Operating Segments

3 Months Ended

Aug. 31, 2014

Segment Reporting [Abstract]

Operating Segments

NOTE 10 — Operating Segments

The Company’s operating segments are evidence of the structure of the Company's internal organization. The NIKE Brand segments are defined by geographic regions for operations participating in NIKE Brand sales activity and also include the results of NIKE Golf and Hurley.

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 operating segment. Converse is also a reportable segment for NIKE, Inc., and operates in one industry: the design, marketing, licensing and selling of casual sneakers, apparel and accessories.

Global Brand Divisions is included within the NIKE Brand for presentation purposes to align with the way management views the Company. Global Brand Divisions primarily represent 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.

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; and certain foreign currency 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 expense (income), net and Income tax expense in the Unaudited Condensed 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 the Company's centrally managed foreign exchange risk management program, standard foreign currency rates are assigned twice per year to each NIKE Brand entity in the Company's geographic operating segments and Converse. 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 Converse 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 the Company's centrally managed foreign exchange risk management program and other conversion gains and losses.

Accounts receivable, Inventories and Property, plant and equipment, net for operating segments are regularly reviewed by management and are therefore provided below.

Certain prior year amounts have been reclassified to conform to fiscal 2015 presentation.

	Three Months Ended August 31,
(In millions)	2014			2013
REVENUES
North America	$	3,513		$	3,135
Western Europe	1,714			1,301
Central & Eastern Europe	392			366
Greater China	679			574
Japan	160			158
Emerging Markets	934			902
Global Brand Divisions	29			32
Total NIKE Brand	7,421			6,468
Converse	575			494
Corporate	(14		)	9
TOTAL NIKE CONSOLIDATED REVENUES	$	7,982		$	6,971
EARNINGS BEFORE INTEREST AND TAXES
North America	$	970		$	813
Western Europe	404			265
Central & Eastern Europe	68			81
Greater China	218			170
Japan	11			24
Emerging Markets	156			210
Global Brand Divisions	(533		)	(466		)
Total NIKE Brand	1,294			1,097
Converse	186			169
Corporate	(242		)	(220		)
Total NIKE Consolidated Earnings Before Interest and Taxes	1,238			1,046
Interest expense (income), net	9			8
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	1,229		$	1,038

	As of August 31,			As of May 31,
(In millions)	2014			2014
ACCOUNTS RECEIVABLE, NET
North America	$	1,485		$	1,505
Western Europe	584			341
Central & Eastern Europe	286			280
Greater China	66			68
Japan	94			162
Emerging Markets	733			819
Global Brand Divisions	79			71
Total NIKE Brand	3,327			3,246
Converse	241			171
Corporate	19			17
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,587		$	3,434
INVENTORIES
North America	$	1,828		$	1,758
Western Europe	709			711
Central & Eastern Europe	192			271
Greater China	272			221
Japan	114			94
Emerging Markets	685			633
Global Brand Divisions	37			18
Total NIKE Brand	3,837			3,706
Converse	210			261
Corporate	(17		)	(20		)
TOTAL INVENTORIES	$	4,030		$	3,947
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	565		$	545
Western Europe	413			384
Central & Eastern Europe	53			51
Greater China	238			232
Japan	250			258
Emerging Markets	112			115
Global Brand Divisions	537			537
Total NIKE Brand	2,168			2,122
Converse	79			70
Corporate	648			642
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,895		$	2,834