Document and Entity Information

6 Months Ended

Nov. 30, 2013

Jan. 2, 2014

Document Type

10-Q

Amendment Flag

false

Document Period End Date

Nov. 30, 2013

Document Fiscal Year Focus

2014

Document Fiscal Period Focus

Q2

Trading Symbol

NKE

Entity Registrant Name

NIKE INC

Entity Central Index Key

0000320187

Current Fiscal Year End Date

--05-31

Entity Well-known Seasoned Issuer

Yes

Entity Current Reporting Status

Yes

Entity Voluntary Filers

No

Entity Filer Category

Large Accelerated Filer

Entity Common Stock Shares Outstanding (In Shares)

885,484,422

Class A Convertible Common Stock

Entity Common Stock Shares Outstanding (In Shares)

177,957,876

Class B Common Stock

Entity Common Stock Shares Outstanding (In Shares)

707,526,546

Unaudited Condensed Consolidated Balance Sheets (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Current assets:

Cash and equivalents

$ 2,086

$ 3,337

Short-term investments (Note 5)

3,101

2,628

Accounts receivable, net

3,208

3,117

Inventories (Note 2)

3,695

3,434

Deferred income taxes (Note 6)

315

308

Prepaid expenses and other current assets (Notes 5 and 9)

1,202

780

Total current assets

13,607

13,604

Property, plant and equipment, net

2,645

2,452

Identifiable intangible assets, net (Note 3)

385

382

Goodwill (Note 3)

131

Deferred income taxes and other assets (Notes 5, 6, and 9)

1,052

1,015

TOTAL ASSETS

17,820

17,584

Current liabilities:

Current portion of long-term debt (Note 5)

7

57

Notes payable (Note 5)

180

121

Accounts payable

1,612

1,646

Accrued liabilities (Notes 4, 5, and 9)

2,005

1,986

Income taxes payable (Note 6)

47

98

Liabilities of discontinued operations (Note 11)

0

18

Total current liabilities

3,851

3,926

Long-term debt (Note 5)

1,201

1,210

Deferred income taxes and other liabilities (Notes 5, 6, and 9)

1,424

1,292

Commitments and contingencies (Note 13)

0

Redeemable preferred stock

0

Shareholders’ equity:

Capital in excess of stated value

5,566

5,184

Accumulated other comprehensive income (Note 10)

90

274

Retained earnings

5,685

5,695

Total shareholders’ equity

11,344

11,156

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

17,820

17,584

Class A Convertible Common Stock

Shareholders’ equity:

Common Stock

0

Class B Common Stock

Shareholders’ equity:

Common Stock

$ 3

Unaudited Condensed Consolidated Balance Sheets (Parenthetical)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Class A Convertible Common Stock

Common Stock, shares outstanding

178

Class B Common Stock

Common Stock, shares outstanding

710

716

Unaudited Condensed Consolidated Statements Of Income (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Revenues

$ 6,431

$ 5,955

$ 13,402

$ 12,429

Cost of sales

3,605

3,425

7,444

7,071

Gross profit

2,826

2,530

5,958

5,358

Demand creation expense

691

613

1,422

1,484

Operating overhead expense

1,397

1,223

2,722

2,411

Total selling and administrative expense

2,088

1,836

4,144

3,895

Interest expense (income), net

8

(1)

16

(4)

Other expense (income), net

13

(17)

41

(45)

Income before income taxes

717

712

1,757

1,512

Income tax expense (Note 6)

180

191

440

406

NET INCOME FROM CONTINUING OPERATIONS

537

521

1,317

1,106

NET LOSS FROM DISCONTINUED OPERATIONS

0

(137)

0

(155)

NET INCOME

$ 537

$ 384

$ 1,317

$ 951

Earnings per share from continuing operations:

Basic earnings per common share (in dollars per share)

$ 0.60

$ 0.58

$ 1.48

$ 1.23

Diluted earnings per common share (in dollars per share)

$ 0.59

$ 0.57

$ 1.45

$ 1.20

Earnings per share from discontinued operations:

Basic earnings per common share (in dollars per share)

$ 0.00

$ (0.15)

$ 0.00

$ (0.18)

Diluted earnings per common share (in dollars per share)

$ 0.00

$ (0.15)

$ 0.00

$ (0.16)

Dividends declared per common share (in dollars per share)

$ 0.24

$ 0.21

$ 0.45

$ 0.39

Unaudited Condensed Consolidated Statements of Comprehensive Income (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Net income

$ 537

$ 384

$ 1,317

$ 951

Other comprehensive income (loss), net of tax:

Change in net foreign currency translation adjustment

14

5

(17)

30

Change in net losses on cash flow hedges

(100)

(61)

(165)

(123)

Change in net (losses) gains on other

(1)

1

(2)

0

Change in release of cumulative translation loss related to Umbro

0

82

0

82

Total other comprehensive (loss) income, net of tax

(87)

27

(184)

(11)

TOTAL COMPREHENSIVE INCOME

$ 450

$ 411

$ 1,133

$ 940

Unaudited Condensed Consolidated Statements of Cash Flows (USD $)

In Millions, unless otherwise specified

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Cash provided by operations:

Net income

$ 1,317

$ 951

Income charges (credits) not affecting cash:

Depreciation

246

211

Deferred income taxes

23

(49)

Stock-based compensation (Note 7)

88

83

Amortization and other

54

55

Net loss on divestitures

0

107

Changes in certain working capital components and other assets and liabilities:

(Increase) decrease in accounts receivable

(89)

22

(Increase) in inventories

(280)

(41)

(Increase) in prepaid expenses and other current assets

(125)

(33)

(Decrease) in accounts payable, accrued liabilities and income taxes

(305)

(61)

Cash provided by operations

929

1,245

Cash (used) provided by investing activities:

Purchases of short-term investments

(2,759)

(1,379)

Maturities of short-term investments

1,602

672

Sales of short-term investments

517

904

Investments in reverse repurchase agreements

(100)

0

Additions to property, plant and equipment

(428)

(250)

Disposals of property, plant and equipment

1

0

Proceeds from divestitures

0

225

Increase in other assets, net of other liabilities

(10)

(12)

Cash (used) provided by investing activities

(1,177)

160

Cash used by financing activities:

Long-term debt payments, including current portion

(57)

(45)

Increase (decrease) in notes payable

66

(10)

Proceeds from exercise of stock options and other stock issuances

233

116

Excess tax benefits from share-based payment arrangements

71

14

Repurchase of common stock

(928)

(1,179)

Dividends — common and preferred

(375)

(327)

Cash used by financing activities

(990)

(1,431)

Effect of exchange rate changes

(13)

0

Net decrease in cash and equivalents

(1,251)

(26)

Cash and equivalents, beginning of period

3,337

2,317

CASH AND EQUIVALENTS, END OF PERIOD

2,086

2,291

Cash paid during the year for:

Dividends declared and not paid

$ 213

$ 188

Summary of Significant Accounting Policies

NOTE 1 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect all normal adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim period. The year-end condensed consolidated balance sheet data as of May 31, 2013 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”). The interim financial information and notes thereto should be read in conjunction with the Company’s latest Annual Report on Form 10-K. The results of operations for the three and six months ended November 30, 2013 are not necessarily indicative of results to be expected for the entire year. Certain prior year amounts have been reclassified to conform to fiscal 2014 presentation.

The Company completed the sale of Cole Haan during the third quarter ended February 28, 2013 and completed the sale of Umbro during the second quarter ended November 30, 2012. As a result, the Company reports the operating results of Cole Haan and Umbro in the net loss from discontinued operations line in the unaudited condensed consolidated statements of income for all periods presented. In addition, the liabilities associated with these businesses are reported as liabilities of discontinued operations, as appropriate, in the unaudited condensed consolidated balance sheets (refer to Note 11 — Discontinued Operations). Unless otherwise indicated, the disclosures accompanying the unaudited condensed consolidated financial statements reflect the Company’s continuing operations.

Recently Adopted Accounting Standards

In July 2013, the FASB issued an accounting standards update intended to provide guidance on the presentation of unrecognized tax benefits, reflecting the manner in which an entity would settle, at the reporting date, any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This accounting standard will be effective for the Company beginning June 1, 2014; early adoption is permitted. The Company has early adopted this guidance and the adoption did not have a material impact on the Company's consolidated financial position or results of operations.

In July 2012, the FASB issued an accounting standards update intended to simplify how an entity tests indefinite-lived intangible assets other than goodwill for impairment by providing entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary. This accounting standard update was effective for the Company beginning June 1, 2013. The adoption did not have a material impact on the Company's consolidated financial position or results of operations.

In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance required companies to present reclassification adjustments out of accumulated other comprehensive income by component in either the statement in which net income is presented or as a separate disclosure in the notes to the financial statements. This requirement was effective for the Company beginning June 1, 2013. As this guidance only amends the presentation of the components of comprehensive income the adoption did not have an impact on the Company’s consolidated financial position or results of operations.

In December 2011, the FASB issued guidance enhancing disclosure requirements surrounding the nature of an entity’s right to offset related arrangements associated with its financial instruments and derivative instruments. This new guidance requires companies to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to master netting arrangements. This new guidance was effective for the Company beginning June 1, 2013. As this guidance only requires expanded disclosures, the adoption did not have an impact on the Company's consolidated financial position or results of operations.

Inventories

NOTE 2 — Inventories

Inventory balances of $3,695 million and $3,434 million at November 30, 2013 and May 31, 2013, respectively, were substantially all finished goods.

Identifiable Intangible Assets and Goodwill

NOTE 3 — Identifiable Intangible Assets and Goodwill

The following table summarizes the Company’s identifiable intangible asset balances as of November 30, 2013 and May 31, 2013:



	As of November 30, 2013							As of May 31, 2013
(In millions)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets:
Patents	$	128	$	(38	)	$	90	$	119	$	(35	)	$	84
Trademarks	45		(36		)	9		43		(32		)	11
Other	19		(16		)	3		20		(16		)	4
TOTAL	$	192	$	(90	)	$	102	$	182	$	(83	)	$	99
Unamortized intangible assets — Trademarks						283							283
IDENTIFIABLE INTANGIBLE ASSETS, NET						$	385						$	382

Amortization expense, which is included in selling and administrative expense, was $4 million and $3 million for the three month periods ended November 30, 2013 and 2012, respectively, and $8 million and $7 million for the six month periods ended November 30, 2013 and 2012, respectively. The estimated amortization expense for intangible assets subject to amortization for the remainder of fiscal year 2014 and each of the years ending May 31, 2015 through May 31, 2018 are as follows: remainder of 2014: $6 million; 2015: $11 million; 2016: $9 million; 2017: $8 million; 2018: $7 million.

Goodwill was $131 million at November 30, 2013 and May 31, 2013, respectively; $64 million is included in the Converse segment and the remaining amounts are included in Global Brand Divisions for segment reporting purposes. There were no accumulated impairment balances for goodwill as of either period end.

Accrued Liabilities

NOTE 4 — Accrued Liabilities

Accrued liabilities included the following:



	As of November 30,		As of May 31,
(In millions)	2013		2013
Compensation and benefits, excluding taxes	$	561	$	713
Endorsement compensation	232		264
Dividends payable	213		188
Taxes other than income taxes	184		192
Advertising and marketing	129		77
Import and logistics costs	121		111
Fair value of derivatives	94		34
Other⁽¹⁾	471		407
TOTAL ACCRUED LIABILITIES	$	2,005	$	1,986


(1)	Other consists of various accrued expenses with no individual item accounting for more than 5% of the balance at November 30, 2013 and May 31, 2013.

Fair Value Measurements

NOTE 5 — Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including derivatives and available-for-sale securities. Fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. The Company uses a three-level hierarchy established by the FASB that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach).

