Operating Segments and Related Information

12 Months Ended

May 31, 2013

Segment Reporting [Abstract]

Operating Segments and Related Information

NOTE 18 — Operating Segments and Related Information

Operating Segments. The Company’s operating segments are evidence of the structure of the Company’s internal organization. The major segments are defined by geographic regions for operations participating in NIKE Brand sales activity excluding NIKE Golf. Each NIKE Brand geographic segment operates predominantly in one industry: the design, development, marketing and selling of athletic footwear, apparel, and equipment. The Company’s reportable operating segments for the NIKE Brand are: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. The Company’s NIKE Brand Direct to Consumer operations are managed within each geographic segment.

The Company’s “Other” category is broken into two components for presentation purposes to align with the way management views the Company. The “Global Brand Divisions” category primarily represents NIKE Brand licensing businesses that are not part of a geographic operating segment, demand creation and operating overhead expenses that are centrally managed for the NIKE Brand, and costs associated with product development and supply chain operations. The “Other Businesses” category consists of the activities of Converse Inc., Hurley International LLC, and NIKE Golf. Activities represented in the “Other” category are considered immaterial for individual disclosure.

Corporate consists largely of unallocated general and administrative expenses, including expenses associated with centrally managed departments, depreciation and amortization related to the Company’s headquarters, unallocated insurance and benefit programs, including stock-based compensation, certain foreign currency gains and losses, including certain hedge gains and losses, certain corporate eliminations and other items.

The primary financial measure used by the Company to evaluate performance of individual operating segments is earnings before interest and taxes (commonly referred to as “EBIT”), which represents net income before interest (income) expense, net and income taxes in the consolidated statements of income. Reconciling items for EBIT represent corporate expense items that are not allocated to the operating segments for management reporting.

As part of our centrally managed foreign exchange risk management program, standard foreign currency rates are assigned twice per year to each NIKE Brand entity in our geographic operating segments and certain Other Businesses. These rates are set approximately nine months in advance of the future selling season based on average market spot rates in the calendar month preceding the date they are established. Inventories and cost of sales for geographic operating segments and certain Other Businesses reflect use of these standard rates to record non-functional currency product purchases in the entity’s functional currency. Differences between assigned standard foreign currency rates and actual market rates are included in Corporate, together with foreign currency hedge gains and losses generated from our centrally managed foreign exchange risk management program and other conversion gains and losses.

Accounts receivable, inventories and property, plant and equipment for operating segments are regularly reviewed by management and are therefore provided below. Additions to long-lived assets as presented in the following table represent capital expenditures.

Certain prior year amounts have been reclassified to conform to fiscal 2013 presentation.

	Year Ended May 31,
(In millions)	2013			2012			2011
REVENUE
North America	$	10,387		$	8,839		$	7,579
Western Europe	4,128			4,144			3,868
Central & Eastern Europe	1,287			1,200			1,040
Greater China	2,453			2,539			2,060
Japan	791			835			773
Emerging Markets	3,718			3,411			2,737
Global Brand Divisions	117			111			96
Total NIKE Brand	22,881			21,079			18,153
Other Businesses	2,500			2,298			2,041
Corporate	(68		)	(46		)	(77		)
TOTAL NIKE CONSOLIDATED REVENUES	$	25,313		$	23,331		$	20,117
EARNINGS BEFORE INTEREST AND TAXES
North America	$	2,534		$	2,030		$	1,736
Western Europe	640			597			730
Central & Eastern Europe	259			234			244
Greater China	809			911			777
Japan	133			136			114
Emerging Markets	1,011			853			688
Global Brand Divisions	(1,396		)	(1,200		)	(971		)
Total NIKE Brand	3,990			3,561			3,318
Other Businesses	456			385			353
Corporate	(1,177		)	(917		)	(805		)
Total NIKE Consolidated Earnings Before Interest and Taxes	3,269			3,029			2,866
Interest (income) expense, net	(3		)	4			4
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	3,272		$	3,025		$	2,862
ADDITIONS TO LONG-LIVED ASSETS
North America	$	201		$	131		$	79
Western Europe	74			93			75
Central & Eastern Europe	22			20			5
Greater China	52			38			43
Japan	6			14			9
Emerging Markets	49			27			21
Global Brand Divisions	216			131			44
Total NIKE Brand	620			454			276
Other Businesses	29			24			27
Corporate	131			109			118
TOTAL ADDITIONS TO LONG-LIVED ASSETS	$	780		$	587		$	421
DEPRECIATION
North America	$	85		$	78		$	70
Western Europe	68			62			52
Central & Eastern Europe	9			6			4
Greater China	34			25			19
Japan	21			23			22
Emerging Markets	20			15			14
Global Brand Divisions	83			53			39
Total NIKE Brand	320			262			220
Other Businesses	24			25			24
Corporate	74			66			71
TOTAL DEPRECIATION	$	418		$	353		$	315

