Nike 2009 Annual Report Download - page 60

NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Cash and Equivalents
Cash and equivalents represent cash and short-term, highly liquid investments with maturities of three
months or less at date of purchase. The carrying amounts reflected in the consolidated balance sheet for cash and
equivalents approximate fair value.
Short-term Investments
Short-term investments consist of highly liquid investments, primarily commercial paper, U.S. Treasury,
U.S. agency, and corporate debt securities, with maturities over three months from the date of purchase. Debt
securities which the Company has the ability and positive intent to hold to maturity are carried at amortized cost,
which approximates fair value. At May 31, 2009, the Company did not hold any short-term investments that were
classified as held-to-maturity. Short-term investments of $124.9 million as of May 31, 2008 were classified as
held-to-maturity and were primarily comprised of U.S. Treasury and U.S. agency securities.
Available-for-sale debt securities are recorded at fair value with net unrealized gains and losses reported, net
of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. The
Company considers all available-for-sale securities, including those with maturity dates beyond 12 months, as
available to support current operational liquidity needs and therefore classifies these securities as short-term
investments within current assets on the consolidated balance sheet. As of May 31, 2009, the Company held
$1,005.0 million of available-for-sale securities with maturity dates within one year and $159.0 million with
maturity dates over one year and less than five years.
Investments classified as available-for-sale consist of the following at fair value:
As of May 31,
2009 2008
(In millions)
Available-for-sale investments:
U.S. treasury and agencies ....................................... $ 772.8 $194.1
Corporate commercial paper and bonds ............................. 391.2 323.2
Total available-for-sale investments ................................... $1,164.0 $517.3
Included in interest income, net for the years ended May 31, 2009, 2008, and 2007, was interest income of
$49.7 million, $115.8 million and $116.9 million, respectively, related to short-term investments and cash and
equivalents.
Allowance for Uncollectible Accounts Receivable
Accounts receivable consists principally of amounts receivable from customers. We make ongoing
estimates relating to the collectibility of our accounts receivable and maintain an allowance for estimated losses
resulting from the inability of our customers to make required payments. In determining the amount of the
allowance, we consider our historical level of credit losses and make judgments about the creditworthiness of
significant customers based on ongoing credit evaluations. Accounts receivable with anticipated collection dates
greater than twelve months from the balance sheet date and related allowances are considered non-current and
recorded in other assets. The allowance for uncollectible accounts receivable was $110.8 million and $78.4
million at May 31, 2009 and 2008, respectively, of which $36.9 million and $36.7 million was recorded in other
assets.
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