Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Nike Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
Federal	430)	231)	328)	(109)	74)	1,167)
State	184)	98)	134)	81)	56)	45)
United States	614)	329)	462)	(28)	130)	1,212)
Foreign	634)	926)	857)	756)	608)	533)
Current	1,248)	1,255)	1,319)	728)	738)	1,745)
Federal	(162)	(522)	(371)	(231)	(33)	595)
State	(25)	(16)	(34)	(47)	(9)	25)
United States	(187)	(538)	(405)	(278)	(42)	620)
Foreign	70)	(112)	20)	(102)	76)	27)
Deferred	(117)	(650)	(385)	(380)	34)	647)
Income tax expense	1,131)	605)	934)	348)	772)	2,392)

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Nike Inc. current decreased from 2021 to 2022 and from 2022 to 2023.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Nike Inc. deferred decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Income tax expense	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Nike Inc. income tax expense decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Nike Inc., effective income tax rate (EITR) reconciliation

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
Federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	29.20%
State taxes, net of federal benefit	1.50%	1.40%	1.30%	0.80%	1.20%	1.20%
Foreign earnings	1.70%	-1.80%	0.20%	5.90%	-2.10%	-17.50%
Subpart F deferred tax benefit	0.00%	-4.70%	0.00%	0.00%	0.00%	0.00%
Foreign-derived intangible income benefit	-6.10%	-4.10%	-3.70%	-8.10%	0.00%	0.00%
Excess tax benefits from share-based compensation	-1.10%	-4.90%	-4.50%	-7.20%	-3.60%	-5.30%
Income tax audits and contingency reserves	1.00%	1.50%	1.50%	-1.40%	0.00%	0.00%
U.S. research and development tax credit	-1.20%	-1.00%	-0.90%	-1.80%	-1.10%	-0.60%
Other, net	1.40%	1.70%	-0.90%	2.90%	0.70%	1.30%
Effective income tax rate, before the Tax Act	18.20%	9.10%	17.70%	20.20%	16.10%	8.30%
Transition tax related to the Tax Act	0.00%	0.00%	0.00%	0.00%	0.00%	43.30%
Remeasurement of deferred tax assets and liabilities related to the Tax Act	0.00%	0.00%	0.00%	0.00%	0.00%	3.70%
Effective income tax rate	18.20%	9.10%	14.00%	12.10%	16.10%	55.30%

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

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Item	Description	The company
Effective income tax rate, before the Tax Act	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Nike Inc. effective income tax rate, before the Tax Act decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Nike Inc., components of deferred tax assets and liabilities

US$ in millions

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
Inventories	79)	136)	78)	84)	66)	73)
Sales return reserves	89)	109)	100)	115)	128)	104)
Deferred compensation	321)	313)	350)	295)	271)	250)
Stock-based compensation	261)	195)	175)	168)	156)	135)
Reserves and accrued liabilities	144)	145)	96)	120)	101)	102)
Operating lease liabilities	511)	508)	499)	491)	—)	—)
Intangibles	255)	275)	187)	—)	—)	—)
Capitalized research and development expenditures	548)	353)	349)	189)	—)	—)
Net operating loss carry-forwards	15)	8)	15)	21)	81)	88)
Subpart F deferred tax	374)	313)	—)	—)	—)	—)
Foreign tax credit carry-forwards	—)	103)	—)	—)	—)	—)
Other	183)	148)	178)	127)	125)	106)
Deferred tax assets	2,780)	2,606)	2,027)	1,610)	928)	858)
Valuation allowance	(22)	(19)	(12)	(26)	(88)	(95)
Deferred tax assets after valuation allowance	2,758)	2,587)	2,015)	1,584)	840)	763)
Foreign withholding tax on undistributed earnings of foreign subsidiaries	(186)	(146)	(182)	(165)	(235)	(155)
Property, plant and equipment	(276)	(247)	(255)	(232)	(188)	(167)
Right-of-use assets	(441)	(437)	(431)	(423)	—)	—)
Other	(56)	(92)	(14)	(32)	(41)	(103)
Deferred tax liabilities	(959)	(922)	(882)	(852)	(464)	(425)
Net deferred tax asset (liability)	1,799)	1,665)	1,133)	732)	376)	338)

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

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Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Nike Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets after valuation allowance	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Nike Inc. deferred tax assets after valuation allowance increased from 2021 to 2022 and from 2022 to 2023.
Net deferred tax asset (liability)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Nike Inc. net deferred tax asset (liability) increased from 2021 to 2022 and from 2022 to 2023.

Nike Inc., adjustments to financial statements

US$ in millions

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
Adjustment to Total Assets
Total assets (as reported)	37,531)	40,321)	37,740)	31,342)	23,717)	22,536)
Less: Noncurrent deferred tax assets, net	1,799)	1,665)	1,133)	732)	376)	338)
Total assets (adjusted)	35,732)	38,656)	36,607)	30,610)	23,341)	22,198)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	14,004)	15,281)	12,767)	8,055)	9,040)	9,812)
Less: Net deferred tax assets (liabilities)	1,799)	1,665)	1,133)	732)	376)	338)
Shareholders’ equity (adjusted)	12,205)	13,616)	11,634)	7,323)	8,664)	9,474)
Adjustment to Net Income
Net income (as reported)	5,070)	6,046)	5,727)	2,539)	4,029)	1,933)
Add: Deferred income tax expense (benefit)	(117)	(650)	(385)	(380)	34)	647)
Net income (adjusted)	4,953)	5,396)	5,342)	2,159)	4,063)	2,580)

