Operating Segments

6 Months Ended

Nov. 30, 2015

Segment Reporting [Abstract]

Operating Segments

NOTE 12 — 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, 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 November 30,						Six Months Ended November 30,
(In millions)	2015			2014			2015			2014
REVENUES
North America	$	3,547		$	3,241		$	7,346		$	6,754
Western Europe	1,299			1,312			2,940			3,025
Central & Eastern Europe	326			347			727			740
Greater China	938			758			1,824			1,437
Japan	205			199			384			359
Emerging Markets	984			1,075			1,950			2,009
Global Brand Divisions	18			27			44			56
Total NIKE Brand	7,317			6,959			15,215			14,380
Converse	398			434			953			1,009
Corporate	(29		)	(13		)	(68		)	(27		)
TOTAL NIKE CONSOLIDATED REVENUES	$	7,686		$	7,380		$	16,100		$	15,362
EARNINGS BEFORE INTEREST AND TAXES
North America	$	882		$	785		$	1,924		$	1,755
Western Europe	307			261			792			665
Central & Eastern Europe	76			57			174			126
Greater China	327			258			657			476
Japan	47			29			83			40
Emerging Markets	241			236			499			392
Global Brand Divisions	(625		)	(554		)	(1,249		)	(1,088		)
Total NIKE Brand	1,255			1,072			2,880			2,366
Converse	85			88			232			274
Corporate	(365		)	(273		)	(688		)	(515		)
Total NIKE Consolidated Earnings Before Interest and Taxes	975			887			2,424			2,125
Interest expense (income), net	5			9			9			18
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	970		$	878		$	2,415		$	2,107

	As of November 30,		As of May 31,
(In millions)	2015		2015
ACCOUNTS RECEIVABLE, NET
North America	$	1,764	$	1,737
Western Europe	372		344
Central & Eastern Europe	206		242
Greater China	116		84
Japan	102		134
Emerging Markets	536		461
Global Brand Divisions	87		88
Total NIKE Brand	3,183		3,090
Converse	241		258
Corporate	13		10
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,437	$	3,358
INVENTORIES
North America	$	2,389	$	2,207
Western Europe	754		699
Central & Eastern Europe	158		169
Greater China	356		249
Japan	113		94
Emerging Markets	464		528
Global Brand Divisions	35		32
Total NIKE Brand	4,269		3,978
Converse	242		237
Corporate	89		122
TOTAL INVENTORIES	$	4,600	$	4,337
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	702	$	632
Western Europe	490		451
Central & Eastern Europe	47		47
Greater China	234		254
Japan	205		205
Emerging Markets	105		103
Global Brand Divisions	510		484
Total NIKE Brand	2,293		2,176
Converse	125		122
Corporate	817		713
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	3,235	$	3,011