Nike 2010 Annual Report Download - page 47

Table of Contents
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 product provided to the endorsers will depend on many factors including general playing conditions, the number of sporting events in
which they participate, and our own decisions regarding product and marketing initiatives. In addition, the costs to design, develop, source, and
purchase the products furnished to the endorsers are incurred over a period of time and are not necessarily tracked separately from similar costs
incurred for products sold to customers.
(2) We generally order product at least 4 to 5 months in advance of sale based primarily on advanced futures orders received from customers. The
amounts listed for product purchase obligations represent agreements (including open purchase orders) to purchase products in the ordinary course of
business, that are enforceable and legally binding and that specify all significant terms. In some cases, prices are subject to change throughout the
production process. The reported amounts exclude product purchase liabilities included in accounts payable on the consolidated balance sheet as of
May 31, 2010.
(3) Other amounts primarily include service and marketing commitments made in the ordinary course of business. The amounts represent the minimum
payments required by legally binding contracts and agreements that specify all significant terms, including open purchase orders for non−product
purchases. The reported amounts exclude those liabilities included in accounts payable or accrued liabilities on the consolidated balance sheet as of
May 31, 2010.
The total liability for uncertain tax positions was $282 million, excluding related interest and penalties, at May 31, 2010. We are not able to
reasonably estimate when or if cash payments of the long−term liability for uncertain tax positions will occur.
We also have the following outstanding short−term debt obligations as of May 31, 2010. Please refer to the accompanying Notes to the Consolidated
Financial Statements (Note 7 — Short−Term Borrowings and Credit Lines) for further description and interest rates related to the short−term debt
obligations listed below.
Outstanding as of
May 31, 2010
(In millions)
Notes payable, due at mutually agreed−upon dates within one year of issuance or on demand $ 139
Payable to Sojitz America for the purchase of inventories, generally due 60 days after shipment of goods
from a foreign port $ 88
As of May 31, 2010, letters of credit of $101 million were outstanding, generally for the purchase of inventory.
Capital Resources
In December 2008, we filed a shelf registration statement with the Securities and Exchange Commission under which $760 million in debt securities
may be issued. As of May 31, 2010, no debt securities had been issued under this shelf registration. We may issue debt securities under the shelf registration
in fiscal 2011 depending on general corporate needs.
As of May 31, 2010, we had no amounts outstanding under our multi−year, $1 billion revolving credit facility in place with a group of banks. The
facility matures in December 2012. Based on our current long−term
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