XML 40 R28.htm IDEA: XBRL DOCUMENT v3.19.1
Risk Management and Derivatives (Tables)
 9 Months Ended
Feb. 28, 2019
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, 2019 and May 31, 2018, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.
 
 
As of February 28, 2019
 
 
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)
 
$
481

 
$
414

 
$
67

 
$
83

 
$
83

 
$
—

Embedded derivatives
 
7

 
1

 
6

 
6

 
4

 
2

TOTAL
 
$
488

 
$
415

 
$
73

 
$
89

 
$
87

 
$
2

(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 $82 million as of February 28, 2019. As of that date, the Company had received $137 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 February 28, 2019.
 
 
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 February 28, 2019 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
 
February 28,
2019
 
May 31,
2018
 
Balance Sheet 
Location
 
February 28,
2019
 
May 31,
2018
Derivatives formally designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
$
343

 
$
118

 
Accrued liabilities
 
$
58

 
$
156

Foreign exchange forwards and options
 
Deferred income taxes and other assets
 
67

 
152

 
Deferred income taxes and other liabilities
 
—

 
—

Total derivatives formally designated as hedging instruments
 
 
 
410

 
270

 
 
 
58

 
156

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
Prepaid expenses and other current assets
 
71

 
119

 
Accrued liabilities
 
25

 
26

Embedded derivatives
 
Prepaid expenses and other current assets
 
1

 
3

 
Accrued liabilities
 
4

 
2

Foreign exchange forwards and options
 
Deferred income taxes and other assets
 
—

 
—

 
Deferred income taxes and other liabilities
 
—

 
—

Embedded derivatives
 
Deferred income taxes and other assets
 
6

 
8

 
Deferred income taxes and other liabilities
 
2

 
6

Total derivatives not designated as hedging instruments
 
 
 
78

 
130

 
 
 
31

 
34

TOTAL DERIVATIVES
 
 
 
$
488

 
$
400

 
 
 
$
89

 
$
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 and nine months ended February 28, 2019 and 2018:
 
 
Three Months Ended February 28, 2019
 
Three Months Ended February 28, 2018
(In millions)
 
Total
 
Amount of Gain (Loss) on Cash Flow Hedge Activity
 
Total
 
Amount of Gain (Loss) on Cash Flow Hedge Activity
Revenues
 
$
9,611

 
$
1

 
$
8,984

 
$
9

Cost of sales
 
5,272

 
34

 
5,046

 
(41
)
Other (income) expense, net
 
(55
)
 
18

 
(1
)
 
(15
)
Interest expense (income), net
 
12

 
(2
)
 
13

 
(1
)
 
 
Nine Months Ended February 28, 2019
 
Nine Months Ended February 28, 2018
(In millions)
 
Total
 
Amount of Gain (Loss) on Cash Flow Hedge Activity
 
Total
 
Amount of Gain (Loss) on Cash Flow Hedge Activity
Revenues
 
$
28,933

 
$
9

 
$
26,608

 
$
24

Cost of sales
 
16,092

 
—

 
15,030

 
(17
)
Other (income) expense, net
 
(50
)
 
9

 
35

 
(33
)
Interest expense (income), net
 
37

 
(5
)
 
42

 
(5
)
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, 2019 and 2018:

(In millions)
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Derivatives(1)

Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income(1)
Three Months Ended February 28,
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
 
Three Months Ended February 28,
2019
 
2018


2019
 
2018
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
$
(50
)
 
$
7


Revenues

$
1

 
$
9

Foreign exchange forwards and options
(1
)
 
(118
)

Cost of sales

34

 
(41
)
Foreign exchange forwards and options
2

 
—


Demand creation expense

—

 
—

Foreign exchange forwards and options
7

 
(47
)

Other (income) expense, net

18

 
(15
)
Interest rate swaps(2)
—

 
—

 
Interest expense (income), net
 
(2
)
 
(1
)
Total designated cash flow hedges
$
(42
)
 
$
(158
)



$
51

 
$
(48
)
(1)
For the three months ended February 28, 2019 and 2018, the amounts recorded in Other (income) expense, net as a result of 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 (loss), 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 (Loss) on Derivatives(1)

Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income(1)
Nine Months Ended February 28,
 
Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
 
Nine Months Ended February 28,
2019
 
2018


2019
 
2018
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
$
(31
)
 
$
26


Revenues

$
9

 
$
24

Foreign exchange forwards and options
273

 
(382
)

Cost of sales

—

 
(17
)
Foreign exchange forwards and options
2

 
1


Demand creation expense

—

 
—

Foreign exchange forwards and options
112

 
(169
)

Other (income) expense, net

9

 
(33
)
Interest rate swaps(2)
—

 
—

 
Interest expense (income), net
 
(5
)
 
(5
)
Total designated cash flow hedges
$
356

 
$
(524
)



$
13

 
$
(31
)
(1)
For the nine months ended February 28, 2019 and 2018, the amounts recorded in Other (income) expense, net as a result of 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 (loss), will be released through Interest expense (income), net over the term of the issued debt.

 
 
Amount of Gain (Loss) Recognized in Income on Derivatives
 
 
 
 
Three Months Ended February 28,
 
Nine Months Ended February 28,
 
Location of Gain (Loss) 
Recognized in Income on Derivatives
(In millions)
 
2019
 
2018
 
2019
 
2018
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
Foreign exchange forwards and options
 
$
(59
)
 
$
(101
)
 
$
129

 
$
(270
)
 
Other (income) expense, net
Embedded derivatives
 
(2
)
 
1

 
2

 
(3
)
 
Other (income) expense, net