	As of May 31,
(In millions)	2013		2012
ACCOUNTS RECEIVABLE, NET
North America	$	1,214	$	1,149
Western Europe	356		420
Central & Eastern Europe	301		261
Greater China	52		221
Japan	133		152
Emerging Markets	546		476
Global Brand Divisions	28		30
Total NIKE Brand	2,630		2,709
Other Businesses	436		401
Corporate	51		22
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,117	$	3,132
INVENTORIES
North America	$	1,435	$	1,272
Western Europe	539		488
Central & Eastern Europe	207		180
Greater China	204		217
Japan	60		83
Emerging Markets	555		521
Global Brand Divisions	32		35
Total NIKE Brand	3,032		2,796
Other Businesses	400		384
Corporate	2		42
TOTAL INVENTORIES	$	3,434	$	3,222
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	406	$	378
Western Europe	326		314
Central & Eastern Europe	44		30
Greater China	213		191
Japan	269		359
Emerging Markets	89		59
Global Brand Divisions	353		205
Total NIKE Brand	1,700		1,536
Other Businesses	77		76
Corporate	675		597
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,452	$	2,209

Revenues by Major Product Lines. Revenues to external customers for NIKE Brand products are attributable to sales of footwear, apparel and equipment. Other revenues to external customers primarily include external sales by Converse, Hurley, and NIKE Golf.

	Year Ended May 31,
(In millions)	2013		2012		2011
Footwear	$	14,539	$	13,428	$	11,519
Apparel	6,820		6,336		5,516
Equipment	1,405		1,204		1,022
Other	2,549		2,363		2,060
TOTAL NIKE CONSOLIDATED REVENUES	$	25,313	$	23,331	$	20,117

Revenues and Long-Lived Assets by Geographic Area

Geographical area information is similar to what is reflected above under operating segments with the exception of the Other activity, which has been allocated to the geographical areas based on the location where the sales originated. Revenues derived in the United States were $11,385 million, $9,793 million, and $8,467 million for the years ended May 31, 2013, 2012, and 2011, respectively. The Company’s largest concentrations of long-lived assets primarily consist of the Company’s world headquarters and distribution facilities in the United States and distribution facilities in Japan, Belgium and China. Long-lived assets attributable to operations in the United States, which are primarily composed of net property, plant & equipment, were $1,424 million, $1,204 million, and $1,056 million at May 31, 2013, 2012, and 2011, respectively. Long-lived assets attributable to operations in Japan were $270 million, $360 million, and $361 million at May 31, 2013, 2012, and 2011, respectively. Long-lived assets attributable to operations in Belgium were $157 million, $164 million, and $182 million at May 31, 2013, 2012, and 2011, respectively. Long-lived assets attributable to operations in China were $212 million, $188 million, and $175 million at May 31, 2013, 2012, and 2011, respectively.

Major Customers

No customer accounted for 10% or more of the Company’s net revenues during the years ended May 31, 2013, 2012, and 2011.