Nike 2006 Annual Report Download - page 59

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company has interest rate swap agreements with the same notional amount and maturity dates as the
$250.0 million corporate bond maturing August 15, 2006, whereby the Company receives fixed interest
payments at the same rate as the bond and pays variable interest payments based on the three-month LIBOR plus
a spread. The interest rates payable on these swap agreements were approximately 6.6% and 4.7% at May 31,
2006 and 2005, respectively.
The Company has an effective shelf registration statement with the Securities and Exchange Commission
for $1 billion of debt securities. The Company has a medium-term note program under the shelf registration that
allows the Company to issue up to $500 million in medium-term notes and has issued $240 million in medium
term notes under this program. During the years ended May 31, 2006 and 2005, there were no notes issued under
the medium-term note program of the shelf registration. The issued notes have coupon rates that range from
4.70% to 5.66%. The maturities range from July 9, 2007 to October 15, 2015. For each of these notes, the
Company has entered into interest rate swap agreements whereby the Company receives fixed interest payments
at the same rate as the notes and pays variable interest payments based on the three-month or six-month LIBOR
plus a spread. Each swap has the same notional amount and maturity date as the corresponding note, except for
the swap for the $50 million note maturing October 1, 2013, which expires October 2, 2006. At May 31, 2006,
the interest rates payable on these swap agreements range from approximately 4.9% to 7.2%.
In June 1996, one of the Company’s Japanese subsidiaries borrowed 10,500 million Japanese yen in a
private placement with a maturity of June 26, 2011. Interest is paid semi-annually. The agreement provides for
early retirement after year ten.
In July 1999, another of the Company’s Japanese subsidiaries assumed 13,000 million in Japanese yen loans
as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These
loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.
Interest is also paid quarterly.
Amounts of long-term debt maturities in each of the years ending May 31, 2007 through 2011 are $255.9
million, $31.0 million, $6.0 million, $30.9 million and $6.0 million, respectively.
Note 8 — Income Taxes
Income before income taxes is as follows:
Year Ended May 31,
2006 2005 2004
(In millions)
Income before income taxes:
United States ...................................... $ 838.6 $ 755.5 $ 607.7
Foreign .......................................... 1,303.0 1,104.3 842.3
$2,141.6 $1,859.8 $1,450.0
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