Fair Value Measurements

12 Months Ended

May 31, 2013

Fair Value Disclosures [Abstract]

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.