Risk Management and Derivatives (Tables)

9 Months Ended

Feb. 28, 2017

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, 2017 and May 31, 2016, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.



	As of February 28, 2017
	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⁾	$	607	$	493	$	114	$	116	$	114	$	2
Embedded derivatives	9		1		8		10		4		6
TOTAL	$	616	$	494	$	122	$	126	$	118	$	8

(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 $114 million as of February 28, 2017. As of that date, the Company had received $293 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 28, 2017.



	As of May 31, 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⁾	$	603	$	487	$	116	$	145	$	115	$	30
Embedded derivatives	7		2		5		9		2		7
Interest rate swaps⁽²⁾	7		7		—		45		45		—
TOTAL	$	617	$	496	$	121	$	199	$	162	$	37

(1)

If the foreign exchange derivative instruments had been netted on the Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $136 million as of May 31, 2016. As of that date, the Company had received $105 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 May 31, 2016.


(2)	As of May 31, 2016, no amount of cash collateral had been received or posted on the derivative asset or liability balance related to the Company's interest rate swaps.

The following table presents the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets as of February 28, 2017 and May 31, 2016:



	Derivative Assets					Derivative Liabilities
(In millions)	Balance Sheet Location	February 28, 2017		May 31, 2016		Balance Sheet Location	February 28, 2017		May 31, 2016
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	366	$	447	Accrued liabilities	$	35	$	38
Interest rate swaps	Prepaid expenses and other current assets	—		7		Accrued liabilities	—		45
Foreign exchange forwards and options	Deferred income taxes and other assets	100		90		Deferred income taxes and other liabilities	2		12
Total derivatives formally designated as hedging instruments		466		544			37		95
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	127		40		Accrued liabilities	79		76
Embedded derivatives	Prepaid expenses and other current assets	1		2		Accrued liabilities	4		2
Foreign exchange forwards and options	Deferred income taxes and other assets	14		26		Deferred income taxes and other liabilities	—		19
Embedded derivatives	Deferred income taxes and other assets	8		5		Deferred income taxes and other liabilities	6		7
Total derivatives not designated as hedging instruments		150		73			89		104
TOTAL DERIVATIVES		$	616	$	617		$	126	$	199

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, 2017 and February 29, 2016:



(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 28, 2017			February 29, 2016				February 28, 2017			February 29, 2016
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	5		$	107		Revenues	$	24		$	(24	)
Foreign exchange forwards and options	(5		)	(142		)	Cost of sales	87			153
Foreign exchange forwards and options	(3		)	—			Total selling and administrative expense	—			—
Foreign exchange forwards and options	4			(91		)	Other (income) expense, net	67			73
Interest rate swaps	—			(49		)	Interest expense (income), net	(2		)	—
Total designated cash flow hedges	$	1		$	(175	)		$	176		$	202


(1)	For the three months ended February 28, 2017 and February 29, 2016, 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 28, 2017			February 29, 2016				February 28, 2017			February 29, 2016
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	45		$	97		Revenues	$	96		$	(99	)
Foreign exchange forwards and options	244			63			Cost of sales	260			451
Foreign exchange forwards and options	(1		)	—			Total selling and administrative expense	—			—
Foreign exchange forwards and options	149			31			Other (income) expense, net	141			173
Interest rate swaps	(54		)	(99		)	Interest expense (income), net	(2		)	—
Total designated cash flow hedges	$	383		$	92			$	495		$	525


(1)	For the nine months ended February 28, 2017 and February 29, 2016, 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 28, 2017			February 29, 2016			February 28, 2017			February 29, 2016
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	—		$	—		$	—		$	2		Interest expense (income), net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	(66		)	(30		)	101			4			Other (income) expense, net
Embedded derivatives	(1		)	(3		)	(2		)	(3		)	Other (income) expense, net


(1)	All interest rate swaps designated as fair value hedges meet the shortcut method requirements under U.S. GAAP. 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.