Nike 2006 Annual Report Download - page 56

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in the Company’s
financial statements in accordance with FASB Statement No. 109, “Accounting for Income Taxes”. The
provisions of FIN 48 are effective for the fiscal year beginning June 1, 2007. The Company is currently
evaluating the impact of the provisions of FIN 48.
Note 2 — Inventories
Inventory balances of $2,076.7 million and $1,811.1 million at May 31, 2006 and 2005, respectively, were
substantially all finished goods.
Note 3 — Property, Plant and Equipment
Property, plant and equipment includes the following:
May 31,
2006 2005
(In millions)
Land ........................................................... $ 195.9 $ 185.4
Buildings ....................................................... 842.6 823.9
Machinery and equipment .......................................... 1,661.7 1,528.4
Leasehold improvements ........................................... 626.7 568.4
Construction in process ............................................ 81.4 73.1
3,408.3 3,179.2
Less accumulated depreciation ...................................... 1,750.6 1,573.4
$1,657.7 $1,605.8
Capitalized interest was not material for the years ended May 31, 2006, 2005 and 2004.
Note 4 — Identifiable Intangible Assets and Goodwill:
The following table summarizes the Company’s identifiable intangible assets and goodwill balances as of
May 31, 2006 and May 31, 2005:
May 31, 2006 May 31, 2005
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(In millions)
Amortized intangible assets:
Patents ....................... $ 34.1 $(10.5) $ 23.6 $ 29.2 $(10.9) $ 18.3
Trademarks .................... 46.4 (11.8) 34.6 54.8 (16.4) 38.4
Other ......................... 21.5 (15.7) 5.8 21.4 (13.5) 7.9
Total ..................... $102.0 $(38.0) $ 64.0 $105.4 $(40.8) $ 64.6
Unamortized intangible assets —
Trademarks ...................... $341.5 $341.5
Total ..................... $405.5 $406.1
Goodwill .......................... $130.8 $135.4
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