Operating Segments

6 Months Ended

Nov. 30, 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 and Hurley sales activity.

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; and unallocated insurance, benefit and compensation 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 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 November 30,						Six Months Ended November 30,
(In millions)	2014			2013			2014			2013
REVENUES
North America	$	3,241		$	2,801		$	6,754		$	5,936
Western Europe	1,312			1,074			3,026			2,375
Central & Eastern Europe	346			295			738			661
Greater China	758			629			1,437			1,203
Japan	199			210			359			368
Emerging Markets	1,075			1,030			2,009			1,932
Global Brand Divisions	28			31			57			63
Total NIKE Brand	6,959			6,070			14,380			12,538
Converse	434			360			1,009			854
Corporate	(13		)	1			(27		)	10
TOTAL NIKE CONSOLIDATED REVENUES	$	7,380		$	6,431		$	15,362		$	13,402
EARNINGS BEFORE INTEREST AND TAXES
North America	$	785		$	647		$	1,755		$	1,460
Western Europe	261			123			665			388
Central & Eastern Europe	57			48			125			129
Greater China	258			197			476			367
Japan	29			47			40			71
Emerging Markets	236			243			392			453
Global Brand Divisions	(552		)	(450		)	(1,085		)	(916		)
Total NIKE Brand	1,074			855			2,368			1,952
Converse	88			100			274			269
Corporate	(275		)	(233		)	(517		)	(453		)
Total NIKE Consolidated Earnings Before Interest and Taxes	887			722			2,125			1,768
Interest expense (income), net	9			8			18			16
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	878		$	714		$	2,107		$	1,752

	As of November 30,		As of May 31,
(In millions)	2014		2014
ACCOUNTS RECEIVABLE, NET
North America	$	1,571	$	1,505
Western Europe	388		341
Central & Eastern Europe	236		280
Greater China	147		68
Japan	115		162
Emerging Markets	661		819
Global Brand Divisions	93		71
Total NIKE Brand	3,211		3,246
Converse	235		171
Corporate	11		17
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,457	$	3,434
INVENTORIES
North America	$	1,902	$	1,758
Western Europe	781		711
Central & Eastern Europe	152		271
Greater China	269		221
Japan	103		94
Emerging Markets	632		633
Global Brand Divisions	25		18
Total NIKE Brand	3,864		3,706
Converse	259		261
Corporate	27		(20		)
TOTAL INVENTORIES	$	4,150	$	3,947
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	594	$	545
Western Europe	429		384
Central & Eastern Europe	48		51
Greater China	248		232
Japan	218		258
Emerging Markets	105		115
Global Brand Divisions	537		537
Total NIKE Brand	2,179		2,122
Converse	92		70
Corporate	656		642
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,927	$	2,834