Risk Management and Derivatives (Tables)

6 Months Ended

Nov. 30, 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 November 30, 2019 and May 31, 2019, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:

	NOVEMBER 30, 2019
	DERIVATIVE ASSETS						DERIVATIVE LIABILITIES
(Dollars 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)	$	427	$	393	$	34	$	73	$	72	$	1
Embedded derivatives	—		—		—		—		—		—
TOTAL	$	427	$	393	$	34	$	73	$	72	$	1

(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 $53 million as of November 30, 2019. As of that date, the Company had received $122 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 November 30, 2019.

	MAY 31, 2019
	DERIVATIVE ASSETS						DERIVATIVE LIABILITIES
(Dollars 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)	$	611	$	611	$	—	$	51	$	51	$	—
Embedded derivatives	11		5		6		3		1		2
TOTAL	$	622	$	616	$	6	$	54	$	52	$	2

(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 $50 million as of May 31, 2019. As of that date, the Company had received $289 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 May 31, 2019.

The following table presents the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets as of November 30, 2019 and May 31, 2019:

	DERIVATIVE ASSETS					DERIVATIVE LIABILITIES
	BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,		BALANCE SHEET LOCATION	NOVEMBER 30,		MAY 31,
(Dollars in millions)		2019		2019			2019		2019
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	354	$	509	Accrued liabilities	$	54	$	5
Foreign exchange forwards and options	Deferred income taxes and other assets	34		—		Deferred income taxes and other liabilities	1		—
Total derivatives formally designated as hedging instruments		388		509			55		5
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	39		102		Accrued liabilities	18		46
Embedded derivatives	Prepaid expenses and other current assets	—		5		Accrued liabilities	—		1
Embedded derivatives	Deferred income taxes and other assets	—		6		Deferred income taxes and other liabilities	—		2
Total derivatives not designated as hedging instruments		39		113			18		49
TOTAL DERIVATIVES		$	427	$	622		$	73	$	54

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 six months ended November 30, 2019 and 2018:

	THREE MONTHS ENDED NOVEMBER 30,
	2019						2018
(Dollars in millions)	TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY			TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	10,326		$	1		$	9,374		$	3
Cost of sales	5,782			102			5,269			10
Demand creation expense	881			(3		)	910			—
Other (income) expense, net	(41		)	31			(48		)	—
Interest expense (income), net	12			(1		)	14			(1		)

	SIX MONTHS ENDED NOVEMBER 30,
	2019						2018
(Dollars in millions)	TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY			TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	20,986		$	9		$	19,322	$	8
Cost of sales	11,571			177			10,820		(34		)
Demand creation expense	1,899			(3		)	1,874		—
Other (income) expense, net	(74		)	77			5		(9		)
Interest expense (income), net	27			(3		)	25		(3		)

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 six months ended November 30, 2019 and 2018:

(Dollars 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 NOVEMBER 30,					LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	THREE MONTHS ENDED NOVEMBER 30,
	2019			2018			2019			2018
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(83	)	$	3	Revenues	$	1		$	3
Foreign exchange forwards and options	37			173		Cost of sales	102			10
Foreign exchange forwards and options	—			—		Demand creation expense	(3		)	—
Foreign exchange forwards and options	27			79		Other (income) expense, net	31			—
Interest rate swaps(2)	—			—		Interest expense (income), net	(1		)	(1		)
Total designated cash flow hedges	$	(19	)	$	255		$	130		$	12

(1) For the three months ended November 30, 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.

(Dollars 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)
	SIX MONTHS ENDED NOVEMBER 30,					LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	SIX MONTHS ENDED NOVEMBER 30,
	2019			2018			2019			2018
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(62	)	$	19	Revenues	$	9		$	8
Foreign exchange forwards and options	146			274		Cost of sales	177			(34		)
Foreign exchange forwards and options	—			—		Demand creation expense	(3		)	—
Foreign exchange forwards and options	60			105		Other (income) expense, net	77			(9		)
Interest rate swaps(2)	—			—		Interest expense (income), net	(3		)	(3		)
Total designated cash flow hedges	$	144		$	398		$	257		$	(38	)

(1) For the six months ended November 30, 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										LOCATION OF GAIN (LOSS)   RECOGNIZED IN INCOME   ON DERIVATIVES
	THREE MONTHS ENDED NOVEMBER 30,					SIX MONTHS ENDED NOVEMBER 30,
(Dollars in millions)	2019			2018		2019			2018
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(21	)	$	74	$	(21	)	$	188	Other (income) expense, net
Embedded derivatives	(4		)	6		(5		)	4		Other (income) expense, net