Leases

12 Months Ended

May 31, 2023

Leases [Abstract]

Leases

NOTE 17 — 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, 2023, 2022 and 2021, lease expense primarily consisted of operating lease costs of $585 million, $593 million and $589 million, respectively. Lease expense also consisted of $403 million, $366 million and $347 million for fiscal years ended May 31, 2023, 2022 and 2021, 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, 2023 and 2022 and 2021, 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, 2023(1)
Fiscal 2024	$	506
Fiscal 2025	562
Fiscal 2026	490
Fiscal 2027	436
Fiscal 2028	369
Thereafter	1,225
Total undiscounted future cash flows related to lease payments	$	3,588
Less interest	377
Present value of lease liabilities	$	3,211

(1)Excludes $278 million as of May 31, 2023, 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,
	2023		2022
Weighted-average remaining lease term (in years)	7.5		7.8
Weighted-average discount rate	2.5	%	2.3	%

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

	YEAR ENDED MAY 31,
(Dollars in millions)	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	575	$	589	$	583
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	602	$	537	$	489