Risk Management and Derivatives: (Tables)

6 Months Ended

Nov. 30, 2011

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the fair values of derivative instruments included within the unaudited condensed consolidated balance sheet as of November 30, 2011 and May 31, 2011:


	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	November 30, 2011		May 31, 2011		Balance Sheet Location	November 30, 2011		May 31, 2011
	(in millions)
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	144	$	22	Accrued liabilities	$	32	$	170
Interest rate swap contracts	Prepaid expenses and other current assets		1		0	Accrued liabilities		0		0
Foreign exchange forwards and options	Deferred income taxes and other long-term assets		26		7	Deferred income taxes and other long-term liabilities		0		10
Interest rate swap contracts	Deferred income taxes and other long-term assets		15		15	Deferred income taxes and other long-term liabilities		0		0

Total derivatives formally designated as hedging instruments			186		44			32		180

Derivatives not formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets		21		9	Accrued liabilities		13		16
Foreign exchange forwards and options	Deferred income taxes and other long-term assets		0		0	Deferred income taxes and other long-term liabilities		2		1

Total derivatives not formally designated as hedging instruments			21		9			15		17

Total derivatives		$	207	$	53		$	47	$	197

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 for the three and six month periods ended November 30, 2011 and 2010:


	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾					Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
Derivatives designated as hedges	Three Months Ended November 30, 2011			Six Months Ended November 30, 2011		Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income⁽¹⁾	Three Months Ended November 30, 2011			Six Months Ended November 30, 2011
	(in millions)						(in millions)
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(4	)	$	17	Revenue	$	7		$	14
Foreign exchange forwards and options		186			143	Cost of sales		(34	)		(73	)
Foreign exchange forwards and options		2			0	Selling and administrative expense		(1	)		(2	)
Foreign exchange forwards and options		25			11	Other (income) expense, net		(7	)		(18	)

Total designated cash flow hedges	$	209		$	171		$	(35	)	$	(79	)
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	46		$	37	Other (income) expense, net	$	0		$	0

⁽¹⁾	For the three and six month periods ended November 30, 2011, the Company recognized an immaterial amount of ineffectiveness from cash flow hedges.


	Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives⁽¹⁾						Amount of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income into Income⁽¹⁾
Derivatives designated as hedges	Three Months Ended November 30, 2010			Six Months Ended November 30, 2010			Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income⁽¹⁾	Three Months Ended November 30, 2010			Six Months Ended November 30, 2010
	(in millions)							(in millions)
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	33		$	4		Revenue	$	(10	)	$	(23	)
Foreign exchange forwards and options		(36	)		(86	)	Cost of sales		35			87
Foreign exchange forwards and options		(3	)		(1	)	Selling and administrative expense		1			1
Foreign exchange forwards and options		(7	)		(30	)	Other (income) expense, net		18			38

Total designated cash flow hedges	$	(13	)	$	(113	)		$	44		$	103
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	(4	)	$	(24	)	Other (income) expense, net	$	0		$	0

⁽¹⁾	For the three and six month periods ended November 30, 2010, the Company recognized an immaterial amount of ineffectiveness from cash flow hedges.


	Amount of Gain (Loss) Recognized in Income on										Location of Gain (Loss) Recognized in Income on Derivatives
	Three Months Ended November 30,					Six Months Ended November 30,
	2011		2010			2011		2010
	(in millions)
Derivatives designated as fair value hedges:
Interest rate swaps⁽¹⁾	$	2	$	1		$	4	$	3		Interest (income) expense, net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	26	$	(20	)	$	3	$	(31	)	Other (income) expense, net

⁽¹⁾

All interest rate swap agreements meet the shortcut method requirements under the accounting standards for derivatives and hedging. Accordingly, changes in the fair values of the interest rate swap agreements are considered to exactly offset changes in the fair value of the underlying long-term debt. Refer to section “Fair Value Hedges” below for additional detail.

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

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- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details