Nike 2016 Annual Report Download - page 43

PART II
Expected Maturity Date
Year Ending May 31,
(Dollars in millions) 2017 2018 2019 2020 2021 Thereafter Total Fair Value
Foreign Exchange Risk
Japanese Yen Functional Currency
Long-term Japanese Yen debt — Fixed rate
Principal payments $ 6 $ 6 $ 6 $ 6 $ 3 $ — $ 27 $ 28
Average interest rate 2.4% 2.4% 2.4% 2.4% 2.4% 0.0% 2.4%
Interest Rate Risk
Japanese Yen Functional Currency
Long-term Japanese Yen debt — Fixed rate
Principal payments $ 6 $ 6 $ 6 $ 6 $ 3 $ — $ 27 $ 28
Average interest rate 2.4% 2.4% 2.4% 2.4% 2.4% 0.0% 2.4%
U.S. Dollar Functional Currency
Long-term U.S. Dollar debt — Fixed rate
Principal payments $ 38 $ — $ — $ — $ — $ 2,000 $2,038 $ 2,097
Average interest rate 6.2% 0.0% 0.0% 0.0% 0.0% 3.4% 3.5%
Anticipated long-term U.S. Dollar debt
issuance — Floating rate swapped to fixed rate
Notional(1) $ 1,500 $ — $ — $ — $ — $ — $1,500 $ 38
Weighted-average fixed rate 2.2% 0.0% 0.0% 0.0% 0.0% 0.0% 2.2%
Weighted-average floating rate 0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.7%
(1) Forward-starting interest rate swaps have been included in the maturities category based on when the related forecasted debt issuance and corresponding swap terminations are
expected to occur.
The fixed interest rate Japanese Yen denominated debt instruments were issued by and are accounted for by one of our Japanese subsidiaries. Accordingly, the
monthly translation of these instruments, which varies due to changes in foreign exchange rates, is recognized in Accumulated other comprehensive income
upon consolidation of this subsidiary.
ITEM 8. Financial Statements and Supplementary Data
Management of NIKE, Inc. is responsible for the information and
representations contained in this report. The financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”) and include certain amounts based
on our best estimates and judgments. Other financial information in this report
is consistent with these financial statements.
Our accounting systems include controls designed to reasonably assure
assets are safeguarded from unauthorized use or disposition and provide for
the preparation of financial statements in conformity with U.S. GAAP. These
systems are supplemented by the selection and training of qualified financial
personnel and an organizational structure providing for appropriate
segregation of duties.
An internal Corporate Audit department reviews the results of its work with the
Audit Committee of the Board of Directors, presently consisting of four
outside directors. The Audit Committee is responsible for the appointment of
the independent registered public accounting firm and reviews, with the
independent registered public accounting firm, management and the internal
audit staff, the scope and the results of the annual audit, the effectiveness of
the accounting control system and other matters relating to the financial
affairs of NIKE as the Audit Committee deems appropriate. The independent
registered public accounting firm and the internal auditors have full access to
the Audit Committee, with and without the presence of management, to
discuss any appropriate matters.
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