Risk Management and Derivatives (Tables)

9 Months Ended

Feb. 29, 2016

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 29, 2016 and May 31, 2015, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.



	As of February 29, 2016
	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⁾	$	963	$	720	$	243	$	117	$	103	$	14
Embedded derivatives	5		1		4		11		3		8
Interest rate swaps⁽²⁾	—		—		—		54		54		—
TOTAL	$	968	$	721	$	247	$	182	$	160	$	22

(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 $116 million as of February 29, 2016. As of that date, the Company had received $338 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 February 29, 2016.


(2)	As of February 29, 2016, no amount of cash collateral had been posted on the derivative liability balance related to the Company's 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 February 29, 2016 and May 31, 2015:



	Derivative Assets					Derivative Liabilities
(In millions)	Balance Sheet Location	February 29, 2016		May 31, 2015		Balance Sheet Location	February 29, 2016		May 31, 2015
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	657	$	825	Accrued liabilities	$	26	$	140
Interest rate swaps	Prepaid expenses and other current assets	—		78		Accrued liabilities	54		—
Foreign exchange forwards and options	Deferred income taxes and other assets	227		520		Deferred income taxes and other liabilities	14		4
Total derivatives formally designated as hedging instruments		884		1,423			94		144
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	63		209		Accrued liabilities	77		20
Embedded derivatives	Prepaid expenses and other current assets	1		2		Accrued liabilities	3		2
Foreign exchange forwards and options	Deferred income taxes and other assets	16		—		Deferred income taxes and other liabilities	—		—
Embedded derivatives	Deferred income taxes and other assets	4		5		Deferred income taxes and other liabilities	8		9
Total derivatives not designated as hedging instruments		84		216			88		31
TOTAL DERIVATIVES		$	968	$	1,639		$	182	$	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 and nine months ended February 29, 2016 and February 28, 2015:



(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						Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Three Months Ended
	February 29, 2016			February 28, 2015				February 29, 2016			February 28, 2015
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	107		$	(146	)	Revenues	$	(24	)	$	(17	)
Foreign exchange forwards and options	(142		)	547			Cost of sales	153			74
Foreign exchange forwards and options	(91		)	277			Other (income) expense, net	73			42
Interest rate swaps	(49		)	44			Interest expense (income), net	—			—
Total designated cash flow hedges	$	(175	)	$	722			$	202		$	99


(1)	For the three months ended February 29, 2016 and 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⁾
	Nine Months Ended						Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income	Nine Months Ended
	February 29, 2016			February 28, 2015				February 29, 2016			February 28, 2015
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	97		$	(188	)	Revenues	$	(99	)	$	(53	)
Foreign exchange forwards and options	63			946			Cost of sales	451			87
Foreign exchange forwards and options	—			—			Total selling and administrative expense	—			—
Foreign exchange forwards and options	31			417			Other (income) expense, net	173			60
Interest rate swaps	(99		)	44			Interest expense (income), net	—			—
Total designated cash flow hedges	$	92		$	1,219			$	525		$	94


(1)	For the nine months ended February 29, 2016 and 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.



	Amount of Gain (Loss) Recognized in Income on Derivatives										Location of Gain (Loss) Recognized in Income on Derivatives
	Three Months Ended					Nine Months Ended
(In millions)	February 29, 2016			February 28, 2015		February 29, 2016			February 28, 2015
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	—		$	1	$	2		$	3	Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	(30		)	278		4			556		Other (income) expense, net
Embedded derivatives	(3		)	2		(3		)	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.