Nike 2009 Annual Report Download - page 87

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NIKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Certain of the Company’s derivative instruments contain credit risk related contingent features. As of
May 31, 2009, the Company was in compliance with all such credit risk related contingent features. The
aggregate fair value of derivative instruments with credit risk related contingent features that are in a net liability
position at May 31, 2009 was $15.2 million. The Company was not required to post any collateral as a result of
these contingent features.
Note 19 — Operating Segments and Related Information
Operating Segments. The Company’s operating segments are evidence of the structure of the Company’s
internal organization. The major segments are defined by geographic regions for operations participating in
NIKE brand sales activity excluding NIKE Golf and NIKE Bauer Hockey. Each NIKE brand geographic segment
operates predominantly in one industry: the design, production, marketing and selling of sports and fitness
footwear, apparel, and equipment. The “Other” category shown below represents activities of Cole Haan,
Converse, Exeter Brands Group (whose primary business was the Starter brand business which was sold on
December 17, 2007), Hurley, NIKE Bauer Hockey (through April 16, 2008), NIKE Golf, and Umbro (beginning
March 3, 2008) which are considered immaterial for individual disclosure based on the aggregation criteria in
SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information.”
Net revenues as shown below represent sales to external customers for each segment. Intercompany
revenues have been eliminated and are immaterial for separate disclosure. The Company evaluates performance
of individual operating segments based on pre-tax income. On a consolidated basis, this amount represents
income before income taxes as shown in the Consolidated Statements of Income. Reconciling items for pre-tax
income represent corporate expense items that are not allocated to the operating segments for management
reporting. Corporate expense consists of unallocated general and administrative expenses, which includes
expenses associated with centrally managed departments, depreciation and amortization related to the
Company’s corporate headquarters, unallocated insurance and benefit programs, foreign currency gains and
losses, including hedge gains and losses, corporate eliminations and other items.
Additions to long-lived assets as presented in the following table represent capital expenditures.
Accounts receivable, inventories and property, plant and equipment for operating segments are regularly
reviewed by management and are therefore provided below.
Certain prior year amounts have been reclassed to conform to fiscal 2009 presentation.
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