Risk Management and Derivatives (Tables)

3 Months Ended

Aug. 31, 2012

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

The following table presents the fair values of derivative instruments included within the consolidated balance sheets as of August 31, 2012 and May 31, 2012:

	Asset Derivatives					Liability Derivatives
(In millions)	Balance Sheet Location	August 31, 2012		May 31, 2012		Balance Sheet Location	August 31, 2012		May 31, 2012
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	109	$	203	Accrued liabilities	$	39	$	35
Foreign exchange forwards and options	Deferred income taxes and other long-term assets		5		7	Deferred income taxes and other long-term liabilities		0		0
Interest rate swap contracts	Deferred income taxes and other long-term assets		14		15	Deferred income taxes and other long-term liabilities		0		0
Total derivatives formally designated as hedging instruments			128		225			39		35
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets		39		55	Accrued liabilities		19		20
Embedded derivatives	Prepaid expenses and other current assets		0		1	Accrued liabilities		0		0
Total derivatives not designated as hedging instruments			39		56			19		20
TOTAL DERIVATIVES		$	167	$	281		$	58	$	55

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following tables present the amounts affecting the consolidated statements of income for the three months ended August 31, 2012 and 2011:

	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)
	Three Months Ended August 31,						Location of Gain (Loss) Reclassified From Accumulated Other Comprehensive Income Into Income	Three Months Ended August 31,
(In millions)	2012			2011				2012			2011
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(9	)	$	21		Revenue	$	(14	)	$	7
Foreign exchange forwards and options		(24	)		(43	)	Cost of sales		32			(39	)
Foreign exchange forwards and options		1			(2	)	Selling and administrative expense		0			(1	)
Foreign exchange forwards and options		(8	)		(14	)	Other (income) expense, net		8			(11	)
Total designated cash flow hedges	$	(40	)	$	(38	)		$	26		$	(44	)
Derivatives designated as net investment hedges:
Foreign exchange forwards and options	$	0		$	(9	)	Other (income) expense, net	$	0		$	0

(1) For the three months ended August 31, 2012 and 2011, the amounts recorded in other (income) expense, net as a result of hedge ineffectiveness and 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 August 31,
(In millions)	2012			2011
Derivatives designated as fair value hedges:
Interest rate swaps(1)	$	2		$	2		Interest (income) expense, net
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options		(29	)		(23	)	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 “Fair Value Hedges” in this note for additional detail.