The levels of hierarchy are described below:


•	Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.


•	Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.


•	Level 3: Unobservable inputs for which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Financial assets and liabilities are classified in their entirety based on the most conservative level of input that is significant to the fair value measurement.

Pricing vendors are utilized for certain Level 1 and Level 2 investments. These vendors either provide a quoted market price in an active market or use observable inputs without applying significant adjustments in their pricing. Observable inputs include broker quotes, interest rates and yield curves observable at commonly quoted intervals, volatilities and credit risks. The Company’s fair value processes include controls that are designed to ensure appropriate fair values are recorded. These controls include an analysis of period-over-period fluctuations and comparison to another independent pricing vendor.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of November 30, 2013 and May 31, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.



	As of November 30, 2013
	Fair Value Measurements Using						Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Balance Sheet Classification
ASSETS
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	160	$	—	$	160	Other current assets and other long-term assets
Interest rate swap contracts	—		9		—		9		Other current assets and other long-term assets
Total derivatives	—		169		—		169
Available-for-sale securities:
U.S. Treasury securities	265		—		—		265		Cash and equivalents
U.S. Agency securities	—		25		—		25		Cash and equivalents
Commercial paper and bonds	—		110		—		110		Cash and equivalents
Money market funds	—		767		—		767		Cash and equivalents
U.S. Treasury securities	1,312		—		—		1,312		Short-term investments
U.S. Agency securities	—		869		—		869		Short-term investments
Commercial paper and bonds	—		920		—		920		Short-term investments
Non-marketable preferred stock	—		—		6		6		Other long-term assets
Total available-for-sale securities	1,577		2,691		6		4,274
TOTAL ASSETS	$	1,577	$	2,860	$	6	$	4,443
LIABILITIES
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	101	$	—	$	101	Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES	$	—	$	101	$	—	$	101

(1)

The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $86 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of November 30, 2013.



	As of May 31, 2013
	Fair Value Measurements Using						Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Balance Sheet Classification
ASSETS
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	278	$	—	$	278	Other current assets and other long-term assets
Interest rate swap contracts	—		11		—		11		Other current assets and other long-term assets
Total derivatives	—		289		—		289
Available-for-sale securities:
U.S. Treasury securities	425		—		—		425		Cash and equivalents
U.S. Agency securities⁽²⁾	—		395		—		395		Cash and equivalents
Commercial paper and bonds⁽²⁾	—		660		—		660		Cash and equivalents
Money market funds	—		836		—		836		Cash and equivalents
U.S. Treasury securities	1,583		—		—		1,583		Short-term investments
U.S. Agency securities⁽²⁾	—		631		—		631		Short-term investments
Commercial paper and bonds⁽²⁾	—		414		—		414		Short-term investments
Non-marketable preferred stock	—		—		5		5		Other long-term assets
Total available-for-sale securities	2,008		2,936		5		4,949
TOTAL ASSETS	$	2,008	$	3,225	$	5	$	5,238
LIABILITIES
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	34	$	—	$	34	Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES	$	—	$	34	$	—	$	34

(1)

The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $34 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of May 31, 2013.


(2)	Amounts have been revised to reflect proper classification between U.S. Agency securities and Commercial paper and bonds.

Derivative financial instruments include foreign exchange forwards and options, embedded derivatives and interest rate swap contracts. The fair value of derivative contracts is determined using observable market inputs such as the daily market foreign currency rates, forward pricing curves, currency volatilities, currency correlations and interest rates, and considers nonperformance risk of the Company and that of its counterparties. Adjustments relating to these nonperformance risks were not material at November 30, 2013 or May 31, 2013. Refer to Note 9 — Risk Management and Derivatives for additional detail.

Available-for-sale securities comprise investments in U.S. Treasury and Agency securities, money market funds, corporate commercial paper, and bonds. These securities are valued using market prices on both active markets (Level 1) and less active markets (Level 2).

The Company’s Level 3 assets comprise investments in certain non-marketable preferred stock. These investments are valued using internally developed models with unobservable inputs. These Level 3 investments are an immaterial portion of the Company's portfolio. Changes in Level 3 investment assets were immaterial during the six months ended November 30, 2013 and the year ended May 31, 2013.

No transfers among the levels within the fair value hierarchy occurred during the six months ended November 30, 2013 or the year ended May 31, 2013.

As of November 30, 2013 and May 31, 2013, the Company had no assets or liabilities that were required to be measured at fair value on a non-recurring basis.

Short-Term Investments

As of November 30, 2013 and May 31, 2013, short-term investments consisted of available-for-sale securities. As of November 30, 2013, the Company held $2,280 million of available-for-sale securities with maturity dates within one year from the purchase date and $821 million with maturity dates over one year and less than five years from the purchase date within short-term investments. As of May 31, 2013, the Company held $2,229 million of available-for-sale securities with maturity dates within one year from purchase date and $399 million with maturity dates over one year and less than five years from purchase date within short-term investments.

Short-term investments classified as available-for-sale consist of the following at fair value:



	November 30,		May 31,
(In millions)	2013		2013
Available-for-sale securities:
U.S. treasury and agencies	$	2,181	$	2,214
Commercial paper and bonds	920		414
TOTAL AVAILABLE-FOR-SALE SECURITIES	$	3,101	$	2,628

Included in interest expense (income), net was interest income related to cash and equivalents and short-term investments of $4 million and $6 million for each of the three month periods ended November 30, 2013 and 2012, respectively, and $6 million and $14 million for each of the six month periods ended November 30, 2013 and 2012, respectively.

Financial Assets and Liabilities Not Recorded at Fair Value

The Company’s long-term debt is recorded at adjusted cost, net of amortized premiums and discounts and interest rate swap fair value adjustments. The fair value of long-term debt is estimated based upon quoted prices for similar instruments (Level 2). The fair value of the Company’s long-term debt, including the current portion, was approximately $1,105 million at November 30, 2013 and $1,219 million at May 31, 2013.

The carrying amounts reflected in the consolidated balance sheets for notes payable approximate fair value.

At November 30, 2013 the Company had $100 million of outstanding receivables related to its investments in reverse repurchase agreements recorded within other current assets on the consolidated balance sheets. The carrying amount of these agreements approximates their fair value based upon observable inputs other than quoted prices (Level 2). The reverse repurchase agreements are fully collateralized.

Income Taxes

NOTE 6 — Income Taxes

The effective tax rate on continuing operations was 25.0% and 26.9% for the six month periods ended November 30, 2013 and 2012, respectively. The decrease in the Company’s effective tax rate was due to an increase in the amount of earnings from lower tax rate jurisdictions.

As of November 30, 2013, total gross unrecognized tax benefits, excluding related interest and penalties, were $513 million, $337 million of which would affect the Company’s effective tax rate if recognized in future periods. As of May 31, 2013, total gross unrecognized tax benefits, excluding related interest and penalties, were $447 million. The liability for payment of interest and penalties increased $19 million during the six months ended November 30, 2013. As of November 30, 2013, accrued interest and penalties related to uncertain tax positions was $131 million (excluding federal benefit).

The Company is subject to taxation primarily in the U.S., China, the Netherlands, and Brazil, as well as various state and other foreign jurisdictions. The Company has concluded substantially all U.S. federal income tax matters through fiscal 2010. The Company is currently under audit by the Internal Revenue Service for the 2011 through 2013 tax years, including the validation of foreign tax credits taken. Many matters are at an advanced stage in the examination process, the most significant of which includes the negotiation of a U.S. Unilateral Advanced Pricing Agreement that covers intercompany transfer pricing positions for fiscal years May 31, 2011 through May 31, 2015. The Company’s major foreign jurisdictions, China, the Netherlands and Brazil, have concluded substantially all income tax matters through calendar 2005, fiscal 2008 and calendar 2007, respectively. Although the timing of resolution of audits is not certain, the Company evaluates all domestic and foreign audit issues in the aggregate, along with the expiration of applicable statutes of limitations, and estimates that it is reasonably possible the total gross unrecognized tax benefits could decrease by up to $21 million within the next 12 months.

Stock-Based Compensation

NOTE 7 — Stock-Based Compensation

In 1990, the Board of Directors adopted, and the shareholders approved, the NIKE, Inc. 1990 Stock Incentive Plan (the “1990 Plan”). The 1990 Plan provides for the issuance of up to 326 million previously unissued shares of Class B Common Stock in connection with stock options and other awards granted under the 1990 Plan. The 1990 Plan authorizes the grant of non-statutory stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, and performance-based awards. The exercise price for stock options and stock appreciation rights may not be less than the fair market value of the underlying shares on the date of grant. A committee of the Board of Directors administers the 1990 Plan. The committee has the authority to determine the employees to whom awards will be made, the amount of the awards, and the other terms and conditions of the awards. Substantially all stock option grants outstanding under the 1990 Plan were granted in the first quarter of each fiscal year, vest ratably over four years, and expire 10 years from the date of grant.

In addition to the 1990 Plan, the Company gives employees the right to purchase shares at a discount to the market price under employee stock purchase plans (“ESPPs”). Employees are eligible to participate through payroll deductions of up to 10% of their compensation. At the end of each six-month offering period, shares are purchased by the participants at 85% of the lower of the fair market value at the beginning or the end of the offering period.

The Company accounts for stock-based compensation by estimating the fair value of options granted under the 1990 Plan and employees’ purchase rights under the ESPPs using the Black-Scholes option pricing model. The Company recognizes this fair value as operating overhead expense over the vesting period using the straight-line method.

The following table summarizes the Company’s total stock-based compensation expense recognized in selling and administrative expense:



	Three Months Ended November 30,				Six Months Ended November 30,
(In millions)	2013		2012		2013		2012
Stock options⁽¹⁾	$	32	$	32	$	61	$	58
ESPPs	6		6		11		10
Restricted stock	8		8		16		15
TOTAL STOCK-BASED COMPENSATION EXPENSE	$	46	$	46	$	88	$	83

(1)

Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees eligible for accelerated stock option vesting upon retirement. Accelerated stock option expense for the three month periods ended November 30, 2013 and 2012 was $4 million and $6 million, respectively, and for the six month periods ended November 30, 2013 and 2012 was $8 million and $10 million, respectively.

As of November 30, 2013, the Company had $242 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized as selling and administrative expense over a weighted average remaining period of 2.6 years.

The weighted average fair value per share of the options granted during the six month periods ended November 30, 2013 and 2012, as computed using the Black-Scholes pricing model, was $14.88 and $12.71, respectively. The weighted average assumptions used to estimate these fair values are as follows:



	Six Months Ended November 30,
	2013		2012
Dividend yield	1.3	%	1.5	%
Expected volatility	27.9	%	35.0	%
Weighted average expected life (in years)	5.3		5.3
Risk-free interest rate	1.3	%	0.6	%

The Company estimates the expected volatility based on the implied volatility in market traded options on the Company’s common stock with a term greater than one year, along with other factors. The weighted average expected life of options is based on an analysis of historical and expected future exercise patterns. The interest rate is based on the U.S. Treasury (constant maturity) risk-free rate in effect at the date of grant for periods corresponding with the expected term of the options.

Earnings Per Share

NOTE 8 — Earnings Per Share

The following is a reconciliation from basic earnings per share to diluted earnings per share. Options to purchase an additional 7.9 million and 27.4 million shares of common stock were outstanding for the three month periods ended November 30, 2013 and 2012, respectively, and 0.1 million and 27.4 million shares of common stock were outstanding for the six month periods ended November 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.



