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51NIKE,INC.-Form10-K
PARTII
Note13Benefi t Plans
The following summarizes the stock option transactions under the plan discussed above:
Shares(1)
Weighted Average
Option Price
(Inmillions)
Options outstanding May31,2008
36.6
$ 40.14
Exercised
(4.0
) 35.70
Forfeited
(1.3
) 51.19
Granted 7.5 58.17
Options outstanding May31,2009 38.8 $ 43.69
Exercised (8.6) 37.64
Forfeited (0.6) 51.92
Granted 6.4 52.79
Options outstanding May31,2010 36.0 $ 46.60
Exercised (7.0) 42.70
Forfeited (0.5) 58.08
Granted 6.3 69.20
Options outstanding May31,2011 34.8 $ 51.29
Options exercisable at May31,
2009 21.4 $ 36.91
2010 20.4 41.16
2011 20.1 $ 44.05
(1) Includes stock appreciation rights transactions.
The weighted average contractual life remaining for options outstanding and
options exercisable at May31,2011 was 6.0years and 4.5years, respectively.
The aggregate intrinsic value for options outstanding and exercisable at
May31,2011 was $1,154million and $811million, respectively. The aggregate
intrinsic value was the amount by which the market value of the underlying
stock exceeded the exercise price of the options. The total intrinsic value of
the options exercised during theyears ended May31,2011,2010, and 2009
was $267million, $239million, and $108million, respectively.
In addition to the 1990 Plan, the Company gives employees the right to purchase
shares at a discount to the market price under employee stock purchase plans
(“ESPPs”). Employees are eligible to participate through payroll deductions
up to 10% of their compensation. At the end of each six-month offering
period, shares are purchased by the participants at 85% of the lower of the
fair market value at the beginning or the end of the offering period. Employees
purchased 0.8million shares during theyears ended May31,2011 and 2010,
and 1.0million shares during the year ended May31,2009.
From time to time, the Company grants restricted stock and unrestricted
stock to key employees under the 1990 Plan. The number of shares granted
to employees during theyears ended May31,2011,2010, and 2009 were
0.2million, 0.5million, and 0.1million with weighted average values per
share of $70.23, $53.16, and $56.97, respectively. Recipients of restricted
shares are entitled to cash dividends and to vote their respective shares
throughout the period of restriction. The value of all of the granted shares
was established by the market price on the date of grant. During theyears
ended May31,2011,2010, and 2009, the fair value of restricted shares
vested was $15million, $8million, and $10million, respectively, determined
as of the date of vesting.
NOTE12 Earnings Per Share
The following is a reconciliation from basic earnings per share to diluted earnings per share. Options to purchase an additional 0.2million, 0.2million, and
13.2million shares of common stock were outstanding at May31,2011,2010, and 2009, respectively, but were not included in the computation of diluted
earnings per share because the options were anti-dilutive.
(Inmillions, except per share data)
Year Ended May31,
2011 2010 2009
Determination of shares:
Weighted average common shares outstanding 475.5 485.5 484.9
Assumed conversion of dilutive stock options and awards 10.2 8.4 5.8
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 485.7 493.9 490.7
Basic earnings per common share $ 4.48 $ 3.93 $ 3.07
Diluted earnings per common share $ 4.39 $ 3.86 $ 3.03
NOTE13 Benefi t Plans
The Company has a profi t sharing plan available to most U.S.-based employees.
The terms of the plan call for annual contributions by the Company as determined
by the Board of Directors. A subsidiary of the Company also has a profi t sharing
plan available to its U.S.-based employees. The terms of the plan call for
annual contributions as determined by the subsidiary’s executive management.
Contributions of $39million, $35million, and $28million were made to the
plans and are included in selling and administrative expense fortheyears ended
May31,2011,2010, and 2009, respectively. The Company has various 401(k)
employee savings plans available to U.S.-based employees. The Company
matches a portion of employee contributions. Companycontributions to