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Revenues Revenues | 3 Months Ended
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Aug. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenues |
Note 11 — Revenues
Nature of Revenues Revenue transactions associated with the sale of NIKE Brand footwear, apparel and equipment, as well as Converse products, comprise a single performance obligation, which consists of the sale of products to customers either through wholesale or direct to consumer channels. The Company satisfies the performance obligation and records revenues when transfer of control has passed to the customer, based on the terms of sale. A customer is considered to have control once they’re able to direct the use and receive substantially all of the benefits of the product. Transfer of control passes to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control passes to retail store customers at the time of sale and to digital commerce customers upon shipment. The transaction price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment terms for wholesale transactions depend on the country of sale or agreement with the customer, and payment is generally required within 90 days or less of shipment or receipt by the wholesale customer. Payment is due at the time of sale for retail store and digital commerce transactions. At August 31, 2018, the Company did not have any contract assets and had an immaterial amount of contract liabilities recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. Consideration for trademark licensing contracts is earned through sales-based or usage-based royalty arrangements and the associated revenues are recognized over the license period. Licensing revenues for the first quarter of fiscal 2019 were immaterial and are included in the results for the NIKE Brand geographic operating segments, Global Brand Divisions and Converse. Taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction, and are collected by the Company from a customer, are excluded from Revenues and Cost of sales in the Unaudited Condensed Consolidated Statements of Income. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost as incurred, and are included in Cost of sales. Disaggregation of Revenues The following table presents the Company’s revenues disaggregated by reportable operating segment, major product lines and by distribution channel for the three months ended August 31, 2018:
| North America |  | Europe, Middle East & Africa |  | Greater China |  | Asia Pacific & Latin America |  | Global Brand Divisions |  | Total NIKE Brand |  | Converse |  | Corporate |  | Total NIKE, Inc.
(In millions)
Revenues by: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Footwear | $ | 2,555 |  |  | $ | 1,642 |  |  | $ | 958 |  |  | $ | 881 |  |  | $ | — |  |  | $ | 6,036 |  |  | $ | 461 |  |  | $ | — |  |  | $ | 6,497 |
Apparel | 1,407 |  |  | 830 |  |  | 380 |  |  | 332 |  |  | — |  |  | 2,949 |  |  | 30 |  |  | — |  |  | 2,979 |
Equipment | 183 |  |  | 135 |  |  | 41 |  |  | 57 |  |  | — |  |  | 416 |  |  | 8 |  |  | — |  |  | 424 |
Other(1) | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | 16 |  |  | 28 |  |  | 4 |  |  | 48 |
TOTAL REVENUES | $ | 4,145 |  |  | $ | 2,607 |  |  | $ | 1,379 |  |  | $ | 1,270 |  |  | $ | 16 |  |  | $ | 9,417 |  |  | $ | 527 |  |  | $ | 4 |  |  | $ | 9,948 |
Revenues by: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales to Wholesale Customers | $ | 2,829 |  |  | $ | 1,916 |  |  | $ | 871 |  |  | $ | 934 |  |  | $ | — |  |  | $ | 6,550 |  |  | $ | 366 |  |  | $ | — |  |  | $ | 6,916 |
Sales through Direct to Consumer | 1,316 |  |  | 691 |  |  | 508 |  |  | 336 |  |  | — |  |  | 2,851 |  |  | 133 |  |  | — |  |  | 2,984 |
Other(1) | — |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | 16 |  |  | 28 |  |  | 4 |  |  | 48 |
TOTAL REVENUES | $ | 4,145 |  |  | $ | 2,607 |  |  | $ | 1,379 |  |  | $ | 1,270 |  |  | $ | 16 |  |  | $ | 9,417 |  |  | $ | 527 |  |  | $ | 4 |  |  | $ | 9,948 |
(1) | Other revenues for Global Brand Divisions and Converse are primarily attributable to licensing businesses. Corporate revenues primarily consist of foreign currency hedge gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse but managed through the Company’s central foreign exchange risk management program.
Sales-related Reserves Consideration promised in the Company’s contracts with customers includes a variable amount related to anticipated sales returns, discounts and miscellaneous claims from customers. This variable consideration is estimated and recorded as a reduction to Revenues and as Accrued liabilities at the time revenues are recognized. The estimated cost of inventory for product returns is recorded in Prepaid expenses and other current assets on the Unaudited Condensed Consolidated Balance Sheets. The provision for anticipated sales returns consists of both contractual return rights and discretionary authorized returns. Provisions for post-invoice sales discounts consist of both contractual programs and discretionary discounts that are expected to be granted at a later date. Estimates of discretionary authorized returns, discounts and claims are based on (1) historical rates, (2) specific identification of outstanding returns not yet received from customers and outstanding discounts and claims and (3) estimated returns, discounts and claims expected, but not yet finalized with customers. Actual returns, discounts and claims in any future period are inherently uncertain and thus may differ from estimates recorded. If actual or expected future returns, discounts or claims were significantly greater or lower than the reserves established, a reduction or increase to net revenues would be recorded in the period in which such determination was made. At August 31, 2018, the Company’s sales-related reserve balance, which includes returns, post-invoice sales discounts and miscellaneous claims was 1,048 million and recorded in Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. The estimated cost of inventory for expected product returns was $367 million and recorded within Prepaid expenses and other current assets on the Unaudited Condensed Consolidated Balance Sheets. At May 31, 2018, the Company’s sales-related reserve balance, which includes returns, post-invoice sales discounts and miscellaneous claims, was $675 million, net of the estimated cost of inventory for product returns, and recognized as a reduction in Accounts receivable, net on the Condensed Consolidated Balance Sheets.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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