NIKE INC, 10-K filed on 7/23/2013
Annual Report
Document and Entity Information (USD $)
12 Months Ended
May 31, 2013
Jul. 19, 2013
Nov. 30, 2012
Document Type
10-K 
 
 
Amendment Flag
false 
 
 
Document Period End Date
May 31, 2013 
 
 
Document Fiscal Year Focus
2013 
 
 
Document Fiscal Period Focus
FY 
 
 
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 Public Float (In Dollars)
 
 
$ 36,979,630,337 
Entity Common Stock Shares Outstanding (In Shares)
 
890,352,466 
 
Class A Convertible Common Stock
 
 
 
Entity Public Float (In Dollars)
 
 
2,206,464,966 
Entity Common Stock Shares Outstanding (In Shares)
 
177,957,876 
 
Class B Common Stock
 
 
 
Entity Public Float (In Dollars)
 
 
$ 34,773,165,371 
Entity Common Stock Shares Outstanding (In Shares)
 
712,394,590 
 
Consolidated Statements Of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Revenues
$ 25,313 
$ 23,331 
$ 20,117 
Cost of sales
14,279 
13,183 
10,915 
Gross profit
11,034 
10,148 
9,202 
Demand creation expense
2,745 
2,607 
2,344 
Operating overhead expense
5,035 
4,458 
4,017 
Total selling and administrative expense
7,780 
7,065 
6,361 
Interest (income) expense, net (Notes 6, 7 and 8)
(3)
4 
4 
Other (income) expense, net (Note 17)
(15)
54 
(25)
Income before income taxes
3,272 
3,025 
2,862 
Income tax expense (Note 9)
808 
756 
690 
NET INCOME FROM CONTINUING OPERATIONS
2,464 
2,269 
2,172 
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS
21 
(46)
(39)
NET INCOME
$ 2,485 
$ 2,223 
$ 2,133 
Basic earnings per common share (Notes 1 and 12)(in dollars per share)
$ 2.75 
$ 2.47 
$ 2.28 
Diluted earnings per common share (Notes 1 and 12)(in dollars per share)
$ 2.69 
$ 2.42 
$ 2.24 
Basic earnings per common share (Notes 1 and 12)(in dollars per share)
$ 0.02 
$ (0.05)
$ (0.04)
Diluted earnings per common share (Notes 1 and 12)(in dollars per share)
$ 0.02 
$ (0.05)
$ (0.04)
Dividends declared per common share (in dollars per share)
$ 0.81 
$ 0.70 
$ 0.60 
Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Net income
$ 2,485 
$ 2,223 
$ 2,133 
Other comprehensive income (loss), net of tax:
 
 
 
Foreign currency translation and other(1)
30 1
(295)1
263 1
Net gain (loss) on cash flow hedges(2)
117 2
255 2
(242)2
Net gain (loss) on net investment hedges(3)
0 3
45 3
(57)3
Reclassification to net income of previously deferred (gains) losses related to hedge derivative instruments(4)
(105)4
49 4
(84)4
Release of cumulative translation loss related to Umbro(5) (Notes 14 and 15)
83 5
0 5
0 5
Total other comprehensive income, net of tax
125 
54 
(120)
TOTAL COMPREHENSIVE INCOME
$ 2,610 
$ 2,277 
$ 2,013 
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Foreign currency translation and other, tax benefit (expense)
$ (12)
$ 0 
$ (121)
Net gain (loss) on cash flow hedges, tax benefit (expense)
(22)
(8)
66 
Net gain (loss) on net investment hedges, tax benefit (expense)
0 
0 
28 
Reclassification to net income of previously deferred net gains related to hedge derivatives, tax (benefit) expense
0 
(14)
24 
Release of cumulative translation loss related to Umbro, tax expense
$ (47)
$ 0 
$ 0 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Current assets:
 
 
Cash and equivalents
$ 3,337 
$ 2,317 
Short-term investments (Note 6)
2,628 
1,440 
Accounts receivable, net (Note 1)
3,117 
3,132 
Inventories (Notes 1 and 2)
3,434 
3,222 
Deferred income taxes (Note 9)
308 
262 
Prepaid expenses and other current assets (Notes 6 and 17)
802 
857 
Assets of discontinued operations (Note 15)
0 
615 
Total current assets
13,626 
11,845 
Property, plant and equipment, net (Note 3)
2,452 
2,209 
Identifiable intangible assets, net (Note 4)
382 
370 
Goodwill (Note 4)
131 
131 
Deferred income taxes and other assets (Notes 6, 9 and 17)
993 
910 
TOTAL ASSETS
17,584 
15,465 
Current liabilities:
 
 
Current portion of long-term debt (Note 8)
57 
49 
Notes payable (Note 7)
121 
108 
Accounts payable (Note 7)
1,646 
1,549 
Accrued liabilities (Notes 5, 6 and 17)
1,986 
1,941 
Income taxes payable (Note 9)
98 
65 
Liabilities of discontinued operations (Note 15)
18 
170 
Total current liabilities
3,926 
3,882 
Long-term debt (Note 8)
1,210 
228 
Deferred income taxes and other liabilities (Notes 6, 9 and 17)
1,292 
974 
Commitments and contingencies (Note 16)
0 
0 
Redeemable Preferred Stock (Note 10)
0 
0 
Shareholders’ equity:
 
 
Capital in excess of stated value
5,184 
4,641 
Accumulated other comprehensive income (Note 14)
274 
149 
Retained earnings
5,695 
5,588 
Total shareholders’ equity
11,156 
10,381 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
17,584 
15,465 
Class A Convertible Common Stock
 
 
Shareholders’ equity:
 
 
Common Stock
0 
0 
Class B Common Stock
 
 
Shareholders’ equity:
 
 
Common Stock
$ 3 
$ 3 
Consolidated Balance Sheets (Parenthetical)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Class A Convertible Common Stock
 
 
Common Stock, shares outstanding
178 
180 
Class B Common Stock
 
 
Common Stock, shares outstanding
716 
736 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Cash provided by operations:
 
 
 
Net income
$ 2,485,000,000 
$ 2,223,000,000 
$ 2,133,000,000 
Income charges (credits) not affecting cash:
 
 
 
Depreciation
438,000,000 
373,000,000 
335,000,000 
Deferred income taxes
21,000,000 
(60,000,000)
(76,000,000)
Stock-based compensation (Note 11)
174,000,000 
130,000,000 
105,000,000 
Amortization and other
75,000,000 
32,000,000 
23,000,000 
Net gain on divestitures
(124,000,000)
0 
0 
Changes in certain working capital components and other assets and liabilities:
 
 
 
Decrease (increase) in accounts receivable
142,000,000 
(323,000,000)
(273,000,000)
(Increase) in inventories
(197,000,000)
(805,000,000)
(551,000,000)
(Increase) in prepaid expenses and other current assets
(28,000,000)
(141,000,000)
(35,000,000)
Increase in accounts payable, accrued liabilities and income taxes payable
41,000,000 
470,000,000 
151,000,000 
Cash provided by operations
3,027,000,000 
1,899,000,000 
1,812,000,000 
Cash (used) provided by investing activities:
 
 
 
Purchases of short-term investments
(3,702,000,000)
(2,705,000,000)
(7,616,000,000)
Maturities of short-term investments
1,501,000,000 
2,585,000,000 
4,313,000,000 
Sales of short-term investments
998,000,000 
1,244,000,000 
2,766,000,000 
Additions to property, plant and equipment
(636,000,000)
(597,000,000)
(432,000,000)
Disposals of property, plant and equipment
14,000,000 
2,000,000 
1,000,000 
Proceeds from divestitures
786,000,000 
0 
0 
Increase in other assets, net of other liabilities
(28,000,000)
(37,000,000)
(30,000,000)
Settlement of net investment hedges
0 
22,000,000 
(23,000,000)
Cash (used) provided by investing activities
(1,067,000,000)
514,000,000 
(1,021,000,000)
Cash used by financing activities:
 
 
 
Net proceeds from long-term debt issuance
986,000,000 
0 
0 
Long-term debt payments, including current portion
(49,000,000)
(203,000,000)
(8,000,000)
Increase (decrease) in notes payable
15,000,000 
(65,000,000)
41,000,000 
Proceeds from exercise of stock options and other stock issuances
313,000,000 
468,000,000 
345,000,000 
Excess tax benefits from share-based payment arrangements
72,000,000 
115,000,000 
64,000,000 
Repurchase of common stock
(1,674,000,000)
(1,814,000,000)
(1,859,000,000)
Dividends — common and preferred
(703,000,000)
(619,000,000)
(555,000,000)
Cash used by financing activities
(1,040,000,000)
(2,118,000,000)
(1,972,000,000)
Effect of exchange rate changes
100,000,000 
67,000,000 
57,000,000 
Net increase (decrease) in cash and equivalents
1,020,000,000 
362,000,000 
(1,124,000,000)
Cash and equivalents, beginning of year
2,317,000,000 
1,955,000,000 
3,079,000,000 
CASH AND EQUIVALENTS, END OF YEAR
3,337,000,000 
2,317,000,000 
1,955,000,000 
Cash paid during the year for:
 
 
 
Interest, net of capitalized interest
20,000,000 
29,000,000 
32,000,000 
Income taxes
702,000,000 
638,000,000 
736,000,000 
Dividends declared and not paid
$ 188,000,000 
$ 165,000,000 
$ 145,000,000 
Consolidated Statements of Shareholders' Equity (USD $)
In Millions, unless otherwise specified
Total
Common Stock Class A
Common Stock Class B
Capital in Excess of Stated Value
Accumulated Other Comprehensive Income
Retained Earnings
Beginning Balance at May. 31, 2010
$ 9,754 
$ 0 
$ 3 
$ 3,441 
$ 215 
$ 6,095 
Beginning Balance (in shares) at May. 31, 2010
 
180 
788 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock options exercised (in shares)
 
 
14.0 
 
 
 
Stock options exercised
368 
 
 
368 
 
 
Repurchase of Class B Common Stock
(1,871)
 
 
(14)
 
(1,857)
Repurchase of Class B Common Stock (in shares)
 
 
(48)
 
 
 
Dividends on Common stock
(569)
 
 
 
 
(569)
Issuance of shares to employees (in shares)
 
 
2 
 
 
 
Issuance of shares to employees
49 
 
 
49 
 
 
Stock-based compensation (Note 11)
105 
 
 
105 
 
 
Forfeiture of shares from employees (in shares)
 
 
0 
 
 
 
Forfeiture of shares from employees
(6)
 
 
(5)
 
(1)
Net income
2,133 
 
 
 
 
2,133 
Other comprehensive income
(120)
 
 
 
(120)
 
Ending Balance at May. 31, 2011
9,843 
0 
3 
3,944 
95 
5,801 
Ending Balance (in shares) at May. 31, 2011
 
180 
756 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock options exercised (in shares)
 
 
18.0 
 
 
 
Stock options exercised
528 
 
 
528 
 
 
Repurchase of Class B Common Stock
(1,805)
 
 
(12)
 
(1,793)
Repurchase of Class B Common Stock (in shares)
 
 
(40)
 
 
 
Dividends on Common stock
(639)
 
 
 
 
(639)
Issuance of shares to employees (in shares)
 
 
2 
 
 
 
Issuance of shares to employees
57 
 
 
57 
 
 
Stock-based compensation (Note 11)
130 
 
 
130 
 
 
Forfeiture of shares from employees (in shares)
 
 
0 
 
 
 
Forfeiture of shares from employees
(10)
 
 
(6)
 
(4)
Net income
2,223 
 
 
 
 
2,223 
Other comprehensive income
54 
 
 
 
54 
 
Ending Balance at May. 31, 2012
10,381 
0 
3 
4,641 
149 
5,588 
Ending Balance (in shares) at May. 31, 2012
 
180 
736 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Stock options exercised (in shares)
 
 
10.0 
 
 
 
Stock options exercised
322 
 
 
322 
 
 
Conversion of Stock, Shares Converted
0 
(2)
2 
 
 
 
Repurchase of Class B Common Stock
(1,657)
 
 
(10)
 
(1,647)
Repurchase of Class B Common Stock (in shares)
 
 
(34)
 
 
 
Dividends on Common stock
(727)
 
 
 
 
(727)
Issuance of shares to employees (in shares)
 
 
2 
 
 
 
Issuance of shares to employees
65 
 
 
65 
 
 
Stock-based compensation (Note 11)
174 
 
 
174 
 
 
Forfeiture of shares from employees (in shares)
 
 
0 
 
 
 
Forfeiture of shares from employees
(12)
 
 
(8)
 
(4)
Net income
2,485 
 
 
 
 
2,485 
Other comprehensive income
125 
 
 
 
125 
 
Ending Balance at May. 31, 2013
$ 11,156 
$ 0 
$ 3 
$ 5,184 
$ 274 
$ 5,695 
Ending Balance (in shares) at May. 31, 2013
 
178 
716 
 
 
 
Consolidated Statements of Shareholders' Equity (Parenthetical)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Statement of Stockholders' Equity [Abstract]
 
 
 
Dividends on Common stock, per share (in dollars per share)
$ 0.81 
$ 0.70 
$ 0.60 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
NOTE 1 — Summary of Significant Accounting Policies
 