	Three Months Ended November 30,					Six Months Ended November 30,
(In millions, except per share data)	2013		2012			2013		2012
Determination of shares:
Weighted average common shares outstanding	888.0		897.0			888.7		901.4
Assumed conversion of dilutive stock options and awards	22.6		16.1			22.0		16.9
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	910.6		913.1			910.7		918.3

Earnings per share from continuing operations:
Basic earnings per common share	$	0.60	$	0.58		$	1.48	$	1.23
Diluted earnings per common share	$	0.59	$	0.57		$	1.45	$	1.20

Earnings per share from discontinued operations:
Basic earnings per common share	$	—	$	(0.15	)	$	—	$	(0.18	)
Diluted earnings per common share	$	—	$	(0.15	)	$	—	$	(0.16	)

Basic earnings per common share for NIKE, Inc.	$	0.60	$	0.43		$	1.48	$	1.05
Diluted earnings per common share for NIKE, Inc.	$	0.59	$	0.42		$	1.45	$	1.04

Risk Management and Derivatives

NOTE 9 — Risk Management and Derivatives

The Company is exposed to global market risks, including the effect of changes in foreign currency exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes.

The Company may elect to designate certain derivatives as hedging instruments under the accounting standards for derivatives and hedging. The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objective and strategy for undertaking hedge transactions. This process includes linking all derivatives designated as hedges to either recognized assets or liabilities or forecasted transactions.

The majority of derivatives outstanding as of November 30, 2013 are designated as cash flow or fair value hedges. All derivatives are recognized on the balance sheet at fair value and classified based on the instrument’s maturity date. The total notional amount of outstanding derivatives as of November 30, 2013 was approximately $10 billion, which primarily comprises cash flow hedges for Euro/U.S. Dollar, British Pound/Euro, and Japanese Yen/U.S. Dollar currency pairs. As of November 30, 2013, there were outstanding currency forward contracts with maturities up to 19 months.

The following table presents the fair values of derivative instruments included within the consolidated balance sheets as of November 30, 2013 and May 31, 2013:



	Asset Derivatives					Liability Derivatives
(In millions)	Balance Sheet Location	November 30, 2013		May 31, 2013		Balance Sheet Location	November 30, 2013		May 31, 2013
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	87	$	141	Accrued liabilities	$	75	$	12
Foreign exchange forwards and options	Deferred income taxes and other long-term assets	33		79		Deferred income taxes and other long-term liabilities	7		—
Interest rate swap contracts	Deferred income taxes and other long-term assets	9		11		Deferred income taxes and other long-term liabilities	—		—
Total derivatives formally designated as hedging instruments		129		231			82		12
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	40		58		Accrued liabilities	19		22
Total derivatives not designated as hedging instruments		40		58			19		22
TOTAL DERIVATIVES		$	169	$	289		$	101	$	34

The following tables present the amounts affecting the consolidated statements of income for the three and six months ended November 30, 2013 and 2012:



(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾						Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾	Three Months Ended November 30,		Six Months Ended November 30,
	2013			2013				2013		2013
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(16	)	$	(19	)	Revenue	$	7	$	21
Foreign exchange forwards and options	(64		)	(88		)	Cost of sales	7		23
Foreign exchange forwards and options	2			3			Selling and administrative expense	—		—
Foreign exchange forwards and options	(16		)	(23		)	Other expense (income), net	6		11
Total designated cash flow hedges	(94		)	(127		)		20		55
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	—		$	—		Other expense (income), net	$	—	$	—


(1)	For the three and six months ended November 30, 2013, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.



(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾						Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾	Three Months Ended November 30,			Six Months Ended November 30,
	2012			2012				2012			2012
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	13		$	4		Revenue	$	(11	)	$	(25	)
Foreign exchange forwards and options	(19		)	(43		)	Cost of sales	51			83
Foreign exchange forwards and options	(3		)	(2		)	Selling and administrative expense	1			1
Foreign exchange forwards and options	(2		)	(10		)	Other expense (income), net	5			13
Total designated cash flow hedges	(11		)	(51		)		46			72
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	—		$	—		Other expense (income), net	$	—		$	—


(1)	For the three and six months ended November 30, 2012, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.



	Amount of Gain (Loss) Recognized in Income on Derivatives												Location of Gain (Loss) Recognized in Income on Derivatives
	Three Months Ended November 30,						Six Months Ended November 30,
(In millions)	2013			2012			2013			2012
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	1		$	1		$	2		$	3		Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	(24		)	(22		)	(39		)	(51		)	Other expense (income), net
Embedded derivatives	$	(1	)	$	(3	)	$	(1	)	$	(3	)	Other expense (income), net


(1)	All interest rate swap agreements meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swap agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Refer to “Fair Value Hedges” in this note for additional detail.

Refer to Note 4 — Accrued Liabilities for derivative instruments recorded in accrued liabilities, and Note 5 — Fair Value Measurements for a description of how the above financial instruments are valued.

Cash Flow Hedges

The purpose of the Company’s foreign currency hedging activities is to protect the Company from the risk that the eventual cash flows resulting from transactions in foreign currencies will be adversely affected by changes in exchange rates. Foreign currency exposures that the Company may elect to hedge in this manner include product cost exposures, non-functional currency denominated external and intercompany revenues, selling and administrative expenses, investments in U.S. Dollar-denominated available-for-sale debt securities, and certain other intercompany transactions.

Product cost exposures are primarily generated through non-functional currency denominated product purchases and the foreign currency adjustment program described below. NIKE entities primarily purchase products in two ways: (1) Certain NIKE entities purchase product from the NIKE Trading Company (“NTC”), a wholly-owned sourcing hub that buys NIKE branded products from third party factories, predominantly in U.S. Dollars. The NTC, whose functional currency is the U.S. Dollar, then sells the products to NIKE entities in their respective functional currencies. When the NTC sells to a NIKE entity with a different functional currency, the result is a foreign currency exposure for the NTC. (2) Other NIKE entities purchase product directly from third party factories in U.S. Dollars. These purchases generate a foreign currency exposure for those NIKE entities with a functional currency other than the U.S. Dollar.

In January 2012, the Company implemented a foreign currency adjustment program with certain factories. The program is designed to more effectively manage foreign currency risk by assuming certain of the factories’ foreign currency exposures, some of which are natural offsets to our existing foreign currency exposures. Under this program, the Company’s payments to these factories are adjusted for rate fluctuations in the basket of currencies (“factory currency exposure index”) in which the labor, materials, and overhead costs incurred by the factories in the production of NIKE branded products (“factory input costs”) are denominated. For the portion of the indices denominated in the local or functional currency of the factory, the Company may elect to place formally designated cash flow hedges. For all currencies within the indices, excluding the U.S. Dollar and the local or functional currency of the factory, an embedded derivative contract is created upon the factory’s acceptance of NIKE’s purchase order. Embedded derivative contracts are separated from the related purchase order and their accounting treatment is described further below.

The Company’s policy permits the utilization of derivatives to reduce its foreign currency exposures where internal netting or other strategies cannot be effectively employed. Hedged transactions are denominated primarily in Euros, British Pounds, and Japanese Yen. The Company may enter into hedge contracts typically starting up to 12 to 18 months in advance of the forecasted transaction and may place incremental hedges for up to 100% of the exposure by the time the forecasted transaction occurs.

All changes in fair value of derivatives designated as cash flow hedges, excluding any ineffective portion, are recorded in other comprehensive income until net income is affected by the variability of cash flows of the hedged transaction. In most cases, amounts recorded in other comprehensive income will be released to net income some time after the maturity of the related derivative. Effective hedge results are classified within the consolidated statements of income in the same manner as the underlying exposure, with the results of hedges of non-functional currency denominated revenues and product cost exposures, excluding embedded derivatives as described below, recorded in revenues or cost of sales, when the underlying hedged transaction affects consolidated net income. Results of hedges of selling and administrative expense are recorded together with those costs when the related expense is recorded. Results of hedges of anticipated purchases and sales of U.S. Dollar-denominated available-for-sale securities are recorded in other expense (income), net when the securities are sold. Results of hedges of certain anticipated intercompany transactions are recorded in other expense (income), net when the transaction occurs. The Company classifies the cash flows at settlement from these designated cash flow hedge derivatives in the same category as the cash flows from the related hedged items, generally within the cash provided by operations component of the cash flow statement.

Premiums paid on options are initially recorded as deferred charges. The Company assesses the effectiveness of options based on the total cash flows method and records total changes in the options’ fair value to other comprehensive income to the degree they are effective.

The Company formally assesses, both at a hedge’s inception and on an ongoing basis, whether the derivatives that are used in the hedging transaction have been highly effective in offsetting changes in the cash flows of hedged items and whether those derivatives may be expected to remain highly effective in future periods. Effectiveness for cash flow hedges is assessed based on forward rates. Ineffectiveness was not material for the three and six months ended November 30, 2013 and 2012.

The Company discontinues hedge accounting prospectively when (1) it determines that the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item (including hedged items such as firm commitments or forecasted transactions); (2) the derivative expires or is sold, terminated, or exercised; (3) it is no longer probable that the forecasted transaction will occur; or (4) management determines that designating the derivative as a hedging instrument is no longer appropriate.

When the Company discontinues hedge accounting because it is no longer probable that the forecasted transaction will occur in the originally expected period, but is expected to occur within an additional two-month period of time thereafter, the gain or loss on the derivative remains in accumulated other comprehensive income and is reclassified to net income when the forecasted transaction affects consolidated net income. However, if it is probable that a forecasted transaction will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses that were accumulated in other comprehensive income will be recognized immediately in other expense (income), net. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company will carry the derivative at its fair value on the balance sheet, recognizing future changes in the fair value in other expense (income), net. For the three and six months ended November 30, 2013 and 2012, the amounts recorded in other expense (income), net as a result of the discontinuance of cash flow hedging because the forecasted transaction was no longer probable of occurring were immaterial.

As of November 30, 2013, $40 million of deferred net gains (net of tax) on both outstanding and matured derivatives accumulated in other comprehensive income are expected to be reclassified to net income during the next 12 months concurrent with the underlying hedged transactions also being recorded in net income. Actual amounts ultimately reclassified to net income are dependent on the exchange rates in effect when derivative contracts that are currently outstanding mature. As of November 30, 2013, the maximum term over which the Company is hedging exposures to the variability of cash flows for its forecasted transactions is 19 months.

Fair Value Hedges

The Company is also exposed to the risk of changes in the fair value of certain fixed-rate debt attributable to changes in interest rates. Derivatives currently used by the Company to hedge this risk are receive-fixed, pay-variable interest rate swaps. As of November 30, 2013, all interest rate swap agreements are designated as fair value hedges of the related long-term debt and meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swap agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. The cash flows associated with the Company’s fair value hedges are periodic interest payments while the swaps are outstanding, which are reflected within the cash provided by operations component of the cash flow statement. The Company recorded no ineffectiveness from its interest rate swaps designated as fair value hedges for the three and six months ended November 30, 2013 or 2012.

Net Investment Hedges

The Company has hedged and may, in the future, hedge the risk of variability in foreign-currency-denominated net investments in wholly-owned international operations. All changes in fair value of the derivatives designated as net investment hedges, except ineffective portions, are reported in the cumulative translation adjustment component of other comprehensive income along with the foreign currency translation adjustments on those investments. The Company classifies the cash flows at settlement of its net investment hedges within the cash provided or used by investing activities component of the cash flow statement. The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from its net investment hedges for the three and six months ended November 30, 2013 or 2012.

Embedded Derivatives

As part of the foreign currency adjustment program described above, an embedded derivative contract is created upon the factory’s acceptance of NIKE’s purchase order for currencies within the factory currency exposure indices that are neither the U.S. Dollar nor the local or functional currency of the factory. Embedded derivative contracts are treated as foreign currency forward contracts that are bifurcated from the related purchase order and recorded at fair value as a derivative asset or liability on the balance sheet with their corresponding change in fair value recognized in other expense (income), net from the date a purchase order is accepted by a factory through the date the purchase price is no longer subject to foreign currency fluctuations. At November 30, 2013, the notional amount of embedded derivatives was approximately $112 million.

