Acquisitions and Divestitures

6 Months Ended

Nov. 30, 2021


NOTE 12 — ACQUISITIONS AND DIVESTITURES

As previously disclosed in the Annual Report on Form 10-K for the fiscal year ended May 31, 2021, the Company remains committed to selling its legal entities in Argentina, Chile and Uruguay and granting distribution rights to third-party distributors. As such, the assets and liabilities of the entities have remained classified as held-for-sale on the Unaudited Condensed Consolidated Balance Sheets.

As of November 30, 2021, held-for-sale assets were $209 million, primarily consisting of $86 million of Accounts receivable, net and $61 million of Inventories; held-for-sale liabilities were $76 million, primarily consisting of $29 million of Accrued liabilities and $26 million of Accounts payable.

As of May 31, 2021, held-for-sale assets were $175 million, primarily consisting of $76 million of Inventories and $59 million of Accounts receivable, net; held-for-sale liabilities were $72 million, primarily consisting of $25 million of Accounts payable and $22 million of Accrued liabilities.

As of November 30, 2021, the Company has recognized a total expected net loss related to the Argentina, Chile and Uruguay transaction of $344 million within Other (income) expense, net, classified within Corporate, and a corresponding allowance within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets. The initial expected loss of $405 million recognized in fiscal 2020 and the subsequent adjustments for changes in fair value are largely due to the anticipated release of the cumulative foreign currency translation losses. These losses will be reclassified from Accumulated other comprehensive income (loss) to Net income upon sale of the legal entities.