Nike 2009 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2009 Nike annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Identified Intangible Assets and Goodwill
All goodwill balances are included in the Company’s “Other” category for segment reporting purposes. The
following table summarizes the Company’s goodwill balance as of May 31, 2009 and 2008 (in millions):
Goodwill, May 31, 2007 ...................................................... $130.8
Acquisition of Umbro Plc ..................................................... 319.2
Other(1) ................................................................... (1.2)
Goodwill, May 31, 2008 ...................................................... 448.8
Purchase price adjustments .................................................... 23.6
Impairment charge .......................................................... (199.3)
Other(1) ................................................................... (79.6)
Goodwill, May 31, 2009 ...................................................... $193.5
(1) Other consists of foreign currency translation adjustments on Umbro goodwill.
The following table summarizes the Company’s identifiable intangible asset balances as of May 31, 2009
and 2008.
May 31, 2009 May 31, 2008
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(In millions)
Amortized intangible assets:
Patents .................... $ 56.6 $(17.2) $ 39.4 $ 47.5 $(14.4) $ 33.1
Trademarks ................ 37.5 (10.9) 26.6 13.2 (7.8) 5.4
Other ..................... 40.0 (19.6) 20.4 65.2 (19.7) 45.5
Total ................. $134.1 $(47.7) $ 86.4 $125.9 $(41.9) $ 84.0
Unamortized intangible assets —
Trademarks .................. $381.0 $659.1
Identifiable intangible assets, net . . . $467.4 $743.1
The effect of foreign exchange fluctuations for the year ended May 31, 2009 reduced unamortized
intangible assets by approximately $98.2 million, resulting from the strengthening of the U.S. dollar in relation to
the British pound sterling.
Amortization expense, which is included in selling and administrative expense, was $11.9 million, $9.2
million and $9.9 million for the years ended May 31, 2009, 2008, and 2007, respectively. The estimated
amortization expense for intangible assets subject to amortization for each of the years ending May 31, 2010
through May 31, 2014 are as follows: 2010: $12.6 million; 2011: $12.2 million; 2012: $11.5 million; 2013: $9.6
million; 2014: $7.6 million.
During the year ended May 31, 2008, the gross carrying amount of unamortized and amortized trademarks
were reduced by $59.6 million and $37.5 million, respectively, as a result of the Company’s divestitures of the
Starter brand business and NIKE Bauer Hockey during the year ended May 31, 2008. See
Note 17 — Divestitures for more information the Company’s divestitures.
66