Operating Segments

3 Months Ended

Aug. 31, 2015

Segment Reporting [Abstract]

Operating Segments

NOTE 11 — 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.

Each NIKE Brand geographic segment operates predominantly in one industry: the design, development and worldwide 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, and include results for the NIKE, Jordan and Hurley brands. The Company’s NIKE Brand Direct to Consumer operations are managed within each geographic operating segment. Converse is also a reportable segment for the Company 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 and demand creation, operating overhead, and product creation and design expenses that are centrally managed for the NIKE Brand.

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, benefit and compensation programs, including stock-based compensation; and certain foreign currency gains and losses, including certain hedge gains and losses.

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 2016 presentation.

	Three Months Ended August 31,
(In millions)	2015			2014
REVENUES
North America	$	3,799		$	3,513
Western Europe	1,641			1,713
Central & Eastern Europe	401			393
Greater China	886			679
Japan	179			160
Emerging Markets	966			934
Global Brand Divisions	26			29
Total NIKE Brand	7,898			7,421
Converse	555			575
Corporate	(39		)	(14		)
TOTAL NIKE CONSOLIDATED REVENUES	$	8,414		$	7,982
EARNINGS BEFORE INTEREST AND TAXES
North America	$	1,042		$	970
Western Europe	485			404
Central & Eastern Europe	98			69
Greater China	330			218
Japan	36			11
Emerging Markets	258			156
Global Brand Divisions	(624		)	(534		)
Total NIKE Brand	1,625			1,294
Converse	147			186
Corporate	(323		)	(242		)
Total NIKE Consolidated Earnings Before Interest and Taxes	1,449			1,238
Interest expense (income), net	4			9
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	1,445		$	1,229

	As of August 31,		As of May 31,
(In millions)	2015		2015
ACCOUNTS RECEIVABLE, NET
North America	$	1,570	$	1,737
Western Europe	499		344
Central & Eastern Europe	249		242
Greater China	76		84
Japan	79		134
Emerging Markets	431		461
Global Brand Divisions	79		88
Total NIKE Brand	2,983		3,090
Converse	288		258
Corporate	17		10
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,288	$	3,358
INVENTORIES
North America	$	2,286	$	2,207
Western Europe	672		699
Central & Eastern Europe	139		169
Greater China	332		249
Japan	106		94
Emerging Markets	507		528
Global Brand Divisions	37		32
Total NIKE Brand	4,079		3,978
Converse	223		237
Corporate	112		122
TOTAL INVENTORIES	$	4,414	$	4,337
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	643	$	632
Western Europe	485		451
Central & Eastern Europe	45		47
Greater China	239		254
Japan	209		205
Emerging Markets	98		103
Global Brand Divisions	513		484
Total NIKE Brand	2,232		2,176
Converse	116		122
Corporate	764		713
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	3,112	$	3,011