Nike 2006 Annual Report Download - page 57

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Amortization expense of identifiable assets with definite lives, which is included in selling and
administrative expense, was $9.8 million, $9.3 million and $12.0 million for the years ended May 31, 2006,
2005, and 2004, respectively. The estimated amortization expense for intangible assets subject to amortization
for each of the succeeding years ending May 31, 2007 through May 31, 2011 is as follows: 2007: $9.5 million;
2008: $8.9 million; 2009: $7.6 million; 2010: $6.7 million; 2011: $6.4 million.
Note 5 — Accrued Liabilities
Accrued liabilities include the following:
May 31,
2006 2005
(In millions)
Compensation and benefits, excluding taxes ........................... $ 427.2 $ 397.2
Endorser compensation ............................................ 124.7 101.9
Taxes other than income taxes ...................................... 115.1 96.8
Fair value of derivatives ........................................... 111.2 61.8
Dividends payable ................................................ 79.5 65.3
Advertising and marketing ......................................... 75.4 76.6
Converse arbitration(1) ............................................. 51.9 —
Other(2) ......................................................... 301.9 253.6
$1,286.9 $1,053.2
(1) The Converse arbitration relates to a charge taken during the fourth quarter ended May 31, 2006 as a result
of a contract dispute between NIKE, Inc.’s Converse subsidiary and a former South American licensee. The
arbitrator awarded the former South American licensee $52.5 million in damages, plus legal fees, less
amounts previously paid, which resulted in the recording of the $51.9 million charge in other expense, net
during the year ended May 31, 2006.
(2) Other consists of various accrued expenses and no individual item accounted for more than $50 million of
the balance at May 31, 2006 or 2005.
Note 6 — Short-Term Borrowings and Credit Lines
Notes payable to banks and interest-bearing accounts payable to Sojitz America as of May 31, 2006 and
2005, are summarized below:
May 31,
2006 2005
Borrowings
Interest
Rate Borrowings
Interest
Rate
(In millions) (In millions)
Notes payable:
U.S. operations ........................... $21.0 0.00%(1) $37.0 0.12%(1)
Non-U.S. operations ....................... 22.4 7.72% 32.8 6.68%
$43.4 $69.8
Sojitz America ............................... 69.7 5.83% 53.1 3.90%
(1) Weighted average interest rate includes non-interest bearing overdrafts.
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