Undesignated Derivative Instruments

The Company may elect to enter into foreign exchange forwards to mitigate the change in fair value of specific assets and liabilities on the balance sheet and/or the embedded derivative contracts explained above. These forwards are not designated as hedging instruments under the accounting standards for derivatives and hedging. Accordingly, these undesignated instruments are recorded at fair value as a derivative asset or liability on the balance sheet with their corresponding change in fair value recognized in other expense (income), net, together with the re-measurement gain or loss from the hedged balance sheet position or embedded derivative contract. The Company classifies the cash flows at settlement from undesignated instruments in the same category as the cash flows from the related hedged items, generally within the cash provided by operations component of the cash flow statement.

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to hedging instruments. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the Company’s exposure to credit risk with these institutions. This credit risk is limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. To manage this risk, the Company has established strict counterparty credit guidelines that are continually monitored.

The Company’s derivative contracts contain credit risk related contingent features designed to protect against significant deterioration in counterparties’ creditworthiness and their ultimate ability to settle outstanding derivative contracts in the normal course of business. The Company’s bilateral credit related contingent features generally require the owing entity, either the Company or the derivative counterparty, to post collateral for the portion of the fair value in excess of $50 million should the fair value of outstanding derivatives per counterparty be greater than $50 million. Additionally, a certain level of decline in credit rating of either the Company or the counterparty could also trigger collateral requirements. As of November 30, 2013, the Company was in compliance with all credit risk related contingent features and the aggregate fair value of its derivative instruments with credit risk related contingent features in a net liability position was $16 million. Accordingly, the Company was not required to post any collateral as a result of these contingent features. Further, as of November 30, 2013, those counterparties which were required to post collateral complied with such requirements. Given the considerations described above, the Company considers the impact of the risk of counterparty default to be immaterial.

Accumulated Other Comprehensive Income

NOTE 10 — Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income, net of tax, were as follows:



(in millions)	Foreign Currency Translation Adjustment⁽¹⁾		Cash Flow Hedges			Net Investment Hedges⁽¹⁾		Other			Total
Balance at August 31, 2013	$	10	$	128		$	95	$	(56	)	$	177
Other comprehensive gains (losses) before reclassifications ⁽²⁾	14		(85		)	—		(2		)	(73		)
Reclassifications to net income of previously deferred (gains) losses ⁽³⁾	—		(15		)	—		1			(14		)
Other comprehensive income (loss)	14		(100		)	—		(1		)	(87		)
Balance at November 30, 2013	$	24	$	28		$	95	$	(57	)	$	90


(1)	The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.


(2)	Net of tax benefit of $0 million, $9 million, $0 million, $0 million, respectively.


(3)	Net of tax expense of $0 million, $5 million, $0 million, $0 million, respectively.



(in millions)	Foreign Currency Translation Adjustment⁽¹⁾			Cash Flow Hedges			Net Investment Hedges⁽¹⁾		Other			Total
Balance at May 31, 2013	$	41		$	193		$	95	$	(55	)	$	274
Other comprehensive gains (losses) before reclassifications ⁽²⁾	(17		)	(120		)	—		(4		)	(141		)
Reclassifications to net income of previously deferred (gains) losses ⁽³⁾	—			(45		)	—		2			(43		)
Other comprehensive income (loss)	(17		)	(165		)	—		(2		)	(184		)
Balance at November 30, 2013	$	24		$	28		$	95	$	(57	)	$	90


(1)	The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.


(2)	Net of tax benefit of $0 million, $7 million, $0 million, $0 million, respectively.


(3)	Net of tax expense of $0 million, $10 million, $0 million, $0 million, respectively.

The following table summarizes the reclassifications from accumulated other comprehensive income to the unaudited condensed consolidated statements of income:



	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(in millions)	2013			2013
Gains (losses) on cash flow hedges:
Foreign exchange forwards and options	$	7		$	21		Revenue
Foreign exchange forwards and options	7			23			Cost of sales
Foreign exchange forwards and options	—			—			Selling and administrative expense
Foreign exchange forwards and options	6			11			Other expense (income), net
Total before tax	20			55
Tax (expense) benefit	(5		)	(10		)
Gain net of tax	$	15		$	45

Gains (losses) on other	$	(1	)	$	(2	)	Other expense (income), net
Total before tax	(1		)	(2		)
Tax (expense) benefit	—			—
(Loss) net of tax	$	(1	)	$	(2	)

Total net gain reclassified for the period	$	14		$	43

Discontinued Operations

NOTE 11 — Discontinued Operations

During the year ended May 31, 2013, the Company divested of Umbro and Cole Haan, allowing it to focus its resources on driving growth in the NIKE, Jordan, Converse, and Hurley brands.

On February 1, 2013, the Company completed the sale of Cole Haan to Apax Partners for an agreed upon purchase price of $570 million and received at closing $561 million, net of $9 million of purchase price adjustments. The transaction resulted in a gain on sale of $231 million, net of $137 million in tax expense; this gain was included in the net income (loss) from discontinued operations line item on the consolidated statements of income for the year ended May 31, 2013. There were no adjustments to these recorded amounts as of November 30, 2013. Beginning November 30, 2012, the Company classified the Cole Haan disposal group as held-for-sale and presented the results of Cole Haan's operations in the net income (loss) from discontinued operations line item on the consolidated statements of income. From this date until the sale, the assets and liabilities of Cole Haan were recorded in the assets of discontinued operations and liabilities of discontinued operations line items on the consolidated balance sheets, respectively. Previously, these amounts were reported in the Company's segment presentation as “Other Businesses.”

Under the sale agreement, the Company agreed to provide certain transition services to Cole Haan for an expected period of 3 to 9 months from the date of sale. These services are complete. The Company will also license NIKE proprietary Air and Lunar technologies to Cole Haan for a transition period. The continuing cash flows related to these items are not significant to Cole Haan and the Company will have no significant continuing involvement with Cole Haan beyond the transition services. Additionally, preexisting guarantees of certain Cole Haan lease payments remain in place after the sale; the maximum exposure under the guarantees is $38 million at November 30, 2013. The fair value of the guarantees is not material.

On November 30, 2012, the Company completed the sale of certain assets of Umbro to Iconix Brand Group (“Iconix”) for $225 million. The Umbro disposal group was classified as held-for-sale as of November 30, 2012 and the results of Umbro's operations are presented in the net loss from discontinued operations line item on the consolidated statements of income. The remaining liabilities of Umbro are recorded in the liabilities of discontinued operations line items on the consolidated balance sheets. Previously, these amounts were reported in the Company's segment presentation as “Other Businesses.” Upon meeting the held-for-sale criteria, the Company recorded a loss of $107 million, net of tax, on the sale of Umbro and the loss was included in the net income (loss) from discontinued operations line item on the consolidated statements of income for the year ended May 31, 2013. The loss on sale was calculated as the net sales price less Umbro assets of $248 million, including intangibles, goodwill, and fixed assets, other miscellaneous charges of $22 million, and the release of the associated cumulative translation adjustment of $129 million. The tax benefit on the loss was $67 million. There were no adjustments to these recorded amounts as of November 30, 2013.

Under the sale agreement, the Company provided transition services to Iconix while certain markets were transitioned to Iconix-designated licensees. These transition services are complete and the Company has wound down the remaining operations of Umbro.

Summarized results of the Company's discontinued operations are as follows:



	Three Months Ended November 30,					Six Months Ended November 30,
(In millions)	2013		2012			2013		2012
Revenues	$	—	$	186		$	—	$	381
Loss before income taxes	—		(220		)	—		(238		)
Income tax benefit	—		83			—		83
Net loss from discontinued operations	$	—	$	(137	)	$	—	$	(155	)

As of November 30, 2013 and May 31, 2013, the aggregate components of liabilities classified as discontinued operations and included in current liabilities consisted of the following:



	As of November 30,		As of May 31,
(In millions)	2013		2013
Accounts payable	$	—	$	1
Accrued liabilities	—		17
TOTAL LIABILITIES	$	—	$	18

There were no assets of discontinued operations as of November 30, 2013 and May 31, 2013.

Operating Segments

NOTE 12 — Operating Segments

The Company’s operating segments are evidence of the structure of the Company's internal organization. The Company's operating segments have changed beginning in the first quarter of fiscal 2014 to mirror the changes in the structure of the Company’s internal organization that were effective during the first quarter of fiscal 2014. The NIKE Brand segments continue to be defined by geographic regions for operations participating in NIKE Brand sales activity and also include the results of NIKE Golf and Hurley, which are now managed within the geographies. Previously, NIKE Golf and Hurley were combined with Converse and reported as "Other Businesses."

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. The Company’s NIKE Brand Direct to Consumer operations are managed within each geographic operating segment. Converse is also a reportable segment for NIKE, Inc., and operates in one industry: the design, marketing, licensing, and selling of casual sneakers, apparel, and accessories. Prior period segment information has been restated to reflect these changes.

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 represent NIKE Brand licensing businesses that are not part of a geographic operating segment, demand creation and operating overhead expenses that are centrally managed for the NIKE Brand, and costs associated with product development and supply chain operations.

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 and benefit programs, including stock-based compensation; certain foreign currency gains and losses, including certain hedge gains and losses; and other items.

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 taxes in the consolidated statements of income. Reconciling items for EBIT represent corporate expense items that are not allocated to the operating segments for management reporting.

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 Converse. These rates are set approximately nine months in advance of the future selling season 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 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 our centrally managed foreign exchange risk management program and other conversion gains and losses.

Accounts receivable, inventories and property, plant and equipment for operating segments are regularly reviewed by management and are therefore provided below.

Certain prior year amounts have been reclassified to conform to fiscal 2014 presentation.



	Three Months Ended November 30,						Six Months Ended November 30,
(In millions)	2013			2012			2013			2012
REVENUE
North America	$	2,801		$	2,564		$	5,936		$	5,430
Western Europe	1,074			908			2,375			2,084
Central & Eastern Europe	295			252			661			579
Greater China	629			582			1,203			1,159
Japan	210			240			368			437
Emerging Markets	1,030			1,074			1,932			1,971
Global Brand Divisions	31			28			63			55
Total NIKE Brand	6,070			5,648			12,538			11,715
Converse	360			316			854			734
Corporate	1			(9		)	10			(20		)
TOTAL NIKE CONSOLIDATED REVENUES	$	6,431		$	5,955		$	13,402		$	12,429
EARNINGS BEFORE INTEREST AND TAXES
North America	$	649		$	565		$	1,462		$	1,210
Western Europe	123			110			388			322
Central & Eastern Europe	48			37			129			91
Greater China	197			187			367			352
Japan	47			45			71			68
Emerging Markets	243			298			453			519
Global Brand Divisions	(462		)	(410		)	(928		)	(866		)
Total NIKE Brand	845			832			1,942			1,696
Converse	100			91			269			215
Corporate	(220		)	(212		)	(438		)	(403		)
Total NIKE Consolidated Earnings Before Interest and Taxes	725			711			1,773			1,508
Interest expense (income), net	8			(1		)	16			(4		)
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	717		$	712		$	1,757		$	1,512



	As of November 30,			As of May 31,
(In millions)	2013			2013
ACCOUNTS RECEIVABLE, NET
North America	$	1,439		$	1,459
Western Europe	327			375
Central & Eastern Europe	275			287
Greater China	89			56
Japan	148			154
Emerging Markets	707			574
Global Brand Divisions	30			29
Total NIKE Brand	3,015			2,934
Converse	168			131
Corporate	25			52
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,208		$	3,117
INVENTORIES
North America	$	1,684		$	1,581
Western Europe	582			556
Central & Eastern Europe	210			207
Greater China	279			209
Japan	88			69
Emerging Markets	634			567
Global Brand Divisions	32			31
Total NIKE Brand	3,509			3,220
Converse	193			210
Corporate	(7		)	4
TOTAL INVENTORIES	$	3,695		$	3,434
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	481		$	424
Western Europe	345			327
Central & Eastern Europe	50			44
Greater China	207			213
Japan	261			269
Emerging Markets	102			89
Global Brand Divisions	536			472
Total NIKE Brand	1,982			1,838
Converse	54			52
Corporate	609			562
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,645		$	2,452

Commitments and Contingencies

NOTE 13 — Commitments and Contingencies

At November 30, 2013, the Company had letters of credit outstanding totaling $129 million. These letters of credit were issued primarily for the purchase of inventory and guarantees of the Company’s performance under certain self-insurance and other programs.

