Risk Management and Derivatives (Tables)

3 Months Ended

Aug. 31, 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 August 31, 2015 and May 31, 2015, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.



	As of August 31, 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⁾	$	1,070	$	771	$	299	$	135	$	116	$	19
Embedded derivatives	8		4		4		12		2		10
Interest rate swaps⁽²⁾	76		76		—		—		—		—
TOTAL	$	1,154	$	851	$	303	$	147	$	118	$	29

(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 $135 million as of August 31, 2015. As of that date, the Company had received $417 million of cash collateral 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 August 31, 2015.


(2)	As of August 31, 2015, the Company had received $51 million of cash collateral related to its interest rate swaps.



	As of May 31, 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⁾	$	1,554	$	1,034	$	520	$	164	$	160	$	4
Embedded derivatives	7		2		5		11		2		9
Interest rate swaps⁽²⁾	78		78		—		—		—		—
TOTAL	$	1,639	$	1,114	$	525	$	175	$	162	$	13

(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 $161 million as of May 31, 2015. As of that date, the Company had received $900 million of cash collateral and $74 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 May 31, 2015.


(2)	As of May 31, 2015, the Company had received $68 million of cash collateral related to its interest rate swaps.

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



	Derivative Assets					Derivative Liabilities
(In millions)	Balance Sheet Location	August 31, 2015		May 31, 2015		Balance Sheet Location	August 31, 2015		May 31, 2015
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	662	$	825	Accrued liabilities	$	90	$	140
Interest rate swaps	Prepaid expenses and other current assets	76		78		Accrued liabilities	—		—
Foreign exchange forwards and options	Deferred income taxes and other assets	298		520		Deferred income taxes and other liabilities	10		4
Total derivatives formally designated as hedging instruments		1,036		1,423			100		144
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	109		209		Accrued liabilities	26		20
Embedded derivatives	Prepaid expenses and other current assets	4		2		Accrued liabilities	2		2
Foreign exchange forwards and options	Deferred income taxes and other assets	1		—		Deferred income taxes and other liabilities	9		—
Embedded derivatives	Deferred income taxes and other assets	4		5		Deferred income taxes and other liabilities	10		9
Total derivatives not designated as hedging instruments		118		216			47		31
TOTAL DERIVATIVES		$	1,154	$	1,639		$	147	$	175

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 months ended August 31, 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⁾
	Three Months Ended August 31,						Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Three Months Ended August 31,
	2015			2014				2015			2014
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	33		$	(38	)	Revenues	$	(43	)	$	(17	)
Foreign exchange forwards and options	(118		)	119			Cost of sales	160			(8		)
Foreign exchange forwards and options	(95		)	37			Other (income) expense, net	31			5
Interest rate swaps	—			—			Interest expense (income), net	—			—
Total designated cash flow hedges	$	(180	)	$	118			$	148		$	(20	)


(1)	For the three months ended August 31, 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.



	Amount of Gain (Loss) Recognized in Income on Derivatives						Location of Gain (Loss) Recognized in Income on Derivatives
	Three Months Ended August 31,
(In millions)	2015			2014
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	1		$	1		Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	(29		)	93			Other (income) expense, net
Embedded derivatives	—			(1		)	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.