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Risk Management and Derivatives (Tables) | 12 Months Ended
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May 31, 2022
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:
| MAY 31, 2022
| 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) | $ | 875 |  | $ | 669 |  | $ | 206 |  |  | $ | 76 |  | $ | 65 |  | $ | 11 |
Embedded derivatives | 5 |  | 5 |  | — |  |  | 1 |  | 1 |  | — |
TOTAL | $ | 880 |  | $ | 674 |  | $ | 206 |  |  | $ | 77 |  | $ | 66 |  | $ | 11 |
(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, 2022. As of that date, the Company received $486 million of cash collateral from counterparties related to foreign exchange derivative instruments. No amount of collateral was posted on the derivative liability balance as of May 31, 2022.
| MAY 31, 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) | $ | 92 |  | $ | 76 |  | $ | 16 |  |  | $ | 456 |  | $ | 415 |  | $ | 41 |
Embedded derivatives | — |  | — |  | — |  |  | 1 |  | 1 |  | — |
TOTAL | $ | 92 |  | $ | 76 |  | $ | 16 |  |  | $ | 457 |  | $ | 416 |  | $ | 41 |
(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 $93 million as of May 31, 2021. As of that date, the Company had posted $39 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 May 31, 2021. The following tables present the fair values of derivative instruments included within the Consolidated Balance Sheets:
| DERIVATIVE ASSETS
| BALANCE SHEET LOCATION | MAY 31,
(Dollars in millions) | 2022 |  | 2021
Derivatives formally designated as hedging instruments: |  |  |  |
Foreign exchange forwards and options | Prepaid expenses and other current assets | $ | 639 |  |  | $ | 42 |
Foreign exchange forwards and options | Deferred income taxes and other assets | 206 |  |  | 16 |
Total derivatives formally designated as hedging instruments |  | 845 |  |  | 58 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange forwards and options | Prepaid expenses and other current assets | 30 |  |  | 34 |
Embedded derivatives | Prepaid expenses and other current assets | 5 |  |  | — |
Total derivatives not designated as hedging instruments |  | 35 |  |  | 34 |
TOTAL DERIVATIVE ASSETS |  | $ | 880 |  |  | $ | 92 |
| DERIVATIVE LIABILITIES
| BALANCE SHEET LOCATION | MAY 31,
(Dollars in millions) | 2022 |  | 2021
Derivatives formally designated as hedging instruments: |  |  |  |
Foreign exchange forwards and options | Accrued liabilities | $ | 37 |  |  | $ | 385 |
Foreign exchange forwards and options | Deferred income taxes and other liabilities | 11 |  |  | 41 |
Total derivatives formally designated as hedging instruments |  | 48 |  |  | 426 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange forwards and options | Accrued liabilities | 28 |  |  | 30 |
Embedded derivatives | Accrued liabilities | 1 |  |  | 1 |
Total derivatives not designated as hedging instruments |  | 29 |  |  | 31 |
TOTAL DERIVATIVE LIABILITIES |  | $ | 77 |  |  | $ | 457 |
Schedule of Derivative Instruments, Gain (Loss) In Statement of Income | The following table presents 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 fiscal years ended May 31, 2022, 2021 and 2020:
| YEAR ENDED MAY 31,
| 2022 |  | 2021 |  | 2020
(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 | $ | 46,710 |  | $ | (82) |  |  | $ | 44,538 |  | $ | 45 |  |  | $ | 37,403 |  | $ | (17) |
Cost of sales | 25,231 |  | (23) |  |  | 24,576 |  | 51 |  |  | 21,162 |  | 364 |
Demand creation expense | 3,850 |  | 1 |  |  | 3,114 |  | 3 |  |  | 3,592 |  | (2) |
Other (income) expense, net | (181) |  | 130 |  |  | 14 |  | (47) |  |  | 139 |  | 181 |
Interest expense (income), net | 205 |  | (7) |  |  | 262 |  | (7) |  |  | 89 |  | (7) |
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, 2022, 2021 and 2020:
(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,
2022 | 2021 | 2020 |  |  | 2022 | 2021 | 2020
Derivatives designated as cash flow hedges: |  |  |  |  |  |  |  |  |
Foreign exchange forwards and options | $ | (39) |  | $ | (61) |  | $ | 28 |  |  | Revenues |  | $ | (82) |  | $ | 45 |  | $ | (17) |
Foreign exchange forwards and options | 889 |  | (563) |  | 283 |  |  | Cost of sales |  | (23) |  | 51 |  | 364 |
Foreign exchange forwards and options | (6) |  | 5 |  | 1 |  |  | Demand creation expense |  | 1 |  | 3 |  | (2) |
Foreign exchange forwards and options | 492 |  | (163) |  | 90 |  |  | Other (income) expense, net |  | 130 |  | (47) |  | 181 |
Interest rate swaps(2) | — |  | — |  | — |  |  | Interest expense (income), net |  | (7) |  | (7) |  | (7) |
Total designated cash flow hedges | $ | 1,336 |  | $ | (782) |  | $ | 402 |  |  |  |  | $ | 19 |  | $ | 45 |  | $ | 519 |
(1)For the fiscal years ended May 31, 2022, 2021 and 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.
| 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) | 2022 | 2021 | 2020 |
Derivatives not designated as hedging instruments: |  |  |  |  |
Foreign exchange forwards and options | $ | 40 |  | $ | (150) |  | $ | 76 |  |  | Other (income) expense, net
Embedded derivatives | (2) |  | (17) |  | (1) |  |  | Other (income) expense, net

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