Description of Business
NIKE, Inc. is a worldwide leader in the design, development and worldwide marketing and selling of athletic footwear, apparel, equipment, accessories and services. Wholly-owned NIKE, Inc. subsidiaries include Converse Inc., which designs, markets and distributes casual footwear, apparel and accessories and Hurley International LLC, which designs, markets and distributes action sports and youth lifestyle footwear, apparel and accessories.
Basis of Consolidation
The consolidated financial statements include the accounts of NIKE, Inc. and its subsidiaries (the “Company”). All significant intercompany transactions and balances have been eliminated.
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 income (loss) from discontinued operations line in the consolidated statements of income for all periods presented. In addition, the assets and liabilities associated with these businesses are reported as assets of discontinued operations and liabilities of discontinued operations, as appropriate, in the consolidated balance sheets (refer to Note 15 — Discontinued Operations). Unless otherwise indicated, the disclosures accompanying the consolidated financial statements reflect the Company’s continuing operations.
On November 15, 2012, the Company announced a two-for-one split of both NIKE Class A and Class B Common shares. The stock split was a 100 percent stock dividend payable on December 24, 2012 to shareholders of record at the close of business December 10, 2012. Common stock began trading at the split-adjusted price on December 26, 2012. All share numbers and per share amounts presented reflect the stock split.
Recognition of Revenues
Wholesale revenues are recognized when title and the risks and rewards of ownership have passed to the customer, based on the terms of sale. This occurs upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer. Retail store revenues are recorded at the time of sale. Provisions for post-invoice sales discounts, returns and miscellaneous claims from customers are estimated and recorded as a reduction to revenue at the time of sale. Post-invoice sales discounts consist of contractual programs with certain customers or discretionary discounts that are expected to be granted to certain customers at a later date. Estimates of discretionary discounts, returns and claims are based on historical rates, specific identification of outstanding claims and outstanding returns not yet received from customers, and estimated discounts, returns and claims expected but not yet finalized with customers. As of May 31, 2013 and 2012, the Company’s reserve balances for post-invoice sales discounts, returns and miscellaneous claims were $531 million and $455 million, respectively.
Cost of Sales
Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), third party royalties, certain foreign currency hedge gains and losses, and research, design and development costs.
Shipping and Handling Costs
Shipping and handling costs are expensed as incurred and included in cost of sales.
Operating Overhead Expense
Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel.
Demand Creation Expense
Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, television, digital and print advertising, brand events, and retail brand presentation. Advertising production costs are expensed the first time an advertisement is run. Advertising placement costs are expensed in the month the advertising appears, while costs related to brand events are expensed when the event occurs. Costs related to retail brand presentation are expensed when the presentation is completed and delivered.
A significant amount of the Company’s promotional expenses result from payments under endorsement contracts. Accounting for endorsement payments is based upon specific contract provisions. Generally, endorsement payments are expensed on a straight-line basis over the term of the contract after giving recognition to periodic performance compliance provisions of the contracts. Prepayments made under contracts are included in prepaid expenses or other assets depending on the period to which the prepayment applies.
Some of the contracts provide for contingent payments to endorsers based upon specific achievements in their sports (e.g., winning a championship). The Company records selling and administrative expense for these amounts when the endorser achieves the specific goal.
Some of the contracts provide for payments based upon endorsers maintaining a level of performance in their sport over an extended period of time (e.g., maintaining a top ranking in a sport for a year). These amounts are recorded in selling and administrative expense when the Company determines that it is probable that the specified level of performance will be maintained throughout the period. In these instances, to the extent that actual payments to the endorser differ from our estimate due to changes in the endorser’s athletic performance, increased or decreased selling and administrative expense may be recorded in a future period.
Some of the contracts provide for royalty payments to endorsers based upon a predetermined percentage of sales of particular products. The Company expenses these payments in cost of sales as the related sales occur. In certain contracts, the Company offers minimum guaranteed royalty payments. For contractual obligations for which the Company estimates it will not meet the minimum guaranteed amount of royalty fees through sales of product, the Company records the amount of the guaranteed payment in excess of that earned through sales of product in selling and administrative expense uniformly over the remaining guarantee period.
Through cooperative advertising programs, the Company reimburses retail customers for certain costs of advertising the Company’s products. The Company records these costs in selling and administrative expense at the point in time when it is obligated to its customers for the costs, which is when the related revenues are recognized. This obligation may arise prior to the related advertisement being run.
Total advertising and promotion expenses were $2,745 million, $2,607 million, and $2,344 million for the years ended May 31, 2013, 2012 and 2011, respectively. Prepaid advertising and promotion expenses recorded in prepaid expenses and other current assets totaled $386 million and $281 million at May 31, 2013 and 2012, respectively.
Cash and Equivalents
Cash and equivalents represent cash and short-term, highly liquid investments, including commercial paper, U.S. treasury, U.S. agency, and corporate debt securities with maturities of three months or less at date of purchase.
Short-Term Investments
Short-term investments consist of highly liquid investments, including commercial paper, U.S. treasury, U.S. agency, and corporate debt securities, with maturities over three months from the date of purchase. Debt securities that the Company has the ability and positive intent to hold to maturity are carried at amortized cost. At May 31, 2013 and 2012, the Company did not hold any short-term investments that were classified as trading or held-to-maturity.
At May 31, 2013 and 2012, short-term investments consisted of available-for-sale securities. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. Realized gains and losses on the sale of securities are determined by specific identification. The Company considers all available-for-sale securities, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs and therefore classifies all securities with maturity dates beyond three months at the date of purchase as current assets within short-term investments on the consolidated balance sheets.
Refer to Note 6 — Fair Value Measurements for more information on the Company’s short-term investments.
Allowance for Uncollectible Accounts Receivable
Accounts receivable consists primarily of amounts receivable from customers. The Company makes ongoing estimates relating to the collectability of its accounts receivable and maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. In determining the amount of the allowance, the Company considers historical levels of credit losses and makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Accounts receivable with anticipated collection dates greater than 12 months from the balance sheet date and related allowances are considered non-current and recorded in other assets. The allowance for uncollectible accounts receivable was $104 million and $91 million at May 31, 2013 and 2012, respectively, of which $54 million and $45 million, respectively, was classified as long-term and recorded in other assets.
Inventory Valuation
Inventories are stated at lower of cost or market and valued primarily on an average cost basis. Inventory costs primarily consist of product cost from our suppliers, as well as freight, import duties, taxes, insurance and logistics and other handling fees.
Property, Plant and Equipment and Depreciation
Property, plant and equipment are recorded at cost. Depreciation for financial reporting purposes is determined on a straight-line basis for buildings and leasehold improvements over 2 to 40 years and for machinery and equipment over 2 to 15 years.
Depreciation and amortization of assets used in manufacturing, warehousing and product distribution are recorded in cost of sales. Depreciation and amortization of other assets are recorded in selling and administrative expense.
Software Development Costs
Internal Use Software. Expenditures for major software purchases and software developed for internal use are capitalized and amortized over a 2 to 10 year period on a straight-line basis. The Company’s policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred.
Computer Software to be Sold, Leased or Otherwise Marketed. Development costs of computer software to be sold, leased, or otherwise marketed as an integral part of a product are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred.
Impairment of Long-Lived Assets
The Company reviews the carrying value of long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value.
Identifiable Intangible Assets and Goodwill
The Company performs annual impairment tests on goodwill and intangible assets with indefinite lives in the fourth quarter of each fiscal year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit or an intangible asset with an indefinite life below its carrying value. Events or changes in circumstances that may trigger interim impairment reviews include significant changes in business climate, operating results, planned investments in the reporting unit, planned divestitures or an expectation that the carrying amount may not be recoverable, among other factors. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, the two-step impairment test is unnecessary. The two-step impairment test first requires the Company to estimate the fair value of its reporting units. If the carrying value of a reporting unit exceeds its fair value, the goodwill of that reporting unit is potentially impaired and the Company proceeds to step two of the impairment analysis. In step two of the analysis, the Company measures and records an impairment loss equal to the excess of the carrying value of the reporting unit's goodwill over its implied fair value, if any.
The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit.
Indefinite-lived intangible assets primarily consist of acquired trade names and trademarks. The Company may first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, the Company determines that it is more likely than not that the indefinite-lived intangible asset is not impaired, no quantitative fair value measurement is necessary. If a quantitative fair value measurement calculation is required for these intangible assets, the Company utilizes the relief-from-royalty method. This method assumes that trade names and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires the Company to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.
Operating Leases
The Company leases retail store space, certain distribution and warehouse facilities, office space, and other non-real estate assets under operating leases. Operating lease agreements may contain rent escalation clauses, rent holidays or certain landlord incentives, including tenant improvement allowances. Rent expense for non-cancelable operating leases with scheduled rent increases or landlord incentives are recognized on a straight-line basis over the lease term, beginning with the effective lease commencement date, which is generally the date in which the Company takes possession of or controls the physical use of the property. Certain leases also provide for contingent rents, which are determined as a percentage of sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when the Company determines that achieving the specified levels during the period is probable.
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 Financial Accounting Standards Board ("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.
Refer to Note 6 — Fair Value Measurements for additional information.
Foreign Currency Translation and Foreign Currency Transactions
Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income in shareholders’ equity.
The Company’s global subsidiaries have various assets and liabilities, primarily receivables and payables, which are denominated in currencies other than their functional currency. These balance sheet items are subject to remeasurement, the impact of which is recorded in other (income) expense, net, within the consolidated statements of income.
Accounting for Derivatives and Hedging Activities
The Company uses derivative financial instruments to reduce its exposure to changes in foreign currency exchange rates and interest rates. All derivatives are recorded at fair value on the balance sheet and changes in the fair value of derivative financial instruments are either recognized in other comprehensive income (a component of shareholders’ equity), debt or net income depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge, and, if designated, the extent to which the hedge is effective. The Company classifies the cash flows at settlement from derivatives in the same category as the cash flows from the related hedged items. For undesignated hedges and designated cash flow hedges, this is within the cash provided by operations component of the consolidated statements of cash flows. For designated net investment hedges, this is generally within the cash provided or used by investing activities component of the cash flow statement. As our fair value hedges are receive-fixed, pay-variable interest rate swaps, the cash flows associated with these derivative instruments are periodic interest payments while the swaps are outstanding. These cash flows are reflected within the cash provided by operations component of the cash flow statement.
Refer to Note 17 — Risk Management and Derivatives for more information on the Company’s risk management program and derivatives.
Stock-Based Compensation
The Company estimates the fair value of options and stock appreciation rights granted under the NIKE, Inc. 1990 Stock Incentive Plan (the “1990 Plan”) and employees’ purchase rights under the Employee Stock Purchase Plans (“ESPPs”) using the Black-Scholes option pricing model. The Company recognizes this fair value, net of estimated forfeitures, as selling and administrative expense in the consolidated statements of income over the vesting period using the straight-line method.
Refer to Note 11 — Common Stock and Stock-Based Compensation for more information on the Company’s stock programs.
Income Taxes
The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce deferred tax assets to the amount management believes is more likely than not to be realized. United States income taxes are provided currently on financial statement earnings of non-U.S. subsidiaries that are expected to be repatriated. The Company determines annually the amount of undistributed non-U.S. earnings to invest indefinitely in its non-U.S. operations.
The Company recognizes a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not that the position will be sustained upon examination by relevant tax authorities. The Company recognizes interest and penalties related to income tax matters in income tax expense.
Refer to Note 9 — Income Taxes for further discussion.
Earnings Per Share
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive stock options and awards.
Refer to Note 12 — Earnings Per Share for further discussion.
Management Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, including estimates relating to assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recently Adopted Accounting Standards
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 will be effective for the Company beginning June 1, 2013, and early adoption is permitted. The Company early adopted this standard and the adoption did not have a material impact on its consolidated financial position or results of operations.
In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. This guidance will allow companies to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. This new guidance was effective for the Company beginning June 1, 2012 and the adoption did not have a material effect on its consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This new guidance eliminates the current option to report other comprehensive income and its components in the statement of shareholders’ equity. Companies are now required to present the components of net income and other comprehensive income in either one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. This requirement was effective for the Company beginning June 1, 2012. As this guidance only amended 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. Further, this guidance required companies to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This requirement will be effective for the Company beginning June 1, 2013. As this guidance only amends the presentation of the components of comprehensive income, the Company does not anticipate the adoption will have an impact on the Company’s consolidated financial position or results of operations.
Recently Issued Accounting Standards
In December 2011, the FASB issued guidance enhancing disclosure requirements surrounding the nature of an entity’s right to offset and 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 is effective for the Company beginning June 1, 2013. As this guidance only requires expanded disclosures, the Company does not anticipate the adoption will have an impact on its consolidated financial position or results of operations.
Inventories
Inventories
NOTE 2 — Inventories
Inventory balances of $3,434 million and $3,222 million at May 31, 2013 and 2012, respectively, were substantially all finished goods.
Property, Plant and Equipment
Property, Plant and Equipment
NOTE 3 — Property, Plant and Equipment
Property, plant and equipment included the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Land
 
$
268

 
$
252

Buildings
 
1,174

 
1,158

Machinery, equipment and internal-use software
 
2,985

 
2,654

Leasehold improvements
 
945

 
883

Construction in process
 
128

 
110

Total property, plant and equipment, gross
 
5,500

 
5,057

Less accumulated depreciation
 
3,048

 
2,848

TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
 
$
2,452

 
$
2,209


Capitalized interest was not material for the years ended May 31, 2013, 2012, and 2011. The Company had $81 million in capital lease obligations as of May 31, 2013 included in machinery, equipment, and internal-use software; there were no capital lease obligations as of May 31, 2012.
Identifiable Intangible Assets and Goodwill
Identifiable Intangible Assets and Goodwill
NOTE 4 — Identifiable Intangible Assets and Goodwill
The following table summarizes the Company’s identifiable intangible asset balances as of May 31, 2013 and 2012:
 
 
As of May 31, 2013
 
As of May 31, 2012
(In millions)
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
Patents
 
$
119

 
$
(35
)
 
$
84

 
$
99

 
$
(29
)
 
$
70

Trademarks
 
43

 
(32
)
 
11

 
40

 
(26
)
 
14

Other
 
20

 
(16
)
 
4

 
19

 
(16
)
 
3

TOTAL
 
$
182

 
$
(83
)
 
$
99

 
$
158

 
$
(71
)
 
$
87

Unamortized intangible assets —
Trademarks
 
 
 
 
 
283

 
 
 
 
 
283

IDENTIFIABLE INTANGIBLE
ASSETS, NET
 
 
 
 
 
$
382

 
 
 
 
 
$
370


Amortization expense, which is included in selling and administrative expense, was $14 million, $14 million, and $13 million for the years ended May 31, 2013, 2012, and 2011, respectively. The estimated amortization expense for intangible assets subject to amortization for each of the years ending May 31, 2014 through May 31, 2018 are as follows: 2014: $13 million; 2015: $9 million; 2016: $9 million; 2017: $7 million; 2018: $6 million.

Goodwill was $131 million at May 31, 2013 and May 31, 2012, respectively, and is included in the Company’s “Other” category for segment reporting purposes. There were no accumulated impairment balances for goodwill as of either period end.
Accrued Liabilities
Accrued Liabilities
NOTE 5 — Accrued Liabilities
Accrued liabilities included the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Compensation and benefits, excluding taxes
 
$
713

 
$
691

Endorsement compensation
 
264

 
288

Taxes other than income taxes
 
192

 
169

Dividends payable
 
188

 
165

Import and logistics costs
 
111

 
133

Advertising and marketing
 
77

 
94

Fair value of derivatives
 
34

 
55

Other(1)
 
407

 
346

TOTAL ACCRUED LIABILITIES
 
$
1,986

 
$
1,941

(1)
Other consists of various accrued expenses with no individual item accounting for more than 5% of the balance at May 31, 2013 and 2012.
Fair Value Measurements
Fair Value Measurements
NOTE 6 — Fair Value Measurements
The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of May 31, 2013 and 2012, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Refer to Note 1 – Summary of Significant Accounting Policies for additional detail regarding the Company’s fair value measurement methodology.
 
 
As of May 31, 2013
 
 
Fair Value
Measurements Using
 
Assets/Liabilities
at Fair Value
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Balance Sheet Classification
ASSETS
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
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
 
—

 
20

 
—

 
20

 
Cash and equivalents
Commercial paper and bonds
 
—

 
1,035

 
—

 
1,035

 
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
 
—

 
401

 
—

 
401

 
Short-term investments
Commercial paper and bonds
 
—

 
644

 
—

 
644

 
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
 
$
—

 
$
34

 
$
—

 
$
34

 
Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES
 
$
—

 
$
34

 
$
—

 
$
34

 
 
 

 
 
As of May 31, 2012
 
 
Fair Value
Measurements Using
 
Assets / 
Liabilities
at Fair Value
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Balance Sheet Classification
ASSETS
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
265

 
$
—

 
$
265

 
Other current assets and other long-term assets
Embedded derivatives
 
—

 
1

 
—

 
1

 
Other current assets
Interest rate swap contracts
 
—

 
15

 
—

 
15

 
Other current assets and other long-term assets
Total derivatives
 
—

 
281

 
—

 
281

 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
226

 
—

 
—

 
226

 
Cash and equivalents
U.S. Agency securities
 
—

 
254

 
—

 
254

 
Cash and equivalents
Commercial paper and bonds
 
—

 
159

 
—

 
159

 
Cash and equivalents
Money market funds
 
—

 
770

 
—

 
770

 
Cash and equivalents
U.S. Treasury securities
 
927

 
—

 
—

 
927

 
Short-term investments
U.S. Agency securities
 
—

 
230

 
—

 
230

 
Short-term investments
Commercial paper and bonds
 
—

 
283

 
—

 
283

 
Short-term investments
Non-marketable preferred stock
 
—

 
—

 
3

 
3

 
Other long-term assets
Total available-for-sale securities
 
1,153

 
1,696

 
3

 
2,852

 
 
TOTAL ASSETS
 
$
1,153

 
$
1,977

 
$
3

 
$
3,133

 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
55

 
$
—

 
$
55

 
Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES
 
$
—

 
$
55

 
$
—

 
$
55

 
 


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 May 31, 2013 or 2012. Refer to Note 17 — 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). Pricing vendors are utilized for certain Level 1 or 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 carrying amounts reflected in the consolidated balance sheets for short-term investments and cash and equivalents approximate fair value.
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 our portfolio. Changes in Level 3 investment assets were immaterial during the years ended May 31, 2013 and 2012.
No transfers among the levels within the fair value hierarchy occurred during the years ended May 31, 2013 or 2012.
As of May 31, 2013 and 2012, 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 May 31, 2013 and 2012, short-term investments consisted of available-for-sale securities. As of May 31, 2013, the Company held $2,229 million of available-for-sale securities with maturity dates within one year from the purchase date and $399 million with maturity dates over one year and less than five years from the purchase date within short-term investments. As of May 31, 2012, the Company held $1,129 million of available-for-sale securities with maturity dates within one year from purchase date and $311 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:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Available-for-sale investments:
 
 
 
 
U.S. treasury and agencies
 
$
1,984

 
$
1,157

Commercial paper and bonds
 
644

 
283

TOTAL AVAILABLE-FOR-SALE INVESTMENTS
 
$
2,628

 
$
1,440



Included in interest (income) expense, net was interest income related to cash and equivalents and short-term investments of $26 million, $27 million, and $28 million for the years ended May 31, 2013, 2012, and 2011, respectively.
For fair value information regarding notes payable and long-term debt, refer to Note 7 — Short-Term Borrowings and Credit Lines and Note 8 — Long-Term Debt.
Short-Term Borrowings and Credit Lines
Short-Term Borrowings and Credit Lines
NOTE 7 — Short-Term Borrowings and Credit Lines
Notes payable and interest-bearing accounts payable to Sojitz Corporation of America (“Sojitz America”) as of May 31, 2013 and 2012, are summarized below:
 
 
As of May 31,
 
 
 
2013
 
 
2012
 
(In millions)
 
Borrowings

 
Interest Rate

 
 
Borrowings

 
Interest Rate

 
Notes payable:
 
 
 
 
 
 
 
 
 
 
U.S. operations
 
$
20

 
0.00
%
(1) 
 
$
30

 
5.50
%
(1) 
Non-U.S. operations
 
101

 
4.77
%
(1) 
 
78

 
9.46
%
(1) 
TOTAL NOTES PAYABLE
 
$
121

 
 
 
 
$
108

 
 
 
Interest-Bearing Accounts Payable:
 
 
 
 
 
 
 
 
 
 
Sojitz America
 
$
55

 
0.99
%
 
 
$
75

 
1.10
%
 
(1)
Weighted average interest rate includes non-interest bearing overdrafts.

The carrying amounts reflected in the consolidated balance sheets for notes payable approximate fair value.
The Company purchases through Sojitz America certain athletic footwear, apparel and equipment it acquires from non-U.S. suppliers. These purchases are for the Company’s operations outside of the United States, Europe and Japan. Accounts payable to Sojitz America are generally due up to 60 days after shipment of goods from the foreign port. The interest rate on such accounts payable is the 60-day London Interbank Offered Rate (“LIBOR”) as of the beginning of the month of the invoice date, plus 0.75%.
As of May 31, 2013 and 2012, the Company had no amounts outstanding under its commercial paper program.
In November 2011, the Company entered into a committed credit facility agreement with a syndicate of banks which provides for up to $1 billion of borrowings pursuant to a revolving credit facility with the option to increase borrowings to $1.5 billion with lender approval. The facility matures on November 1, 2016, with a one-year extension option prior to both the second and third anniversary of the closing date, provided that extensions shall not extend beyond November 1, 2018. Based on the Company’s current long-term senior unsecured debt ratings of A+ and A1 from Standard and Poor’s Corporation and Moody’s Investor Services, respectively, the interest rate charged on any outstanding borrowings would be the prevailing LIBOR plus 0.56%. The facility fee is 0.065% of the total commitment. Under this committed credit facility, the Company must maintain, among other things, certain minimum specified financial ratios with which the Company was in compliance at May 31, 2013. No amounts were outstanding under this facility as of May 31, 2013 or 2012.
Long-Term Debt
Long-Term Debt
NOTE 8 — Long-Term Debt
Long-term debt, net of unamortized premiums and discounts and swap fair value adjustments, comprises the following: 
 
 
 
 
 
 
 
 
Book Value Outstanding
As of May 31,
Scheduled Maturity (Dollars in millions)
 
Original
Principal
 
Interest
Rate
 
Interest
Payments
 
2013
 
2012
Corporate Bond Payables:(4)
 
 
 
 
 
 
 
 
 
 
July 23, 2012(1)
 
$
25

 
5.66
%
 
Semi-Annually
 
$
—

 
$
25

August 7, 2012(1)
 
$
15

 
5.40
%
 
Semi-Annually
 
—

 
15

October 1, 2013
 
$
50

 
4.70
%
 
Semi-Annually
 
50

 
50

October 15, 2015(1)
 
$
100

 
5.15
%
 
Semi-Annually
 
111

 
115

May 1, 2023(5)
 
$
500

 
2.25
%
 
Semi-Annually
 
499

 
—

May 1, 2043(5)
 
$
500

 
3.63
%
 
Semi-Annually
 
499

 
—

Promissory Notes:(2)
 
 
 
 
 
 
 
 
 
 
April 1, 2017
 
$
40

 
6.20
%
 
Monthly
 
40

 
—

January 1, 2018
 
$
19

 
6.79
%
 
Monthly
 
19

 
—

Japanese Yen Notes:
 
 
 
 
 
 
 
 
 
 
August 20, 2001 through November 20, 2020(3)
 
¥
9,000

 
2.60
%
 
Quarterly
 
34

 
50

August 20, 2001 through November 20, 2020(3)
 
¥
4,000

 
2.00
%
 
Quarterly
 
15

 
22

Total
 
 
 
 
 
 
 
1,267

 
277

Less current maturities
 
 

 
 

 
 
 
57

 
49

TOTAL LONG-TERM DEBT
 
 
 
 
 
 
 
$
1,210

 
$
228

(1)
The Company has entered into interest rate swap agreements whereby the Company receives fixed interest payments at the same rate as the note and pays variable interest payments based on the six-month LIBOR plus a spread. The swaps have the same notional amount and maturity date as the corresponding note. At May 31, 2013, the interest rates payable on these swap agreements ranged from approximately 0.3% to 0.4%.
(2)
The Company assumed a total of $59 million in bonds payable on May 30, 2013 as part of its agreement to purchase certain Corporate properties, which was treated as a non-cash financing transaction. The property serves as collateral for the debt. The purchase of these properties was accounted for as a business combination where the total consideration of $85 million was allocated to the land and buildings acquired; no other tangible or intangible assets or liabilities resulted from the purchase. The bonds mature in 2017 and 2018 and the Company does not have the ability to re-negotiate the terms of the debt agreements and would incur significant financial penalties if the notes are paid off prior to maturity.
(3)
NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.
(4)
Senior unsecured obligations rank equally with our other unsecured and unsubordinated indebtedness.
(5)
The bonds carry a make whole call provision and are redeemable at any time prior to maturity. The bonds also feature a par call provision payable 3 months and 6 months prior to the scheduled maturity date for the bonds maturing on May 1, 2023 and May 1, 2043, respectively.
 