There have been no other significant subsequent developments relating to the commitments and contingencies reported on the Company's latest Annual Report on Form 10-K.

Summary of Significant Accounting Policies (Policies)

Recently Adopted Accounting Standards

In July 2013, the FASB issued an accounting standards update intended to provide guidance on the presentation of unrecognized tax benefits, reflecting the manner in which an entity would settle, at the reporting date, any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. This accounting standard will be effective for the Company beginning June 1, 2014; early adoption is permitted. The Company has early adopted this guidance and the adoption did not have a material impact on the Company's consolidated financial position or results of operations.

In July 2012, the FASB issued an accounting standards update intended to simplify how an entity tests indefinite-lived intangible assets other than goodwill for impairment by providing entities with an option to perform a qualitative assessment to determine whether further impairment testing is necessary. This accounting standard update was effective for the Company beginning June 1, 2013. The adoption did not have a material impact on the Company's consolidated financial position or results of operations.

In June 2011, the FASB issued guidance on the presentation of comprehensive income. This guidance required companies to present reclassification adjustments out of accumulated other comprehensive income by component in either the statement in which net income is presented or as a separate disclosure in the notes to the financial statements. This requirement was effective for the Company beginning June 1, 2013. As this guidance only amends the presentation of the components of comprehensive income the adoption did not have an impact on the Company’s consolidated financial position or results of operations.

In December 2011, the FASB issued guidance enhancing disclosure requirements surrounding the nature of an entity’s right to offset related arrangements associated with its financial instruments and derivative instruments. This new guidance requires companies to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to master netting arrangements. This new guidance was effective for the Company beginning June 1, 2013. As this guidance only requires expanded disclosures, the adoption did not have an impact on the Company's consolidated financial position or results of operations.

Identifiable Intangible Assets and Goodwill (Tables)

Schedule of Intangible Assets by Major Class

The following table summarizes the Company’s identifiable intangible asset balances as of November 30, 2013 and May 31, 2013:



	As of November 30, 2013							As of May 31, 2013
(In millions)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Amortized intangible assets:
Patents	$	128	$	(38	)	$	90	$	119	$	(35	)	$	84
Trademarks	45		(36		)	9		43		(32		)	11
Other	19		(16		)	3		20		(16		)	4
TOTAL	$	192	$	(90	)	$	102	$	182	$	(83	)	$	99
Unamortized intangible assets — Trademarks						283							283
IDENTIFIABLE INTANGIBLE ASSETS, NET						$	385						$	382

Accrued Liabilities (Tables)

Schedule of Accrued Liabilities

Accrued liabilities included the following:



	As of November 30,		As of May 31,
(In millions)	2013		2013
Compensation and benefits, excluding taxes	$	561	$	713
Endorsement compensation	232		264
Dividends payable	213		188
Taxes other than income taxes	184		192
Advertising and marketing	129		77
Import and logistics costs	121		111
Fair value of derivatives	94		34
Other⁽¹⁾	471		407
TOTAL ACCRUED LIABILITIES	$	2,005	$	1,986


(1)	Other consists of various accrued expenses with no individual item accounting for more than 5% of the balance at November 30, 2013 and May 31, 2013.

Fair Value Measurements (Tables)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of November 30, 2013 and May 31, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.



	As of November 30, 2013
	Fair Value Measurements Using						Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Balance Sheet Classification
ASSETS
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	160	$	—	$	160	Other current assets and other long-term assets
Interest rate swap contracts	—		9		—		9		Other current assets and other long-term assets
Total derivatives	—		169		—		169
Available-for-sale securities:
U.S. Treasury securities	265		—		—		265		Cash and equivalents
U.S. Agency securities	—		25		—		25		Cash and equivalents
Commercial paper and bonds	—		110		—		110		Cash and equivalents
Money market funds	—		767		—		767		Cash and equivalents
U.S. Treasury securities	1,312		—		—		1,312		Short-term investments
U.S. Agency securities	—		869		—		869		Short-term investments
Commercial paper and bonds	—		920		—		920		Short-term investments
Non-marketable preferred stock	—		—		6		6		Other long-term assets
Total available-for-sale securities	1,577		2,691		6		4,274
TOTAL ASSETS	$	1,577	$	2,860	$	6	$	4,443
LIABILITIES
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	101	$	—	$	101	Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES	$	—	$	101	$	—	$	101

(1)

The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $86 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of November 30, 2013.



	As of May 31, 2013
	Fair Value Measurements Using						Assets/Liabilities at Fair Value
(In millions)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value		Balance Sheet Classification
ASSETS
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	278	$	—	$	278	Other current assets and other long-term assets
Interest rate swap contracts	—		11		—		11		Other current assets and other long-term assets
Total derivatives	—		289		—		289
Available-for-sale securities:
U.S. Treasury securities	425		—		—		425		Cash and equivalents
U.S. Agency securities⁽²⁾	—		395		—		395		Cash and equivalents
Commercial paper and bonds⁽²⁾	—		660		—		660		Cash and equivalents
Money market funds	—		836		—		836		Cash and equivalents
U.S. Treasury securities	1,583		—		—		1,583		Short-term investments
U.S. Agency securities⁽²⁾	—		631		—		631		Short-term investments
Commercial paper and bonds⁽²⁾	—		414		—		414		Short-term investments
Non-marketable preferred stock	—		—		5		5		Other long-term assets
Total available-for-sale securities	2,008		2,936		5		4,949
TOTAL ASSETS	$	2,008	$	3,225	$	5	$	5,238
LIABILITIES
Derivatives:
Foreign exchange forwards and options⁽¹⁾	$	—	$	34	$	—	$	34	Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES	$	—	$	34	$	—	$	34

(1)

The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $34 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of May 31, 2013.


(2)	Amounts have been revised to reflect proper classification between U.S. Agency securities and Commercial paper and bonds.

Available-for-sale Securities

Short-term investments classified as available-for-sale consist of the following at fair value:



	November 30,		May 31,
(In millions)	2013		2013
Available-for-sale securities:
U.S. treasury and agencies	$	2,181	$	2,214
Commercial paper and bonds	920		414
TOTAL AVAILABLE-FOR-SALE SECURITIES	$	3,101	$	2,628

Stock-Based Compensation (Tables)

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

The following table summarizes the Company’s total stock-based compensation expense recognized in selling and administrative expense:



	Three Months Ended November 30,				Six Months Ended November 30,
(In millions)	2013		2012		2013		2012
Stock options⁽¹⁾	$	32	$	32	$	61	$	58
ESPPs	6		6		11		10
Restricted stock	8		8		16		15
TOTAL STOCK-BASED COMPENSATION EXPENSE	$	46	$	46	$	88	$	83

(1)

Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees eligible for accelerated stock option vesting upon retirement. Accelerated stock option expense for the three month periods ended November 30, 2013 and 2012 was $4 million and $6 million, respectively, and for the six month periods ended November 30, 2013 and 2012 was $8 million and $10 million, respectively.

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted average assumptions used to estimate these fair values are as follows:



	Six Months Ended November 30,
	2013		2012
Dividend yield	1.3	%	1.5	%
Expected volatility	27.9	%	35.0	%
Weighted average expected life (in years)	5.3		5.3
Risk-free interest rate	1.3	%	0.6	%

Earnings Per Share (Tables)

Schedule of Earnings Per Share, Basic and Diluted

The following is a reconciliation from basic earnings per share to diluted earnings per share. Options to purchase an additional 7.9 million and 27.4 million shares of common stock were outstanding for the three month periods ended November 30, 2013 and 2012, respectively, and 0.1 million and 27.4 million shares of common stock were outstanding for the six month periods ended November 30, 2013 and 2012, respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.



	Three Months Ended November 30,					Six Months Ended November 30,
(In millions, except per share data)	2013		2012			2013		2012
Determination of shares:
Weighted average common shares outstanding	888.0		897.0			888.7		901.4
Assumed conversion of dilutive stock options and awards	22.6		16.1			22.0		16.9
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	910.6		913.1			910.7		918.3

Earnings per share from continuing operations:
Basic earnings per common share	$	0.60	$	0.58		$	1.48	$	1.23
Diluted earnings per common share	$	0.59	$	0.57		$	1.45	$	1.20

Earnings per share from discontinued operations:
Basic earnings per common share	$	—	$	(0.15	)	$	—	$	(0.18	)
Diluted earnings per common share	$	—	$	(0.15	)	$	—	$	(0.16	)

Basic earnings per common share for NIKE, Inc.	$	0.60	$	0.43		$	1.48	$	1.05
Diluted earnings per common share for NIKE, Inc.	$	0.59	$	0.42		$	1.45	$	1.04

Risk Management and Derivatives (Tables)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the fair values of derivative instruments included within the consolidated balance sheets as of November 30, 2013 and May 31, 2013:



	Asset Derivatives					Liability Derivatives
(In millions)	Balance Sheet Location	November 30, 2013		May 31, 2013		Balance Sheet Location	November 30, 2013		May 31, 2013
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	87	$	141	Accrued liabilities	$	75	$	12
Foreign exchange forwards and options	Deferred income taxes and other long-term assets	33		79		Deferred income taxes and other long-term liabilities	7		—
Interest rate swap contracts	Deferred income taxes and other long-term assets	9		11		Deferred income taxes and other long-term liabilities	—		—
Total derivatives formally designated as hedging instruments		129		231			82		12
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	40		58		Accrued liabilities	19		22
Total derivatives not designated as hedging instruments		40		58			19		22
TOTAL DERIVATIVES		$	169	$	289		$	101	$	34

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following tables present the amounts affecting the consolidated statements of income for the three and six months ended November 30, 2013 and 2012:



(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾						Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾	Three Months Ended November 30,		Six Months Ended November 30,
	2013			2013				2013		2013
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(16	)	$	(19	)	Revenue	$	7	$	21
Foreign exchange forwards and options	(64		)	(88		)	Cost of sales	7		23
Foreign exchange forwards and options	2			3			Selling and administrative expense	—		—
Foreign exchange forwards and options	(16		)	(23		)	Other expense (income), net	6		11
Total designated cash flow hedges	(94		)	(127		)		20		55
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	—		$	—		Other expense (income), net	$	—	$	—


(1)	For the three and six months ended November 30, 2013, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.



(In millions)	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾						Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾	Three Months Ended November 30,			Six Months Ended November 30,
	2012			2012				2012			2012
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	13		$	4		Revenue	$	(11	)	$	(25	)
Foreign exchange forwards and options	(19		)	(43		)	Cost of sales	51			83
Foreign exchange forwards and options	(3		)	(2		)	Selling and administrative expense	1			1
Foreign exchange forwards and options	(2		)	(10		)	Other expense (income), net	5			13
Total designated cash flow hedges	(11		)	(51		)		46			72
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	—		$	—		Other expense (income), net	$	—		$	—


(1)	For the three and six months ended November 30, 2012, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.



