
|
|
|
|
|
|
|
|
|
4,634,475
|
|
Real estate funds
|
|
|
687,196
|
|
|
|
|
|
|
|
|
|
|
|
687,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total registered investment companies*
|
|
|
125,305,033
|
|
|
|
|
|
|
|
|
|
|
|
125,305,033
|
|
Interest bearing cash
|
|
|
10,022
|
|
|
|
|
|
|
|
|
|
|
|
10,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at fair value
|
|
$
|
922,964,397
|
|
|
$
|
2,043,125,727
|
|
|
$
|
182,066,145
|
|
|
$
|
3,148,156,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Included within the total registered investment companies of $125,305,033 is $59,620,186 of self-directed brokerage accounts.
|
Level 3 Gains and Losses
The following table sets forth a summary of changes in the fair value of the Plans Level 3 assets for the year ended May 31, 2016:
|
|
|
|
|
|
|
Morley Stable
Value Fund
|
|
Balance at beginning of year
|
|
$
|
182,066,145
|
|
|
|
Purchases
|
|
|
101,884,414
|
|
Sales
|
|
|
(75,177,003
|
)
|
Realized gains, net
|
|
|
6.054.866
|
|
Unrealized losses, net
|
|
|
(1,237,148
|
)
|
|
|
|
|
|
Balance at end of year
|
|
$
|
213,591,274
|
|
|
|
|
|
|
12
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Fair Value of Investments in Entities that Use NAV
The following table summarizes those investments measured at fair value using NAV as a practical expedient as of
May 31, 2016 and 2015, respectively.
May 31, 2016
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
|
|
Redemption
Notice Period
|
|
|
|
|
|
NTGI Collective Short Term Government Fund
|
|
$
|
25,930,497
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Government STIF
|
|
|
4,419,148
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Russell 3000 Equity Index Fund
|
|
|
245,769,533
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Aggregate Bond Index Fund
|
|
|
349,407,098
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Russell 2000 Equity Index Fund
|
|
|
294,666,713
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective S&P 500 Equity Index Fund
|
|
|
673,075,006
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective World Government Bond Index Fund
|
|
|
59,360,371
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective All Country World Ex-US Index Fund
|
|
|
161,345,666
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective All Country World Ex-US Investable Market Index Fund
|
|
|
279,942,078
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective Global Real Estate Index Fund
|
|
|
37,473,044
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
Morley Stable Value Fund
|
|
|
213,591,274
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
May 31,
2015
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Fair Value
|
|
|
Unfunded
Commitments
|
|
Redemption
Frequency
|
|
Redemption
Notice Period
|
|
|
|
|
|
NTGI Collective Short Term Government Fund
|
|
$
|
26,084,035
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Government STIF
|
|
|
6,861,438
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Russell 3000 Equity Index Fund
|
|
|
242,279,977
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Aggregate Bond Index Fund
|
|
|
309,639,404
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective Russell 2000 Equity Index Fund
|
|
|
298,028,090
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective S&P 500 Equity Index Fund
|
|
|
629,845,122
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
NT Collective World Government Bond Index Fund
|
|
|
55,502,819
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective All Country World Ex-US Index Fund
|
|
|
276,159,178
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective All Country World Ex-US Investable Market Index Fund
|
|
|
166,064,569
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
NT Collective Global Real Estate Index Fund
|
|
|
32,661,095
|
|
|
N/A
|
|
Daily
|
|
1 Day
|
Morley Stable Value Fund
|
|
|
182,066,145
|
|
|
N/A
|
|
Daily
|
|
Same Day
|
5.
|
Party-in-Interest Transactions
|
The Plans investments represent funds invested in, or maintained by, Northern Trust and Charles Schwab. Northern Trust is the trustee of the Plan assets and Charles Schwab is the custodian of
selected assets and, therefore, these investments represent exempt party-in-interest transactions.
13
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
Certain Plan investments are shares of Company common stock.
