Nike 2009 Annual Report Download - page 70

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Fair Value Measurements Using Assets /Liabilities at
Fair Value Balance Sheet ClassificationLevel 1 Level 2 Level 3
(In millions)
Assets
Derivatives ........... $ — $ 378.7 $ — $ 378.7 Other current assets
and other long-term
assets
Available-for-sale
securities .......... 240.0 1,314.8 — 1,554.8 Cash equivalents
Available-for-sale
securities .......... 467.9 696.1 — 1,164.0 Short-term investments
Total assets ...... $707.9 $2,389.6 $ — $ 3,097.5
Liabilities
Derivatives ........... $ — $ 68.9 $ — $ 68.9 Accrued liabilities and
other long-term
liabilities
Total Liabilities . . $ — $ 68.9 $ — $ 68.9
Derivative financial instruments include foreign currency forwards, option contracts and interest rate
swaps. The fair value of these derivatives contracts is determined using observable market inputs such as the
forward pricing curve, currency volatilities, currency correlations, and interest rates, and considers
nonperformance risk of the Company and that of its counterparties. Adjustments relating to these risks were not
material for the year ended May 31, 2009.
Available-for-sale securities are primarily comprised of investments in U.S. Treasury and agency securities,
corporate commercial paper and bonds. These securities are valued using market prices on both active markets
(level 1) and less active markets (level 2). Level 1 instrument valuations are obtained from real-time quotes for
transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained
from readily-available pricing sources for comparable instruments.
The Company had no material Level 3 measurements as of May 31, 2009.
In accordance with the requirements of SFAS No. 107, “Disclosures about Fair Value of Financial
Instruments”, the Company annually discloses the fair value of its debt, which is recorded on the consolidated
balance sheets at adjusted cost. Refer to Note 8 — Long-Term Debt for additional detail.
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