Operating Segments

9 Months Ended

Feb. 28, 2015

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, net, 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 February 28,						Nine Months Ended February 28,
(In millions)	2015			2014			2015			2014
REVENUES
North America	$	3,254		$	3,069		$	10,008		$	9,005
Western Europe	1,416			1,292			4,442			3,667
Central & Eastern Europe	319			356			1,057			1,017
Greater China	801			697			2,238			1,900
Japan	166			177			525			545
Emerging Markets	955			937			2,964			2,869
Global Brand Divisions	28			26			85			89
Total NIKE Brand	6,939			6,554			21,319			19,092
Converse	538			420			1,547			1,274
Corporate	(17		)	(2		)	(44		)	8
TOTAL NIKE CONSOLIDATED REVENUES	$	7,460		$	6,972		$	22,822		$	20,374
EARNINGS BEFORE INTEREST AND TAXES
North America	$	830		$	729		$	2,585		$	2,189
Western Europe	335			275			1,000			663
Central & Eastern Europe	51			79			176			208
Greater China	251			234			727			601
Japan	22			21			62			92
Emerging Markets	234			228			626			681
Global Brand Divisions	(552		)	(528		)	(1,637		)	(1,444		)
Total NIKE Brand	1,171			1,038			3,539			2,990
Converse	163			133			437			402
Corporate	(282		)	(282		)	(799		)	(735		)
Total NIKE Consolidated Earnings Before Interest and Taxes	1,052			889			3,177			2,657
Interest expense (income), net	6			9			24			25
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	1,046		$	880		$	3,153		$	2,632

	As of February 28,		As of May 31,
(In millions)	2015		2014
ACCOUNTS RECEIVABLE, NET
North America	$	1,546	$	1,505
Western Europe	391		341
Central & Eastern Europe	220		280
Greater China	98		68
Japan	95		162
Emerging Markets	551		819
Global Brand Divisions	90		71
Total NIKE Brand	2,991		3,246
Converse	290		171
Corporate	13		17
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,294	$	3,434
INVENTORIES
North America	$	2,146	$	1,758
Western Europe	681		711
Central & Eastern Europe	149		271
Greater China	246		221
Japan	123		94
Emerging Markets	571		633
Global Brand Divisions	26		18
Total NIKE Brand	3,942		3,706
Converse	219		261
Corporate	85		(20		)
TOTAL INVENTORIES	$	4,246	$	3,947
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	598	$	545
Western Europe	411		384
Central & Eastern Europe	42		51
Greater China	240		232
Japan	213		258
Emerging Markets	102		115
Global Brand Divisions	500		537
Total NIKE Brand	2,106		2,122
Converse	93		70
Corporate	663		642
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,862	$	2,834