	Amount of Gain (Loss) Recognized in Income on Derivatives												Location of Gain (Loss) Recognized in Income on Derivatives
	Three Months Ended November 30,						Six Months Ended November 30,
(In millions)	2013			2012			2013			2012
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	1		$	1		$	2		$	3		Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	(24		)	(22		)	(39		)	(51		)	Other expense (income), net
Embedded derivatives	$	(1	)	$	(3	)	$	(1	)	$	(3	)	Other expense (income), net


(1)	All interest rate swap agreements meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swap agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Refer to “Fair Value Hedges” in this note for additional detail.

Accumulated Other Comprehensive Income (Tables)

Schedule of Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income, net of tax, were as follows:



(in millions)	Foreign Currency Translation Adjustment⁽¹⁾		Cash Flow Hedges			Net Investment Hedges⁽¹⁾		Other			Total
Balance at August 31, 2013	$	10	$	128		$	95	$	(56	)	$	177
Other comprehensive gains (losses) before reclassifications ⁽²⁾	14		(85		)	—		(2		)	(73		)
Reclassifications to net income of previously deferred (gains) losses ⁽³⁾	—		(15		)	—		1			(14		)
Other comprehensive income (loss)	14		(100		)	—		(1		)	(87		)
Balance at November 30, 2013	$	24	$	28		$	95	$	(57	)	$	90


(1)	The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.


(2)	Net of tax benefit of $0 million, $9 million, $0 million, $0 million, respectively.


(3)	Net of tax expense of $0 million, $5 million, $0 million, $0 million, respectively.



(in millions)	Foreign Currency Translation Adjustment⁽¹⁾			Cash Flow Hedges			Net Investment Hedges⁽¹⁾		Other			Total
Balance at May 31, 2013	$	41		$	193		$	95	$	(55	)	$	274
Other comprehensive gains (losses) before reclassifications ⁽²⁾	(17		)	(120		)	—		(4		)	(141		)
Reclassifications to net income of previously deferred (gains) losses ⁽³⁾	—			(45		)	—		2			(43		)
Other comprehensive income (loss)	(17		)	(165		)	—		(2		)	(184		)
Balance at November 30, 2013	$	24		$	28		$	95	$	(57	)	$	90


(1)	The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.


(2)	Net of tax benefit of $0 million, $7 million, $0 million, $0 million, respectively.


(3)	Net of tax expense of $0 million, $10 million, $0 million, $0 million, respectively.

Reclassification out of Accumulated Other Comprehensive Income

The following table summarizes the reclassifications from accumulated other comprehensive income to the unaudited condensed consolidated statements of income:



	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	Three Months Ended November 30,			Six Months Ended November 30,			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(in millions)	2013			2013
Gains (losses) on cash flow hedges:
Foreign exchange forwards and options	$	7		$	21		Revenue
Foreign exchange forwards and options	7			23			Cost of sales
Foreign exchange forwards and options	—			—			Selling and administrative expense
Foreign exchange forwards and options	6			11			Other expense (income), net
Total before tax	20			55
Tax (expense) benefit	(5		)	(10		)
Gain net of tax	$	15		$	45

Gains (losses) on other	$	(1	)	$	(2	)	Other expense (income), net
Total before tax	(1		)	(2		)
Tax (expense) benefit	—			—
(Loss) net of tax	$	(1	)	$	(2	)

Total net gain reclassified for the period	$	14		$	43

Discontinued Operations (Tables)

Summarized results from discontinued operations

Summarized results of the Company's discontinued operations are as follows:



	Three Months Ended November 30,					Six Months Ended November 30,
(In millions)	2013		2012			2013		2012
Revenues	$	—	$	186		$	—	$	381
Loss before income taxes	—		(220		)	—		(238		)
Income tax benefit	—		83			—		83
Net loss from discontinued operations	$	—	$	(137	)	$	—	$	(155	)

As of November 30, 2013 and May 31, 2013, the aggregate components of liabilities classified as discontinued operations and included in current liabilities consisted of the following:



	As of November 30,		As of May 31,
(In millions)	2013		2013
Accounts payable	$	—	$	1
Accrued liabilities	—		17
TOTAL LIABILITIES	$	—	$	18

Operating Segments (Tables)

Schedule of Segment Reporting Information, by Segment

Accounts receivable, inventories and property, plant and equipment for operating segments are regularly reviewed by management and are therefore provided below.

Certain prior year amounts have been reclassified to conform to fiscal 2014 presentation.



	Three Months Ended November 30,						Six Months Ended November 30,
(In millions)	2013			2012			2013			2012
REVENUE
North America	$	2,801		$	2,564		$	5,936		$	5,430
Western Europe	1,074			908			2,375			2,084
Central & Eastern Europe	295			252			661			579
Greater China	629			582			1,203			1,159
Japan	210			240			368			437
Emerging Markets	1,030			1,074			1,932			1,971
Global Brand Divisions	31			28			63			55
Total NIKE Brand	6,070			5,648			12,538			11,715
Converse	360			316			854			734
Corporate	1			(9		)	10			(20		)
TOTAL NIKE CONSOLIDATED REVENUES	$	6,431		$	5,955		$	13,402		$	12,429
EARNINGS BEFORE INTEREST AND TAXES
North America	$	649		$	565		$	1,462		$	1,210
Western Europe	123			110			388			322
Central & Eastern Europe	48			37			129			91
Greater China	197			187			367			352
Japan	47			45			71			68
Emerging Markets	243			298			453			519
Global Brand Divisions	(462		)	(410		)	(928		)	(866		)
Total NIKE Brand	845			832			1,942			1,696
Converse	100			91			269			215
Corporate	(220		)	(212		)	(438		)	(403		)
Total NIKE Consolidated Earnings Before Interest and Taxes	725			711			1,773			1,508
Interest expense (income), net	8			(1		)	16			(4		)
TOTAL NIKE CONSOLIDATED EARNINGS BEFORE TAXES	$	717		$	712		$	1,757		$	1,512

Reconciliation of Assets from Segment to Consolidated



	As of November 30,			As of May 31,
(In millions)	2013			2013
ACCOUNTS RECEIVABLE, NET
North America	$	1,439		$	1,459
Western Europe	327			375
Central & Eastern Europe	275			287
Greater China	89			56
Japan	148			154
Emerging Markets	707			574
Global Brand Divisions	30			29
Total NIKE Brand	3,015			2,934
Converse	168			131
Corporate	25			52
TOTAL ACCOUNTS RECEIVABLE, NET	$	3,208		$	3,117
INVENTORIES
North America	$	1,684		$	1,581
Western Europe	582			556
Central & Eastern Europe	210			207
Greater China	279			209
Japan	88			69
Emerging Markets	634			567
Global Brand Divisions	32			31
Total NIKE Brand	3,509			3,220
Converse	193			210
Corporate	(7		)	4
TOTAL INVENTORIES	$	3,695		$	3,434
PROPERTY, PLANT AND EQUIPMENT, NET
North America	$	481		$	424
Western Europe	345			327
Central & Eastern Europe	50			44
Greater China	207			213
Japan	261			269
Emerging Markets	102			89
Global Brand Divisions	536			472
Total NIKE Brand	1,982			1,838
Converse	54			52
Corporate	609			562
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET	$	2,645		$	2,452

Inventories - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Inventory Disclosure [Abstract]

Inventory balances (substantially all finished goods)

$ 3,695

$ 3,434

Identifiable Intangible Assets and Goodwill - Identifiable Intangible Asset Balances (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Goodwill and Intangible Assets Disclosure [Line Items]

Gross Carrying Amount

$ 192

$ 182

Accumulated Amortization

(90)

(83)

Net Carrying Amount

102

99

Unamortized intangible assets — Trademarks

283

Identifiable intangible assets, net

385

382

Patents

Goodwill and Intangible Assets Disclosure [Line Items]

Gross Carrying Amount

128

119

Accumulated Amortization

(38)

(35)

Net Carrying Amount

90

84

Trademarks

Goodwill and Intangible Assets Disclosure [Line Items]

Gross Carrying Amount

45

43

Accumulated Amortization

(36)

(32)

Net Carrying Amount

9

11

Other

Goodwill and Intangible Assets Disclosure [Line Items]

Gross Carrying Amount

19

20

Accumulated Amortization

(16)

Net Carrying Amount

$ 3

$ 4

Identified Intangible Assets and Goodwill - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

May 31, 2013

Goodwill and Intangible Assets Disclosure [Line Items]

Amortization expense, which is included in selling and administrative expense

$ 4

$ 3

$ 8

$ 7

Estimated amortization expense for intangible assets subject to amortization, remainder of 2014

6

Estimated amortization expense for intangible assets subject to amortization, 2015

11

Estimated amortization expense for intangible assets subject to amortization, 2016

9

Estimated amortization expense for intangible assets subject to amortization, 2017

8

Estimated amortization expense for intangible assets subject to amortization, 2018

7

Goodwill

131

Converse Segment

Goodwill and Intangible Assets Disclosure [Line Items]

Goodwill

$ 64

Accrued Liabilities (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Accrued Liabilities, Current [Abstract]

Compensation and benefits, excluding taxes

$ 561

$ 713

Endorsement compensation

232

264

Dividends payable

184

192

Taxes other than income taxes

213

188

Advertising and marketing

129

77

Import and logistics costs

121

111

Fair value of derivatives

94

34

Other

471 ¹

407 ¹

TOTAL ACCRUED LIABILITIES

$ 2,005

$ 1,986

Maximum percent of accrued liabilities to be included in Other (percent)

5.00%

[1] Other consists of various accrued expenses with no individual item accounting for more than 5% of the balance at November 30, 2013 and May 31, 2013.

Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Assets

Derivative assets

$ 169

$ 289

Fair Value, Measurements, Recurring

Assets

Derivative assets

169

289

Available-for-sale securities

4,274

4,949

Total Assets

4,443

5,238

Liabilities

Total Liabilities

101

34

Reduction in derivative assets and liabilities if netted

86

34

Fair Value, Measurements, Recurring |
U.S. Treasury securities |
Cash and equivalents

Assets

Available-for-sale securities

265

425

Fair Value, Measurements, Recurring |
U.S. Treasury securities |
Short-term investments

Assets

Available-for-sale securities

1,312

1,583

Fair Value, Measurements, Recurring |
U.S. Agency securities |
Cash and equivalents

Assets

Available-for-sale securities

25

395 ¹

Fair Value, Measurements, Recurring |
U.S. Agency securities |
Short-term investments

Assets

Available-for-sale securities

869

631 ¹

Fair Value, Measurements, Recurring |
Commercial paper and bonds |
Cash and equivalents

Assets

Available-for-sale securities

110

660 ¹

Fair Value, Measurements, Recurring |
Commercial paper and bonds |
Short-term investments

Assets

Available-for-sale securities

920

414 ¹

Fair Value, Measurements, Recurring |
Money market funds |
Cash and equivalents

Assets

Available-for-sale securities

767

836

Fair Value, Measurements, Recurring |
Non-marketable preferred stock |
Other Assets

Assets

Available-for-sale securities

6

5

Fair Value, Measurements, Recurring |
Foreign exchange forwards and options |
Other Assets

Assets

Derivative assets

160 ²

278 ³

Fair Value, Measurements, Recurring |
Foreign exchange forwards and options |
Other Liabilities

Liabilities

Derivative liabilities

101 ²

34 ³

Fair Value, Measurements, Recurring |
Interest rate swap contracts |
Other Assets

