Risk Management and Derivatives (Tables)

9 Months Ended

Feb. 28, 2021

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, 2021
	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)	$	80	$	62	$	18	$	544	$	462	$	82
Embedded derivatives	—		—		—		1		1		—
TOTAL	$	80	$	62	$	18	$	545	$	463	$	82

(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 $80 million as of February 28, 2021. As of that date, the Company had posted $183 million of cash collateral to various counterparties related to foreign exchange derivative instruments. No amount of collateral was received on the Company's derivative asset balance as of February 28, 2021.


	MAY 31, 2020
	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)	$	94	$	91	$	3	$	205	$	188	$	17
Embedded derivatives	1		1		—		2		2		—
TOTAL	$	95	$	92	$	3	$	207	$	190	$	17

(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, 2020. As of that date, no amount of cash collateral had been received or posted on the derivative asset and liability balances related to these foreign exchange derivative instruments.

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)		2021		2020
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	26	$	43
Foreign exchange forwards and options	Deferred income taxes and other assets	18		1
Total derivatives formally designated as hedging instruments		44		44
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	36		48
Embedded derivatives	Prepaid expenses and other current assets	—		1
Foreign exchange forwards and options	Deferred income taxes and other assets	—		2

Total derivatives not designated as hedging instruments		36		51
TOTAL DERIVATIVE ASSETS		$	80	$	95

	DERIVATIVE LIABILITIES
	BALANCE SHEET LOCATION	FEBRUARY 28,		MAY 31,
(Dollars in millions)		2021		2020
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	$	458	$	173
Foreign exchange forwards and options	Deferred income taxes and other liabilities	82		17
Total derivatives formally designated as hedging instruments		540		190
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Accrued liabilities	4		15
Embedded derivatives	Accrued liabilities	1		2


Total derivatives not designated as hedging instruments		5		17
TOTAL DERIVATIVE LIABILITIES		$	545	$	207

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, 2021				FEBRUARY 29, 2020
(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	10,357	$	16	$	10,104	$	(21)
Cost of sales	5,638		(35)		5,631		110
Demand creation expense	711		1		870		—
Other (income) expense, net	(22)		(26)		297		44
Interest expense (income), net	64		(2)		12		(2)


	NINE MONTHS ENDED
	FEBRUARY 28, 2021				FEBRUARY 29, 2020
(Dollars in millions)	TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY		TOTAL		AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	32,194	$	56	$	31,090	$	(12)
Cost of sales	17,887		110		17,202		287
Demand creation expense	2,117		2		2,769		(3)
Other (income) expense, net	18		(31)		223		121
Interest expense (income), net	199		(5)		39		(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				LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	THREE MONTHS ENDED
	FEBRUARY 28, 2021		FEBRUARY 29, 2020			FEBRUARY 28, 2021		FEBRUARY 29, 2020
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(38)	$	17	Revenues	$	16	$	(21)
Foreign exchange forwards and options	(99)		39		Cost of sales	(35)		110
Foreign exchange forwards and options	1		1		Demand creation expense	1		—
Foreign exchange forwards and options	(24)		7		Other (income) expense, net	(26)		44
Interest rate swaps(2)	—		—		Interest expense (income), net	(2)		(2)
Total designated cash flow hedges	$	(160)	$	64		$	(46)	$	131

(1)For the three months ended February 28, 2021 and February 29, 2020, 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				LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME	NINE MONTHS ENDED
	FEBRUARY 28, 2021		FEBRUARY 29, 2020			FEBRUARY 28, 2021		FEBRUARY 29, 2020
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	(32)	$	(45)	Revenues	$	56	$	(12)
Foreign exchange forwards and options	(539)		185		Cost of sales	110		287
Foreign exchange forwards and options	4		1		Demand creation expense	2		(3)
Foreign exchange forwards and options	(183)		67		Other (income) expense, net	(31)		121
Interest rate swaps(2)	—		—		Interest expense (income), net	(5)		(5)
Total designated cash flow hedges	$	(750)	$	208		$	132	$	388

(1)For the nine months ended February 28, 2021 and February 29, 2020, 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				NINE MONTHS ENDED
(Dollars in millions)	FEBRUARY 28, 2021		FEBRUARY 29, 2020		FEBRUARY 28, 2021		FEBRUARY 29, 2020


Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	(11)	$	12	$	(98)	$	(9)	Other (income) expense, net
Embedded derivatives	(4)		(2)		(17)		(7)		Other (income) expense, net