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NKE » Topics » Net Investment Hedges

This excerpt taken from the NKE 10-K filed Jul 27, 2009.

Net Investment Hedges

The Company also hedges the risk of variability in foreign-currency-denominated net investments in wholly-owned international subsidiaries. All changes in fair value of the derivatives designated as net investment hedges, except ineffective portions, are reported in the cumulative translation adjustment component of other comprehensive income along with the foreign currency translation adjustments on those investments. The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from its net investment hedges for the years ended May 31, 2009 and 2008.

This excerpt taken from the NKE 10-Q filed Apr 9, 2009.

Net Investment Hedges

The Company also hedges the risk of variability in foreign-currency-denominated net investments in wholly-owned international operations. All changes in fair value of the derivatives designated as net investment hedges, except ineffective portions, are reported in the cumulative translation adjustment component of other comprehensive income along with the foreign currency translation adjustments on those investments. The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from its net investment hedges for the three and nine month periods ended February 28, 2009.

This excerpt taken from the NKE 10-K filed Jul 28, 2008.

Net Investment Hedges

During 2008, the Company began to hedge the risk of variability in foreign-currency-denominated net investments in wholly-owned international operations. Derivatives used by the Company to hedge this foreign currency exposure are forward exchange contracts and the underlying hedged investments are denominated in euros. All changes in fair value of the derivatives designated as net investment hedges, except ineffective portions, are reported in the cumulative translation adjustment component of other comprehensive income along with the foreign currency translation adjustments on those investments.

The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from its net investment hedges in 2008.

As of May 31, 2008, $68.6 million of deferred net losses on both outstanding and matured derivatives was included in the cumulative translation adjustment component of other comprehensive income.

 

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Table of Contents

NIKE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 

The fair values of all derivatives recorded on the consolidated balance sheet are as follows:

 

     May 31,  
   2008     2007  
   (In millions)  

Unrealized Gains:

     

Foreign currency exchange contracts and options

    $ 145.4     $ 43.5  

Interest rate swaps

      5.4       0.5  

Unrealized (Losses):

     

Foreign currency exchange contracts and options

      (194.4 )     (90.6 )

Interest rate swaps

      —       (2.6 )

EXCERPTS ON THIS PAGE:

10-K
Jul 27, 2009
10-Q
Apr 9, 2009
10-K
Jul 28, 2008

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