Operating Segments

9 Months Ended

Feb. 28, 2017

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 Unaudited Condensed 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						Nine Months Ended
(In millions)	February 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
REVENUES
North America	$	3,782		$	3,683		$	11,463		$	11,029
Western Europe	1,499			1,442			4,647			4,382
Central & Eastern Europe	362			359			1,130			1,086
Greater China	1,075			982			3,150			2,806
Japan	236			205			719			589
Emerging Markets	950			879			2,942			2,829
Global Brand Divisions	19			17			55			61
Total NIKE Brand	7,923			7,567			24,106			22,782
Converse	498			489			1,488			1,442
Corporate	11			(24		)	79			(92		)
TOTAL NIKE, INC. REVENUES	$	8,432		$	8,032		$	25,673		$	24,132
EARNINGS BEFORE INTEREST AND TAXES
North America	$	980		$	903		$	2,896		$	2,827
Western Europe	290			334			918			1,126
Central & Eastern Europe	57			69			196			243
Greater China	381			358			1,127			1,015
Japan	49			36			147			119
Emerging Markets	193			202			601			701
Global Brand Divisions	(598		)	(625		)	(1,988		)	(1,874		)
Total NIKE Brand	1,352			1,277			3,897			4,157
Converse	109			127			340			359
Corporate	(119		)	(264		)	(478		)	(952		)
Total NIKE, Inc. Earnings Before Interest and Taxes	1,342			1,140			3,759			3,564
Interest expense (income), net	19			5			41			14
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,323		$	1,135		$	3,718		$	3,550

	As of February 28,		As of May 31,
(In millions)	2017		2016
ACCOUNTS RECEIVABLE, NET
North America	$	1,860	$	1,689
Western Europe	416		378
Central & Eastern Europe	273		194
Greater China	101		74
Japan	106		129
Emerging Markets	604		409
Global Brand Divisions	92		76
Total NIKE Brand	3,452		2,949
Converse	283		270
Corporate	17		22
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,752	$	3,241
INVENTORIES
North America	$	2,127	$	2,363
Western Europe	992		929
Central & Eastern Europe	213		210
Greater China	431		375
Japan	166		146
Emerging Markets	616		478
Global Brand Divisions	68		35
Total NIKE Brand	4,613		4,536
Converse	309		306
Corporate	10		(4		)
TOTAL INVENTORIES	$	4,932	$	4,838
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	784	$	742
Western Europe	617		589
Central & Eastern Europe	46		50
Greater China	210		234
Japan	213		223
Emerging Markets	122		109
Global Brand Divisions	513		511
Total NIKE Brand	2,505		2,458
Converse	121		125
Corporate	1,167		937
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	3,793	$	3,520