Short-Term Borrowings and Credit Lines

12 Months Ended

May 31, 2013

Short-term Debt and Line of Credit Facility [Abstract]

Short-Term Borrowings and Credit Lines

NOTE 7 — Short-Term Borrowings and Credit Lines

Notes payable and interest-bearing accounts payable to Sojitz Corporation of America (“Sojitz America”) as of May 31, 2013 and 2012, are summarized below:

	As of May 31,
	2013					2012
(In millions)	Borrowings		Interest Rate			Borrowings		Interest Rate
Notes payable:
U.S. operations	$	20	0.00	%	(1)	$	30	5.50	%	(1)
Non-U.S. operations	101		4.77	%	(1)	78		9.46	%	(1)
TOTAL NOTES PAYABLE	$	121				$	108
Interest-Bearing Accounts Payable:
Sojitz America	$	55	0.99	%		$	75	1.10	%

(1) Weighted average interest rate includes non-interest bearing overdrafts.

The carrying amounts reflected in the consolidated balance sheets for notes payable approximate fair value.

The Company purchases through Sojitz America certain athletic footwear, apparel and equipment it acquires from non-U.S. suppliers. These purchases are for the Company’s operations outside of the United States, Europe and Japan. Accounts payable to Sojitz America are generally due up to 60 days after shipment of goods from the foreign port. The interest rate on such accounts payable is the 60-day London Interbank Offered Rate (“LIBOR”) as of the beginning of the month of the invoice date, plus 0.75%.

As of May 31, 2013 and 2012, the Company had no amounts outstanding under its commercial paper program.

In November 2011, the Company entered into a committed credit facility agreement with a syndicate of banks which provides for up to $1 billion of borrowings pursuant to a revolving credit facility with the option to increase borrowings to $1.5 billion with lender approval. The facility matures on November 1, 2016, with a one-year extension option prior to both the second and third anniversary of the closing date, provided that extensions shall not extend beyond November 1, 2018. Based on the Company’s current long-term senior unsecured debt ratings of A+ and A1 from Standard and Poor’s Corporation and Moody’s Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing LIBOR plus 0.56%. The facility fee is 0.065% of the total commitment. Under this committed credit facility, the Company must maintain, among other things, certain minimum specified financial ratios with which the Company was in compliance at May 31, 2013. No amounts were outstanding under this facility as of May 31, 2013 or 2012.