Nike 2014 Annual Report Download - page 22

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PART II
Results of Operations
Unless otherwise indicated, the following disclosures reflect the Company’s continuing operations.
(Dollars in millions, except per share data) Fiscal 2014 Fiscal 2013(1) % Change Fiscal 2012(1) % Change
Revenues $ 27,799 $ 25,313 10% $ 23,331 8%
Cost of sales 15,353 14,279 8% 13,183 8%
Gross profit 12,446 11,034 13% 10,148 9%
Gross margin % 44.8% 43.6% 43.5%
Demand creation expense 3,031 2,745 10% 2,607 5%
Operating overhead expense 5,735 5,051 14% 4,472 13%
Total selling and administrative expense 8,766 7,796 12% 7,079 10%
% of Revenues 31.5% 30.8% 30.3%
Interest expense (income), net 33 (3) — 4 —
Other expense (income), net 103 (15) — 54 —
Income before income taxes 3,544 3,256 9% 3,011 8%
Income tax expense 851 805 6% 754 7%
Effective tax rate 24.0% 24.7% 25.0%
Net income from continuing operations 2,693 2,451 10% 2,257 9%
Net income (loss) from discontinued operations — 21 — (46) —
Net income $ 2,693 $ 2,472 9% $ 2,211 12%
Diluted earnings per share — continuing
operations $ 2.97 $ 2.68 11% $ 2.40 12%
Diluted earnings per share — discontinued
operations $ — $ 0.02 — $ (0.05) —
(1) Prior year amounts have been revised to correctly expense internally developed patent and trademark costs as incurred. Refer to Note 1 — Summary of Significant Accounting Policies in
the accompanying Notes to the Consolidated Financial Statements.
NIKE, INC. 2014 Annual Report and Notice of Annual Meeting 65
FORM 10-K