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PART II
NOTE 14 — Accumulated Other Comprehensive Income
The changes in Accumulated other comprehensive income, net of tax, were as follows:
(In millions)
Foreign
Currency
Translation
Adjustment(1)
Cash
Flow
Hedges
Net
Investment
Hedges(1) Other Total
Balance at May 31, 2014 $ 9 $ 32 $ 95 $ (51) $ 85
Other comprehensive gains (losses) before reclassifications(2) (20) 1,447 — 33 1,460
Reclassifications to net income of previously deferred (gains) losses(3) — (259) — (40) (299)
Other comprehensive income (loss) (20) 1,188 — (7) 1,161
Balance at May 31, 2015 $ (11) $ 1,220 $ 95 $ (58) $ 1,246
(1) The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or
upon complete or substantially complete liquidation of the respective entity.
(2) Net of tax benefit (expense) of $ 0 million, $ (33) million, $ 0 million, $ 0 million and $ (33) million, respectively.
(3) Net of tax (benefit) expense of $ 0 million, $ 2 million, $ 0 million, $ 0 million and $ 2 million, respectively.
(In millions)
Foreign
Currency
Translation
Adjustment(1)
Cash
Flow
Hedges
Net
Investment
Hedges(1) Other Total
Balance at May 31, 2013 $ 41 $ 193 $ 95 $ (55) $ 274
Other comprehensive gains (losses) before reclassifications(2) (32) (134) — — (166)
Reclassifications to net income of previously deferred (gains) losses(3) — (27) — 4 (23)
Other comprehensive income (loss) (32) (161) — 4 (189)
Balance at May 31, 2014 $ 9 $ 32 $ 95 $ (51) $ 85
(1) The accumulated foreign currency translation adjustment and net investment hedge gains/losses related to an investment in a foreign subsidiary are reclassified to Net income upon sale or
upon complete or substantially complete liquidation of the respective entity.
(2) Net of tax benefit (expense) of $ 0 million, $ 9 million, $ 0 million, $ 0 million and $ 9 million, respectively.
(3) Net of tax (benefit) expense of $ 0 million, $ 9 million, $ 0 million, $ 0 million and $ 9 million respectively.
The following table summarizes the reclassifications from Accumulated other comprehensive income to the Consolidated Statements of Income:
Amount of Gain (Loss)
Reclassified from Accumulated
Other Comprehensive Income
into Income Location of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income
into IncomeYear Ended May 31,
(In millions) 2015 2014
Gains (losses) on cash flow hedges:
Foreign exchange forwards and options $ (95) $ 14 Revenues
Foreign exchange forwards and options 220 12 Cost of sales
Foreign exchange forwards and options — — Total selling and administrative expense
Foreign exchange forwards and options 136 10 Other (income) expense, net
Total before tax 261 36
Tax expense (2) (9)
Gain, net of tax 259 27
Gains (losses) on other 40 (4) Other (income) expense, net
Total before tax 40 (4)
Tax expense — —
Gain (loss), net of tax 40 (4)
Total net gain reclassified for the period $ 299 $ 23
Refer to Note 17 — Risk Management and Derivatives for more information on the Company’s risk management program and derivatives.
NOTE 15 — Discontinued Operations
During the year ended May 31, 2013, the Company divested of Umbro and
Cole Haan, allowing it to focus its resources on driving growth in the NIKE,
Jordan, Converse and Hurley brands.
On February 1, 2013, the Company completed the sale of Cole Haan to Apax
Partners for an agreed upon purchase price of $570 million and received at
closing $561 million, net of $9 million of purchase price adjustments. The
transaction resulted in a gain on sale of $231 million, net of $137 million in
Income tax expense; this gain is included in the Net income from discontinued
operations line item on the Consolidated Statements of Income. There were no
adjustments to these recorded amounts as of May 31, 2015. 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 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
126