NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 44: 
|    |                                              |
|---:|:---------------------------------------------|
|  2 | NIKE, Inc. Consolidated Statements of Income |


|    |                                          |                    |        |      |        |      |        |        |    |    |        |
|---:|:-----------------------------------------|:-------------------|:-------|:-----|:-------|:-----|:-------|:-------|:---|:---|:-------|
|  2 |                                          | Year Ended May 31, |        |      |        |      |        |        |    |    |        |
|  3 | (In millions, except per share data)     | 2018               |        | 2017 |        | 2016 |        |        |    |    |        |
|  4 | Revenues                                 | $                  | 36,397 |      |        | $    | 34,350 |        |    | $  | 32,376 |
|  5 | Cost of sales                            | 20,441             |        |      | 19,038 |      |        | 17,405 |    |    |        |
|  6 | Gross profit                             | 15,956             |        |      | 15,312 |      |        | 14,971 |    |    |        |
|  7 | Demand creation expense                  | 3,577              |        |      | 3,341  |      |        | 3,278  |    |    |        |
|  8 | Operating overhead expense               | 7,934              |        |      | 7,222  |      |        | 7,191  |    |    |        |
|  9 | Total selling and administrative expense | 11,511             |        |      | 10,563 |      |        | 10,469 |    |    |        |
| 10 | Interest expense (income), net           | 54                 |        |      | 59     |      |        | 19     |    |    |        |
| 11 | Other expense (income), net              | 66                 |        |      | (196   | )    |        | (140   | )  |    |        |
| 12 | Income before income taxes               | 4,325              |        |      | 4,886  |      |        | 4,623  |    |    |        |
| 13 | Income tax expense                       | 2,392              |        |      | 646    |      |        | 863    |    |    |        |
| 14 | NET INCOME                               | $                  | 1,933  |      |        | $    | 4,240  |        |    | $  | 3,760  |
| 16 | Earnings per common share:               |                    |        |      |        |      |        |        |    |    |        |
| 17 | Basic                                    | $                  | 1.19   |      |        | $    | 2.56   |        |    | $  | 2.21   |
| 18 | Diluted                                  | $                  | 1.17   |      |        | $    | 2.51   |        |    | $  | 2.16   |
| 20 | Dividends declared per common share      | $                  | 0.78   |      |        | $    | 0.70   |        |    | $  | 0.62   |

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

44



, NIKE INC 10-K form for the fiscal year ended 2018-05-31, page 48: 
|    |                                                            |
|---:|:-----------------------------------------------------------|
|  2 | NIKE, Inc. Consolidated Statements of Shareholders' Equity |


