XML 33 R21.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Derivative Instruments | 6 Months Ended
--- | ---
Mar. 01, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments
|  | Gross Notional Amount(1) |  | Fair Value of
Current Assets(2) |  | Current Liabilities(3) |  | Noncurrent Assets(4)
As of March 1, 2018 |  |  |  |  |  |  |  |
Derivative instruments with hedge accounting designation |  |  |  |  |  |  |  |
Cash flow currency hedges |  | $ | 565 |  |  | $ | 20 |  |  | $ | (1 | ) |  | $ | — |
Fair value currency hedges |  | 2,567 |  |  | 44 |  |  | (2 | ) |  | — |
|  | $ | 3,132 |  |  | 64 |  |  | (3 | ) |  | — |
Derivative instruments without hedge accounting designation |  |  |  |  |  |  |  |
Non-designated currency hedges |  | $ | 1,763 |  |  | 11 |  |  | (3 | ) |  | — |
Convertible notes settlement obligation |  | 6 |  |  | — |  |  | (309 | ) |  | — |
|  |  |  | 11 |  |  | (312 | ) |  | — |
|  |  |  | $ | 75 |  |  | $ | (315 | ) |  | $ | — |
As of August 31, 2017 |  |  |  |  |  |  |  |
Derivative instruments with hedge accounting designation |  |  |  |  |  |  |  |
Cash flow currency hedges |  | $ | 456 |  |  | $ | 17 |  |  | $ | — |  |  | $ | — |
Derivative instruments without hedge accounting designation |  |  |  |  |  |  |  |
Non-designated currency hedges |  | $ | 4,847 |  |  | 34 |  |  | (5 | ) |  | 1 |
Convertible notes settlement obligation |  | 2 |  |  | — |  |  | (47 | ) |  | — |
|  |  |  | 34 |  |  | (52 | ) |  | 1 |
|  |  |  | $ | 51 |  |  | $ | (52 | ) |  | $ | 1 |
(1) | Notional amounts of currency forward hedge contracts in U.S. dollars and convertible notes settlement obligations in shares.
(2) | Included in receivables – other.
(3) | Included in accounts payable and accrued expenses – other for forward contracts and in current debt for convertible notes settlement obligations.
(4) | Included in other noncurrent assets.
Derivative Instruments with Hedge Accounting Designation We utilize currency forward contracts that generally mature within twelve months to hedge our exposure to changes in currency exchange rates. Currency forward contracts are measured at fair value based on market-based observable inputs including currency exchange spot and forward rates, interest rates, and credit-risk spreads (Level 2). Cash Flow Hedges: We utilize cash flow hedges to hedge our exposure to changes in cash flows from changes in currency exchange rates for certain capital expenditures. For derivative instruments designated as cash flow hedges, the effective portion of the realized and unrealized gain or loss on the derivatives is included as a component of accumulated other comprehensive income. Amounts in accumulated other comprehensive income are reclassified into earnings in the same line items and in the same periods in which the underlying transactions affect earnings. For the periods presented prior to the second quarter of 2018, the ineffective and excluded portion of the realized and unrealized gain or loss was included in other non-operating income (expense). As a result of adopting ASU 2017-12, beginning in the second quarter of 2018, such amounts are included in the same line item in which the underlying transactions affect earnings. We recognized gains in accumulated other comprehensive income from the effective portion of cash flow hedges of $21 million and $17 million for the second quarter and first six months of 2018, respectively, and losses of $9 million in the first six months of 2017. Neither the amount excluded from hedge effectiveness nor the reclassifications from accumulated other comprehensive income to earnings were material in the second quarters or first six months of 2018 and 2017. The amounts from cash flow hedges included in accumulated other comprehensive income that are expected to be reclassified into earnings in the next 12 months were also not material. Fair Value Hedges: We utilize fair value hedges to hedge our exposure to certain changes in fair values from changes in currency exchange rates for certain monetary assets and liabilities. For derivative forward contracts designated as fair value hedges, hedge effectiveness is determined by the change of the fair value of the undiscounted spot rate of the forward contract. The change in fair value of the hedge instrument attributed to changes in the undiscounted spot rate is recognized in other non-operating income (expense). The time value associated with the hedge instrument is excluded from the assessment of the effectiveness of the hedge and is recognized on a straight-line basis over the life of the hedge to other non-operating income (expense). Amounts recorded to other comprehensive income (loss) for the second quarter of 2018 were not material. The effects of fair value hedges on our consolidated statements of operations were as follows:
Quarter ended March 1, 2018 |  | Other Non-Operating Income (Expense)
Gain (loss) on remeasurement of hedged assets and liabilities |  | $ | (56 | )
Gain (loss) on derivatives designated as hedging instruments |  | 56 |
Amortization of amounts excluded from hedge effectiveness |  | (19 | )
|  | $ | (19 | )
Derivative Instruments without Hedge Accounting Designation Currency Derivatives: Except for certain asset and liabilities hedged using fair value hedges, we generally utilize a rolling hedge strategy with currency forward contracts that mature within nine months to hedge our exposures of monetary assets and liabilities to changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Currency forward contracts are valued at fair values based on the middle of bid and ask prices of dealers or exchange quotations (Level 2). Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities due to changes in currency exchange rates are included in other non-operating income (expense). For derivative instruments without hedge accounting designation, we recognized gains of $50 million and $52 million for the second quarter and first six months of 2018, respectively, and gains of $61 million and losses of $117 million for the second quarter and first six months of 2017, respectively. Convertible Notes Settlement Obligations: For settlement obligations associated with our convertible notes that become derivative debt liabilities subject to mark-to-market accounting treatment, the fair values of the underlying derivative settlement obligations were initially determined using the Black-Scholes option valuation model (Level 2), which requires inputs of stock price, expected stock-price volatility, estimated option life, risk-free interest rate, and dividend rate. The subsequent measurement amounts of our convertible note settlement obligations were based on the volume-weighted-average stock price (Level 2). (See "Debt" note.) We recognized losses of $20 million and $24 million for the second quarter and first six months of 2018, respectively, for the changes in fair value of the derivative settlement obligations in other non-operating income (expense), net.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration