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Risk Management and Derivatives (Tables)

12 Months Ended

May 31, 2019

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 as of May 31, 2019 and 2018, and indicate the level in the fair value hierarchy in which the Company classifies the fair value measurement.

	AS OF MAY 31, 2019
	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)	$	611		$	611		$	—			$	51		$	51		$	—
Embedded derivatives	11			5			6				3			1			2
TOTAL	$	622		$	616		$	6			$	54		$	52		$	2

(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 $50 million as of May 31, 2019. As of that date, the Company had received $289 million of cash collateral from various counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the Company's derivative liability balance as of May 31, 2019.

	AS OF MAY 31, 2018
	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)	$	389		$	237		$	152			$	182		$	182		$	—
Embedded derivatives	11			3			8				8			2			6
TOTAL	$	400		$	240		$	160			$	190		$	184		$	6

(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 $182 million as of May 31, 2018. As of that date, the Company had received $23 million of cash collateral from various counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the Company's derivative liability balance as of May 31, 2018.

The following table presents the fair values of derivative instruments included within the Consolidated Balance Sheets as of May 31, 2019 and 2018. Refer to Note 6 — Fair Value Measurements for a description of how the financial instruments in the table below are valued.

	DERIVATIVE ASSETS								DERIVATIVE LIABILITIES
	BALANCE SHEET LOCATION	AS OF MAY 31,							BALANCE SHEET LOCATION	AS OF MAY 31,
(Dollars in millions)		2019			2018					2019			2018
Derivatives formally designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	$	509		$	118			Accrued liabilities	$	5		$	156
Foreign exchange forwards and options	Deferred income taxes and other assets	—			152				Deferred income taxes and other liabilities	—			—
Total derivatives formally designated as hedging instruments		509			270					5			156
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	Prepaid expenses and other current assets	102			119				Accrued liabilities	46			26
Embedded derivatives	Prepaid expenses and other current assets	5			3				Accrued liabilities	1			2
Embedded derivatives	Deferred income taxes and other assets	6			8				Deferred income taxes and other liabilities	2			6
Total derivatives not designated as hedging instruments		113			130					49			34
TOTAL DERIVATIVES		$	622		$	400				$	54		$	190

Schedule Of Derivative Instruments, Gain (Loss) In Statement Of Income

The following tables present the amounts in the 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 for the years ended May 31, 2019, 2018 and 2017:

	YEAR ENDED MAY 31,
	2019							2018							2017
(Dollars in millions)	TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY				TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY				TOTAL			AMOUNT OF GAIN (LOSS) ON CASH FLOW HEDGE ACTIVITY
Revenues	$	39,117		$	(5	)		$	36,397		$	34			$	34,350		$	96
Cost of sales	21,643			53				20,441			(90		)		19,038			339
Demand creation expense	3,753			—				3,577			1				3,341			—
Other (income) expense, net	(78		)	35				66			(69		)		(196		)	199
Interest expense (income), net	49			(7		)		54			(7		)		59			(4		)

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 years ended May 31, 2019, 2018 and 2017:

(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)
	YEAR ENDED MAY 31,										LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME		YEAR ENDED MAY 31,
	2019			2018			2017						2019			2018			2017
Derivatives designated as cash flow hedges:
Foreign exchange forwards and options	$	14		$	19		$	72			Revenues		$	(5	)	$	34		$	96
Foreign exchange forwards and options	405			(50		)	43				Cost of sales		53			(90		)	339
Foreign exchange forwards and options	2			1			(4		)		Demand creation expense		—			1			—
Foreign exchange forwards and options	156			(19		)	37				Other (income) expense, net		35			(69		)	199
Interest rate swaps(2)	—			—			(54		)		Interest expense (income), net		(7		)	(7		)	(4		)
Total designated cash flow hedges	$	577		$	(49	)	$	94					$	76		$	(131	)	$	630

(1) For the years ended May 31, 2019, 2018 and 2017, 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.

	AMOUNT OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES										LOCATION OF GAIN (LOSS) RECOGNIZED IN INCOME ON DERIVATIVES
	YEAR ENDED MAY 31,
(Dollars in millions)	2019			2018			2017
Derivatives not designated as hedging instruments:
Foreign exchange forwards and options	$	166		$	(57	)	$	(44	)		Other (income) expense, net
Embedded derivatives	7			(4		)	(2		)		Other (income) expense, net

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Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments.

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-Publisher FASB
-Name Accounting Standards Codification
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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.

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