Nike 2009 Annual Report Download - page 42

Cash used by investing activities was $0.8 billion during fiscal 2009 compared to $0.5 billion in fiscal 2008.
The year-over-year increase was primarily due to a net increase in short-term investments purchased in fiscal
2009. The increase in net purchases of short-term investments in fiscal 2009 was partially offset by proceeds
from settlement of net investment hedges of $191.3 million. During the second half of fiscal 2008, we began to
use net investment hedges to mitigate the risk of variability in foreign-currency-denominated net investments in
certain wholly-owned international subsidiaries.
Cash used in financing activities was $0.7 billion during fiscal 2009, compared to $1.2 billion in fiscal
2008. The decrease in fiscal 2009 was primarily due to a decrease in share repurchases to preserve liquidity given
the current financial market conditions.
In fiscal 2009, we purchased approximately 10.6 million shares of NIKE’s Class B Common Stock for
$639.0 million. As of the end of fiscal 2009, we have repurchased 49.2 million shares for $2.7 billion under the
$3 billion program approved by our Board of Directors in June 2006. In September 2008, our Board of Directors
approved a new $5 billion share repurchase program. The new program will commence upon completion of our
current $3 billion share repurchase program. We expect to fund share repurchases from operating cash flow,
excess cash, and/or debt. The timing and the amount of shares purchased will be dictated by our capital needs and
stock market conditions.
Off-Balance Sheet Arrangements
In connection with various contracts and agreements, we provide routine indemnifications relating to the
enforceability of intellectual property rights, coverage for legal issues that arise and other items that fall under
the scope of Financial Accounting Standards Board (“FASB”) Interpretation No. 45, “Guarantor’s Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.”
Currently, we have several such agreements in place. However, based on our historical experience and the
estimated probability of future loss, we have determined that the fair value of such indemnifications is not
material to our financial position or results of operations.
Contractual Obligations
Our significant long-term contractual obligations as of May 31, 2009, and significant endorsement contracts
entered into through the date of this report are as follows:
Cash Payments Due During the Year Ending May 31,
Description of Commitment 2010 2011 2012 2013 2014 Thereafter Total
(In millions)
Operating Leases ................ $ 330.2 $ 281.3 $ 233.6 $195.6 $168.6 $ 588.5 $1,797.8
Long-term Debt ................. 32.0 6.9 167.1 46.9 56.9 144.6 $ 454.4
Endorsement Contracts(1) .......... 711.7 654.6 601.0 509.7 431.0 1,293.9 $4,201.9
Product Purchase Obligations(2) ..... 1,985.7 — — — — — $1,985.7
Other(3) ........................ 247.1 106.3 67.8 78.0 3.0 2.0 $ 504.2
Total ...................... $3,306.7 $1,049.1 $1,069.5 $830.2 $659.5 $2,029.0 $8,944.0
(1) The amounts listed for endorsement contracts represent approximate amounts of base compensation and
minimum guaranteed royalty fees we are obligated to pay athlete and sport team endorsers of our products.
Actual payments under some contracts may be higher than the amounts listed as these contracts provide for
bonuses to be paid to the endorsers based upon athletic achievements and/or royalties on product sales in
future periods. Actual payments under some contracts may also be lower as these contracts include
provisions for reduced payments if athletic performance declines in future periods.
In addition to the cash payments, we are obligated to furnish our endorsers with NIKE product for their use.
It is not possible to determine how much we will spend on this product on an annual basis as the contracts
generally do not stipulate a specific amount of cash to be spent on the product. The amount of
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