RESTRUCTURING

9 Months Ended

Feb. 29, 2024

Restructuring and Related Activities [Abstract]

NOTE 14 — RESTRUCTURING

During the third quarter of fiscal 2024, the Company announced a multi-year enterprise initiative designed to accelerate its future growth. As part of this initiative, management is taking steps to streamline the organization which will include a net reduction in the Company's global workforce. As of February 29, 2024, the Company expects to recognize pre-tax restructuring charges of approximately $450 million, primarily associated with employee severance costs and accelerated stock-based compensation expense, the majority of which are expected to be recognized by the end of fiscal 2024. The related cash payments are expected to take place through the first half of fiscal 2025. The expected pre-tax charges are estimates and are subject to a number of assumptions and actual results may vary from the estimates provided.

During the third quarter of fiscal 2024, the Company recognized pre-tax restructuring charges of $403 million. These charges were classified within Corporate as follows:


	THREE MONTHS ENDED FEBRUARY 29, 2024
(Dollars in millions)	OPERATING OVERHEAD EXPENSE		COST OF SALES		TOTAL
Employee severance and related costs(1)	$	319	$	60	$	379
Stock-based compensation expense(2)	21		3		24
Total pre-tax restructuring charges	$	340	$	63	$	403

(1)Employee severance costs are recognized when a future related expense is considered probable and reasonably estimable.

(2)Non-cash restructuring related stock-based compensation expense is accelerated over the requisite service period, which for certain impacted employees could extend through the first half of fiscal 2025.

As of February 29, 2024, a majority of the $379 million of employee severance and related costs are reflected within Accrued liabilities on the Unaudited Condensed Consolidated Balance Sheets, classified within Other in Note 2 — Accrued Liabilities, and an immaterial amount is reflected within Accounts payable. As of February 29, 2024, the Company has not made any cash payments related to this activity.