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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
such agreements in place. However, based on the Company’s historical experience and the estimated probability
of future loss, the Company has determined that the fair value of such indemnifications is not material to the
Company’s financial position or results of operations.
In the ordinary course of its business, the Company is involved in various legal proceedings involving
contractual and employment relationships, product liability claims, trademark rights, and a variety of other
matters. The Company does not believe there are any pending legal proceedings that will have a material impact
on the Company’s financial position or results of operations.
Note 16 — Restructuring Charges
During the fourth quarter of fiscal 2009, the Company took necessary steps to streamline its management
structure, enhance consumer focus, drive innovation more quickly to market and establish a more scalable,
long-term cost structure. As a result, the Company reduced its global workforce by approximately 5% and
incurred pre-tax restructuring charges of $195 million, primarily consisting of severance costs related to the
workforce reduction. As nearly all of the restructuring activities were completed in the fourth quarter of fiscal
2009, the Company does not expect to recognize additional costs in future periods relating to these actions. The
restructuring charge is reflected in the corporate expense line in the segment presentation of pre-tax income in
Note 19 — Operating Segments and Related Information.
The activity in the restructuring accrual for the year ended May 31, 2009 is as follows (in millions):
Restructuring accrual — June 1, 2008 ............................................ $ —
Severance and related costs .................................................... 195.0
Cash payments .............................................................. (29.4)
Non-cash stock option and restricted stock expense ................................. (19.5)
Foreign currency translation and other ........................................... 3.5
Restructuring accrual — May 31, 2009 ........................................... $149.6
The accrual balance as of May 31, 2009 will be relieved throughout fiscal year 2010 and early 2011, as
severance payments are completed. The restructuring accrual is included in Accrued liabilities in the
Consolidated Balance Sheet.
As part of its restructuring activities, the Company reorganized its NIKE brand operations geographic
structure. In fiscal 2009, 2008 and 2007, NIKE brand operations were organized into the following four
geographic regions: U.S., Europe, Middle East and Africa (collectively, “EMEA”), Asia Pacific, and
Americas. In the fourth quarter of 2009, the Company initiated a reorganization of the NIKE Brand business into
a new operating model. As a result of this reorganization, beginning in the first quarter of fiscal 2010, the NIKE
brand operations will consist of the following six geographies: North America, Western Europe, Central/Eastern
Europe, Greater China, Japan, and Emerging Markets.
Note 17 — Divestitures
On December 17, 2007, the Company completed the sale of the Starter brand business to Iconix Brand
Group, Inc. for $60.0 million in cash. This transaction resulted in a gain of $28.6 million during the year ended
May 31, 2008.
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