Leases

12 Months Ended

May 31, 2022

Leases [Abstract]

Leases

NOTE 19 — LEASES

Lease expense is recognized in Cost of sales or Operating overhead expense within the Consolidated Statements of Income, based on the underlying nature of the leased asset. For the fiscal years ended May 31, 2022, 2021 and 2020, lease expense primarily consisted of operating lease costs of $593 million, $589 million and $569 million, respectively. Lease expense also consisted of $366 million, $347 million and $337 million for fiscal years ended May 31, 2022, 2021 and 2020, respectively, primarily related to variable lease costs, which includes an immaterial amount of short-term lease costs. As of and for the fiscal years ended May 31, 2022 and 2021 and 2020, finance leases were not a material component of the Company's lease portfolio.

The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the Operating lease liabilities recognized in the Company’s Consolidated Balance Sheets are as follows:

(Dollars in millions)	AS OF MAY 31, 2022(1)
Fiscal 2023	$	491
Fiscal 2024	543
Fiscal 2025	490
Fiscal 2026	405
Fiscal 2027	350
Thereafter	1,250
Total undiscounted future cash flows related to lease payments	$	3,529
Less interest	332
Present value of lease liabilities	$	3,197

(1)Excludes $175 million as of May 31, 2022, of future operating lease payments for lease agreements signed but not yet commenced.

The following table includes supplemental information used to calculate the present value of Operating lease liabilities:

	AS OF MAY 31,
	2022		2021
Weighted-average remaining lease term (in years)	7.8		8.3
Weighted-average discount rate	2.3	%	2.3	%

The following table includes supplemental cash and non-cash information related to operating leases:

	YEAR ENDED MAY 31,
(Dollars in millions)	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	589	$	583	$	532
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	537	$	489	$	705	(1)

(1)Excludes the amount initially capitalized in conjunction with the adoption of Topic 842.