The scheduled maturity of long-term debt in each of the years ending May 31, 2014 through 2018 are $57 million, $7 million, $108 million, $45 million and $25 million, respectively, at face value.
The fair value of the Company’s long-term debt, including the current portion, was approximately $1,219 million at May 31, 2013 and $283 million at May 31, 2012. The fair value of long-term debt is estimated based upon quoted prices of similar instruments (level 2).
Income Taxes
Income Taxes
NOTE 9 — Income Taxes
Income before income taxes is as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Income before income taxes:
 
 
 
 
 
 
United States
 
$
1,240

 
$
804

 
$
1,040

Foreign
 
2,032

 
2,221

 
1,822

TOTAL INCOME BEFORE INCOME TAXES
 
$
3,272

 
$
3,025

 
$
2,862


The provision for income taxes is as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Current:
 
 
 
 
 
 
United States
 
 
 
 
 
 
Federal
 
$
434

 
$
289

 
$
298

State
 
69

 
51

 
57

Foreign
 
398

 
488

 
435

Total
 
901

 
828

 
790

Deferred:
 
 
 
 
 
 
United States
 
 
 
 
 
 
Federal
 
1

 
(48
)
 
(62
)
State
 
(4
)
 
5

 
—

Foreign
 
(90
)
 
(29
)
 
(38
)
Total
 
(93
)
 
(72
)
 
(100
)
TOTAL INCOME TAX EXPENSE
 
$
808

 
$
756

 
$
690


A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows:
 
 
Year Ended May 31,
  
 
2013
 
2012
 
2011
Federal income tax rate
 
35.0
 %
 
35.0
 %
 
35.0
 %
State taxes, net of federal benefit
 
1.4
 %
 
1.3
 %
 
1.3
 %
Foreign earnings
 
-11.8
 %
 
-11.9
 %
 
-11.4
 %
Other, net
 
0.1
 %
 
0.6
 %
 
-0.8
 %
EFFECTIVE INCOME TAX RATE
 
24.7
 %
 
25.0
 %
 
24.1
 %

The effective tax rate from continuing operations for the year ended May 31, 2013 was 30 basis points lower than the effective tax rate from continuing operations for the year ended May 31, 2012 primarily due to tax benefits received from the intercompany sale of intellectual property rights outside of the U.S., the retroactive reinstatement of the research and development credit and the intra-period allocation of tax expense between continuing operations, discontinued operations, and other comprehensive income. The decrease in the effective tax rate was partially offset by a higher effective tax rate on operations as a result of an increase in earnings in higher tax jurisdictions. The effective tax rate from continuing operations for the year ended May 31, 2012 was 90 basis points higher than the effective tax rate from continuing operations for the year ended May 31, 2011 primarily due to the changes in uncertain tax positions partially offset by a reduction in the effective rate related to a decrease in earnings in higher tax jurisdictions.
Deferred tax assets and (liabilities) comprise the following: 
 
 
As of May 31,
(In millions)
 
2013
 
2012
Deferred tax assets:
 
 
 
 
Allowance for doubtful accounts
 
$
20

 
$
17

Inventories
 
40

 
37

Sales return reserves
 
101

 
84

Deferred compensation
 
197

 
186

Stock-based compensation
 
140

 
126

Reserves and accrued liabilities
 
66

 
66

Foreign loss carry-forwards
 
19

 
35

Foreign tax credit carry-forwards
 
106

 
216

Undistributed earnings of foreign subsidiaries
 
162

 
82

Other
 
47

 
62

Total deferred tax assets
 
898

 
911

Valuation allowance
 
(5
)
 
(27
)
Total deferred tax assets after valuation allowance
 
893

 
884

Deferred tax liabilities:
 
 
 
 
Property, plant and equipment
 
(241
)
 
(191
)
Intangibles
 
(96
)
 
(98
)
Other
 
(20
)
 
(22
)
Total deferred tax liability
 
(357
)
 
(311
)
NET DEFERRED TAX ASSET
 
$
536

 
$
573


The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits:
 
 
As of May 31,
(In millions)
 
2013
 
2012
 
2011
Unrecognized tax benefits, as of the beginning of the period
 
$
285

 
$
212

 
$
282

Gross increases related to prior period tax positions
 
77

 
48

 
13

Gross decreases related to prior period tax positions
 
(3
)
 
(25
)
 
(98
)
Gross increases related to current period tax positions
 
130

 
91

 
59

Gross decreases related to current period tax positions
 
(9
)
 
(1
)
 
(6
)
Settlements
 
—

 
(20
)
 
(43
)
Lapse of statute of limitations
 
(21
)
 
(9
)
 
(8
)
Changes due to currency translation
 
(12
)
 
(11
)
 
13

UNRECOGNIZED TAX BENEFITS, AS OF THE END OF THE PERIOD
 
$
447

 
$
285

 
$
212


As of May 31, 2013, the total gross unrecognized tax benefits, excluding related interest and penalties, were $447 million, $281 million of which would affect the Company's effective tax rate if recognized in future periods.
The Company recognizes interest and penalties related to income tax matters in income tax expense. The liability for payment of interest and penalties increased $4 million, $17 million, and $10 million during the years ended May 31, 2013, 2012, and 2011, respectively. As of May 31, 2013 and 2012, accrued interest and penalties related to uncertain tax positions was $112 million and $108 million, respectively (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. Many issues 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 issues for fiscal years May 31, 2011 through May 31, 2015. In addition, the Company is in appeals regarding the validation of foreign tax credits taken. The Company’s major foreign jurisdictions, China, the Netherlands and Brazil, have concluded substantially all income tax matters through calendar 2005, fiscal 2007 and calendar 2006, 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 $86 million within the next 12 months.
We provide for United States income taxes on the undistributed earnings of foreign subsidiaries unless they are considered indefinitely reinvested outside the United States. At May 31, 2013, the indefinitely reinvested earnings in foreign subsidiaries upon which United States income taxes have not been provided was approximately $6.7 billion. If these undistributed earnings were repatriated to the United States, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, they would generate foreign tax credits that would reduce the federal tax liability associated with the foreign dividend or the otherwise taxable transaction. Assuming a full utilization of the foreign tax credits, the potential net deferred tax liability associated with these temporary differences of undistributed earnings would be approximately $2.2 billion at May 31, 2013.
A portion of the Company's foreign operations are benefiting from a tax holiday, which will phase out in 2019. This tax holiday may be extended when certain conditions are met or may be terminated early if certain conditions are not met. The impact of this tax holiday decreased foreign taxes by $108 million, $117 million, and $36 million for the fiscal years ended May 31, 2013, 2012, and 2011, respectively. The benefit of the tax holiday on net income per share (diluted) was $0.12, $0.12, and $0.04 for the fiscal years ended May 31, 2013, 2012, and 2011, respectively.
Deferred tax assets at May 31, 2013 and 2012 were reduced by a valuation allowance relating to tax benefits of certain subsidiaries with operating losses. The net change in the valuation allowance was a decrease of $22 million, an increase of $23 million, and a decrease of $1 million for the years ended May 31, 2013, 2012, and 2011, respectively.
The Company does not anticipate that any foreign tax credit carry-forwards will expire unutilized.
The Company has available domestic and foreign loss carry-forwards of $58 million at May 31, 2013. Such losses will expire as follows: 
 
 
Year Ending May 31,
(In millions)
 
2014
 
2015
 
2016
 
2017
 
2018- 2032
 
Indefinite

 
Total

Net Operating Losses
 
$
—

 
—

 
2

 
—

 
52

 
4

 
$
58



During the years ended May 31, 2013, 2012, and 2011, income tax benefits attributable to employee stock-based compensation transactions of $76 million, $120 million, and $68 million, respectively, were allocated to shareholders’ equity.
Redeemable Preferred Stock
Redeemable Preferred Stock
NOTE 10 — Redeemable Preferred Stock

Sojitz America is the sole owner of the Company’s authorized Redeemable Preferred Stock, $1 par value, which is redeemable at the option of Sojitz America or the Company at par value aggregating $0.3 million. A cumulative dividend of $0.10 per share is payable annually on May 31 and no dividends may be declared or paid on the common stock of the Company unless dividends on the Redeemable Preferred Stock have been declared and paid in full. There have been no changes in the Redeemable Preferred Stock in the three years ended May 31, 2013, 2012, and 2011. As the holder of the Redeemable Preferred Stock, Sojitz America does not have general voting rights but does have the right to vote as a separate class on the sale of all or substantially all of the assets of the Company and its subsidiaries, on merger, consolidation, liquidation or dissolution of the Company or on the sale or assignment of the NIKE trademark for athletic footwear sold in the United States. The Redeemable Preferred Stock has been fully issued to Sojitz America and is not blank check preferred stock. The Company's articles of incorporation do not permit the issuance of additional preferred stock.
Common Stock and Stock-Based Compensation
Common Stock and Stock-Based Compensation
NOTE 11 — Common Stock and Stock-Based Compensation
The authorized number of shares of Class A Common Stock, no par value, and Class B Common Stock, no par value, are 200 million and 1,200 million, respectively. Each share of Class A Common Stock is convertible into one share of Class B Common Stock. Voting rights of Class B Common Stock are limited in certain circumstances with respect to the election of directors. There are no differences in the dividend and liquidation preferences or participation rights of the Class A and Class B common shareholders.
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 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.
The following table summarizes the Company’s total stock-based compensation expense recognized in selling and administrative expense: 
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Stock options(1)
 
$
123

 
$
96

 
$
77

ESPPs
 
19

 
16

 
14

Restricted stock
 
32

 
18

 
14

TOTAL STOCK-BASED COMPENSATION EXPENSE
 
$
174

 
$
130

 
$
105

(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 years ended May 31, 2013, 2012, and 2011 was $22 million, $17 million, and $12 million, respectively.
As of May 31, 2013, the Company had $199 million of unrecognized compensation costs from stock options, net of estimated forfeitures, to be recognized as selling and administrative expense over a weighted average period of 2.3 years.
The weighted average fair value per share of the options granted during the years ended May 31, 2013, 2012, and 2011, as computed using the Black-Scholes pricing model, was $12.71, $11.08, and $8.84, respectively. The weighted average assumptions used to estimate these fair values are as follows:
 
 
Year Ended May 31,
  
 
2013
 
2012
 
2011
Dividend yield
 
1.5
%
 
1.4
%
 
1.6
%
Expected volatility
 
35.0
%
 
29.5
%
 
31.5
%
Weighted average expected life (in years)
 
5.3

 
5.0

 
5.0

Risk-free interest rate
 
0.6
%
 
1.4
%
 
1.7
%

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.
The following summarizes the stock option transactions under the plan discussed above: 
 
 
Shares (1)
 
Weighted Average
Option Price
  
 
(In millions)

 
  
Options outstanding May 31, 2010
 
72.2

 
$
23.30

Exercised
 
(14.0
)
 
21.35

Forfeited
 
(1.3
)
 
29.03

Granted
 
12.7

 
34.60

Options outstanding May 31, 2011
 
69.6

 
$
25.65

Exercised
 
(18.0
)
 
22.81

Forfeited
 
(1.0
)
 
35.61

Granted
 
13.7

 
45.87

Options outstanding May 31, 2012
 
64.3

 
$
30.59

Exercised
 
(9.9
)
 
24.70

Forfeited
 
(1.3
)
 
40.14

Granted
 
14.6

 
46.55

Options outstanding May 31, 2013
 
67.7

 
$
34.72

Options exercisable at May 31,
 
 
 
 
2011
 
40.1

 
$
22.03

2012
 
33.9

 
24.38

2013
 
35.9

 
27.70

(1)
Includes stock appreciation rights transactions.

The weighted average contractual life remaining for options outstanding and options exercisable at May 31, 2013 was 6.3 years and 4.7 years, respectively. The aggregate intrinsic value for options outstanding and exercisable at May 31, 2013 was $1,823 million and $1,218 million, respectively. The aggregate intrinsic value was the amount by which the market value of the underlying stock exceeded the exercise price of the options. The total intrinsic value of the options exercised during the years ended May 31, 2013, 2012, and 2011 was $293 million, $453 million, and $267 million, respectively.
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. Employees purchased 1.6 million, 1.7 million, and 1.6 million shares during each of the three years ended May 31, 2013, 2012 and 2011, respectively.
From time to time, the Company grants restricted stock units and restricted stock to key employees under the 1990 Plan. The number of shares underlying such awards granted to employees during the years ended May 31, 2013, 2012, and 2011 were 1.6 million, 0.7 million, and 0.4 million with weighted average values per share of $46.86, $49.49, and $35.11, respectively. Recipients of restricted stock are entitled to cash dividends and to vote their respective shares throughout the period of restriction. Recipients of restricted stock units are entitled to dividend equivalent cash payments upon vesting. The value of all grants of restricted stock and restricted stock units was established by the market price on the date of grant. During the years ended May 31, 2013, 2012, and 2011, the aggregate fair value of restricted stock and restricted stock units vested was $25 million, $22 million, and $15 million, respectively, determined as of the date of vesting.
Earnings Per Share
Earnings Per Share
NOTE 12 — Earnings Per Share
The following is a reconciliation from basic earnings per share to diluted earnings per share. Options to purchase an additional 0.1 million, 0.2 million, and 0.3 million shares of common stock were outstanding at May 31, 2013, 2012, and 2011 respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.
 
 
 
Year Ended May 31,
(In millions, except per share data)
 
2013
 
2012
 
2011
Determination of shares:
 
 
 
 
 
 
Weighted average common shares outstanding
 
897.3

 
920.0

 
951.1

Assumed conversion of dilutive stock options and awards
 
19.1

 
19.6

 
20.2

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
916.4

 
939.6

 
971.3

 
 
 
 
 
 
 
Earnings per share from continuing operations:
 
 
 
 
 
 
Basic earnings per common share
 
$
2.75

 
$
2.47

 
$
2.28

Diluted earnings per common share
 
$
2.69

 
$
2.42

 
$
2.24

 
 
 
 
 
 
 
Earnings per share from discontinued operations:
 
 
 
 
 
 
Basic earnings per common share
 
$
0.02

 
$
(0.05
)
 
$
(0.04
)
Diluted earnings per common share
 
$
0.02

 
$
(0.05
)
 
$
(0.04
)
 
 
 
 
 
 
 
Basic earnings per common share for NIKE, Inc.
 
$
2.77

 
$
2.42

 
$
2.24

Diluted earnings per common share for NIKE, Inc.
 
