Operating Segments

6 Months Ended

Nov. 30, 2020


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; Europe, Middle East & Africa (EMEA); Greater China; and Asia Pacific & Latin America (APLA), and include results for the NIKE and Jordan brands.

The Company's NIKE Direct operations are managed within each NIKE Brand geographic operating segment. Converse is also a reportable segment for the Company, and operates in one industry: the design, marketing, licensing and selling of athletic lifestyle 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 revenues represent NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. Global Brand Divisions costs represent demand creation and operating overhead expense that include product creation and design expenses centrally managed for the NIKE Brand, as well as costs associated with NIKE Direct global digital operations and enterprise technology.

Corporate consists primarily 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 (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 NOVEMBER 30,				SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2020		2019		2020		2019
REVENUES
North America	$	4,006	$	3,982	$	8,231	$	8,275
Europe, Middle East & Africa	2,958		2,537		5,868		5,310
Greater China	2,298		1,847		4,078		3,526
Asia Pacific & Latin America	1,471		1,468		2,570		2,813
Global Brand Divisions	8		10		12		16
Total NIKE Brand	10,741		9,844		20,759		19,940
Converse	476		480		1,039		1,035
Corporate	26		2		39		11
TOTAL NIKE, INC. REVENUES	$	11,243	$	10,326	$	21,837	$	20,986
EARNINGS BEFORE INTEREST AND TAXES
North America	$	1,023	$	875	$	2,325	$	1,975
Europe, Middle East & Africa	660		510		1,352		1,119
Greater China	891		694		1,579		1,363
Asia Pacific & Latin America	424		377		704		718
Global Brand Divisions	(841)		(872)		(1,694)		(1,729)
Converse	87		90		255		228
Corporate	(718)		(413)		(1,215)		(837)
Interest expense (income), net	70		12		135		27
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES	$	1,456	$	1,249	$	3,171	$	2,810


	NOVEMBER 30,		MAY 31,
(Dollars in millions)	2020		2020
ACCOUNTS RECEIVABLE, NET
North America	$	1,236	$	1,020
Europe, Middle East & Africa	1,350		712
Greater China	250		321
Asia Pacific & Latin America(1)	591		425
Global Brand Divisions	96		65
Total NIKE Brand	3,523		2,543
Converse	153		149
Corporate	37		57
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,713	$	2,749
INVENTORIES
North America	$	2,401	$	3,077
Europe, Middle East & Africa	1,589		2,070
Greater China	1,137		882
Asia Pacific & Latin America(1)	620		770
Global Brand Divisions	131		137
Total NIKE Brand	5,878		6,936
Converse	315		341
Corporate	(103)		90
TOTAL INVENTORIES	$	6,090	$	7,367


	NOVEMBER 30,		MAY 31,
(Dollars in millions)	2020		2020
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	632	$	645
Europe, Middle East & Africa	934		885
Greater China	246		214
Asia Pacific & Latin America(1)	312		296
Global Brand Divisions	866		830
Total NIKE Brand	2,990		2,870
Converse	72		80
Corporate	1,897		1,916
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	4,959	$	4,866

(1)Excludes assets held-for-sale as of November 30, 2020 and May 31, 2020. See Note 13 — Acquisitions and Divestitures for additional information.