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Operating Segments | 3 Months Ended
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Aug. 31, 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. In June 2017, NIKE, Inc. announced a new company alignment designed to allow NIKE to better serve the consumer personally, at scale. As a result of this organizational realignment, the Company’s reportable operating segments for the NIKE Brand are: North America; Europe, Middle East & Africa; Greater China; and Asia Pacific & Latin America, and include results for the NIKE, Jordan and Hurley brands. Certain prior year amounts have been reclassified to conform to fiscal 2018 presentation. This includes reclassified operating segment data to reflect the changes in the Company’s operating structure, which became effective June 1, 2017. These changes had no impact on previously reported consolidated statements of income, balance sheets, statements of cash flows or statements of shareholders’ equity. The Company’s NIKE Direct 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 August 31,
(In millions) |  | 2017 |  | 2016
REVENUES |  |  |  |
North America |  | $ | 3,924 |  |  | $ | 4,031 |
Europe, Middle East & Africa |  | 2,344 |  |  | 2,262 |
Greater China |  | 1,108 |  |  | 1,020 |
Asia Pacific & Latin America |  | 1,189 |  |  | 1,131 |
Global Brand Divisions |  | 20 |  |  | 15 |
Total NIKE Brand |  | 8,585 |  |  | 8,459 |
Converse |  | 483 |  |  | 574 |
Corporate |  | 2 |  |  | 28 |
TOTAL NIKE, INC. REVENUES |  | $ | 9,070 |  |  | $ | 9,061 |
EARNINGS BEFORE INTEREST AND TAXES |  |  |  |
North America |  | $ | 1,002 |  |  | $ | 1,004 |
Europe, Middle East & Africa |  | 451 |  |  | 485 |
Greater China |  | 394 |  |  | 371 |
Asia Pacific & Latin America |  | 260 |  |  | 209 |
Global Brand Divisions |  | (675 | ) |  | (771 | )
Total NIKE Brand |  | 1,432 |  |  | 1,298 |
Converse |  | 89 |  |  | 153 |
Corporate |  | (433 | ) |  | (163 | )
Total NIKE, Inc. Earnings Before Interest and Taxes |  | 1,088 |  |  | 1,288 |
Interest expense (income), net |  | 16 |  |  | 7 |
TOTAL NIKE, INC. INCOME BEFORE INCOME TAXES |  | $ | 1,072 |  |  | $ | 1,281 |
|  | As of August 31, |  | As of May 31,
(In millions) |  | 2017 |  | 2017
ACCOUNTS RECEIVABLE, NET |  |  |  |
North America |  | $ | 1,759 |  |  | $ | 1,798 |
Europe, Middle East & Africa |  | 972 |  |  | 690 |
Greater China |  | 112 |  |  | 102 |
Asia Pacific & Latin America |  | 696 |  |  | 693 |
Global Brand Divisions |  | 88 |  |  | 86 |
Total NIKE Brand |  | 3,627 |  |  | 3,369 |
Converse |  | 229 |  |  | 297 |
Corporate |  | 15 |  |  | 11 |
TOTAL ACCOUNTS RECEIVABLE, NET |  | $ | 3,871 |  |  | $ | 3,677 |
INVENTORIES |  |  |  |
North America |  | $ | 2,222 |  |  | $ | 2,218 |
Europe, Middle East & Africa |  | 1,359 |  |  | 1,327 |
Greater China |  | 537 |  |  | 463 |
Asia Pacific & Latin America |  | 769 |  |  | 694 |
Global Brand Divisions |  | 72 |  |  | 68 |
Total NIKE Brand |  | 4,959 |  |  | 4,770 |
Converse |  | 274 |  |  | 286 |
Corporate |  | (22 | ) |  | (1 | )
TOTAL INVENTORIES |  | $ | 5,211 |  |  | $ | 5,055 |
PROPERTY, PLANT AND EQUIPMENT, NET |  |  |  |
North America |  | $ | 827 |  |  | $ | 819 |
Europe, Middle East & Africa |  | 731 |  |  | 709 |
Greater China |  | 229 |  |  | 225 |
Asia Pacific & Latin America |  | 343 |  |  | 340 |
Global Brand Divisions |  | 543 |  |  | 533 |
Total NIKE Brand |  | 2,673 |  |  | 2,626 |
Converse |  | 122 |  |  | 125 |
Corporate |  | 1,291 |  |  | 1,238 |
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET |  | $ | 4,086 |  |  | $ | 3,989 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599 + Details
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