For the year ended May 31, 2016 and 2015, the Plan purchased 751,343 and 515,012 shares of NIKE, Inc. Class B common stock, respectively, at a cost of $12,852,936 and $10,893,677, respectively. For the same years ended, the Plan sold 2,093,897
and 1,640,852 shares of NIKE, Inc. Class B common stock, respectively, with proceeds of $64,289,847 and $49,541,486, respectively. At May 31, 2016 and 2015, the Plan held $792,318,316 (14,348,394 shares) and $797,649,342 (15,690,948 shares),
respectively, of NIKE, Inc. Class B common stock.
There was a two-for-one stock split on the NIKE, Inc. common stock that
occurred in December 2015. The share amounts for the year-ended May 31, 2015 have been restated to reflect the stock split.
The
Internal Revenue Service (IRS) has determined and informed the Plan by letter dated December 16, 2013 that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC). Although the Plan has been
amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.
7.
|
Nonparticipant-directed Investments
|
Information about the net assets at May 31 and the significant components of the changes in net assets for the year ended May 31 relating to the nonparticipant-directed investments is as
follows:
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Net assets
|
|
|
|
|
|
|
|
|
Collective trust funds
|
|
$
|
604,656,620
|
|
|
$
|
600,282,895
|
|
Employer receivable
|
|
|
63,974,081
|
|
|
|
57,931,594
|
|
Registered investment companies
|
|
|
62,296,329
|
|
|
|
65,684,847
|
|
Accrued interest and dividends
|
|
|
641
|
|
|
|
35
|
|
Other liability
|
|
|
(275,279
|
)
|
|
|
|
|
Common stock
|
|
|
1,402
|
|
|
|
|
|
Due from broker for securities sold
|
|
|
2,393,032
|
|
|
|
|
|
Accrued expenses
|
|
|
(48,509
|
)
|
|
|
(44,878
|
)
|
|
|
|
|
|
|
|
|
|
Total net assets
|
|
$
|
732,998,317
|
|
|
$
|
723,854,493
|
|
|
|
|
|
|
|
|
|
|
14
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2016 and 2015
|
|
|
|
|
|
|
Year Ended
|
|
|
|
May 31, 2016
|
|
Changes in net assets
|
|
|
|
|
Net depreciation in fair value of investments
|
|
$
|
(16,532,529
|
)
|
Employer contributions
|
|
|
63,974,081
|
|
Interest and dividends
|
|
|
1,531,707
|
|
Administrative and investment expenses
|
|
|
(568,484
|
)
|
Benefits paid to participants
|
|
|
(39,260,949
|
)
|
|
|
|
|
|
Increase in net assets
|
|
$
|
9,143,826
|
|
|
|
|
|
|
8.
|
Reconciliation of Financial Statements to Form 5500
|
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 at May 31, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Net assets available for benefits per the financial statements
|
|
$
|
3,360,357,171
|
|
|
$
|
3,247,462,096
|
|
Benefits payable
|
|
|
(390,384
|
)
|
|
|
(1,359,155
|
)
|
Difference in valuation of stable value fund
|
|
|
|
|
|
|
1,852,621
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per Form 5500
|
|
$
|
3,359,966,787
|
|
|
$
|
3,247,955,562
|
|
|
|
|
|
|
|
|
|
|
The following is a reconciliation of the net increase in net assets available for benefits per the
financial statements to the Form 5500 at May 31, 2016:
|
|
|
|
|
Net increase in net assets per the financial statements
|
|
$
|
112,895,075
|
|
Benefits payable at May 31, 2016
|
|
|
(390,384
|
)
|
Benefits payable at May 31, 2015
|
|
|
1,359,155
|
|
Difference of valuation of stable value fund at May 31, 2015
|
|
|
(1,852,621
|
)
|
|
|
|
|
|
Net increase in net assets per Form 5500
|
|
$
|
112,011,225
|
|
|
|
|
|
|
15
Supplemental Schedules
401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.