Risk Management and Derivatives (Tables)

3 Months Ended

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



	As of August 31, 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⁾	$	476	$	347	$	129	$	99	$	99	$	—
Embedded derivatives	9		3		6		12		3		9
TOTAL	$	485	$	350	$	135	$	111	$	102	$	9

(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 $99 million as of August 31, 2018. As of that date, the Company had received $31 million of cash collateral from various counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the Company’s derivative liability balance as of August 31, 2018.



	As of May 31, 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⁾	$	389	$	237	$	152	$	182	$	182	$	—
Embedded derivatives	11		3		8		8		2		6
TOTAL	$	400	$	240	$	160	$	190	$	184	$	6

(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 $182 million as of May 31, 2018. As of that date, the Company had received $23 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, 2018.

The following table presents the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets as of August 31, 2018 and May 31, 2018. 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	August 31, 2018		May 31, 2018		Balance Sheet Location	August 31, 2018		May 31, 2018
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	207	$	118	Accrued liabilities	$	72	$	156
Foreign exchange forwards and options	Deferred income taxes and other assets	128		152		Deferred income taxes and other liabilities	—		—
Total derivatives formally designated as hedging instruments		335		270			72		156
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	140		119		Accrued liabilities	27		26
Embedded derivatives	Prepaid expenses and other current assets	3		3		Accrued liabilities	3		2
Foreign exchange forwards and options	Deferred income taxes and other assets	1		—		Deferred income taxes and other liabilities	—		—
Embedded derivatives	Deferred income taxes and other assets	6		8		Deferred income taxes and other liabilities	9		6
Total derivatives not designated as hedging instruments		150		130			39		34
TOTAL DERIVATIVES		$	485	$	400		$	111	$	190

Schedule Of Derivative Instruments, Gain (Loss) In Statement Of Income

The following tables present the amounts in the Unaudited Condensed Consolidated Statements of Income in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items for the three months ended August 31, 2018 and 2017:



	Three Months Ended August 31, 2018
(In millions)	Revenues		Cost of Sales			Demand Creation Expense		Other Expense (Income), Net			Interest Expense (Income), Net
Total	$	9,948	$	5,551		$	964	$	53		$	11
Amount of gain (loss) on cash flow hedge activity	5		(44		)	—		(9		)	(2		)



	Three Months Ended August 31, 2017
(In millions)	Revenues		Cost of Sales		Demand Creation Expense		Other Expense (Income), Net		Interest Expense (Income), Net
Total	$	9,070	$	5,108	$	855	$	18	$	16
Amount of gain (loss) on cash flow hedge activity	2		45		—		2		(2		)

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, 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 August 31,					Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Three Months Ended August 31,
	2018		2017				2018			2017
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	16	$	55		Revenues	$	5		$	2
Foreign exchange forwards and options	101		(277		)	Cost of sales	(44		)	45
Foreign exchange forwards and options	—		1			Demand creation expense	—			—
Foreign exchange forwards and options	26		(129		)	Other expense (income), net	(9		)	2
Interest rate swaps⁽²⁾	—		—			Interest expense (income), net	(2		)	(2		)
Total designated cash flow hedges	$	143	$	(350	)		$	(50	)	$	47


(1)	For the three months ended August 31, 2018 and 2017, the amounts recorded in Other expense (income), 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 August 31,
(In millions)	2018			2017
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	114		$	(194	)	Other expense (income), net
Embedded derivatives	(2		)	(1		)	Other expense (income), net