Operating Segments

6 Months Ended

Nov. 30, 2016

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, 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 (DTC) 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 represents 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 Consolidated Statements of Income.

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 to Converse. These rates are set approximately nine and twelve months in advance of the future selling seasons to which they relate (specifically, for each currency, one standard rate applies to the fall and holiday selling seasons and one standard rate applies to the spring and summer selling seasons) 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 the 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.

	Three Months Ended November 30,						Six Months Ended November 30,
(In millions)	2016			2015			2016			2015
REVENUES
North America	$	3,650		$	3,547		$	7,681		$	7,346
Western Europe	1,385			1,299			3,148			2,940
Central & Eastern Europe	328			326			768			727
Greater China	1,055			938			2,075			1,824
Japan	238			205			483			384
Emerging Markets	1,047			984			1,992			1,950
Global Brand Divisions	21			18			36			44
Total NIKE Brand	7,724			7,317			16,183			15,215
Converse	416			398			990			953
Corporate	40			(29		)	68			(68		)
TOTAL NIKE, INC. REVENUES	$	8,180		$	7,686		$	17,241		$	16,100
EARNINGS BEFORE INTEREST AND TAXES
North America	$	912		$	882		$	1,916		$	1,924
Western Europe	236			307			628			792
Central & Eastern Europe	58			76			139			174
Greater China	375			327			746			657
Japan	48			47			98			83
Emerging Markets	237			241			408			499
Global Brand Divisions	(619		)	(625		)	(1,390		)	(1,249		)
Total NIKE Brand	1,247			1,255			2,545			2,880
Converse	78			85			231			232
Corporate	(196		)	(365		)	(359		)	(688		)
Total NIKE, Inc. Earnings Before Interest and Taxes	1,129			975			2,417			2,424
Interest expense (income), net	15			5			22			9
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,114		$	970		$	2,395		$	2,415

	As of November 30,		As of May 31,
(In millions)	2016		2016
ACCOUNTS RECEIVABLE, NET
North America	$	1,691	$	1,689
Western Europe	385		378
Central & Eastern Europe	205		194
Greater China	167		74
Japan	114		129
Emerging Markets	620		409
Global Brand Divisions	81		76
Total NIKE Brand	3,263		2,949
Converse	209		270
Corporate	6		22
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,478	$	3,241
INVENTORIES
North America	$	2,290	$	2,363
Western Europe	994		929
Central & Eastern Europe	207		210
Greater China	442		375
Japan	166		146
Emerging Markets	569		478
Global Brand Divisions	45		35
Total NIKE Brand	4,713		4,536
Converse	313		306
Corporate	7		(4		)
TOTAL INVENTORIES	$	5,033	$	4,838
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	755	$	742
Western Europe	573		589
Central & Eastern Europe	44		50
Greater China	212		234
Japan	212		223
Emerging Markets	117		109
Global Brand Divisions	471		511
Total NIKE Brand	2,384		2,458
Converse	120		125
Corporate	1,062		937
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	3,566	$	3,520