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RISK MANAGEMENT AND DERIVATIVES (Tables)

9 Months Ended

Feb. 28, 2023

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 and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement:


	FEBRUARY 28, 2023
	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)	$	651	$	551	$	100	$	176	$	112	$	64
Embedded derivatives	5		5		—		2		2		—
TOTAL	$	656	$	556	$	100	$	178	$	114	$	64

(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 $175 million as of February 28, 2023. As of that date, the Company received $100 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of February 28, 2023.


	MAY 31, 2022
	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)	$	875	$	669	$	206	$	76	$	65	$	11
Embedded derivatives	5		5		—		1		1		—
TOTAL	$	880	$	674	$	206	$	77	$	66	$	11

(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 $76 million as of May 31, 2022. As of that date, the Company received $486 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of May 31, 2022

The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets:


	DERIVATIVE ASSETS
	BALANCE SHEET LOCATION	FEBRUARY 28,		MAY 31,
(Dollars in millions)		2023		2022
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	530	$	639
Foreign exchange forwards and options	Deferred income taxes and other assets	100		206
Total derivatives formally designated as hedging instruments		630		845
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	21		30
Embedded derivatives	Prepaid expenses and other current assets	5		5


Total derivatives not designated as hedging instruments		26		35
TOTAL DERIVATIVE ASSETS		$	656	$	880

	DERIVATIVE LIABILITIES
	BALANCE SHEET LOCATION	FEBRUARY 28,		MAY 31,
(Dollars in millions)		2023		2022
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	$	93	$	37
Foreign exchange forwards and options	Deferred income taxes and other liabilities	64		11
Total derivatives formally designated as hedging instruments		157		48
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	19		28
Embedded derivatives	Accrued liabilities	2		1


Total derivatives not designated as hedging instruments		21		29
TOTAL DERIVATIVE LIABILITIES		$	178	$	77

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:


	THREE MONTHS ENDED FEBRUARY 28,
	2023				2022
(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	12,390	$	14	$	10,871	$	(22)
Cost of sales	7,019		182		5,804		17
Demand creation expense	923		(1)		854		—
Other (income) expense, net	(58)		90		(94)		45
Interest expense (income), net	(7)		(2)		53		(2)


	NINE MONTHS ENDED FEBRUARY 28,
	2023				2022
(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	38,392	$	9	$	34,476	$	(63)
Cost of sales	21,695		464		18,500		(79)
Demand creation expense	2,968		(4)		2,789		1
Other (income) expense, net	(283)		297		(235)		56
Interest expense (income), net	22		(6)		165		(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:


(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 FEBRUARY 28,				LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	THREE MONTHS ENDED FEBRUARY 28,
	2023		2022			2023		2022
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	30	$	(37)	Revenues	$	14	$	(22)
Foreign exchange forwards and options	(141)		4		Cost of sales	182		17
Foreign exchange forwards and options	1		—		Demand creation expense	(1)		—
Foreign exchange forwards and options	(65)		31		Other (income) expense, net	90		45
Interest rate swaps(2)	—		—		Interest expense (income), net	(2)		(2)
TOTAL DESIGNATED CASH FLOW HEDGES	$	(175)	$	(2)		$	283	$	38

(1)For the three months ended February 28, 2023 and 2022, 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)
	NINE MONTHS ENDED FEBRUARY 28,				LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	NINE MONTHS ENDED FEBRUARY 28,
	2023		2022			2023		2022
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	52	$	(74)	Revenues	$	9	$	(63)
Foreign exchange forwards and options	245		522		Cost of sales	464		(79)
Foreign exchange forwards and options	(2)		(3)		Demand creation expense	(4)		1
Foreign exchange forwards and options	181		304		Other (income) expense, net	297		56
Interest rate swaps(2)	—		—		Interest expense (income), net	(6)		(5)
TOTAL DESIGNATED CASH FLOW HEDGES	$	476	$	749		$	760	$	(90)

(1)For the nine months ended February 28, 2023 and 2022, 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.


	AMOUNT OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES								LOCATION OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
	THREE MONTHS ENDED FEBRUARY 28,				NINE MONTHS ENDED FEBRUARY 28,
(Dollars in millions)	2023		2022		2023		2022


Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(12)	$	(20)	$	32	$	12	Other (income) expense, net
Embedded derivatives	(14)		—		20		(9)		Other (income) expense, net