Risk Management and Derivatives (Tables)

9 Months Ended

Feb. 28, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following tables present information about the Company’s derivative assets and liabilities measured at fair value on a recurring basis as of February 28, 2015 and May 31, 2014, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.



	As of February 28, 2015
	Derivative Assets						Derivative Liabilities
(In millions)	Assets at Fair Value		Other Current Assets		Other Long-term Assets		Liabilities at Fair Value		Accrued Liabilities		Other Long-term Liabilities
Level 2:
Foreign exchange forwards and options⁽¹⁾	$	1,459	$	1,005	$	454	$	195	$	167	$	28
Embedded derivatives	1		1		—		—		—		—
Interest rate swaps⁽²⁾	47		47		—		—		—		—
TOTAL	$	1,507	$	1,053	$	454	$	195	$	167	$	28

(1)

If the foreign exchange derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $193 million as of February 28, 2015. As of that date, the Company had received $736 million of cash collateral and $77 million of securities from various counterparties related to these foreign exchange derivative instruments. No amount of collateral was posted on the Company’s derivative liability balance as of February 28, 2015.


(2)	As of February 28, 2015, the Company had received $33 million of cash collateral related to its interest rate swaps.



	As of May 31, 2014
	Derivative Assets						Derivative Liabilities
(In millions)	Assets at Fair Value		Other Current Assets		Other Long-term Assets		Liabilities at Fair Value		Accrued Liabilities		Other Long-term Liabilities
Level 2:
Foreign exchange forwards and options⁽¹⁾	$	127	$	101	$	26	$	85	$	84	$	1
Interest rate swaps⁽¹⁾	6		—		6		—		—		—
TOTAL	$	133	$	101	$	32	$	85	$	84	$	1


(1)	If the foreign exchange derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $63 million as of May 31, 2014. No amounts of collateral were received or posted on the Company’s derivative assets and liabilities as of May 31, 2014.

The following table presents the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets as of February 28, 2015 and May 31, 2014:



	Derivative Assets					Derivative Liabilities
(In millions)	Balance Sheet Location	February 28, 2015		May 31, 2014		Balance Sheet Location	February 28, 2015		May 31, 2014
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	762	$	76	Accrued liabilities	$	141	$	57
Interest rate swaps	Prepaid expenses and other current assets	47		—		Accrued liabilities	—		—
Foreign exchange forwards and options	Deferred income taxes and other assets	454		26		Deferred income taxes and other liabilities	28		1
Interest rate swaps	Deferred income taxes and other assets	—		6		Deferred income taxes and other liabilities	—		—
Total derivatives formally designated as hedging instruments		1,263		108			169		58
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	243		25		Accrued liabilities	26		27
Embedded derivatives	Prepaid expenses and other current assets	1		—		Accrued liabilities	—		—
Total derivatives not designated as hedging instruments		244		25			26		27
TOTAL DERIVATIVES		$	1,507	$	133		$	195	$	85

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following tables present the amounts affecting the Unaudited Condensed Consolidated Statements of Income for the three and nine months ended February 28, 2015 and 2014:



(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⁾
(In millions)	Three Months Ended February 28, 2015			Nine Months Ended February 28, 2015			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Three Months Ended February 28, 2015			Nine Months Ended February 28, 2015
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(146	)	$	(188	)	Revenues	$	(17	)	$	(53	)
Foreign exchange forwards and options	547			946			Cost of sales	74			87
Foreign exchange forwards and options	—			—			Total selling and administrative expense	—			—
Foreign exchange forwards and options	277			417			Other (income) expense, net	42			60
Interest rate swaps	44			44			Interest expense (income), net	—			—
Total designated cash flow hedges	$	722		$	1,219			$	99		$	94


(1)	For the three and nine months ended February 28, 2015, 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.



(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⁾
(In millions)	Three Months Ended February 28, 2014			Nine Months Ended February 28, 2014			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Three Months Ended February 28, 2014			Nine Months Ended February 28, 2014
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(20	)	$	(39	)	Revenues	$	(1	)	$	20
Foreign exchange forwards and options	(12		)	(100		)	Cost of sales	(5		)	18
Foreign exchange forwards and options	1			4			Total selling and administrative expense	—			—
Foreign exchange forwards and options	(5		)	(28		)	Other (income) expense, net	(5		)	6
Total designated cash flow hedges	$	(36	)	$	(163	)		$	(11	)	$	44


(1)	For the three and nine months ended February 28, 2014, 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
	Three Months Ended February 28,					Nine Months Ended February 28,
(In millions)	2015		2014			2015		2014
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	1	$	1		$	3	$	3		Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	278	$	(11	)	$	556	$	(50	)	Other (income) expense, net
Embedded derivatives	$	2	$	1		$	3	$	—		Other (income) expense, net


(1)	All interest rate swaps designated as fair value hedges meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swaps 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.