$
2.71

 
$
2.37

 
$
2.20

Benefit Plans
Benefit Plans
NOTE 13 — Benefit Plans
The Company has a profit sharing plan available to most U.S.-based employees. The terms of the plan call for annual contributions by the Company as determined by the Board of Directors. A subsidiary of the Company also had a profit sharing plan available to its U.S.-based employees prior to fiscal 2012. The terms of the plan called for annual contributions as determined by the subsidiary’s executive management. Contributions of $47 million, $40 million, and $39 million were made to the plans and are included in selling and administrative expense for the years ended May 31, 2013, 2012, and 2011, respectively. The Company has various 401(k) employee savings plans available to U.S.-based employees. The Company matches a portion of employee contributions. Company contributions to the savings plans were $46 million, $42 million, and $38 million for the years ended May 31, 2013, 2012, and 2011, respectively, and are included in selling and administrative expense.
The Company also has a Long-Term Incentive Plan (“LTIP”) that was adopted by the Board of Directors and approved by shareholders in September 1997 and later amended in fiscal 2007. The Company recognized $50 million, $51 million, and $31 million of selling and administrative expense related to cash awards under the LTIP during the years ended May 31, 2013, 2012, and 2011, respectively.
The Company has pension plans in various countries worldwide. The pension plans are only available to local employees and are generally government mandated. The liability related to the unfunded pension liabilities of the plans was $104 million and $113 million at May 31, 2013 and May 31, 2012, respectively, which was primarily classified as long-term in other liabilities.
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income
NOTE 14 — Accumulated Other Comprehensive Income
The components of accumulated other comprehensive income, net of tax, are as follows:
 
 
May 31
(In millions)
 
2013
 
2012
Cumulative translation adjustment and other
 
$
(14
)
 
$
(127
)
Net deferred gain on cash flow hedge derivatives
 
193

 
181

Net deferred gain on net investment hedge derivatives
 
95

 
95

ACCUMULATED OTHER COMPREHENSIVE INCOME
 
$
274

 
$
149



Refer to Note 17— Risk Management and Derivatives for more information on the Company's risk management program and derivatives.
Discontinuted Operations
Discontinued Operations
NOTE 15 — Discontinued Operations
The Company continually evaluates its existing portfolio of businesses to ensure resources are invested in those businesses that are accretive to the NIKE Brand and represent the largest growth potential and highest returns. During the year, 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 is included in the net income (loss) from discontinued operations line item on the consolidated statements of income. There were no adjustments to these recorded amounts as of May 31, 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. 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 expected to be 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 $44 million at May 31, 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 income (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 is included in the net income (loss) from discontinued operations line item on the consolidated statements of income. 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 May 31, 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.
For the year ended May 31, 2013, net income (loss) from discontinued operations included, for both businesses, the net gain or loss on sale, net operating losses, tax expenses, and approximately $20 million in wind down costs.
Summarized results of the Company's discontinued operations are as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Revenues
 
$
523

 
$
796

 
$
746

Income (loss) before income taxes
 
108

 
(43
)
 
(18
)
Income tax expense (benefit)
 
87

 
3

 
21

Net income (loss) from discontinued operations
 
$
21

 
$
(46
)
 
$
(39
)

As of May 31, 2013 and 2012, the aggregate components of assets and liabilities classified as discontinued operations and included in current assets and current liabilities consisted of the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Accounts Receivable, net
 
$
—

 
$
148

Inventories
 
—

 
128

Deferred income taxes and other assets
 
—

 
35

Property, plant and equipment, net
 
—

 
70

Identifiable intangible assets, net
 
—

 
234

 TOTAL ASSETS
 
$
—

 
$
615

Accounts payable
 
$
1

 
$
42

Accrued liabilities
 
17

 
112

Deferred income taxes and other liabilities
 
—

 
16

TOTAL LIABILITIES
 
$
18

 
$
170

Commitments and Contingencies
Commitments and Contingencies
NOTE 16 — Commitments and Contingencies
The Company leases space for certain of its offices, warehouses and retail stores under leases expiring from 1 to 21 years after May 31, 2013. Rent expense was $482 million, $431 million, and $386 million for the years ended May 31, 2013, 2012 and 2011, respectively. Amounts of minimum future annual rental commitments under non-cancelable operating leases in each of the five years ending May 31, 2014 through 2018 are $403 million, $340 million, $304 million, $272 million, $225 million, respectively, and $816 million in later years. Amounts of minimum future annual commitments under non-cancelable capital leases in each of the four years ending May 31, 2014 through 2017 are $23 million, $28 million, $21 million, and $9 million, respectively; the Company has no capital lease obligations beyond the year ending May 31, 2017.
As of May 31, 2013 and 2012, the Company had letters of credit outstanding totaling $149 million and $137 million, respectively. These letters of credit were generally issued for the purchase of inventory and guarantees of the Company’s performance under certain self-insurance and other programs.
In connection with various contracts and agreements, the Company provides routine indemnifications relating to the enforceability of intellectual property rights, coverage for legal issues that arise and other items where the Company is acting as the guarantor. Currently, the Company has several such agreements in place. However, based on the Company’s historical experience and the estimated probability of future loss, the Company has determined that the fair value of such indemnifications is not material to the Company’s financial position or results of operations.
In the ordinary course of its business, the Company is involved in various legal proceedings involving contractual and employment relationships, product liability claims, trademark rights, and a variety of other matters. While the Company cannot predict the outcome of its pending legal matters with certainty, the Company does not believe any currently identified claim, proceeding or litigation, either individually or in aggregate, will have a material impact on the Company’s results of operations, financial position or cash flows.
Risk Management and Derivatives
Risk Management and Derivatives
NOTE 17 — 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 May 31, 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 May 31, 2013 was approximately $9 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 May 31, 2013, there were outstanding currency forward contracts with maturities up to 24 months.

The following table presents the fair values of derivative instruments included within the consolidated balance sheets as of May 31, 2013 and 2012: 
 
 
Asset Derivatives
 
Liability Derivatives
(In millions)
 
Balance Sheet
Location
 
2013
 
2012
 
Balance Sheet 
Location
 
2013
 
2012
Derivatives formally designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
$
141

 
$
203

 
Accrued liabilities
 
$
12

 
$
35

Foreign exchange forwards and options
 
Deferred income taxes and other long-term assets
 
79

 
7

 
Deferred income taxes and other long-term liabilities
 
—

 
—

Interest rate swap contracts
 
Deferred income taxes and other long-term assets
 
11

 
15

 
Deferred income taxes and other long-term liabilities
 
—

 
—

Total derivatives formally designated as hedging instruments
 
 
 
$
231

 
$
225

 
 
 
$
12

 
$
35

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
$
58

 
$
55

 
Accrued liabilities
 
$
22

 
$
20

Embedded derivatives
 
Prepaid expenses and other current assets
 
—

 
1

 
Accrued liabilities
 
—

 
—

Total derivatives not designated as hedging instruments
 
 
 
58

 
56

 
 
 
22

 
20

TOTAL DERIVATIVES
 
 
 
$
289

 
$
281

 
 
 
$
34

 
$
55


The following tables present the amounts affecting the consolidated statements of income for years ended May 31, 2013, 2012 and 2011:

(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)
Year Ended May 31,
 
Location of Gain (Loss) Reclassified From 
Accumulated Other Comprehensive Income Into Income(1)
 
Year Ended May 31,
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
42

 
$
(29
)
 
$
(87
)
 
Revenue

 
$
(19
)
 
$
5

 
$
(30
)
Foreign exchange forwards and options
 
67

 
253

 
(152
)
 
Cost of sales

 
113

 
(57
)
 
103

Foreign exchange forwards and options
 
(3
)
 
3

 
(4
)
 
Selling and administrative expense

 
2

 
(2
)
 
1

Foreign exchange forwards and options
 
33

 
36

 
(65
)
 
Other (income) expense, net

 
9

 
(9
)
 
34

Total designated cash flow hedges
 
$
139

 
$
263

 
$
(308
)
 
 
 
$
105

 
$
(63
)
 
$
108

Derivatives designated as net investment hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
45

 
$
(85
)
 
Other (income) expense, net

 
$
—

 
$
—

 
$
—

(1)
For the years ended May 31, 2013, 2012, and 2011, the amounts recorded in other (income) expense, 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
 
 
Year Ended May 31,
 
(In millions)
 
2013
 
2012
 
2011
 
Derivatives designated as fair value hedges:
 
 
 
 
 
 
 
 
Interest rate swaps(1)
 
$
5

 
$
6

 
$
6

 
Interest (income) expense, net
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
51

 
64

 
(30
)
 
Other (income) expense, net
Embedded derivatives
 
$
(4
)
 
$
1

 
$
—

 
Other (income) expense, 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 5 — Accrued Liabilities for derivative instruments recorded in accrued liabilities, Note 6 — Fair Value Measurements for a description of how the above financial instruments are valued, Note 14 — Accumulated Other Comprehensive Income and the consolidated statements of shareholders’ equity for additional information on changes in other comprehensive income for the years ended May 31, 2013, 2012 and 2011.
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 (income) expense, net when the securities are sold. Results of hedges of certain anticipated intercompany transactions are recorded in other (income) expense, 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 years ended May 31, 2013, 2012 and 2011.
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 (income) expense, 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 (income) expense, net. For the years ended May 31, 2013, 2012 and 2011, the amounts recorded in other (income) expense, 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 May 31, 2013, $132 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 May 31, 2013, the maximum term over which the Company is hedging exposures to the variability of cash flows for its forecasted transactions is 24 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 May 31, 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 years ended May 31, 2013, 2012, or 2011.
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 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 years ended May 31, 2013, 2012, or 2011.
Embedded Derivatives
As part of the foreign currency adjustment program described above, currencies within the factory currency exposure indices that are neither the U.S. Dollar nor 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 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 (income) expense, 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 May 31, 2013, the notional amount of embedded derivatives was approximately $136 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 (income) expense, 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 May 31, 2013, the Company was in compliance with all credit risk related contingent features and the fair value of its derivative instruments with credit risk related contingent features in a net liability position was insignificant. Accordingly, the Company was not required to post any collateral as a result of these contingent features. Further, as of May 31, 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.
SCHEDULE II - Valuation and qualifying accounts
SCHEDULE II - Valuation and qualifying accounts
SCHEDULE II — Valuation and qualifying accounts
(In millions)
 
Balance at
Beginning of Period
 
Charged to Costs
and Expenses
 
Charged to
Other Accounts
 
Write-Offs, Net
 
Balance at End
of Period
Sales returns reserve
 
 
 
 
 
 
 
 
 

For the year ended May 31, 2011
 
$
141

 
$
354

 
$
1

 
$
(345
)
 
$
151

For the year ended May 31, 2012
 
151

 
401

 
(3
)
 
(376
)
 
173

For the year ended May 31, 2013
 
173

 
538

 
1

 
(471
)
 
241

Allowance for doubtful accounts(1)
 
 
 
 
 
 
 
 
 
 
For the year ended May 31, 2011
 
$
109

 
$
28

 
$
14

 
$
(31
)
 
$
120

For the year ended May 31, 2012
 
120

 
21

 
(9
)
 
(41
)
 
91

For the year ended May 31, 2013
 
91

 
31

 
1

 
(19
)
 
104

(1)
Includes both current and non-current portions of the allowance for doubtful accounts. The non-current portion is classified in deferred income taxes and other assets on the consolidated balance sheets.
Summary of Significant Accounting Policies (Policies)
Software to be Sold, Leased, or Otherwise Marketed, Policy [Policy Text Block] 
Computer Software to be Sold, Leased or Otherwise Marketed. Development costs of computer software to be sold, leased, or otherwise marketed as an integral part of a product are subject to capitalization beginning when a product’s technological feasibility has been established and ending when a product is available for general release to customers. In most instances, the Company’s products are released soon after technological feasibility has been established. Therefore, costs incurred subsequent to achievement of technological feasibility are usually not significant, and generally most software development costs have been expensed as incurred.
Basis of Consolidation 
Basis of Consolidation
The consolidated financial statements include the accounts of NIKE, Inc. and its subsidiaries (the “Company”). All significant intercompany transactions and balances have been eliminated.
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 income (loss) from discontinued operations line in the consolidated statements of income for all periods presented. In addition, the assets and liabilities associated with these businesses are reported as assets of discontinued operations and liabilities of discontinued operations, as appropriate, in the consolidated balance sheets (refer to Note 15 — Discontinued Operations). Unless otherwise indicated, the disclosures accompanying the consolidated financial statements reflect the Company’s continuing operations.
On November 15, 2012, the Company announced a two-for-one split of both NIKE Class A and Class B Common shares. The stock split was a 100 percent stock dividend payable on December 24, 2012 to shareholders of record at the close of business December 10, 2012. Common stock began trading at the split-adjusted price on December 26, 2012. All share numbers and per share amounts presented reflect the stock split.
Recognition of Revenues 
Recognition of Revenues
Wholesale revenues are recognized when title and the risks and rewards of ownership have passed to the customer, based on the terms of sale. This occurs upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer. Retail store revenues are recorded at the time of sale. Provisions for post-invoice sales discounts, returns and miscellaneous claims from customers are estimated and recorded as a reduction to revenue at the time of sale. Post-invoice sales discounts consist of contractual programs with certain customers or discretionary discounts that are expected to be granted to certain customers at a later date. Estimates of discretionary discounts, returns and claims are based on historical rates, specific identification of outstanding claims and outstanding returns not yet received from customers, and estimated discounts, returns and claims expected but not yet finalized with customers. As of May 31, 2013 and 2012, the Company’s reserve balances for post-invoice sales discounts, returns and miscellaneous claims were $531 million and $455 million, respectively.
Cost of Sales 
Cost of Sales
Cost of sales consists primarily of inventory costs, as well as warehousing costs (including the cost of warehouse labor), third party royalties, certain foreign currency hedge gains and losses, and research, design and development costs.
Shipping and Handling Costs 
Shipping and Handling Costs
Shipping and handling costs are expensed as incurred and included in cost of sales.
Operating Overhead Expense 
Operating Overhead Expense
Operating overhead expense consists primarily of payroll and benefit related costs, rent, depreciation and amortization, professional services, and meetings and travel.
Demand Creation Expense 
Demand Creation Expense
Demand creation expense consists of advertising and promotion costs, including costs of endorsement contracts, television, digital and print advertising, brand events, and retail brand presentation. Advertising production costs are expensed the first time an advertisement is run. Advertising placement costs are expensed in the month the advertising appears, while costs related to brand events are expensed when the event occurs. Costs related to retail brand presentation are expensed when the presentation is completed and delivered.
A significant amount of the Company’s promotional expenses result from payments under endorsement contracts. Accounting for endorsement payments is based upon specific contract provisions. Generally, endorsement payments are expensed on a straight-line basis over the term of the contract after giving recognition to periodic performance compliance provisions of the contracts. Prepayments made under contracts are included in prepaid expenses or other assets depending on the period to which the prepayment applies.
Some of the contracts provide for contingent payments to endorsers based upon specific achievements in their sports (e.g., winning a championship). The Company records selling and administrative expense for these amounts when the endorser achieves the specific goal.
Some of the contracts provide for payments based upon endorsers maintaining a level of performance in their sport over an extended period of time (e.g., maintaining a top ranking in a sport for a year). These amounts are recorded in selling and administrative expense when the Company determines that it is probable that the specified level of performance will be maintained throughout the period. In these instances, to the extent that actual payments to the endorser differ from our estimate due to changes in the endorser’s athletic performance, increased or decreased selling and administrative expense may be recorded in a future period.
Some of the contracts provide for royalty payments to endorsers based upon a predetermined percentage of sales of particular products. The Company expenses these payments in cost of sales as the related sales occur. In certain contracts, the Company offers minimum guaranteed royalty payments. For contractual obligations for which the Company estimates it will not meet the minimum guaranteed amount of royalty fees through sales of product, the Company records the amount of the guaranteed payment in excess of that earned through sales of product in selling and administrative expense uniformly over the remaining guarantee period.
Through cooperative advertising programs, the Company reimburses retail customers for certain costs of advertising the Company’s products. The Company records these costs in selling and administrative expense at the point in time when it is obligated to its customers for the costs, which is when the related revenues are recognized. This obligation may arise prior to the related advertisement being run.
Total advertising and promotion expenses were $2,745 million, $2,607 million, and $2,344 million for the years ended May 31, 2013, 2012 and 2011, respectively. Prepaid advertising and promotion expenses recorded in prepaid expenses and other current assets totaled $386 million and $281 million at May 31, 2013 and 2012, respectively.
Cash and Equivalents 
Cash and Equivalents
Cash and equivalents represent cash and short-term, highly liquid investments, including commercial paper, U.S. treasury, U.S. agency, and corporate debt securities with maturities of three months or less at date of purchase.
Short-Term Investments 
Short-Term Investments
Short-term investments consist of highly liquid investments, including commercial paper, U.S. treasury, U.S. agency, and corporate debt securities, with maturities over three months from the date of purchase. Debt securities that the Company has the ability and positive intent to hold to maturity are carried at amortized cost. At May 31, 2013 and 2012, the Company did not hold any short-term investments that were classified as trading or held-to-maturity.
At May 31, 2013 and 2012, short-term investments consisted of available-for-sale securities. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. Realized gains and losses on the sale of securities are determined by specific identification. The Company considers all available-for-sale securities, including those with maturity dates beyond 12 months, as available to support current operational liquidity needs and therefore classifies all securities with maturity dates beyond three months at the date of purchase as current assets within short-term investments on the consolidated balance sheets.
Refer to Note 6 — Fair Value Measurements for more information on the Company’s short-term investments.
Allowance for Uncollectible Accounts Receivable 
Allowance for Uncollectible Accounts Receivable
Accounts receivable consists primarily of amounts receivable from customers. The Company makes ongoing estimates relating to the collectability of its accounts receivable and maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. In determining the amount of the allowance, the Company considers historical levels of credit losses and makes judgments about the creditworthiness of significant customers based on ongoing credit evaluations. Accounts receivable with anticipated collection dates greater than 12 months from the balance sheet date and related allowances are considered non-current and recorded in other assets. The allowance for uncollectible accounts receivable was $104 million and $91 million at May 31, 2013 and 2012, respectively, of which $54 million and $45 million, respectively, was classified as long-term and recorded in other assets.
Inventory Valuation 
Inventory Valuation
Inventories are stated at lower of cost or market and valued primarily on an average cost basis. Inventory costs primarily consist of product cost from our suppliers, as well as freight, import duties, taxes, insurance and logistics and other handling fees.
Property, Plant and Equipment and Depreciation 
Property, Plant and Equipment and Depreciation
Property, plant and equipment are recorded at cost. Depreciation for financial reporting purposes is determined on a straight-line basis for buildings and leasehold improvements over 2 to 40 years and for machinery and equipment over 2 to 15 years.
Depreciation and amortization of assets used in manufacturing, warehousing and product distribution are recorded in cost of sales. Depreciation and amortization of other assets are recorded in selling and administrative expense.
Software Development Costs 
Software Development Costs
Internal Use Software. Expenditures for major software purchases and software developed for internal use are capitalized and amortized over a 2 to 10 year period on a straight-line basis. The Company’s policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software. In addition, the Company also capitalizes certain payroll and payroll-related costs for employees who are directly associated with internal use computer software projects. The amount of capitalizable payroll costs with respect to these employees is limited to the time directly spent on such projects. Costs associated with preliminary project stage activities, training, maintenance and all other post-implementation stage activities are expensed as incurred.
Impairment of Long-Lived Assets 
Impairment of Long-Lived Assets
The Company reviews the carrying value of long-lived assets or asset groups to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable market value of an asset, among others. If such facts indicate a potential impairment, the Company would assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company will estimate the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value.
Identifiable Intangible Assets and Goodwill 
Identifiable Intangible Assets and Goodwill
The Company performs annual impairment tests on goodwill and intangible assets with indefinite lives in the fourth quarter of each fiscal year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit or an intangible asset with an indefinite life below its carrying value. Events or changes in circumstances that may trigger interim impairment reviews include significant changes in business climate, operating results, planned investments in the reporting unit, planned divestitures or an expectation that the carrying amount may not be recoverable, among other factors. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount, the two-step impairment test is unnecessary. The two-step impairment test first requires the Company to estimate the fair value of its reporting units. If the carrying value of a reporting unit exceeds its fair value, the goodwill of that reporting unit is potentially impaired and the Company proceeds to step two of the impairment analysis. In step two of the analysis, the Company measures and records an impairment loss equal to the excess of the carrying value of the reporting unit's goodwill over its implied fair value, if any.
The Company generally bases its measurement of the fair value of a reporting unit on a blended analysis of the present value of future discounted cash flows and the market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the Company expects the reporting unit to generate in the future. The Company's significant estimates in the discounted cash flows model include: its weighted average cost of capital; long-term rate of growth and profitability of the reporting unit's business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the reporting unit to comparable publicly traded companies in similar lines of business. Significant estimates in the market valuation approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit.
Indefinite-lived intangible assets primarily consist of acquired trade names and trademarks. The Company may first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, the Company determines that it is more likely than not that the indefinite-lived intangible asset is not impaired, no quantitative fair value measurement is necessary. If a quantitative fair value measurement calculation is required for these intangible assets, the Company utilizes the relief-from-royalty method. This method assumes that trade names and trademarks have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires the Company to estimate the future revenue for the related brands, the appropriate royalty rate and the weighted average cost of capital.
Operating Leases 
Operating Leases
The Company leases retail store space, certain distribution and warehouse facilities, office space, and other non-real estate assets under operating leases. Operating lease agreements may contain rent escalation clauses, rent holidays or certain landlord incentives, including tenant improvement allowances. Rent expense for non-cancelable operating leases with scheduled rent increases or landlord incentives are recognized on a straight-line basis over the lease term, beginning with the effective lease commencement date, which is generally the date in which the Company takes possession of or controls the physical use of the property. Certain leases also provide for contingent rents, which are determined as a percentage of sales in excess of specified levels. A contingent rent liability is recognized together with the corresponding rent expense when specified levels have been achieved or when the Company determines that achieving the specified levels during the period is probable.
Fair Value Measurements 
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 Financial Accounting Standards Board ("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.
Refer to Note 6 — Fair Value Measurements for additional information.
Foreign Currency Translation and Foreign Currency Transactions 
Foreign Currency Translation and Foreign Currency Transactions
Adjustments resulting from translating foreign functional currency financial statements into U.S. Dollars are included in the foreign currency translation adjustment, a component of accumulated other comprehensive income in shareholders’ equity.
The Company’s global subsidiaries have various assets and liabilities, primarily receivables and payables, which are denominated in currencies other than their functional currency. These balance sheet items are subject to remeasurement, the impact of which is recorded in other (income) expense, net, within the consolidated statements of income.
Accounting for Derivatives and Hedging Activities 
Accounting for Derivatives and Hedging Activities
The Company uses derivative financial instruments to reduce its exposure to changes in foreign currency exchange rates and interest rates. All derivatives are recorded at fair value on the balance sheet and changes in the fair value of derivative financial instruments are either recognized in other comprehensive income (a component of shareholders’ equity), debt or net income depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge, and, if designated, the extent to which the hedge is effective. The Company classifies the cash flows at settlement from derivatives in the same category as the cash flows from the related hedged items. For undesignated hedges and designated cash flow hedges, this is within the cash provided by operations component of the consolidated statements of cash flows. For designated net investment hedges, this is generally within the cash provided or used by investing activities component of the cash flow statement. As our fair value hedges are receive-fixed, pay-variable interest rate swaps, the cash flows associated with these derivative instruments are periodic interest payments while the swaps are outstanding. These cash flows are reflected within the cash provided by operations component of the cash flow statement.
Refer to Note 17 — Risk Management and Derivatives for more information on the Company’s risk management program and derivatives.
Stock-Based Compensation 
Stock-Based Compensation
The Company estimates the fair value of options and stock appreciation rights granted under the NIKE, Inc. 1990 Stock Incentive Plan (the “1990 Plan”) and employees’ purchase rights under the Employee Stock Purchase Plans (“ESPPs”) using the Black-Scholes option pricing model. The Company recognizes this fair value, net of estimated forfeitures, as selling and administrative expense in the consolidated statements of income over the vesting period using the straight-line method.
Refer to Note 11 — Common Stock and Stock-Based Compensation for more information on the Company’s stock programs.
Income Taxes 
Income Taxes
The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance to reduce deferred tax assets to the amount management believes is more likely than not to be realized. United States income taxes are provided currently on financial statement earnings of non-U.S. subsidiaries that are expected to be repatriated. The Company determines annually the amount of undistributed non-U.S. earnings to invest indefinitely in its non-U.S. operations.
The Company recognizes a tax benefit from uncertain tax positions in the financial statements only when it is more likely than not that the position will be sustained upon examination by relevant tax authorities. The Company recognizes interest and penalties related to income tax matters in income tax expense.
Refer to Note 9 — Income Taxes for further discussion.
Earnings Per Share 
Earnings Per Share
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the year. Diluted earnings per common share is calculated by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive stock options and awards.
Refer to Note 12 — Earnings Per Share for further discussion.
Management Estimates 
Management Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates, including estimates relating to assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recently Adopted Accounting Standards 
Recently Adopted Accounting Standards
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 will be effective for the Company beginning June 1, 2013, and early adoption is permitted. The Company early adopted this standard and the adoption did not have a material impact on its consolidated financial position or results of operations.
In September 2011, the FASB issued updated guidance on the periodic testing of goodwill for impairment. This guidance will allow companies to assess qualitative factors to determine if it is more-likely-than-not that goodwill might be impaired and whether it is necessary to perform the two-step goodwill impairment test required under current accounting standards. This new guidance was effective for the Company beginning June 1, 2012 and the adoption did not have a material effect on its consolidated financial position or results of operations.
In June 2011, the FASB issued guidance on the presentation of comprehensive income. This new guidance eliminates the current option to report other comprehensive income and its components in the statement of shareholders’ equity. Companies are now required to present the components of net income and other comprehensive income in either one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. This requirement was effective for the Company beginning June 1, 2012. As this guidance only amended 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. Further, this guidance required companies to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This requirement will be effective for the Company beginning June 1, 2013. As this guidance only amends the presentation of the components of comprehensive income, the Company does not anticipate the adoption will have an impact on the Company’s consolidated financial position or results of operations.
Recently Issued Accounting Standards 
Recently Issued Accounting Standards
In December 2011, the FASB issued guidance enhancing disclosure requirements surrounding the nature of an entity’s right to offset and 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 is effective for the Company beginning June 1, 2013. As this guidance only requires expanded disclosures, the Company does not anticipate the adoption will have an impact on its consolidated financial position or results of operations
Property, Plant and Equipment (Tables)
Schedule of Property, Plant and Equipment
Property, plant and equipment included the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Land
 
