401(k) Savings and Profit Sharing Plan for Employees of NIKE, Inc.
Notes to Financial Statements
May 31, 2023 and
2022
Investment Valuation and Income Recognition
Investments held by the Plan are stated at fair value. Fair value is defined as the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3 for further discussion of fair value measurements.
Investments are purchased and sold at the fair value of the underlying investments and receive the interest and dividend earnings of the
underlying investments. Purchases and sales of securities are recorded on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The Plan
presents, in the Statement of Changes in Net Assets Available for Benefits, the net appreciation or depreciation in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation or depreciation on
those investments.
Notes Receivable From Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is
recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred.
Benefits
Payable
Benefits are recorded when paid. Accordingly, benefits payable to persons that have elected to withdraw from the Plan but not
yet paid have not been accrued. At May 31, 2023 and 2022, there were $3,669,496 and $956,725, respectively, payable to participants. See Note 6.
Expenses
Certain
expenses of maintaining the Plan are paid by the Plan, unless otherwise paid by the Company. Expenses that are paid by the Company are excluded from these financial statements. Fees related to the administration of notes receivable from participants
are charged directly to the participants account and are included in administrative expenses. Investment related expenses are in net investment income as a separate line item in the Statement of Changes in Net Assets Available for Benefits.
The Plan pays for participant maintenance fees, communications fees, and fees for participant transactions and projects.
Use of
Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, including
estimates relating to assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net
assets available for benefits during the reporting period. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan offers investments in securities that are exposed to various risks, such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities, and thus the net asset value (NAV) of the funds, will occur in the near term and that such
changes could materially affect participants account balances and the amounts reported in the Statements of Net Assets Available for Benefits. Market values of investments may decline for a number of reasons, including changes in prevailing
market and interest rates, increases in defaults and credit rating downgrades. Common stock held by the Plan was approximately 15 and 17 percent of investments held as of May 31, 2023 and 2022, respectively. Additionally, there are two and
three funds that were individually greater than 10 percent of the total investment held at fair value, which totaled to approximately 23 and 35 percent of the total investment held at fair value as of May 31, 2023 and 2022,
respectively. The two funds greater than 10 percent of the total investment held at fair value are: 1) MFO BLACKROCK LIFEPATH INDEX 2035 FUND F (12%) and 2) MFO BLACKROCK LIFEPATH INDEX 2040 FUND F (11%). Refer to the Supplemental Schedule of
Assets (Held at End of Year) herein for more detail.
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