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RISK MANAGEMENT AND DERIVATIVES (Tables) | 3 Months Ended
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Aug. 31, 2024
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:
| AUGUST 31, 2024
| 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) | $ | 175 |  | $ | 165 |  | $ | 10 |  |  | $ | 198 |  | $ | 167 |  | $ | 31 |
Interest rate swaps(1) | 63 |  | — |  | 63 |  |  | — |  | — |  | — |
TOTAL | $ | 238 |  | $ | 165 |  | $ | 73 |  |  | $ | 198 |  | $ | 167 |  | $ | 31 |
(1)If the derivative instruments had been netted on the Unaudited Condensed Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $141 million as of August 31, 2024. As of that date, the Company received $34 million of cash collateral and $12 million of securities from various counterparties on the derivative asset balance and posted $45 million cash collateral on the derivative liability balance.
| MAY 31, 2024
| 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) | $ | 343 |  | $ | 299 |  | $ | 44 |  |  | $ | 120 |  | $ | 115 |  | $ | 5 |
Interest rate swaps(1) | — |  | — |  | — |  |  | 31 |  | — |  | 31 |
TOTAL | $ | 343 |  | $ | 299 |  | $ | 44 |  |  | $ | 151 |  | $ | 115 |  | $ | 36 |
(1)If the derivative instruments had been netted on the Consolidated Balance Sheets, the asset and liability positions each would have been reduced by $142 million as of May 31, 2024. As of that date, the Company received $112 million of cash collateral from various counterparties on the derivative asset balance and posted $10 million cash collateral on the derivative liability balance. The following tables present the fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets:
| DERIVATIVE ASSETS
| BALANCE SHEET LOCATION | AUGUST 31, | MAY 31,
(Dollars in millions) | 2024 | 2024
Derivatives formally designated as hedging instruments: |  |  |
Foreign exchange forwards and options | Prepaid expenses and other current assets | $ | 139 |  | $ | 269 |
Foreign exchange forwards and options | Deferred income taxes and other assets | 10 |  | 44 |
Interest rate swaps | Deferred income taxes and other assets | 63 |  | — |
Total derivatives formally designated as hedging instruments |  | 212 |  | 313 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange forwards and options | Prepaid expenses and other current assets | 26 |  | 30 |
Total derivatives not designated as hedging instruments |  | 26 |  | 30 |
TOTAL DERIVATIVE ASSETS |  | $ | 238 |  | $ | 343 |
| DERIVATIVE LIABILITIES
| BALANCE SHEET LOCATION | AUGUST 31, | MAY 31,
(Dollars in millions) | 2024 | 2024
Derivatives formally designated as hedging instruments: |  |  |
Foreign exchange forwards and options | Accrued liabilities | $ | 161 |  | $ | 110 |
Foreign exchange forwards and options | Deferred income taxes and other liabilities | 31 |  | 5 |
Interest rate swaps | Deferred income taxes and other liabilities | — |  | 31 |
Total derivatives formally designated as hedging instruments |  | 192 |  | 146 |
Derivatives not designated as hedging instruments: |  |  |
Foreign exchange forwards and options | Accrued liabilities | 6 |  | 5 |
Total derivatives not designated as hedging instruments |  | 6 |  | 5 |
TOTAL DERIVATIVE LIABILITIES |  | $ | 198 |  | $ | 151 |
Schedule of Derivative Instruments, Gain (Loss) In Statement of Income | 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 AUGUST 31, |  | LOCATION OF GAIN (LOSS) RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) INTO INCOME |  | THREE MONTHS ENDED AUGUST 31,
2024 | 2023 |  |  | 2024 | 2023
Derivatives designated as cash flow hedges: |  |  |  |  |  |  |
Foreign exchange forwards and options | $ | (44) |  | $ | (18) |  |  | Revenues |  | $ | (21) |  | $ | 1 |
Foreign exchange forwards and options | (98) |  | (2) |  |  | Cost of sales |  | 70 |  | 86 |
Foreign exchange forwards and options | — |  | — |  |  | Demand creation expense |  | — |  | — |
Foreign exchange forwards and options | (29) |  | (10) |  |  | Other (income) expense, net |  | 30 |  | 35 |
Interest rate swaps(2) | — |  | — |  |  | Interest expense (income), net |  | (2) |  | (2) |
TOTAL DESIGNATED CASH FLOW HEDGES | $ | (171) |  | $ | (30) |  |  |  |  | $ | 77 |  | $ | 120 |
(1)For the three months ended August 31, 2024 and 2023, 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
| THREE MONTHS ENDED AUGUST 31, |  |
(Dollars in millions) | 2024 | 2023 |  |  |
Derivatives not designated as hedging instruments: |  |  |  |  |  |
Foreign exchange forwards and options | $ | — |  | $ | (27) |  |  |  |  | Other (income) expense, net

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