$
268

 
$
252

Buildings
 
1,174

 
1,158

Machinery, equipment and internal-use software
 
2,985

 
2,654

Leasehold improvements
 
945

 
883

Construction in process
 
128

 
110

Total property, plant and equipment, gross
 
5,500

 
5,057

Less accumulated depreciation
 
3,048

 
2,848

TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
 
$
2,452

 
$
2,209

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 May 31, 2013 and 2012:
 
 
As of May 31, 2013
 
As of May 31, 2012
(In millions)
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
 
Gross Carrying
Amount
 
Accumulated
Amortization
 
Net Carrying
Amount
Amortized intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
Patents
 
$
119

 
$
(35
)
 
$
84

 
$
99

 
$
(29
)
 
$
70

Trademarks
 
43

 
(32
)
 
11

 
40

 
(26
)
 
14

Other
 
20

 
(16
)
 
4

 
19

 
(16
)
 
3

TOTAL
 
$
182

 
$
(83
)
 
$
99

 
$
158

 
$
(71
)
 
$
87

Unamortized intangible assets —
Trademarks
 
 
 
 
 
283

 
 
 
 
 
283

IDENTIFIABLE INTANGIBLE
ASSETS, NET
 
 
 
 
 
$
382

 
 
 
 
 
$
370

Accrued Liabilities (Tables)
Schedule of Accrued Liabilities
Accrued liabilities included the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Compensation and benefits, excluding taxes
 
$
713

 
$
691

Endorsement compensation
 
264

 
288

Taxes other than income taxes
 
192

 
169

Dividends payable
 
188

 
165

Import and logistics costs
 
111

 
133

Advertising and marketing
 
77

 
94

Fair value of derivatives
 
34

 
55

Other(1)
 
407

 
346

TOTAL ACCRUED LIABILITIES
 
$
1,986

 
$
1,941

(1)
Other consists of various accrued expenses with no individual item accounting for more than 5% of the balance at May 31, 2013 and 2012
Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of May 31, 2013 and 2012, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Refer to Note 1 – Summary of Significant Accounting Policies for additional detail regarding the Company’s fair value measurement methodology.
 
 
As of May 31, 2013
 
 
Fair Value
Measurements Using
 
Assets/Liabilities
at Fair Value
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Balance Sheet Classification
ASSETS
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
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
 
—

 
20

 
—

 
20

 
Cash and equivalents
Commercial paper and bonds
 
—

 
1,035

 
—

 
1,035

 
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
 
—

 
401

 
—

 
401

 
Short-term investments
Commercial paper and bonds
 
—

 
644

 
—

 
644

 
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
 
$
—

 
$
34

 
$
—

 
$
34

 
Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES
 
$
—

 
$
34

 
$
—

 
$
34

 
 
 

 
 
As of May 31, 2012
 
 
Fair Value
Measurements Using
 
Assets / 
Liabilities
at Fair Value
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Balance Sheet Classification
ASSETS
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
265

 
$
—

 
$
265

 
Other current assets and other long-term assets
Embedded derivatives
 
—

 
1

 
—

 
1

 
Other current assets
Interest rate swap contracts
 
—

 
15

 
—

 
15

 
Other current assets and other long-term assets
Total derivatives
 
—

 
281

 
—

 
281

 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
226

 
—

 
—

 
226

 
Cash and equivalents
U.S. Agency securities
 
—

 
254

 
—

 
254

 
Cash and equivalents
Commercial paper and bonds
 
—

 
159

 
—

 
159

 
Cash and equivalents
Money market funds
 
—

 
770

 
—

 
770

 
Cash and equivalents
U.S. Treasury securities
 
927

 
—

 
—

 
927

 
Short-term investments
U.S. Agency securities
 
—

 
230

 
—

 
230

 
Short-term investments
Commercial paper and bonds
 
—

 
283

 
—

 
283

 
Short-term investments
Non-marketable preferred stock
 
—

 
—

 
3

 
3

 
Other long-term assets
Total available-for-sale securities
 
1,153

 
1,696

 
3

 
2,852

 
 
TOTAL ASSETS
 
$
1,153

 
$
1,977

 
$
3

 
$
3,133

 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
55

 
$
—

 
$
55

 
Accrued liabilities and other long-term liabilities
TOTAL LIABILITIES
 
$
—

 
$
55

 
$
—

 
$
55

 
 
Available-for-sale Securities 
Short-term investments classified as available-for-sale consist of the following at fair value:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Available-for-sale investments:
 
 
 
 
U.S. treasury and agencies
 
$
1,984

 
$
1,157

Commercial paper and bonds
 
644

 
283

TOTAL AVAILABLE-FOR-SALE INVESTMENTS
 
$
2,628

 
$
1,440

Short-Term Borrowings and Credit Lines (Tables)
Schedule of Short-term Debt
Notes payable and interest-bearing accounts payable to Sojitz Corporation of America (“Sojitz America”) as of May 31, 2013 and 2012, are summarized below:
 
 
As of May 31,
 
 
 
2013
 
 
2012
 
(In millions)
 
Borrowings

 
Interest Rate

 
 
Borrowings

 
Interest Rate

 
Notes payable:
 
 
 
 
 
 
 
 
 
 
U.S. operations
 
$
20

 
0.00
%
(1) 
 
$
30

 
5.50
%
(1) 
Non-U.S. operations
 
101

 
4.77
%
(1) 
 
78

 
9.46
%
(1) 
TOTAL NOTES PAYABLE
 
$
121

 
 
 
 
$
108

 
 
 
Interest-Bearing Accounts Payable:
 
 
 
 
 
 
 
 
 
 
Sojitz America
 
$
55

 
0.99
%
 
 
$
75

 
1.10
%
 
(1)
Weighted average interest rate includes non-interest bearing overdrafts.

Long-Term Debt (Tables)
Schedule of Long-term Debt Instruments
Long-term debt, net of unamortized premiums and discounts and swap fair value adjustments, comprises the following: 
 
 
 
 
 
 
 
 
Book Value Outstanding
As of May 31,
Scheduled Maturity (Dollars in millions)
 
Original
Principal
 
Interest
Rate
 
Interest
Payments
 
2013
 
2012
Corporate Bond Payables:(4)
 
 
 
 
 
 
 
 
 
 
July 23, 2012(1)
 
$
25

 
5.66
%
 
Semi-Annually
 
$
—

 
$
25

August 7, 2012(1)
 
$
15

 
5.40
%
 
Semi-Annually
 
—

 
15

October 1, 2013
 
$
50

 
4.70
%
 
Semi-Annually
 
50

 
50

October 15, 2015(1)
 
$
100

 
5.15
%
 
Semi-Annually
 
111

 
115

May 1, 2023(5)
 
$
500

 
2.25
%
 
Semi-Annually
 
499

 
—

May 1, 2043(5)
 
$
500

 
3.63
%
 
Semi-Annually
 
499

 
—

Promissory Notes:(2)
 
 
 
 
 
 
 
 
 
 
April 1, 2017
 
$
40

 
6.20
%
 
Monthly
 
40

 
—

January 1, 2018
 
$
19

 
6.79
%
 
Monthly
 
19

 
—

Japanese Yen Notes:
 
 
 
 
 
 
 
 
 
 
August 20, 2001 through November 20, 2020(3)
 
¥
9,000

 
2.60
%
 
Quarterly
 
34

 
50

August 20, 2001 through November 20, 2020(3)
 
¥
4,000

 
2.00
%
 
Quarterly
 
15

 
22

Total
 
 
 
 
 
 
 
1,267

 
277

Less current maturities
 
 

 
 

 
 
 
57

 
49

TOTAL LONG-TERM DEBT
 
 
 
 
 
 
 
$
1,210

 
$
228

(1)
The Company has entered into interest rate swap agreements whereby the Company receives fixed interest payments at the same rate as the note and pays variable interest payments based on the six-month LIBOR plus a spread. The swaps have the same notional amount and maturity date as the corresponding note. At May 31, 2013, the interest rates payable on these swap agreements ranged from approximately 0.3% to 0.4%.
(2)
The Company assumed a total of $59 million in bonds payable on May 30, 2013 as part of its agreement to purchase certain Corporate properties, which was treated as a non-cash financing transaction. The property serves as collateral for the debt. The purchase of these properties was accounted for as a business combination where the total consideration of $85 million was allocated to the land and buildings acquired; no other tangible or intangible assets or liabilities resulted from the purchase. The bonds mature in 2017 and 2018 and the Company does not have the ability to re-negotiate the terms of the debt agreements and would incur significant financial penalties if the notes are paid off prior to maturity.
(3)
NIKE Logistics YK assumed a total of ¥13.0 billion in loans as part of its agreement to purchase a distribution center in Japan, which serves as collateral for the loans. These loans mature in equal quarterly installments during the period August 20, 2001 through November 20, 2020.
(4)
Senior unsecured obligations rank equally with our other unsecured and unsubordinated indebtedness.
(5)
The bonds carry a make whole call provision and are redeemable at any time prior to maturity. The bonds also feature a par call provision payable 3 months and 6 months prior to the scheduled maturity date for the bonds maturing on May 1, 2023 and May 1, 2043, respectively.
Income Taxes (Tables)
Schedule of Income before Income Tax, Domestic and Foreign 
Income before income taxes is as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Income before income taxes:
 
 
 
 
 
 
United States
 
$
1,240

 
$
804

 
$
1,040

Foreign
 
2,032

 
2,221

 
1,822

TOTAL INCOME BEFORE INCOME TAXES
 
$
3,272

 
$
3,025

 
$
2,862

Schedule of Components of Income Tax Expense (Benefit) 
The provision for income taxes is as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Current:
 
 
 
 
 
 
United States
 
 
 
 
 
 
Federal
 
$
434

 
$
289

 
$
298

State
 
69

 
51

 
57

Foreign
 
398

 
488

 
435

Total
 
901

 
828

 
790

Deferred:
 
 
 
 
 
 
United States
 
 
 
 
 
 
Federal
 
1

 
(48
)
 
(62
)
State
 
(4
)
 
5

 
—

Foreign
 
(90
)
 
(29
)
 
(38
)
Total
 
(93
)
 
(72
)
 
(100
)
TOTAL INCOME TAX EXPENSE
 
$
808

 
$
756

 
$
690

Schedule of Effective Income Tax Rate Reconciliation 
A reconciliation from the U.S. statutory federal income tax rate to the effective income tax rate is as follows:
 
 
Year Ended May 31,
  
 
2013
 
2012
 
2011
Federal income tax rate
 
35.0
 %
 
35.0
 %
 
35.0
 %
State taxes, net of federal benefit
 
1.4
 %
 
1.3
 %
 
1.3
 %
Foreign earnings
 
-11.8
 %
 
-11.9
 %
 
-11.4
 %
Other, net
 
0.1
 %
 
0.6
 %
 
-0.8
 %
EFFECTIVE INCOME TAX RATE
 
24.7
 %
 
25.0
 %
 
24.1
 %
Schedule of Deferred Tax Assets and Liabilities 
Deferred tax assets and (liabilities) comprise the following: 
 