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

Nike Inc., Financial Data: Reported vs. Adjusted

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Nike Inc., adjusted financial ratios

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
Net Profit Margin
Reported net profit margin	9.90%	12.94%	12.86%	6.79%	10.30%	5.31%
Adjusted net profit margin	9.67%	11.55%	11.99%	5.77%	10.39%	7.09%
Total Asset Turnover
Reported total asset turnover	1.36	1.16	1.18	1.19	1.65	1.62
Adjusted total asset turnover	1.43	1.21	1.22	1.22	1.68	1.64
Financial Leverage
Reported financial leverage	2.68	2.64	2.96	3.89	2.62	2.30
Adjusted financial leverage	2.93	2.84	3.15	4.18	2.69	2.34
Return on Equity (ROE)
Reported ROE	36.20%	39.57%	44.86%	31.52%	44.57%	19.70%
Adjusted ROE	40.58%	39.63%	45.92%	29.48%	46.90%	27.23%
Return on Assets (ROA)
Reported ROA	13.51%	14.99%	15.17%	8.10%	16.99%	8.58%
Adjusted ROA	13.86%	13.96%	14.59%	7.05%	17.41%	11.62%

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Nike Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Nike Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Nike Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Nike Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Nike Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Nike Inc., Financial Ratios: Reported vs. Adjusted

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	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	5,070)	6,046)	5,727)	2,539)	4,029)	1,933)
Revenues	51,217)	46,710)	44,538)	37,403)	39,117)	36,397)
Profitability Ratio
Net profit margin¹	9.90%	12.94%	12.86%	6.79%	10.30%	5.31%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	4,953)	5,396)	5,342)	2,159)	4,063)	2,580)
Revenues	51,217)	46,710)	44,538)	37,403)	39,117)	36,397)
Profitability Ratio
Adjusted net profit margin²	9.67%	11.55%	11.99%	5.77%	10.39%	7.09%

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Revenues
= 100 × 5,070 ÷ 51,217 = 9.90%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Revenues
= 100 × 4,953 ÷ 51,217 = 9.67%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Nike Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Revenues	51,217)	46,710)	44,538)	37,403)	39,117)	36,397)
Total assets	37,531)	40,321)	37,740)	31,342)	23,717)	22,536)
Activity Ratio
Total asset turnover¹	1.36	1.16	1.18	1.19	1.65	1.62
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues	51,217)	46,710)	44,538)	37,403)	39,117)	36,397)
Adjusted total assets	35,732)	38,656)	36,607)	30,610)	23,341)	22,198)
Activity Ratio
Adjusted total asset turnover²	1.43	1.21	1.22	1.22	1.68	1.64

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

2023 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 51,217 ÷ 37,531 = 1.36

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 51,217 ÷ 35,732 = 1.43

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Nike Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	37,531)	40,321)	37,740)	31,342)	23,717)	22,536)
Shareholders’ equity	14,004)	15,281)	12,767)	8,055)	9,040)	9,812)
Solvency Ratio
Financial leverage¹	2.68	2.64	2.96	3.89	2.62	2.30
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	35,732)	38,656)	36,607)	30,610)	23,341)	22,198)
Adjusted shareholders’ equity	12,205)	13,616)	11,634)	7,323)	8,664)	9,474)
Solvency Ratio
Adjusted financial leverage²	2.93	2.84	3.15	4.18	2.69	2.34

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 37,531 ÷ 14,004 = 2.68

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 35,732 ÷ 12,205 = 2.93

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Nike Inc. adjusted financial leverage ratio decreased from 2021 to 2022 but then slightly increased from 2022 to 2023.

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	5,070)	6,046)	5,727)	2,539)	4,029)	1,933)
Shareholders’ equity	14,004)	15,281)	12,767)	8,055)	9,040)	9,812)
Profitability Ratio
ROE¹	36.20%	39.57%	44.86%	31.52%	44.57%	19.70%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	4,953)	5,396)	5,342)	2,159)	4,063)	2,580)
Adjusted shareholders’ equity	12,205)	13,616)	11,634)	7,323)	8,664)	9,474)
Profitability Ratio
Adjusted ROE²	40.58%	39.63%	45.92%	29.48%	46.90%	27.23%

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 5,070 ÷ 14,004 = 36.20%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 4,953 ÷ 12,205 = 40.58%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Nike Inc. adjusted ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019	May 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	5,070)	6,046)	5,727)	2,539)	4,029)	1,933)
Total assets	37,531)	40,321)	37,740)	31,342)	23,717)	22,536)
Profitability Ratio
ROA¹	13.51%	14.99%	15.17%	8.10%	16.99%	8.58%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	4,953)	5,396)	5,342)	2,159)	4,063)	2,580)
Adjusted total assets	35,732)	38,656)	36,607)	30,610)	23,341)	22,198)
Profitability Ratio
Adjusted ROA²	13.86%	13.96%	14.59%	7.05%	17.41%	11.62%

Based on: 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31), 10-K (reporting date: 2018-05-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 5,070 ÷ 37,531 = 13.51%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 4,953 ÷ 35,732 = 13.86%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Nike Inc. adjusted ROA deteriorated from 2021 to 2022 and from 2022 to 2023.

Nike Inc. (NYSE:NKE)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Adjustments to Financial Statements: Removal of Deferred Taxes

Nike Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Nike Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)