Assets

Derivative assets

9

11

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1

Assets

Derivative assets

0

Available-for-sale securities

1,577

2,008

Total Assets

1,577

2,008

Liabilities

Total Liabilities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Treasury securities |
Cash and equivalents

Assets

Available-for-sale securities

265

425

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Treasury securities |
Short-term investments

Assets

Available-for-sale securities

1,312

1,583

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Agency securities |
Cash and equivalents

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Agency securities |
Short-term investments

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Commercial paper and bonds |
Cash and equivalents

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Commercial paper and bonds |
Short-term investments

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Money market funds |
Cash and equivalents

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Non-marketable preferred stock |
Other Assets

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Foreign exchange forwards and options |
Other Assets

Assets

Derivative assets

0 ²

0 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Foreign exchange forwards and options |
Other Liabilities

Liabilities

Derivative liabilities

0 ²

0 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Interest rate swap contracts |
Other Assets

Assets

Derivative assets

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2

Assets

Derivative assets

169

289

Available-for-sale securities

2,691

2,936

Total Assets

2,860

3,225

Liabilities

Total Liabilities

101

34

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Treasury securities |
Cash and equivalents

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Treasury securities |
Short-term investments

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Agency securities |
Cash and equivalents

Assets

Available-for-sale securities

25

395 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Agency securities |
Short-term investments

Assets

Available-for-sale securities

869

631 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Commercial paper and bonds |
Cash and equivalents

Assets

Available-for-sale securities

110

660 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Commercial paper and bonds |
Short-term investments

Assets

Available-for-sale securities

920

414 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Money market funds |
Cash and equivalents

Assets

Available-for-sale securities

767

836

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Non-marketable preferred stock |
Other Assets

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Foreign exchange forwards and options |
Other Assets

Assets

Derivative assets

160 ²

278 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Foreign exchange forwards and options |
Other Liabilities

Liabilities

Derivative liabilities

101 ²

34 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Interest rate swap contracts |
Other Assets

Assets

Derivative assets

9

11

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3

Assets

Derivative assets

0

Available-for-sale securities

6

5

Total Assets

6

5

Liabilities

Total Liabilities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Treasury securities |
Cash and equivalents

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Treasury securities |
Short-term investments

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Agency securities |
Cash and equivalents

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Agency securities |
Short-term investments

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Commercial paper and bonds |
Cash and equivalents

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Commercial paper and bonds |
Short-term investments

Assets

Available-for-sale securities

0

0 ¹

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Money market funds |
Cash and equivalents

Assets

Available-for-sale securities

0

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Non-marketable preferred stock |
Other Assets

Assets

Available-for-sale securities

6

5

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Foreign exchange forwards and options |
Other Assets

Assets

Derivative assets

0 ²

0 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Foreign exchange forwards and options |
Other Liabilities

Liabilities

Derivative liabilities

0 ²

0 ³

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Interest rate swap contracts |
Other Assets

Assets

Derivative assets

$ 0

[1] Amounts have been revised to reflect proper classification between U.S. Agency securities and Commercial paper and bonds.

[2] The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $86 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of November 30, 2013.

[3] The Company’s derivative financial instruments are subject to master netting arrangements that allow for the offset of assets and liabilities in the event of default or early termination of the contract. The Company elects to record the gross assets and liabilities of its derivative financial instruments in the consolidated balance sheets. If the derivative financial instruments had been netted in the consolidated balance sheets, the asset and liability positions each would have been reduced by $34 million. No material amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of May 31, 2013.

Fair Value Measurements - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

May 31, 2013

Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]

Available-for-sale securities with maturity dates within one year from purchase date

$ 2,280

$ 2,229

Available-for-sale securities with maturity dates over one year and less than five years from purchase date

821

399

Interest income related to cash and equivalents and short-term investments

4

6

14

Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2

Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]

Fair value of long term debt

1,105

1,219

Reverse Repurchase Agreements Receivables

$ 100

Fair Value Measurements - Short-Term Investments Classified as Available-For-Sale (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Available-for-sale investments:

Available-for-sale investments

$ 3,101

$ 2,628

U.S. Treasury and Agencies

Available-for-sale investments:

Available-for-sale investments

2,181

2,214

Corporate commercial paper and bonds

Available-for-sale investments:

Available-for-sale investments

$ 920

$ 414

Income Taxes - Income before Income Taxes (Detail) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

May 31, 2013

Income Tax Disclosure [Abstract]

Effective tax rate on continuing operations (percent)

25.00%

26.90%

Total gross unrecognized tax benefits, excluding related interest and penalties

$ 513

$ 447

Total gross unrecognized tax benefits, excluding related interest and penalties, amount which would affect the Company's effective tax rate if recognized in future periods

337

Increase in liability for payment of interest and penalties

19

Accrued interest and penalties related to uncertain tax positions (excluding federal benefit)

131

Estimated decrease in total gross unrecognized tax benefits as a result of resolutions of global tax examinations and expiration of applicable statutes of limitations

$ 21

Stock Based Compensation - Additional Information (Detail) (USD $)

In Millions, except Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Common Stock and Share Based Compensation [Line Items]

Accelerated stock option expense

$ 4

$ 6

$ 8

$ 10

Stock Incentive Plan 1990 [Member] |
Common Class B

Common Stock and Share Based Compensation [Line Items]

Shares available for grant (in shares)

326,000,000

Stock options vesting period (in years)

4 years

Stock options expiration from the date of grant (in years)

10 years

Unrecognized compensation costs from stock options, net of estimated forfeitures

$ 242

Unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized as operating overhead expense over a weighted average period (in years)

2 years 7 months 6 days

Weighted average fair value per share of the options granted (in dollars per share)

$ 14.88

$ 12.71

Minimum term of market traded options for estimates of expected volatility (in years)

1 year

Employee Stock [Member] |
Common Class B

Common Stock and Share Based Compensation [Line Items]

Employee stock purchase plans, payroll deductions (percent)

10.00%

Employee stock purchase plan offering period (in months)

6 months

Shares purchased, price as percentage of lower of the fair market value (percent)

85.00%

Stock-Based Compensation - Total Stock-Based Compensation Expense (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]

Stock-based compensation expense

$ 46

$ 88

$ 83

Stock Options

Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]

Stock-based compensation expense

32 ¹

61 ¹

58 ¹

ESPPs

Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]

Stock-based compensation expense

6

11

10

Restricted stock

Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]

Stock-based compensation expense

$ 8

$ 16

$ 15

[1] Expense for stock options includes the expense associated with stock appreciation rights. Accelerated stock option expense is recorded for employees eligible for accelerated stock option vesting upon retirement. Accelerated stock option expense for the three month periods ended November 30, 2013 and 2012 was $4 million and $6 million, respectively, and for the six month periods ended November 30, 2013 and 2012 was $8 million and $10 million, respectively.

Stock-Based Compensation - Total Stock-Based Compensation Expense (Parenthetical) (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Common Stock and Stock-based Compensation [Abstract]

Accelerated stock option expense

$ 4

$ 6

$ 8

$ 10

Stock-Based Compensation - Weighted Average Assumptions Used to Estimate Fair Values (Detail) (Stock Incentive Plan 1990 [Member], Class B Common Stock)

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Stock Incentive Plan 1990 [Member] |
Class B Common Stock

Common Stock and Share Based Compensation [Line Items]

Dividend yield

1.30%

1.50%

Expected volatility

27.90%

35.00%

Weighted average expected life (in years)

5 years 3 months 18 days

Risk-free interest rate

1.30%

0.60%

Earnings Per Share - Additional Information (Detail)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Earnings Per Share [Abstract]

Anti-dilutive options not included in the computation of diluted earnings per share

7.9

27.4

0.1

27.4

Earnings Per Share - Reconciliation from Basic Earnings Per Share to Diluted Earnings Per Share (Detail) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Determination of shares:

Weighted average common shares outstanding (in shares)

888.0

897.0

888.7

901.4

Assumed conversion of dilutive stock options and awards (in shares)

22.6

16.1

22.0

16.9

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in shares)

910.6

913.1

910.7

918.3

Earnings per share from continuing operations:

Basic earnings per common share (in dollars per share)

$ 0.60

$ 0.58

$ 1.48

$ 1.23

Diluted earnings per common share (in dollars per share)

$ 0.59

$ 0.57

$ 1.45

$ 1.20

Earnings per share from discontinued operations:

Basic earnings per common share (in dollars per share)

$ 0.00

$ (0.15)

$ 0.00

$ (0.18)

Diluted earnings per common share (in dollars per share)

$ 0.00

$ (0.15)

$ 0.00

$ (0.16)

Basic earnings per common share for NIKE, Inc. (in dollars per share)

$ 0.60

$ 0.43

$ 1.48

$ 1.05

Diluted earnings per common share for NIKE, Inc. (in dollars per share)

$ 0.59

$ 0.42

$ 1.45

$ 1.04

Risk Management and Derivatives - Additional Information (Detail) (USD $)

6 Months Ended

Nov. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Line Items]

Total notional amount of outstanding derivatives

$ 10,000,000,000

Maximum term over which the Company is hedging exposures to the variability of cash flows for its forecasted and recorded transactions (in months)

19 months

Percentage of anticipated exposures hedged (percent)

100.00%

Deferred net gains (net of tax) on both outstanding and matured derivatives accumulated in other comprehensive income are expected to be reclassified to net income during the next twelve months as a result of underlying hedged transactions also being recorded in net income

40,000,000

Aggregate fair value of derivative instruments in net liability position

16,000,000

Embedded derivatives

Derivative Instruments and Hedging Activities Disclosure [Line Items]

Notional amount of embedded derivatives

112,000,000

Minimum

Derivative Instruments and Hedging Activities Disclosure [Line Items]

Typical time period that anticipated exposures are hedged against (in months)

12 months

Minimum fair value of outstanding derivative above which the credit related contingent features require the derivative party to post collateral

$ 50,000,000

Maximum

Derivative Instruments and Hedging Activities Disclosure [Line Items]

Typical time period that anticipated exposures are hedged against (in months)

18 months

Risk Management and Derivatives - FV of Derivative Instruments Included within Consolidated Balance Sheet (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Derivatives, Fair Value [Line Items]

Asset Derivatives

$ 169

$ 289

Liability Derivatives

101

34

Designated as Hedging Instrument

Derivatives, Fair Value [Line Items]

Asset Derivatives

129

231

Liability Derivatives

82

12

Designated as Hedging Instrument |
Foreign exchange forwards and options |
Prepaid expenses and other current assets

Derivatives, Fair Value [Line Items]

Asset Derivatives

87

141

Designated as Hedging Instrument |
Foreign exchange forwards and options |
Deferred income taxes and other long-term assets

Derivatives, Fair Value [Line Items]

Asset Derivatives

33

79

Designated as Hedging Instrument |
Foreign exchange forwards and options |
Accrued liabilities

Derivatives, Fair Value [Line Items]

Liability Derivatives

75

12

Designated as Hedging Instrument |
Foreign exchange forwards and options |
Deferred income taxes and other long-term liabilities

Derivatives, Fair Value [Line Items]

Liability Derivatives

7

0

Designated as Hedging Instrument |
Interest rate swap contracts |
Deferred income taxes and other long-term assets

Derivatives, Fair Value [Line Items]

Asset Derivatives

9

11

Designated as Hedging Instrument |
Interest rate swap contracts |
Deferred income taxes and other long-term liabilities

Derivatives, Fair Value [Line Items]

Liability Derivatives

0

Derivatives not designated as hedging instruments

Derivatives, Fair Value [Line Items]

Asset Derivatives

40

58

Liability Derivatives

19

22

Derivatives not designated as hedging instruments |
Foreign exchange forwards and options |
Prepaid expenses and other current assets

Derivatives, Fair Value [Line Items]