 
As of May 31,
(In millions)
 
2013
 
2012
Deferred tax assets:
 
 
 
 
Allowance for doubtful accounts
 
$
20

 
$
17

Inventories
 
40

 
37

Sales return reserves
 
101

 
84

Deferred compensation
 
197

 
186

Stock-based compensation
 
140

 
126

Reserves and accrued liabilities
 
66

 
66

Foreign loss carry-forwards
 
19

 
35

Foreign tax credit carry-forwards
 
106

 
216

Undistributed earnings of foreign subsidiaries
 
162

 
82

Other
 
47

 
62

Total deferred tax assets
 
898

 
911

Valuation allowance
 
(5
)
 
(27
)
Total deferred tax assets after valuation allowance
 
893

 
884

Deferred tax liabilities:
 
 
 
 
Property, plant and equipment
 
(241
)
 
(191
)
Intangibles
 
(96
)
 
(98
)
Other
 
(20
)
 
(22
)
Total deferred tax liability
 
(357
)
 
(311
)
NET DEFERRED TAX ASSET
 
$
536

 
$
573

Unrecognized Tax Benefits Reconciliation 
The following is a reconciliation of the changes in the gross balance of unrecognized tax benefits:
 
 
As of May 31,
(In millions)
 
2013
 
2012
 
2011
Unrecognized tax benefits, as of the beginning of the period
 
$
285

 
$
212

 
$
282

Gross increases related to prior period tax positions
 
77

 
48

 
13

Gross decreases related to prior period tax positions
 
(3
)
 
(25
)
 
(98
)
Gross increases related to current period tax positions
 
130

 
91

 
59

Gross decreases related to current period tax positions
 
(9
)
 
(1
)
 
(6
)
Settlements
 
—

 
(20
)
 
(43
)
Lapse of statute of limitations
 
(21
)
 
(9
)
 
(8
)
Changes due to currency translation
 
(12
)
 
(11
)
 
13

UNRECOGNIZED TAX BENEFITS, AS OF THE END OF THE PERIOD
 
$
447

 
$
285

 
$
212

Summary of Operating Loss Carryforwards 
The Company has available domestic and foreign loss carry-forwards of $58 million at May 31, 2013. Such losses will expire as follows: 
 
 
Year Ending May 31,
(In millions)
 
2014
 
2015
 
2016
 
2017
 
2018- 2032
 
Indefinite

 
Total

Net Operating Losses
 
$
—

 
—

 
2

 
—

 
52

 
4

 
$
58

Common Stock and 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: 
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Stock options(1)
 
$
123

 
$
96

 
$
77

ESPPs
 
19

 
16

 
14

Restricted stock
 
32

 
18

 
14

TOTAL STOCK-BASED COMPENSATION EXPENSE
 
$
174

 
$
130

 
$
105

(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 years ended May 31, 2013, 2012, and 2011 was $22 million, $17 million, and $12 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:
 
 
Year Ended May 31,
  
 
2013
 
2012
 
2011
Dividend yield
 
1.5
%
 
1.4
%
 
1.6
%
Expected volatility
 
35.0
%
 
29.5
%
 
31.5
%
Weighted average expected life (in years)
 
5.3

 
5.0

 
5.0

Risk-free interest rate
 
0.6
%
 
1.4
%
 
1.7
%
Schedule of Share-based Compensation, Stock Options, Activity 
The following summarizes the stock option transactions under the plan discussed above: 
 
 
Shares (1)
 
Weighted Average
Option Price
  
 
(In millions)

 
  
Options outstanding May 31, 2010
 
72.2

 
$
23.30

Exercised
 
(14.0
)
 
21.35

Forfeited
 
(1.3
)
 
29.03

Granted
 
12.7

 
34.60

Options outstanding May 31, 2011
 
69.6

 
$
25.65

Exercised
 
(18.0
)
 
22.81

Forfeited
 
(1.0
)
 
35.61

Granted
 
13.7

 
45.87

Options outstanding May 31, 2012
 
64.3

 
$
30.59

Exercised
 
(9.9
)
 
24.70

Forfeited
 
(1.3
)
 
40.14

Granted
 
14.6

 
46.55

Options outstanding May 31, 2013
 
67.7

 
$
34.72

Options exercisable at May 31,
 
 
 
 
2011
 
40.1

 
$
22.03

2012
 
33.9

 
24.38

2013
 
35.9

 
27.70

(1)
Includes stock appreciation rights transactions.
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 0.1 million, 0.2 million, and 0.3 million shares of common stock were outstanding at May 31, 2013, 2012, and 2011 respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.
 
 
 
Year Ended May 31,
(In millions, except per share data)
 
2013
 
2012
 
2011
Determination of shares:
 
 
 
 
 
 
Weighted average common shares outstanding
 
897.3

 
920.0

 
951.1

Assumed conversion of dilutive stock options and awards
 
19.1

 
19.6

 
20.2

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
916.4

 
939.6

 
971.3

 
 
 
 
 
 
 
Earnings per share from continuing operations:
 
 
 
 
 
 
Basic earnings per common share
 
$
2.75

 
$
2.47

 
$
2.28

Diluted earnings per common share
 
$
2.69

 
$
2.42

 
$
2.24

 
 
 
 
 
 
 
Earnings per share from discontinued operations:
 
 
 
 
 
 
Basic earnings per common share
 
$
0.02

 
$
(0.05
)
 
$
(0.04
)
Diluted earnings per common share
 
$
0.02

 
$
(0.05
)
 
$
(0.04
)
 
 
 
 
 
 
 
Basic earnings per common share for NIKE, Inc.
 
$
2.77

 
$
2.42

 
$
2.24

Diluted earnings per common share for NIKE, Inc.
 
$
2.71

 
$
2.37

 
$
2.20

Accumulated Other Comprehensive Income (Tables)
Schedule of Accumulated Other Comprehensive Income
The components of accumulated other comprehensive income, net of tax, are as follows:
 
 
May 31
(In millions)
 
2013
 
2012
Cumulative translation adjustment and other
 
$
(14
)
 
$
(127
)
Net deferred gain on cash flow hedge derivatives
 
193

 
181

Net deferred gain on net investment hedge derivatives
 
95

 
95

ACCUMULATED OTHER COMPREHENSIVE INCOME
 
$
274

 
$
149

Discontinuted Operations (Tables)
Summarized results from discontinued operations
Summarized results of the Company's discontinued operations are as follows:
 
 
Year Ended May 31,
(In millions)
 
2013
 
2012
 
2011
Revenues
 
$
523

 
$
796

 
$
746

Income (loss) before income taxes
 
108

 
(43
)
 
(18
)
Income tax expense (benefit)
 
87

 
3

 
21

Net income (loss) from discontinued operations
 
$
21

 
$
(46
)
 
$
(39
)

As of May 31, 2013 and 2012, the aggregate components of assets and liabilities classified as discontinued operations and included in current assets and current liabilities consisted of the following:
 
 
As of May 31,
(In millions)
 
2013
 
2012
Accounts Receivable, net
 
$
—

 
$
148

Inventories
 
—

 
128

Deferred income taxes and other assets
 
—

 
35

Property, plant and equipment, net
 
—

 
70

Identifiable intangible assets, net
 
—

 
234

 TOTAL ASSETS
 
$
—

 
$
615

Accounts payable
 
$
1

 
$
42

Accrued liabilities
 
17

 
112

Deferred income taxes and other liabilities
 
—

 
16

TOTAL LIABILITIES
 
$
18

 
$
170

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 May 31, 2013 and 2012: 
 
 
Asset Derivatives
 
Liability Derivatives
(In millions)
 
Balance Sheet
Location
 
2013
 
2012
 
Balance Sheet 
Location
 
2013
 
2012
Derivatives formally designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
$
141

 
$
203

 
Accrued liabilities
 
$
12

 
$
35

Foreign exchange forwards and options
 
Deferred income taxes and other long-term assets
 
79

 
7

 
Deferred income taxes and other long-term liabilities
 
—

 
—

Interest rate swap contracts
 
Deferred income taxes and other long-term assets
 
11

 
15

 
Deferred income taxes and other long-term liabilities
 
—

 
—

Total derivatives formally designated as hedging instruments
 
 
 
$
231

 
$
225

 
 
 
$
12

 
$
35

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
$
58

 
$
55

 
Accrued liabilities
 
$
22

 
$
20

Embedded derivatives
 
Prepaid expenses and other current assets
 
—

 
1

 
Accrued liabilities
 
—

 
—

Total derivatives not designated as hedging instruments
 
 
 
58

 
56

 
 
 
22

 
20

TOTAL DERIVATIVES
 
 
 
$
289

 
$
281

 
 
 
$
34

 
$
55

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The following tables present the amounts affecting the consolidated statements of income for years ended May 31, 2013, 2012 and 2011:

(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)
Year Ended May 31,
 
Location of Gain (Loss) Reclassified From 
Accumulated Other Comprehensive Income Into Income(1)
 
Year Ended May 31,
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
42

 
$
(29
)
 
$
(87
)
 
Revenue

 
$
(19
)
 
$
5

 
$
(30
)
Foreign exchange forwards and options
 
67

 
253

 
(152
)
 
Cost of sales

 
113

 
(57
)
 
103

Foreign exchange forwards and options
 
(3
)
 
3

 
(4
)
 
Selling and administrative expense

 
2

 
(2
)
 
1

Foreign exchange forwards and options
 
33

 
36

 
(65
)
 
Other (income) expense, net

 
9

 
(9
)
 
34

Total designated cash flow hedges
 
$
139

 
$
263

 
$
(308
)
 
 
 
$
105

 
$
(63
)
 
$
108

Derivatives designated as net investment hedges:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
—

 
$
45

 
$
(85
)
 
Other (income) expense, net

 
$
—

 
$
—

 
$
—

(1)
For the years ended May 31, 2013, 2012, and 2011, the amounts recorded in other (income) expense, 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
 
 
Year Ended May 31,
 
(In millions)
 
2013
 
2012
 
2011
 
Derivatives designated as fair value hedges:
 
 
 
 
 
 
 
 
Interest rate swaps(1)
 
$
5

 
$
6

 
$
6

 
Interest (income) expense, net
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
51

 
64

 
(30
)
 
Other (income) expense, net
Embedded derivatives
 
$
(4
)
 
$
1

 
$
—

 
Other (income) expense, 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.

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
0 Months Ended 12 Months Ended
Nov. 15, 2012
May 31, 2013
May 31, 2012
May 31, 2011
Significant Accounting Policies [Line Items]
 
 
 
 
Stock split ratio for 100 percent of stock dividend declared
2 
 
 
 
Reserve balances for sales discounts, returns and miscellaneous claims
 
$ 531 
$ 455 
 
Total advertising and promotion expenses
 
2,745 
2,607 
2,344 
Prepaid advertising and promotion expenses
 
386 
281 
 
Allowance for uncollectible accounts receivable
 
104 
91 
 
Allowance for uncollectible accounts receivable, long-term
 
54 
45 
 
Goodwill
 
131 
131 
 
Trademark and Other intangible assets
 
$ 382 
$ 370 
 
Minimum |
Building
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
2 years 
 
 
Minimum |
Leasehold Improvements
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
2 years 
 
 
Minimum |
Machinery and Equipment
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
2 years 
 
 
Minimum |
Software and Software Development Costs
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
2 years 
 
 
Maximum |
Building
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
40 years 
 
 
Maximum |
Leasehold Improvements
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
40 years 
 
 
Maximum |
Machinery and Equipment
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
15 years 
 
 
Maximum |
Software and Software Development Costs
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Property, plant and equipment, minimum useful life (in years)
 
10 years 
 
 
Class B Common Stock
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Stock split ratio for 100 percent of stock dividend declared
2 
 
 
 
Class A Convertible Common Stock
 
 
 
 
Significant Accounting Policies [Line Items]
 
 
 
 
Stock split ratio for 100 percent of stock dividend declared
2 
 
 
 
Inventories - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Inventory Disclosure [Abstract]
 
 
Inventory balances, were substantially all finished goods
$ 3,434 
$ 3,222 
Property Plant and Equipment (Detail) (USD $)
May 31, 2013
May 31, 2012
Property, Plant and Equipment [Abstract]
 
 
Land
$ 268,000,000 
$ 252,000,000 
Buildings
1,174,000,000 
1,158,000,000 
Machinery, equipment and internal-use software
2,985,000,000 
2,654,000,000 
Leasehold improvements
945,000,000 
883,000,000 
Construction in process
128,000,000 
110,000,000 
Total property, plant and equipment, gross
5,500,000,000 
5,057,000,000 
Less accumulated depreciation
3,048,000,000 
2,848,000,000 
TOTAL PROPERTY, PLANT AND EQUIPMENT, NET
2,452,000,000 
2,209,000,000 
Capital lease obligations
$ 81,000,000 
$ 0 
Identifiable Intangible Assets and Goodwill - Identifiable Intangible Asset Balances (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Goodwill and Intangible Assets Disclosure [Line Items]
 
 
Gross Carrying Amount
$ 182 
$ 158 
Accumulated Amortization
(83)
(71)
Net Carrying Amount
99 
87 
Unamortized intangible assets - Trademarks
283 
283 
Identifiable intangible assets, net
382 
370 
Patents
 
 
Goodwill and Intangible Assets Disclosure [Line Items]
 
 
Gross Carrying Amount
119 
99 
Accumulated Amortization
(35)
(29)
Net Carrying Amount
84 
70 
Trademarks
 
 
Goodwill and Intangible Assets Disclosure [Line Items]
 
 
Gross Carrying Amount
43 
40 
Accumulated Amortization
(32)
(26)
Net Carrying Amount
11 
14 
Other
 
 
Goodwill and Intangible Assets Disclosure [Line Items]
 
 
Gross Carrying Amount
20 
19 
Accumulated Amortization
(16)
(16)
Net Carrying Amount
$ 4 
$ 3 
Identified Intangible Assets and Goodwill - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Goodwill and Intangible Assets Disclosure [Line Items]
 
 
 
Amortization expense, which is included in selling and administrative expense
$ 14 
$ 14 
$ 13 
Estimated amortization expense for intangible assets subject to amortization, 2014
13 
 
 
Estimated amortization expense for intangible assets subject to amortization, 2015
9 
 
 
Estimated amortization expense for intangible assets subject to amortization, 2016
9 
 
 
Estimated amortization expense for intangible assets subject to amortization, 2017
7 
 
 
Estimated amortization expense for intangible assets subject to amortization, 2018
6 
 
 
Goodwill
$ 131 
$ 131 
 
Accrued Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Accrued Liabilities, Current [Abstract]
 
 
Compensation and benefits, excluding taxes
$ 713 
$ 691 
Endorsement compensation
264 
288 
Taxes other than income taxes
192 
169 
Dividends payable
188 
165 
Import and logistics costs
111 
133 
Advertising and marketing
77 
94 
Fair value of derivatives
34 
55 
Other
407 1
346 1
TOTAL ACCRUED LIABILITIES
$ 1,986 
$ 1,941 
Maximum percent of accrued liabilities to be included in Other
5.00% 
5.00% 
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Assets
 
 
Derivative assets
$ 289 
$ 281 
Fair Value, Measurements, Recurring
 
 
Assets
 
 
Derivative assets
289 
281 
Available-for-sale securities
4,949 
2,852 
Total Assets
5,238 
3,133 
Liabilities
 
 
Total Liabilities
34 
55 
Fair Value, Measurements, Recurring |
U.S. Treasury securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
425 
226 
Fair Value, Measurements, Recurring |
U.S. Treasury securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
1,583 
927 
Fair Value, Measurements, Recurring |
U.S. Agency securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
20 
254 
Fair Value, Measurements, Recurring |
U.S. Agency securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
401 
230 
Fair Value, Measurements, Recurring |
Commercial paper and bonds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
1,035 
159 
Fair Value, Measurements, Recurring |
Commercial paper and bonds |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
644 
283 
Fair Value, Measurements, Recurring |
Money market funds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
836 
770 
Fair Value, Measurements, Recurring |
Non-marketable preferred stock |
Other Assets
 
 
Assets
 
 
Available-for-sale securities
5 
3 
Fair Value, Measurements, Recurring |
Foreign exchange forwards and options |
Other Assets
 
 
Assets
 
 
Derivative assets
278 
265 
Fair Value, Measurements, Recurring |
Foreign exchange forwards and options |
Other Liabilities
 
 
Liabilities
 
 
Derivative liabilities
34 
55 
Fair Value, Measurements, Recurring |
Embedded derivatives |
Other Assets
 
 
Assets
 
 
Derivative assets
 
1 
Fair Value, Measurements, Recurring |
Interest rate swap contracts |
Other Assets
 
 
Assets
 
 
Derivative assets
11 
15 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1
 
 
Assets
 
 
Derivative assets
0 
0 
Available-for-sale securities
2,008 
1,153 
Total Assets
2,008 
1,153 
Liabilities
 
 
Total Liabilities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Treasury securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
425 
226 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Treasury securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
1,583 
927 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Agency securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
U.S. Agency securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Commercial paper and bonds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Commercial paper and bonds |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Money market funds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Non-marketable preferred stock |
Other Assets
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Foreign exchange forwards and options |
Other Assets
 
 
Assets
 
 
Derivative assets
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Foreign exchange forwards and options |
Other Liabilities
 
 
Liabilities
 
 
Derivative liabilities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Embedded derivatives |
Other Assets
 
 
Assets
 
 
Derivative assets
 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 1 |
Interest rate swap contracts |
Other Assets
 
 
Assets
 
 
Derivative assets
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2
 
 
Assets
 
 
Derivative assets
289 
281 
Available-for-sale securities
2,936 
1,696 
Total Assets
3,225 
1,977 
Liabilities
 
 
Total Liabilities
34 
55 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Treasury securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Treasury securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Agency securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
20 
254 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
U.S. Agency securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
401 
230 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Commercial paper and bonds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
1,035 
159 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Commercial paper and bonds |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
644 
283 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Money market funds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
836 
770 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Non-marketable preferred stock |
Other Assets
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Foreign exchange forwards and options |
Other Assets
 
