Risk Management and Derivatives (Tables)

9 Months Ended

Feb. 28, 2018

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, 2018 and May 31, 2017, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.



	As of February 28, 2018
	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⁾	$	83	$	65	$	18	$	648	$	536	$	112
Embedded derivatives	13		2		11		8		3		5
TOTAL	$	96	$	67	$	29	$	656	$	539	$	117

(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 $83 million as of February 28, 2018. As of that date, the Company had posted $354 million of cash collateral to various counterparties related to foreign exchange derivative instruments. No amount of collateral was received on the Company’s derivative asset balance as of February 28, 2018.



	As of May 31, 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⁾	$	231	$	216	$	15	$	246	$	166	$	80
Embedded derivatives	10		1		9		8		2		6
TOTAL	$	241	$	217	$	24	$	254	$	168	$	86


(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 $187 million as of May 31, 2017. As of that date, no amount of cash collateral had been received or posted on the derivative asset and liability balances related to foreign exchange derivative instruments.

The following table presents the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets as of February 28, 2018 and May 31, 2017. Refer to Note 4 — Fair Value Measurements for a description of how the financial instruments in the table below are valued.



	Derivative Assets					Derivative Liabilities
(In millions)	Balance Sheet Location	February 28, 2018		May 31, 2017		Balance Sheet Location	February 28, 2018		May 31, 2017
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	42	$	113	Accrued liabilities	$	403	$	59
Foreign exchange forwards and options	Deferred income taxes and other assets	18		13		Deferred income taxes and other liabilities	112		73
Total derivatives formally designated as hedging instruments		60		126			515		132
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	23		103		Accrued liabilities	133		107
Embedded derivatives	Prepaid expenses and other current assets	2		1		Accrued liabilities	3		2
Foreign exchange forwards and options	Deferred income taxes and other assets	—		2		Deferred income taxes and other liabilities	—		7
Embedded derivatives	Deferred income taxes and other assets	11		9		Deferred income taxes and other liabilities	5		6
Total derivatives not designated as hedging instruments		36		115			141		122
TOTAL DERIVATIVES		$	96	$	241		$	656	$	254

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, 2018 and 2017:



(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 February 28,						Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Three Months Ended February 28,
	2018			2017				2018			2017
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	7		$	5		Revenues	$	9		$	24
Foreign exchange forwards and options	(118		)	(5		)	Cost of sales	(41		)	87
Foreign exchange forwards and options	—			(3		)	Total selling and administrative expense	—			—
Foreign exchange forwards and options	(47		)	4			Other (income) expense, net	(15		)	67
Interest rate swaps⁽²⁾	—			—			Interest expense (income), net	(1		)	(2		)
Total designated cash flow hedges	$	(158	)	$	1			$	(48	)	$	176


(1)	For the three months ended February 28, 2018 and 2017, 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.


(2)	Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income, will be released through Interest expense (income), net over the term of the issued debt.



(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 February 28,						Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Nine Months Ended February 28,
	2018			2017				2018			2017
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	26		$	45		Revenues	$	24		$	96
Foreign exchange forwards and options	(382		)	244			Cost of sales	(17		)	260
Foreign exchange forwards and options	1			(1		)	Total selling and administrative expense	—			—
Foreign exchange forwards and options	(169		)	149			Other (income) expense, net	(33		)	141
Interest rate swaps⁽²⁾	—			(54		)	Interest expense (income), net	(5		)	(2		)
Total designated cash flow hedges	$	(524	)	$	383			$	(31	)	$	495


(1)	For the nine months ended February 28, 2018 and 2017, 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.


(2)	Gains and losses associated with terminated interest rate swaps, which were previously designated as cash flow hedges and recorded in Accumulated other comprehensive income, will be released through Interest expense (income), net over the term of the issued debt.



	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)	2018			2017			2018			2017
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(101	)	$	(66	)	$	(270	)	$	101		Other (income) expense, net
Embedded derivatives	1			(1		)	(3		)	(2		)	Other (income) expense, net