|    |                                                                                   |              |    |                                |    |                                     |    |                  |       |       |      |      |    |        |     |        |        |     |        |    |       |    |    |       |    |        |
|---:|:----------------------------------------------------------------------------------|:-------------|:---|:-------------------------------|:---|:------------------------------------|:---|:-----------------|:------|:------|:-----|:-----|:---|:-------|:----|:-------|:-------|:----|:-------|:---|:------|:---|:---|:------|:---|:-------|
|  2 |                                                                                   | Common Stock |    | Capital inExcessof StatedValue |    | AccumulatedOtherComprehensiveIncome |    | RetainedEarnings |       | Total |      |      |    |        |     |        |        |     |        |    |       |    |    |       |    |        |
|  3 |                                                                                   | Class A      |    | Class B                        |    |                                     |    |                  |       |       |      |      |    |        |     |        |        |     |        |    |       |    |    |       |    |        |
|  4 | (In millions, except per share data)                                              | Shares       |    | Amount                         |    | Shares                              |    | Amount           |       |       |      |      |    |        |     |        |        |     |        |    |       |    |    |       |    |        |
|  5 | Balance at May 31, 2015                                                           | 355          |    |                                | $  | -                                   |    |                  | 1,357 |       |      | $    | 3  |        |     | $      | 4,165  |     |        | $  | 1,246 |    | $  | 7,293 | $  | 12,707 |
|  6 | Stock options exercised                                                           |              |    |                                |    | 22                                  |    |                  |       |       | 680  |      |    |        |     |        |        | 680 |        |    |       |    |    |       |    |        |
|  7 | Conversion to Class B Common Stock                                                | (2           | )  |                                | -  |                                     |    | 2                |       |       | -    |      |    |        |     |        |        |     |        | -  |       |    |    |       |    |        |
|  8 | Repurchase of Class B Common Stock                                                |              |    |                                |    | (55                                 | )  |                  |       |       | (148 | )    |    |        |     | (3,090 | )      |     | (3,238 | )  |       |    |    |       |    |        |
|  9 | Dividends on common stock ($0.62 per share) and preferred stock ($0.10 per share) |              |    |                                |    |                                     |    |                  |       |       |      |      |    | (1,053 | )   |        | (1,053 | )   |        |    |       |    |    |       |    |        |
| 10 | Issuance of shares to employees, net of shares withheld for employee taxes        |              |    |                                |    | 3                                   |    |                  |       |       | 105  |      |    |        |     | (11    | )      |     | 94     |    |       |    |    |       |    |        |
| 11 | Stock-based compensation                                                          |              |    |                                |    |                                     |    |                  |       | 236   |      |      |    |        |     |        | 236    |     |        |    |       |    |    |       |    |        |
| 12 | Net income                                                                        |              |    |                                |    |                                     |    |                  |       |       |      |      |    | 3,760  |     |        | 3,760  |     |        |    |       |    |    |       |    |        |
| 13 | Other comprehensive income (loss)                                                 |              |    |                                |    |                                     |    |                  |       |       |      | (928 | )  |        |     |        | (928   | )   |        |    |       |    |    |       |    |        |
| 14 | Balance at May 31, 2016                                                           | 353          |    |                                | $  | -                                   |    |                  | 1,329 |       |      | $    | 3  |        |     | $      | 5,038  |     |        | $  | 318   |    | $  | 6,899 | $  | 12,258 |
| 15 | Stock options exercised                                                           |              |    |                                |    | 17                                  |    |                  |       |       | 525  |      |    |        |     |        |        | 525 |        |    |       |    |    |       |    |        |
| 16 | Conversion to Class B Common Stock                                                | (24          | )  |                                | -  |                                     |    | 24               |       |       | -    |      |    |        |     |        |        |     |        | -  |       |    |    |       |    |        |
| 17 | Repurchase of Class B Common Stock                                                |              |    |                                |    | (60                                 | )  |                  |       |       | (189 | )    |    |        |     | (3,060 | )      |     | (3,249 | )  |       |    |    |       |    |        |
| 18 | Dividends on common stock ($0.70 per share) and preferred stock ($0.10 per share) |              |    |                                |    |                                     |    |                  |       |       |      |      |    | (1,159 | )   |        | (1,159 | )   |        |    |       |    |    |       |    |        |
| 19 | Issuance of shares to employees, net of shares withheld for employee taxes        |              |    |                                |    | 4                                   |    |                  |       |       | 121  |      |    |        |     | (13    | )      |     | 108    |    |       |    |    |       |    |        |
| 20 | Stock-based compensation                                                          |              |    |                                |    |                                     |    |                  |       | 215   |      |      |    |        |     |        | 215    |     |        |    |       |    |    |       |    |        |
| 21 | Net income                                                                        |              |    |                                |    |                                     |    |                  |       |       |      |      |    | 4,240  |     |        | 4,240  |     |        |    |       |    |    |       |    |        |
| 22 | Other comprehensive income (loss)                                                 |              |    |                                |    |                                     |    |                  |       |       |      | (531 | )  |        |     |        | (531   | )   |        |    |       |    |    |       |    |        |
| 23 | Balance at May 31, 2017                                                           | 329          |    |                                | $  | -                                   |    |                  | 1,314 |       |      | $    | 3  |        |     | $      | 5,710  |     |        | $  | (213  | )  | $  | 6,907 | $  | 12,407 |
| 24 | Stock options exercised                                                           |              |    |                                |    | 24                                  |    |                  |       |       | 600  |      |    |        |     |        |        | 600 |        |    |       |    |    |       |    |        |
| 25 | Conversion to Class B Common Stock                                                | -            |    |                                | -  |                                     |    | -                |       |       | -    |      |    |        |     |        |        |     |        | -  |       |    |    |       |    |        |
| 26 | Repurchase of Class B Common Stock                                                |              |    |                                |    | (70                                 | )  |                  |       |       | (254 | )    |    |        |     | (4,013 | )      |     | (4,267 | )  |       |    |    |       |    |        |
| 27 | Dividends on common stock ($0.78 per share) and preferred stock ($0.10 per share) |              |    |                                |    |                                     |    |                  |       |       |      |      |    | (1,265 | )   |        | (1,265 | )   |        |    |       |    |    |       |    |        |
| 28 | Issuance of shares to employees, net of shares withheld for employee taxes        |              |    |                                |    | 4                                   |    |                  |       |       | 110  |      |    |        |     | (28    | )      |     | 82     |    |       |    |    |       |    |        |
| 29 | Stock-based compensation                                                          |              |    |                                |    |                                     |    |                  |       | 218   |      |      |    |        |     |        | 218    |     |        |    |       |    |    |       |    |        |
| 30 | Net income                                                                        |              |    |                                |    |                                     |    |                  |       |       |      |      |    | 1,933  |     |        | 1,933  |     |        |    |       |    |    |       |    |        |
| 31 | Other comprehensive income (loss)                                                 |              |    |                                |    |                                     |    |                  |       |       |      | 104  |    |        |     |        | 104    |     |        |    |       |    |    |       |    |        |
| 32 | Reclassifications to retained earnings in accordance with ASU 2018-02             |              |    |                                |    |                                     |    |                  |       |       |      | 17   |    |        | (17 | )      |        | -   |        |    |       |    |    |       |    |        |
| 33 | Balance at May 31, 2018                                                           | 329          |    |                                | $  | -                                   |    |                  | 1,272 |       |      | $    | 3  |        |     | $      | 6,384  |     |        | $  | (92   | )  | $  | 3,517 | $  | 9,812  |

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

48





Question: How did Nike Inc.'s net income in 2018 compare to 2017, and what was its impact on retained earnings?
Answer: Net Income 2018: $1,933 million
Net Income 2017: $4,240 million

Formula:
Percentage Change in Net Income = ((Net Income 2018 - Net Income 2017) / Net Income 2017) × 100

Calculation:
Percentage Change = ((1,933 - 4,240) / 4,240) × 100
Percentage Change = (-2,307 / 4,240) × 100 ≈ -54.44%

Impact on Retained Earnings:
Net income directly impacts retained earnings, as it represents the company's profit added to the retained earnings after dividends are paid. Despite a positive net income in 2018, retained earnings declined significantly due to higher dividend payouts ($1,265 million) and share repurchases, coupled with the significant decrease in net income.

Answer:
Net income decreased by approximately 54.44% from 2017 to 2018. This substantial decline negatively impacted retained earnings, which dropped from $6,907 million in 2017 to $3,517 million in 2018, driven by reduced profitability and higher shareholder returns.