 
Assets
 
 
Derivative assets
278 
265 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Foreign exchange forwards and options |
Other Liabilities
 
 
Liabilities
 
 
Derivative liabilities
34 
55 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Embedded derivatives |
Other Assets
 
 
Assets
 
 
Derivative assets
 
1 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 2 |
Interest rate swap contracts |
Other Assets
 
 
Assets
 
 
Derivative assets
11 
15 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3
 
 
Assets
 
 
Derivative assets
0 
0 
Available-for-sale securities
5 
3 
Total Assets
5 
3 
Liabilities
 
 
Total Liabilities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Treasury securities |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Treasury securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
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 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
U.S. Agency securities |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Commercial paper and bonds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Commercial paper and bonds |
Short-term investments
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Money market funds |
Cash and equivalents
 
 
Assets
 
 
Available-for-sale securities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Non-marketable preferred stock |
Other Assets
 
 
Assets
 
 
Available-for-sale securities
5 
3 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Foreign exchange forwards and options |
Other Assets
 
 
Assets
 
 
Derivative assets
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Foreign exchange forwards and options |
Other Liabilities
 
 
Liabilities
 
 
Derivative liabilities
0 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Embedded derivatives |
Other Assets
 
 
Assets
 
 
Derivative assets
 
0 
Fair Value, Measurements, Recurring |
Fair Value Measurements Using Level 3 |
Interest rate swap contracts |
Other Assets
 
 
Assets
 
 
Derivative assets
$ 0 
$ 0 
Fair Value Measurements - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Fair Value Disclosures [Abstract]
 
 
 
Available-for-sale securities with maturity dates within one year from purchase date
$ 2,229 
$ 1,129 
 
Available-for-sale securities with maturity dates over one year and less than five years from purchase date
399 
311 
 
Interest income related to cash and equivalents and short-term investments
$ 26 
$ 27 
$ 28 
Fair Value Measurements - Short-Term Investments Classified as Available-For-Sale (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Available-for-sale investments:
 
 
Available-for-sale investments
$ 2,628 
$ 1,440 
U.S. Treasury and Agencies
 
 
Available-for-sale investments:
 
 
Available-for-sale investments
1,984 
1,157 
Corporate commercial paper and bonds
 
 
Available-for-sale investments:
 
 
Available-for-sale investments
$ 644 
$ 283 
Short-Term Borrowings and Credit Lines - Notes Payable to Banks and Interest Bearing Accounts Payable to Sojitz Corporation of America (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Notes payable:
 
 
TOTAL NOTES PAYABLE
$ 121 
$ 108 
Interest-Bearing Accounts Payable:
 
 
Sojitz America
55 
75 
Sojitz America - interest rate
0.99% 
1.10% 
U.S. operations
 
 
Notes payable:
 
 
TOTAL NOTES PAYABLE
20 
30 
U.S. operations |
Notes Payable
 
 
Notes payable:
 
 
Notes payable - interest rate
0.00% 1
5.50% 1
Non-U.S. operations
 
 
Notes payable:
 
 
TOTAL NOTES PAYABLE
$ 101 
$ 78 
Non-U.S. operations |
Notes Payable
 
 
Notes payable:
 
 
Notes payable - interest rate
4.77% 1
9.46% 1
Short Term Borrowings and Credit Lines - Additional Information (Detail) (USD $)
1 Months Ended 12 Months Ended
Nov. 1, 2011
May 31, 2013
May 31, 2012
Debt Instrument [Line Items]
 
 
 
Amounts outstanding under commercial paper program
 
$ 0 
$ 0 
Revolving credit facility, borrowing capacity
1,000,000,000 
 
 
Revolving credit facility, optional maximum borrowing capacity
1,500,000,000.0 
 
 
Revolving credit facility, optional extension period (in years)
1 year 
 
 
Basis spread on variable rate, above LIBOR
 
0.56% 
 
Revolving credit facility, fee
 
0.065% 
 
Line of credit facility, amount outstanding
 
$ 0 
$ 0 
External Credit Rating, Standard & Poor's
 
 
 
Debt Instrument [Line Items]
 
 
 
Long-term senior unsecured debt rating
 
A+ 
 
External Credit Rating, Moody's
 
 
 
Debt Instrument [Line Items]
 
 
 
Long-term senior unsecured debt rating
 
A1 
 
Before Extension
 
 
 
Debt Instrument [Line Items]
 
 
 
Revolving credit facility, maturity period
Nov. 01, 2016 
 
 
After Extension |
Maximum
 
 
 
Debt Instrument [Line Items]
 
 
 
Revolving credit facility, maturity period
Nov. 01, 2018 
 
 
Sojitz America Accounts Payable
 
 
 
Debt Instrument [Line Items]
 
 
 
Accounts payable, due date period (in days)
 
60 days 
 
Accounts payable, interest rate margin above LIBOR
 
0.75% 
 
Long Term Debt - Net of Unamortized Premiums and Discounts and Swap Fair Value Adjustments (Detail)
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
May 31, 2013
USD ($)
May 31, 2012
USD ($)
May 31, 2013
5.66% Corporate bond, payable July 23, 2012
USD ($)
May 31, 2012
5.66% Corporate bond, payable July 23, 2012
USD ($)
May 31, 2013
5.40% Corporate bond, payable August 7, 2012
USD ($)
May 31, 2012
5.40% Corporate bond, payable August 7, 2012
USD ($)
May 31, 2013
4.70% Corporate bond, payable October 1, 2013
USD ($)
May 31, 2012
4.70% Corporate bond, payable October 1, 2013
USD ($)
May 31, 2013
5.15% Corporate bond, payable October 15, 2015
USD ($)
May 31, 2012
5.15% Corporate bond, payable October 15, 2015
USD ($)
May 31, 2013
2.25% Corporate bond, payable May 1, 2023
USD ($)
May 31, 2012
2.25% Corporate bond, payable May 1, 2023
USD ($)
May 31, 2013
3.63 % Corporate bond, payable May 1, 2043
USD ($)
May 31, 2012
3.63 % Corporate bond, payable May 1, 2043
USD ($)
May 31, 2013
6.20% Promissory note, payable April 1, 2017
USD ($)
May 31, 2012
6.20% Promissory note, payable April 1, 2017
USD ($)
May 31, 2013
6.79% Promissory note, payable January 1, 2018
USD ($)
May 31, 2012
6.79% Promissory note, payable January 1, 2018
USD ($)
May 31, 2013
2.60% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
USD ($)
May 31, 2013
2.60% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
JPY (¥)
May 31, 2012
2.60% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
USD ($)
May 31, 2013
2.00% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
USD ($)
May 31, 2013
2.00% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
JPY (¥)
May 31, 2012
2.00% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
USD ($)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long Term Debt, original principal
 
 
$ 25,000,000 1 2
 
$ 15,000,000 1 2
 
$ 50,000,000 1
 
$ 100,000,000 1 2
 
$ 500,000,000 1 3
 
$ 500,000,000 1 3
 
$ 40,000,000 4
 
$ 19,000,000 4
 
 
¥ 9,000,000,000 5
 
 
¥ 4,000,000,000 5
 
Long-term debt, interest rate
 
 
5.66% 1 2
 
5.40% 1 2
 
4.70% 1
 
5.15% 1 2
 
2.25% 1 3
 
3.63% 1 3
 
6.20% 4
 
6.79% 4
 
2.60% 5
2.60% 5
 
2.00% 5
2.00% 5
 
Long-term debt, interest payment
 
 
Semi-Annually 1 2
 
Semi-Annually 1 2
 
Semi-Annually 1
 
Semi-Annually 1 2
 
Semi-Annually 1 3
 
Semi-Annually 1 3
 
Monthly 4
 
Monthly 4
 
Quarterly 5
Quarterly 5
 
Quarterly 5
Quarterly 5
 
Long Term Debt
1,267,000,000 
277,000,000 
0 1 2
25,000,000 1 2
0 1 2
15,000,000 1 2
50,000,000 1
50,000,000 1
111,000,000 1 2
115,000,000 1 2
499,000,000 1 3
0 1 3
499,000,000 1 3
0 1 3
40,000,000 4
0 4
19,000,000 4
0 4
34,000,000 5
 
50,000,000 5
15,000,000 5
 
22,000,000 5
Less current maturities
57,000,000 
49,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL LONG-TERM DEBT
$ 1,210,000,000 
$ 228,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long Term Debt - Net of Unamortized Premiums and Discounts and Swap Fair Value Adjustments (Parenthetical) (Detail)
12 Months Ended 12 Months Ended
May 31, 2013
Minimum
May 31, 2013
Maximum
May 31, 2013
5.66% Corporate bond, payable July 23, 2012
USD ($)
May 31, 2013
5.40% Corporate bond, payable August 7, 2012
USD ($)
May 31, 2013
4.70% Corporate bond, payable October 1, 2013
USD ($)
May 30, 2013
6.2% and 6.79% Promissory notes, payable April 1, 2017 and January 1, 2018
USD ($)
May 31, 2013
5.15% Corporate bond, payable October 15, 2015
USD ($)
May 31, 2013
2.25% Corporate bond, payable May 1, 2023
USD ($)
May 31, 2013
3.63 % Corporate bond, payable May 1, 2043
USD ($)
May 31, 2013
6.20% Promissory note, payable April 1, 2017
USD ($)
May 31, 2013
6.79% Promissory note, payable January 1, 2018
USD ($)
May 31, 2013
2.60% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
JPY (¥)
May 31, 2013
2.00% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
JPY (¥)
May 31, 2013
2.6% and 2.0% Japanese Yen note, maturing August 20, 2001 through November 20, 2020
JPY (¥)
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, maturity date
 
 
Jul. 23, 2012 
Aug. 07, 2012 
Oct. 01, 2013 
 
Oct. 15, 2015 
May 01, 2023 
May 01, 2043 
Apr. 01, 2017 
Jan. 01, 2018 
Nov. 20, 2020 
Nov. 20, 2020 
 
Long Term Debt, original principal
 
 
$ 25,000,000 1 2
$ 15,000,000 1 2
$ 50,000,000 1
$ 59,000,000 
$ 100,000,000 1 2
$ 500,000,000 1 3
$ 500,000,000 1 3
$ 40,000,000 4
$ 19,000,000 4
¥ 9,000,000,000 5
¥ 4,000,000,000 5
¥ 13,000,000,000 
Interest Rates swap, lower range of variable interest rate payable
0.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rates swap, higher range of variable interest rate payable
 
0.40% 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, minimum maturity date
 
 
 
 
 
 
 
 
 
 
 
 
 
Aug. 20, 2001 
Debt instrument, maximum maturity date
 
 
 
 
 
 
 
 
 
 
 
 
 
Nov. 20, 2020 
Par call provision payable period prior to scheduled maturity
 
 
 
 
 
 
 
3 months 
6 months 
 
 
 
 
 
Long Term Debt - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 30, 2013
May 31, 2012
Long-term Debt Disclosure [Abstract]
 
 
 
Business Acquisition, Purchase Price Allocation, Property, Plant and Equipment
 
$ 85 
 
Maturity of long-term debt in 2014
57 
 
 
Maturity of long-term debt in 2015
7 
 
 
Maturity of long-term debt in 2016
108 
 
 
Maturity of long-term debt in 2017
45 
 
 
Maturity of long-term debt in 2018
25 
 
 
Fair value of long term debt
$ 1,219 
 
$ 283 
Income Taxes - Income before Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Income before income taxes:
 
 
 
United States
$ 1,240 
$ 804 
$ 1,040 
Foreign
2,032 
2,221 
1,822 
Income before income taxes
$ 3,272 
$ 3,025 
$ 2,862 
Income Taxes - Provision for Income Taxes (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Current:
 
 
 
Federal
$ 434 
$ 289 
$ 298 
State
69 
51 
57 
Foreign
398 
488 
435 
Current Income Tax Expense (Benefit), Total
901 
828 
790 
Deferred:
 
 
 
Federal
1 
(48)
(62)
State
(4)
5 
0 
Foreign
(90)
(29)
(38)
Total Deferred Income Tax Expense (Benefit), Total
(93)
(72)
(100)
Income tax expense
$ 808 
$ 756 
$ 690 
Income Taxes - Reconciliation from United States Statutory Federal Income Tax Rate to Effective Income Tax Rate (Detail)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Income Tax Disclosure [Abstract]
 
 
 
Federal income tax rate
35.00% 
35.00% 
35.00% 
State taxes, net of federal benefit
1.40% 
1.30% 
1.30% 
Foreign earnings
(11.80%)
(11.90%)
(11.40%)
Other, net
0.10% 
0.60% 
(0.80%)
EFFECTIVE INCOME TAX RATE
24.70% 
25.00% 
24.10% 
Income Taxes - Additional Information (Detail) (USD $)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
May 31, 2010
Income Taxes [Line Items]
 
 
 
 
Effective tax rate, change from prior period
(0.30%)
0.90% 
 
 
Total gross unrecognized tax benefits, excluding related interest and penalties
$ 447,000,000 
$ 285,000,000 
$ 212,000,000 
$ 282,000,000 
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
281,000,000 
 
 
 
Increase in liability for payment of interest and penalties
4,000,000 
17,000,000 
10,000,000 
 
Accrued interest and penalties related to uncertain tax positions (excluding federal benefit)
112,000,000 
108,000,000 
 
 
Estimated decrease in total gross unrecognized tax benefits as a result of resolutions of global tax examinations and expiration of applicable statutes of limitations
86,000,000 
 
 
 
Reinvestment of the cumulative undistributed earnings of certain foreign subsidiaries
6,700,000,000 
 
 
 
Unrecognized deferred tax liability associated with the indefinitely reinvested undistributed earnings
2,200,000,000 
 
 
 
Tax holiday, expiration period (year)
2019 
 
 
 
Decrease in income tax expense related to tax holiday
108,000,000 
117,000,000 
36,000,000 
 
Decrease in income tax expense related to tax holiday per diluted share, (in dollars per share)
$ 0.12 
$ 0.12 
$ 0.04 
 
Valuation allowance related to tax benefits of certain subsidiaries with operating losses
22,000,000 
23,000,000 
1,000,000 
 
Deferred tax assets for foreign tax credit carry-forwards
106,000,000 
216,000,000 
 
 
Available domestic and foreign loss carry-forwards
58,000,000 
 
 
 
Income tax benefits attributable to employee stock-based compensation
$ 76,000,000 
$ 120,000,000 
$ 68,000,000 
 
Income Taxes - Deferred Tax Assets and Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Deferred tax assets:
 
 
Allowance for doubtful accounts
$ 20 
$ 17 
Inventories
40 
37 
Sales return reserves
101 
84 
Deferred compensation
197 
186 
Stock-based compensation
140 
126 
Reserves and accrued liabilities
66 
66 
Foreign loss carry-forwards
19 
35 
Foreign tax credit carry-forwards
106 
216 
Undistributed earnings of foreign subsidiaries
162 
82 
Other
47 
62 
Total deferred tax assets
898 
911 
Valuation allowance
(5)
(27)
Total deferred tax assets after valuation allowance
893 
884 
Deferred tax liabilities:
 
 
Property, plant and equipment
(241)
(191)
Intangibles
(96)
(98)
Other
(20)
(22)
Total deferred tax liability
(357)
(311)
NET DEFERRED TAX ASSET
$ 536 
$ 573 
Income Taxes - Reconciliation of Changes in Gross Balance of Unrecognized Tax Benefits (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Unrecognized tax benefits, as of the beginning of the period
$ 285 
$ 212 
$ 282 
Gross increases related to prior period tax positions
77 
48 
13 
Gross decreases related to prior period tax positions
(3)
(25)
(98)
Gross increases related to current period tax positions
130 
91 
59 
Gross decreases related to current period tax positions
(9)
(1)
(6)
Settlements
0 
(20)
(43)
Lapse of statute of limitations
(21)
(9)
(8)
Changes due to currency translation
(12)
(11)
13 
UNRECOGNIZED TAX BENEFITS, AS OF THE END OF THE PERIOD
$ 447 
$ 285 
$ 212 
Income Taxes - Available Domestic and Foreign Loss Carryforwards (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
$ 58 
2014
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
0 
Expire In 2015 [Member]
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
0 
2016
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
2 
2017
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
0 
2018 - 2032
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
52 
Indefinite
 
Operating Loss Carryforwards [Line Items]
 
Net Operating Losses
$ 4 
Redeemable Preferred Stock - Additional Information (Detail) (Non-marketable preferred stock, USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
May 31, 2013
Non-marketable preferred stock
 
Temporary Equity [Line Items]
 
Redeemable preferred stock, par value
$ 1 
Redeemable preferred stock, redeemable value (in dollars)
$ 0.3 
Redeemable preferred stock, dividends payable annually per share
$ 0.10 
Common Stock and Stock Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Class A Convertible Common Stock
 
 
 
Common Stock and Share Based Compensation [Line Items]
 
 
 
Common Stock, number of shares authorized (in shares)
200,000,000 
 
 
Common stock conversion
Each share of Class A Common Stock is convertible into one share of Class B Common Stock. 
 
