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Table of Contents NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
interest in a VIE makes the holder the primary beneficiary of the VIE. This guidance is effective for the Company beginning June 1, 2010. The Company is
currently evaluating the impact of the provisions of this new standard.
Note 2 — Inventories
Inventory balances of $2,040.8 million and $2,357.0 million at May 31, 2010 and 2009, respectively, were substantially all finished goods.
Note 3 — Property, Plant and Equipment
Property, plant and equipment included the following:
As of May 31,
2010 2009
(In millions)
Land $ 222.8 $ 221.6
Buildings 951.9 974.0
Machinery and equipment 2,217.5 2,094.3
Leasehold improvements 820.6 802.0
Construction in process 177.0 163.8
4,389.8 4,255.7
Less accumulated depreciation 2,457.9 2,298.0
$ 1,931.9 $ 1,957.7
Capitalized interest was not material for the years ended May 31, 2010, 2009 and 2008.
Note 4 — Acquisition, Identifiable Intangible Assets, Goodwill and Umbro Impairment
Acquisition
On March 3, 2008, the Company completed its acquisition of 100% of the outstanding shares of Umbro, a leading United Kingdom−based global
soccer brand, for a purchase price of 290.5 million British Pounds Sterling in cash (approximately $576.4 million), inclusive of direct transaction costs. This
acquisition is intended to strengthen the Company’s market position in the United Kingdom and expand NIKE’s global leadership in soccer, a key area of
growth for the Company. This acquisition also provides positions in emerging soccer markets such as China, Russia and Brazil. The results of Umbro’s
operations have been included in the Company’s consolidated financial statements since the date of acquisition as part of the Company’s “Other” operating
segment.
The acquisition of Umbro was accounted for as a purchase business combination. The purchase price was allocated to tangible and identifiable
intangible assets acquired and liabilities assumed based on their respective estimated fair values on the date of acquisition, with the remaining purchase
price recorded as goodwill.
Based on our preliminary purchase price allocation at May 31, 2008, identifiable intangible assets and goodwill relating to the purchase approximated
$419.5 million and $319.2 million, respectively. Goodwill recognized in this transaction is deductible for tax purposes. Identifiable intangible assets include
$378.4 million for trademarks that have an indefinite life, and $41.1 million for other intangible assets consisting of Umbro’s
66