Operating Segments

9 Months Ended

Feb. 29, 2016

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						Nine Months Ended
(In millions)	February 29, 2016			February 28, 2015			February 29, 2016			February 28, 2015
REVENUES
North America	$	3,683		$	3,254		$	11,029		$	10,008
Western Europe	1,442			1,413			4,382			4,438
Central & Eastern Europe	359			321			1,086			1,061
Greater China	982			801			2,806			2,238
Japan	205			166			589			525
Emerging Markets	879			955			2,829			2,964
Global Brand Divisions	17			29			61			85
Total NIKE Brand	7,567			6,939			22,782			21,319
Converse	489			538			1,442			1,547
Corporate	(24		)	(17		)	(92		)	(44		)
TOTAL NIKE CONSOLIDATED REVENUES	$	8,032		$	7,460		$	24,132		$	22,822
EARNINGS BEFORE INTEREST AND TAXES
North America	$	903		$	830		$	2,827		$	2,585
Western Europe	334			333			1,126			998
Central & Eastern Europe	69			52			243			178
Greater China	358			251			1,015			727
Japan	36			22			119			62
Emerging Markets	202			234			701			626
Global Brand Divisions	(625		)	(552		)	(1,874		)	(1,640		)
Total NIKE Brand	1,277			1,170			4,157			3,536
Converse	127			163			359			437
Corporate	(264		)	(281		)	(952		)	(796		)
Total NIKE Consolidated Earnings Before Interest and Taxes	1,140			1,052			3,564			3,177
Interest expense (income), net	5			6			14			24
TOTAL NIKE CONSOLIDATED INCOME BEFORE INCOME TAXES	$	1,135		$	1,046		$	3,550		$	3,153

	As of February 29,		As of May 31,
(In millions)	2016		2015
ACCOUNTS RECEIVABLE, NET
North America	$	1,717	$	1,737
Western Europe	402		344
Central & Eastern Europe	234		242
Greater China	104		84
Japan	93		134
Emerging Markets	436		461
Global Brand Divisions	77		88
Total NIKE Brand	3,063		3,090
Converse	291		258
Corporate	14		10
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,368	$	3,358
INVENTORIES
North America	$	2,308	$	2,207
Western Europe	831		699
Central & Eastern Europe	179		169
Greater China	345		249
Japan	151		94
Emerging Markets	434		528
Global Brand Divisions	31		32
Total NIKE Brand	4,279		3,978
Converse	282		237
Corporate	29		122
TOTAL INVENTORIES	$	4,590	$	4,337
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	705	$	632
Western Europe	532		451
Central & Eastern Europe	45		47
Greater China	226		254
Japan	221		205
Emerging Markets	100		103
Global Brand Divisions	505		484
Total NIKE Brand	2,334		2,176
Converse	123		122
Corporate	872		713
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	3,329	$	3,011