 
Common stock, Class A conversion ratio to Class B (in shares)
1 
 
 
Common Class B
 
 
 
Common Stock and Share Based Compensation [Line Items]
 
 
 
Common Stock, number of shares authorized (in shares)
1,200,000,000 
 
 
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
$ 199 
 
 
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 3 months 18 days 
 
 
Weighted average fair value per share of the options granted (in dollars per share)
$ 12.71 
$ 11.08 
$ 8.84 
Minimum term of market traded options for estimates of expected volatility (in years)
1 year 
 
 
Weighted average remaining contractual life for options outstanding (in years)
6 years 3 months 18 days 
 
 
Weighted average remaining contractual life for options exercisable (in years)
4 years 8 months 12 days 
 
 
Aggregate intrinsic value for options outstanding
1,823 
 
 
Aggregate intrinsic value for options exercisable
1,218 
 
 
Total intrinsic value of options exercised
293 
453 
267 
Restricted Stock |
Stock Incentive Plan 1990 [Member] |
Common Class B
 
 
 
Common Stock and Share Based Compensation [Line Items]
 
 
 
Restricted and unrestricted stock granted to key employees under 1990 Plan, number of shares (in shares)
1,600,000 
700,000 
400,000 
Restricted stock granted to key employees under 1990 Plan, weighted average values per share (in dollars per shares)
$ 46.86 
$ 49.49 
$ 35.11 
Restricted stock vested, fair value
$ 25 
$ 22 
$ 15 
Employee Stock [Member] |
Common Class B
 
 
 
Common Stock and Share Based Compensation [Line Items]
 
 
 
Employee stock purchase plans, payroll deductions
10.00% 
 
 
Employee stock purchase plan offering period
6 months 
 
 
Shares purchased, price as percentage of lower of the fair market value
85.00% 
 
 
Purchase of shares by employee (in shares)
1,600,000 
1,700,000 
1,600,000 
Common Stock and Stock-Based Compensation - Total Stock-Based Compensation Expense (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense
$ 174 
$ 130 
$ 105 
Stock Options
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense
123 1
96 1
77 1
ESPPs
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense
19 
16 
14 
Restricted Stock
 
 
 
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
 
 
 
Stock-based compensation expense
$ 32 
$ 18 
$ 14 
Common Stock and Stock-Based Compensation - Total Stock-Based Compensation Expense (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Common Stock and Stock-based Compensation [Abstract]
 
 
 
Accelerated stock option expense
$ 22 
$ 17 
$ 12 
Common Stock and Stock-Based Compensation - Weighted Average Assumptions Used to Estimate Fair Values (Detail)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Common Stock and Stock-based Compensation [Abstract]
 
 
 
Dividend yield
1.50% 
1.40% 
1.60% 
Expected volatility
35.00% 
29.50% 
31.50% 
Weighted average expected life (in years)
5 years 3 months 
5 years 
5 years 
Risk-free interest rate
0.60% 
1.40% 
1.70% 
Common Stock and Stock-Based Compensation - Stock Option Transactions Under Plan (Detail) (Stock Incentive Plan 1990 [Member], USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Stock Incentive Plan 1990 [Member]
 
 
 
Options Outstanding - Shares
 
 
 
Beginning Balance (in shares)
64.3 1
69.6 1
72.2 1
Exercised (in shares)
(9.9)1
(18.0)1
(14.0)1
Forfeited (in shares)
(1.3)1
(1.0)1
(1.3)1
Granted (in shares)
14.6 1
13.7 1
12.7 1
Ending Balance (in shares)
67.7 1
64.3 1
69.6 1
Options exercisable (in shares)
35.9 1
33.9 1
40.1 1
Options Outstanding - Weighted-Average Option Price
 
 
 
Beginning Balance (in dollars per share)
$ 30.59 
$ 25.65 
$ 23.30 
Exercised (in dollars per share)
$ 24.70 
$ 22.81 
$ 21.35 
Forfeited (in dollars per share)
$ 40.14 
$ 35.61 
$ 29.03 
Granted (in dollars per share)
$ 46.55 
$ 45.87 
$ 34.60 
Ending Balance (in dollars per share)
$ 34.72 
$ 30.59 
$ 25.65 
Options exercisable (in dollars per share)
$ 27.70 
$ 24.38 
$ 22.03 
Earnings Per Share - Additional Information (Detail)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Earnings Per Share [Abstract]
 
 
 
Anti-dilutive options not included in the computation of diluted earnings per share
0.1 
0.2 
0.3 
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
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Determination of shares:
 
 
 
Weighted average common shares outstanding (in shares)
897.3 
920.0 
951.1 
Assumed conversion of dilutive stock options and awards (in shares)
19.1 
19.6 
20.2 
DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in shares)
916.4 
939.6 
971.3 
Earnings per share from continuing operations:
 
 
 
Income (Loss) from Continuing Operations, Per Basic Share (in dollars per share)
$ 2.75 
$ 2.47 
$ 2.28 
Income (Loss) from Continuing Operations, Per Diluted Share (in dollars per share)
$ 2.69 
$ 2.42 
$ 2.24 
Earnings per share from discontinued operations:
 
 
 
Income (Loss) from Discontinued Operations, Per Basic Share (in dollars per share)
$ 0.02 
$ (0.05)
$ (0.04)
Income (Loss) from Discontinued Operations, Per Diluted Share (in dollars per share)
$ 0.02 
$ (0.05)
$ (0.04)
Basic earnings per common share (in dollars per share)
$ 2.77 
$ 2.42 
$ 2.24 
Diluted earnings per common share (in dollars per share)
$ 2.71 
$ 2.37 
$ 2.20 
Benefit Plans - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Defined Contribution Plan Disclosure [Line Items]
 
 
 
401(k) employee savings plans, expenses
$ 46 
$ 42 
$ 38 
Liability related to the unfunded pension plan
104 
113 
 
Profit Sharing Plan
 
 
 
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Contribution and cash award expenses included in selling and administrative expenses
47 
40 
39 
Long Term Incentive Plan
 
 
 
Defined Contribution Plan Disclosure [Line Items]
 
 
 
Contribution and cash award expenses included in selling and administrative expenses
$ 50 
$ 51 
$ 31 
Accumulated Other Comprehensive Income Net of Tax (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
Cumulative translation adjustment and other
$ (14)
$ (127)
Net deferred gain on cash flow hedge derivatives
193 
181 
Net deferred gain on net investment hedge derivatives
95 
95 
ACCUMULATED OTHER COMPREHENSIVE INCOME
$ 274 
$ 149 
Discontinuted Operations (Details) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Feb. 1, 2013
Cole Haan
Feb. 1, 2013
Cole Haan
Minimum
Feb. 1, 2013
Cole Haan
Maximum
Nov. 30, 2012
Umbro
May 31, 2013
Umbro
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
 
 
 
Agreed upon purchase price from discontinued operations
 
 
 
$ 570,000,000 
 
 
 
 
Proceeds from Divestiture of Businesses
786,000,000 
0 
0 
561,000,000 
 
 
225,000,000 
 
Purchase price adjustments
 
 
 
9,000,000 
 
 
 
 
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax
124,000,000 
0 
0 
231,000,000 
 
 
(107,000,000)
 
Tax (benefit) expense on sale of discontinued operations
 
 
 
(137,000,000)
 
 
67,000,000 
 
Period of transition service (in months)
 
 
 
 
3 months 
9 months 
 
 
Lease guarantee
 
 
 
44,000,000 
 
 
 
 
Assets, including intangibles, goodwill, and fixed assets
 
 
 
 
 
 
248,000,000 
 
Other miscellaneous charges
 
 
 
 
 
 
22,000,000 
 
Release of cumulative translation adjustment related to Umbro, pre-tax
 
 
 
 
 
 
129,000,000 
 
Wind down cost recognized
 
 
 
 
 
 
 
$ 20,000,000 
Discontinued Operations Discontinuted Operations - Summarized Results (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
 
 
 
Revenues
$ 523 
$ 796 
$ 746 
Income (loss) before income taxes
108 
(43)
(18)
Income tax expense (benefit)
87 
3 
21 
Net income (loss) from discontinued operations
21 
(46)
(39)
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract]
 
 
 
Accounts Receivable, net
0 
148 
 
Inventories
0 
128 
 
Deferred income taxes and other assets
0 
35 
 
Property, plant and equipment, net
0 
70 
 
Identifiable intangible assets, net
0 
234 
 
TOTAL ASSETS
0 
615 
 
Accounts payable
1 
42 
 
Accrued liabilities
17 
112 
 
Deferred income taxes and other liabilities
0 
16 
 
TOTAL LIABILITIES
$ 18 
$ 170 
 
Commitments and Contingencies - Additional Information (Detail) (USD $)
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Expiration date of operating lease, lower limit (in years)
1 year 
 
 
Expiration date of operating lease, upper limit (in years)
21 years 
 
 
Rent expense
$ 482,000,000 
$ 431,000,000 
$ 386,000,000 
Minimum rental commitments, operating leases, 2013
403,000,000 
 
 
Minimum rental commitments, operating leases, 2014
340,000,000 
 
 
Minimum rental commitments, operating leases, 2015
304,000,000 
 
 
Minimum rental commitments, operating leases, 2016
272,000,000 
 
 
Minimum rental commitments, operating leases, 2017
225,000,000 
 
 
Minimum rental commitments, operating leases, thereafter
816,000,000 
 
 
Minimum commitments, capital leases, 2013
23,000,000 
 
 
Minimum commitments, capital leases, 2014
28,000,000 
 
 
Minimum commitments, capital leases, 2015
21,000,000 
 
 
Minimum commitments, capital leases, 2016
9,000,000 
 
 
Minimum commitments, capital leases, thereafter
0 
 
 
Letters of credit outstanding
$ 149,000,000 
$ 137,000,000 
 
Risk Management and Derivatives - Additional Information (Detail) (USD $)
12 Months Ended
May 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Line Items]
 
Total notional amount of outstanding derivatives
$ 9,000,000,000 
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
132,000,000 
Maximum term over which the Company is hedging exposures to the variability of cash flows for its forecasted and recorded transactions (in months)
24 months 
Embedded derivatives
 
Derivative Instruments and Hedging Activities Disclosure [Line Items]
 
Notional amount of embedded derivatives
136,000,000 
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
May 31, 2013
May 31, 2012
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
$ 289 
$ 281 
Liability Derivatives
34 
55 
Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
231 
225 
Liability Derivatives
12 
35 
Designated as Hedging Instrument |
Foreign exchange forwards and options |
Prepaid expenses and other current assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
141 
203 
Designated as Hedging Instrument |
Foreign exchange forwards and options |
Deferred income taxes and other long-term assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
79 
7 
Designated as Hedging Instrument |
Foreign exchange forwards and options |
Accrued liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Liability Derivatives
12 
35 
Designated as Hedging Instrument |
Foreign exchange forwards and options |
Deferred income taxes and other long-term liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Liability Derivatives
0 
0 
Designated as Hedging Instrument |
Interest rate swap contracts |
Deferred income taxes and other long-term assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
11 
15 
Designated as Hedging Instrument |
Interest rate swap contracts |
Deferred income taxes and other long-term liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Liability Derivatives
0 
0 
Derivatives not designated as hedging instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
58 
56 
Liability Derivatives
22 
20 
Derivatives not designated as hedging instruments |
Foreign exchange forwards and options |
Prepaid expenses and other current assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
58 
55 
Derivatives not designated as hedging instruments |
Foreign exchange forwards and options |
Accrued liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Liability Derivatives
22 
20 
Derivatives not designated as hedging instruments |
Embedded derivatives |
Prepaid expenses and other current assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Asset Derivatives
0 
1 
Derivatives not designated as hedging instruments |
Embedded derivatives |
Accrued liabilities
 
 
Derivatives, Fair Value [Line Items]
 
 
Liability Derivatives
$ 0 
$ 0 
Risk Management and Derivatives - Amounts Affecting Consolidated Statements of Income (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
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
$ 51 
$ 64 
$ (30)
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
(4)
1 
0 
Derivatives designated as cash flow hedges
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
139 1
263 1
(308)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
105 1
(63)1
108 1
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
42 1
(29)1
(87)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
(19)1
5 1
(30)1
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
67 1
253 1
(152)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
113 1
(57)1
103 1
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
(3)1
3 1
(4)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
2 1
(2)1
1 1
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
33 1
36 1
(65)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
9 1
(9)1
34 1
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
45 1
(85)1
Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income
0 1
0 1
0 1
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
$ 5 2
$ 6 2
$ 6 2
Operating Segments and Related Information - Information by Operating Segments (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
$ 25,313 
$ 23,331 
$ 20,117 
Earnings Before Interest and Taxes
3,269 
3,029 
2,866 
Interest (income) expense, net
(3)
4 
4 
Income before income taxes
3,272 
3,025 
2,862 
Additions to Long-lived Assets
780 
587 
421 
Depreciation
418 
353 
315 
NIKE Brand
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
22,881 
21,079 
18,153 
Earnings Before Interest and Taxes
3,990 
3,561 
3,318 
Additions to Long-lived Assets
620 
454 
276 
Depreciation
320 
262 
220 
NIKE Brand |
North America
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
10,387 
8,839 
7,579 
Earnings Before Interest and Taxes
2,534 
2,030 
1,736 
Additions to Long-lived Assets
201 
131 
79 
Depreciation
85 
78 
70 
NIKE Brand |
Western Europe
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
4,128 
4,144 
3,868 
Earnings Before Interest and Taxes
640 
597 
730 
Additions to Long-lived Assets
74 
93 
75 
Depreciation
68 
62 
52 
NIKE Brand |
Central & Eastern Europe
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
1,287 
1,200 
1,040 
Earnings Before Interest and Taxes
259 
234 
244 
Additions to Long-lived Assets
22 
20 
5 
Depreciation
9 
6 
4 
NIKE Brand |
Greater China
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
2,453 
2,539 
2,060 
Earnings Before Interest and Taxes
809 
911 
777 
Additions to Long-lived Assets
52 
38 
43 
Depreciation
34 
25 
19 
NIKE Brand |
Japan
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
791 
835 
773 
Earnings Before Interest and Taxes
133 
136 
114 
Additions to Long-lived Assets
6 
14 
9 
Depreciation
21 
23 
22 
NIKE Brand |
Emerging Markets
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
3,718 
3,411 
2,737 
Earnings Before Interest and Taxes
1,011 
853 
688 
Additions to Long-lived Assets
49 
27 
21 
Depreciation
20 
15 
14 
NIKE Brand |
Global Brand Divisions
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
117 
111 
96 
Earnings Before Interest and Taxes
(1,396)
(1,200)
(971)
Additions to Long-lived Assets
216 
131 
44 
Depreciation
83 
53 
39 
Other Businesses
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
2,500 
2,298 
2,041 
Earnings Before Interest and Taxes
456 
385 
353 
Additions to Long-lived Assets
29 
24 
27 
Depreciation
24 
25 
24 
Corporate
 
 
 
Segment Reporting, Revenue Reconciling Item [Line Items]
 
 
 
Net Revenue
(68)
(46)
(77)
Earnings Before Interest and Taxes
(1,177)
(917)
(805)
Additions to Long-lived Assets
131 
109 
118 
Depreciation
$ 74 
$ 66 
$ 71 
Operating Segments and Related Information - Accounts Receivable Net Inventories and Property Plant and Equipment Net by Operating Segments (Detail) (USD $)
In Millions, unless otherwise specified
May 31, 2013
May 31, 2012
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
$ 3,117 
$ 3,132 
Inventories
3,434 
3,222 
Property, Plant and Equipment, net
2,452 
2,209 
NIKE Brand
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
2,630 
2,709 
Inventories
3,032 
2,796 
Property, Plant and Equipment, net
1,700 
1,536 
NIKE Brand |
North America
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
1,214 
1,149 
Inventories
1,435 
1,272 
Property, Plant and Equipment, net
406 
378 
NIKE Brand |
Western Europe
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
356 
420 
Inventories
539 
488 
Property, Plant and Equipment, net
326 
314 
NIKE Brand |
Central & Eastern Europe
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
301 
261 
Inventories
207 
180 
Property, Plant and Equipment, net
44 
30 
NIKE Brand |
Greater China
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
52 
221 
Inventories
204 
217 
Property, Plant and Equipment, net
213 
191 
NIKE Brand |
Japan
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
133 
152 
Inventories
60 
83 
Property, Plant and Equipment, net
269 
359 
NIKE Brand |
Emerging Markets
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
546 
476 
Inventories
555 
521 
Property, Plant and Equipment, net
89 
59 
NIKE Brand |
Global Brand Divisions
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
28 
30 
Inventories
32 
35 
Property, Plant and Equipment, net
353 
205 
Other Businesses
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
436 
401 
Inventories
400 
384 
Property, Plant and Equipment, net
77 
76 
Corporate
 
 
Segment Reporting, Asset Reconciling Item [Line Items]
 
 
Accounts Receivable, net
51 
22 
Inventories
2 
42 
Property, Plant and Equipment, net
$ 675 
$ 597 
Operating Segments and Related Information - Revenues by Major Product Line (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Revenue from External Customer [Line Items]
 
 
 
Revenues
$ 25,313 
$ 23,331 
$ 20,117 
Footwear
 
 
 
Revenue from External Customer [Line Items]
 
 
 
Revenues
14,539 
13,428 
11,519 
Apparel
 
 
 
Revenue from External Customer [Line Items]
 
 
 
Revenues
6,820 
6,336 
5,516 
Equipment
 
 
 
Revenue from External Customer [Line Items]
 
 
 
Revenues
1,405 
1,204 
1,022 
Other products
 
 
 
Revenue from External Customer [Line Items]
 
 
 
Revenues
$ 2,549 
$ 2,363 
$ 2,060 
Operating Segments and Related Information - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Sales Revenue, Net
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Number of customers exceeding risk threshold
0 
0 
0 
Net Revenues [Member]
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Concentration Risk, Percentage
10.00% 
 
 
U.S. operations
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Revenues
$ 11,385 
$ 9,793 
$ 8,467 
Long-lived assets attributable to operations (Domestic)
1,424 
1,204 
1,056 
Japan
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Long-lived assets attributable to operations (Foreign)
270 
360 
361 
BELGIUM
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Long-lived assets attributable to operations (Foreign)
157 
164 
182 
China
 
 
 
Regional Reporting Disclosure [Line Items]
 
 
 
Long-lived assets attributable to operations (Foreign)
$ 212 
$ 188 
$ 175 
SCHEDULE II - Valuation and Qualifying Accounts (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended
May 31, 2013
May 31, 2012
May 31, 2011
Allowance for Sales Returns
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
$ 173 
$ 151 
$ 141 
Charged to Costs and Expenses
538 
401 
354 
Charged to Other Accounts
1 
(3)
1 
Write-Offs Net of Recoveries
(471)
(376)
(345)
Balance at End of Period
241 
173 
151 
Allowance for Doubtful Accounts
 
 
 
Movement in Valuation Allowances and Reserves [Roll Forward]
 
 
 
Balance at Beginning of Period
91 1
120 1
109 
Charged to Costs and Expenses
31 
21 
28 
Charged to Other Accounts
1 
(9)
14 
Write-Offs Net of Recoveries
(19)
(41)
(31)
Balance at End of Period
$ 104 1
$ 91 1
$ 120 1