Summary
NIKE, Inc. filed an 8-K on September 28, 2009, to announce significant changes to its NIKE brand operating segment reporting structure and its primary financial performance measure for these segments. Effective the first quarter of fiscal year 2010, the company is reorganizing the NIKE brand into six distinct geographical operating segments: North America, Western Europe, Central/Eastern Europe, Greater China, Japan, and Emerging Markets. This new structure replaces the previous four-region model (United States, EMEA, Asia Pacific, and Americas). Furthermore, effective June 1, 2009, NIKE has adopted Earnings Before Interest and Taxes (EBIT) as its primary financial measure for evaluating individual operating segment performance, replacing the prior use of income before income taxes. The company has restated historical financial information to align with these new reporting segments and the updated primary financial measure. These changes are primarily for reporting and comparability purposes and do not impact the consolidated financial statements previously reported.
Key Highlights
- 1NIKE is reorganizing its NIKE brand operating segments into six new geographies, effective Q1 FY2010: North America, Western Europe, Central/Eastern Europe, Greater China, Japan, and Emerging Markets.
- 2This new six-segment structure replaces the previous four-region reporting model (United States, EMEA, Asia Pacific, Americas).
- 3Effective June 1, 2009, NIKE has changed its primary financial measure for evaluating segment performance from 'income before income taxes' to 'Earnings Before Interest and Taxes' (EBIT).
- 4Historical segment data has been reclassified and restated to conform to the new segment structure and the updated primary financial measure (EBIT).
- 5The reclassification and change in primary financial measure affect only the reporting of segment results and do not alter previously reported consolidated financial statements.
- 6The filing includes Exhibits 99.1 and 99.2, which detail the effects of the segment reclassification on historical divisional revenues and EBIT.
- 7South Africa's reporting segment will shift from Central/Eastern Europe to Emerging Markets in Q1 FY2012, after a transitional period through FY2011.