Asset Derivatives

40

58

Derivatives not designated as hedging instruments |
Foreign exchange forwards and options |
Accrued liabilities

Derivatives, Fair Value [Line Items]

Liability Derivatives

$ 19

$ 22

Risk Management and Derivatives - Amounts Affecting Consolidated Statements of Income (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Foreign exchange forwards and options |
Other (income) expense, net |
Derivatives not designated as hedging instruments

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Income on Derivatives

$ (24)

$ (22)

$ (39)

$ (51)

Embedded derivatives |
Other (income) expense, net |
Derivatives not designated as hedging instruments

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Income on Derivatives

(1)

(3)

(1)

(3)

Derivatives designated as cash flow hedges

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

(94)¹

(11)²

(127)¹

(51)²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

20 ¹

46 ²

55 ¹

72 ²

Derivatives designated as cash flow hedges |
Foreign exchange forwards and options |
Revenue

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

(16)¹

13 ²

(19)¹

4 ²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

7 ¹

(11)²

21 ¹

(25)²

Derivatives designated as cash flow hedges |
Foreign exchange forwards and options |
Cost of sales

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

(64)¹

(19)²

(88)¹

(43)²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

7 ¹

51 ²

23 ¹

83 ²

Derivatives designated as cash flow hedges |
Foreign exchange forwards and options |
Selling and administrative expense

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

2 ¹

(3)²

3 ¹

(2)²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

0 ¹

1 ²

0 ¹

1 ²

Derivatives designated as cash flow hedges |
Foreign exchange forwards and options |
Other (income) expense, net

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

(16)¹

(2)²

(23)¹

(10)²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

6 ¹

5 ²

11 ¹

13 ²

Derivatives designated as net investment hedges |
Foreign exchange forwards and options |
Other (income) expense, net

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives

0 ¹

0 ²

0 ¹

0 ²

Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income

0 ¹

0 ²

0 ¹

0 ²

Derivatives designated as fair value hedges |
Interest rate swap contracts |
Interest (income) expense, net

Derivative Instruments, Gain (Loss) [Line Items]

Amount of Gain (Loss) Recognized in Income on Derivatives

$ 1 ³

$ 2 ³

$ 3 ³

[1] For the three and six months ended November 30, 2013, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

[2] For the three and six months ended November 30, 2012, the amounts recorded in other expense (income), net as a result of hedge ineffectiveness and the discontinuance of cash flow hedges because the forecasted transactions were no longer probable of occurring were immaterial.

[3] All interest rate swap agreements meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swap agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Refer to “Fair Value Hedges” in this note for additional detail.

Accumulated Other Comprehensive Income - Changes in AOCI (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Accumulated other comprehensive income balance at the beginning of the period

$ 177

$ 274

Other comprehensive gains (losses) before reclassifications, net of tax

(73)¹

(141)¹

Reclassifications to net income of previously deferred (gains) losses, net of tax

14 ²

43 ²

Other comprehensive income (loss)

(87)

(184)

Accumulated other comprehensive income balance at the end of the period

90

Foreign Currency Translation Adjustment

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Accumulated other comprehensive income balance at the beginning of the period

10 ³

41 ³

Other comprehensive gains (losses) before reclassifications, net of tax

14 ¹ ³

(17)¹ ³

Reclassifications to net income of previously deferred (gains) losses, net of tax

0 ² ³

Other comprehensive income (loss)

14 ³

(17)³

Accumulated other comprehensive income balance at the end of the period

24 ³

Other comprehensive income, before reclassification, tax benefit (expense)

0

Reclassification from accumulated other comprehensive income, tax (benefit) expense

0

Cash Flow Hedges

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Accumulated other comprehensive income balance at the beginning of the period

128

193

Other comprehensive gains (losses) before reclassifications, net of tax

(85)¹

(120)¹

Reclassifications to net income of previously deferred (gains) losses, net of tax

15 ²

45 ²

Other comprehensive income (loss)

(100)

(165)

Accumulated other comprehensive income balance at the end of the period

28

Other comprehensive income, before reclassification, tax benefit (expense)

9

7

Reclassification from accumulated other comprehensive income, tax (benefit) expense

5

10

Net Investment Hedges

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Accumulated other comprehensive income balance at the beginning of the period

95 ³

Other comprehensive gains (losses) before reclassifications, net of tax

0 ¹ ³

Reclassifications to net income of previously deferred (gains) losses, net of tax

0 ² ³

Other comprehensive income (loss)

0 ³

Accumulated other comprehensive income balance at the end of the period

95 ³

Other comprehensive income, before reclassification, tax benefit (expense)

0

Reclassification from accumulated other comprehensive income, tax (benefit) expense

0

Other

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Accumulated other comprehensive income balance at the beginning of the period

(56)

(55)

Other comprehensive gains (losses) before reclassifications, net of tax

(2)¹

(4)¹

Reclassifications to net income of previously deferred (gains) losses, net of tax

(1)²

(2)²

Other comprehensive income (loss)

(1)

(2)

Accumulated other comprehensive income balance at the end of the period

(57)

Other comprehensive income, before reclassification, tax benefit (expense)

0

Reclassification from accumulated other comprehensive income, tax (benefit) expense

$ 0

[1] Net of tax benefit of $0 million, $7 million, $0 million, $0 million, respectively.

[2] Net of tax expense of $0 million, $10 million, $0 million, $0 million, respectively.

[3] The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to net income upon sale or upon complete or substantially complete liquidation of the respective entity.

Accumulated Other Comprehensive Income - Reclassification out of AOCI (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Reclassification out of Accumulated Other Comprehensive Income [Line Items]

Cost of sales

$ (3,605)

$ (3,425)

$ (7,444)

$ (7,071)

Selling and administrative expense

(2,088)

(1,836)

(4,144)

(3,895)

Other expense (income), net

(13)

17

(41)

45

Total before tax

717

712

1,757

1,512

Tax (expense) benefit

(180)

(191)

(440)

(406)

NET INCOME FROM CONTINUING OPERATIONS

537

521

1,317

1,106

November 30, 2013

Reclassification out of Accumulated Other Comprehensive Income [Line Items]

NET INCOME FROM CONTINUING OPERATIONS

14

43

Gain (losses) on cash flow hedges |
November 30, 2013

Reclassification out of Accumulated Other Comprehensive Income [Line Items]

Total before tax

20

55

Tax (expense) benefit

(5)

(10)

NET INCOME FROM CONTINUING OPERATIONS

15

45

Gain (losses) on cash flow hedges |
Foreign exchange forwards and options |
November 30, 2013

Reclassification out of Accumulated Other Comprehensive Income [Line Items]

Revenue

7

21

Cost of sales

7

23

Selling and administrative expense

0

Other expense (income), net

6

11

Other |
November 30, 2013

Reclassification out of Accumulated Other Comprehensive Income [Line Items]

Other expense (income), net

(1)

(2)

Total before tax

(1)

(2)

Tax (expense) benefit

0

NET INCOME FROM CONTINUING OPERATIONS

$ (1)

$ (2)

Discontinued Operations (Details) (USD $)

In Millions, unless otherwise specified

6 Months Ended

0 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Feb. 1, 2013

Cole Haan

Nov. 30, 2013

Cole Haan

Feb. 1, 2013

Cole Haan

Minimum

Feb. 1, 2013

Cole Haan

Maximum

Nov. 30, 2012

Umbro

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Agreed upon purchase price from discontinued operations

$ 570

Proceeds from divestitures

0

225

561

225

Purchase price adjustments

9

Gain (loss) on disposal of discontinued operations, net of tax

0

(107)

231

(107)

Tax (benefit) expense on sale of discontinued operations

(137)

67

Period of transition service (in months)

3 months

9 months

Lease guarantee

38

Assets, including intangibles, goodwill, and fixed assets

248

Other miscellaneous charges

22

Release of cumulative translation adjustment related to Umbro, pre-tax

$ 129

Discontinued Operations Discontinued Operations - Summarized Results (Details) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

May 31, 2013

Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]

Revenues

$ 0

$ 186

$ 0

$ 381

Loss before income taxes

0

(220)

0

(238)

Income tax benefit

0

83

0

83

Net loss from discontinued operations

0

(137)

0

(155)

Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract]

Accounts payable

0

1

Accrued liabilities

0

17

TOTAL LIABILITIES

$ 0

$ 18

Operating Segments - Information by Operating Segments (Detail) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Nov. 30, 2013

Nov. 30, 2012

Nov. 30, 2013

Nov. 30, 2012

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

$ 6,431

$ 5,955

$ 13,402

$ 12,429

Earnings Before Interest and Taxes

725

711

1,773

1,508

Interest expense (income), net

8

(1)

16

(4)

Income before income taxes

717

712

1,757

1,512

NIKE Brand

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

6,070

5,648

12,538

11,715

Earnings Before Interest and Taxes

845

832

1,942

1,696

NIKE Brand |
North America

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

2,801

2,564

5,936

5,430

Earnings Before Interest and Taxes

649

565

1,462

1,210

NIKE Brand |
Western Europe

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

1,074

908

2,375

2,084

Earnings Before Interest and Taxes

123

110

388

322

NIKE Brand |
Central & Eastern Europe

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

295

252

661

579

Earnings Before Interest and Taxes

48

37

129

91

NIKE Brand |
Greater China

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

629

582

1,203

1,159

Earnings Before Interest and Taxes

197

187

367

352

NIKE Brand |
Japan

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

210

240

368

437

Earnings Before Interest and Taxes

47

45

71

68

NIKE Brand |
Emerging Markets

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

1,030

1,074

1,932

1,971

Earnings Before Interest and Taxes

243

298

453

519

NIKE Brand |
Global Brand Divisions

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

31

28

63

55

Earnings Before Interest and Taxes

(462)

(410)

(928)

(866)

Converse

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

360

316

854

734

Earnings Before Interest and Taxes

100

91

269

215

Corporate

Segment Reporting, Revenue Reconciling Item [Line Items]

Net Revenue

1

(9)

10

(20)

Earnings Before Interest and Taxes

$ (220)

$ (212)

$ (438)

$ (403)

Operating Segments - Accounts Receivable Net Inventories and Property Plant and Equipment Net by Operating Segments (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

May 31, 2013

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

$ 3,208

$ 3,117

Inventories

3,695

3,434

Property, Plant and Equipment, net

2,645

2,452

NIKE Brand

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

3,015

2,934

Inventories

3,509

3,220

Property, Plant and Equipment, net

1,982

1,838

NIKE Brand |
North America

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

1,439

1,459

Inventories

1,684

1,581

Property, Plant and Equipment, net

481

424

NIKE Brand |
Western Europe

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

327

375

Inventories

582

556

Property, Plant and Equipment, net

345

327

NIKE Brand |
Central & Eastern Europe

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

275

287

Inventories

210

207

Property, Plant and Equipment, net

50

44

NIKE Brand |
Greater China

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

89

56

Inventories

279

209

Property, Plant and Equipment, net

207

213

NIKE Brand |
Japan

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

148

154

Inventories

88

69

Property, Plant and Equipment, net

261

269

NIKE Brand |
Emerging Markets

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

707

574

Inventories

634

567

Property, Plant and Equipment, net

102

89

NIKE Brand |
Global Brand Divisions

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

30

29

Inventories

32

31

Property, Plant and Equipment, net

536

472

Converse

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

168

131

Inventories

193

210

Property, Plant and Equipment, net

54

52

Corporate

Segment Reporting, Asset Reconciling Item [Line Items]

Accounts Receivable, net

25

52

Inventories

(7)

4

Property, Plant and Equipment, net

$ 609

$ 562

Commitments and Contingencies - Additional Information (Detail) (USD $)

In Millions, unless otherwise specified

Nov. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Letters of credit outstanding

$ 129