DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair values of the derivative financial instruments included in the consolidated balance sheets

The fair values of the Company’s derivative financial instruments included in the consolidated balance sheets are presented as follows:

	Asset Derivatives					Liability Derivatives
		Fair Value (1)					Fair Value (1)
(In millions)	Balance Sheet Location	March 31, 2024		June 30, 2023		Balance Sheet Location	March 31, 2024		June 30, 2023
Derivatives Designated as Hedging Instruments:
Foreign currency cash flow hedges	Prepaid expenses and other current assets	$	36	$	56	Other accrued liabilities	$	8	$	16
Cross-currency swap contracts	Prepaid expenses and other current assets	52		22		Other accrued liabilities	—		—
Net investment hedges	Prepaid expenses and other current assets	7		—		Other accrued liabilities	—		13
Interest rate-related derivatives	Prepaid expenses and other current assets	—		—		Other accrued liabilities	148		150
Total Derivatives Designated as Hedging Instruments		95		78			156		179
Derivatives Not Designated as Hedging Instruments:
Foreign currency forward contracts	Prepaid expenses and other current assets	7		20		Other accrued liabilities	7		20
Total derivatives		$	102	$	98		$	163	$	199

(1)See Note 6 – Fair Value Measurements for further information about how the fair value of derivative assets and liabilities are determined.

Schedule of gains and losses related to derivative financial instruments designated as hedging instruments that are included in the assessment of effectiveness

The amounts of the gains and losses related to the Company’s derivative financial instruments designated as hedging instruments that are included in the assessment of effectiveness are as follows:

	Amount of Gain (Loss) Recognized in OCI on Derivatives				Location of Gain (Loss) Reclassified from AOCI into Earnings	Amount of Gain (Loss) Reclassified from AOCI into Earnings(1)
	Three Months Ended March 31					Three Months Ended March 31
(In millions)	2024		2023			2024		2023
Derivatives in Cash Flow Hedging Relationships:
Foreign currency forward contracts	$	36	$	(11)	Net sales	$	15	$	22
Interest rate-related derivatives	—		(11)		Interest expense	—		(1)
	36		(22)			15		21
Derivatives in Net Investment Hedging Relationships(2):
Foreign currency forward contracts(3)	11		(23)			—		—
Total derivatives	$	47	$	(45)		$	15	$	21

(1)The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because it is probable that forecasted transactions will not occur by the end of the original time period was not material.

(2)During the three months ended March 31, 2024 and 2023, the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $3 million and $6 million, respectively.

(3)Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

	Amount of Gain (Loss) Recognized in OCI on Derivatives				Location of Gain (Loss) Reclassified from AOCI into Earnings	Amount of Gain (Loss) Reclassified from AOCI into Earnings(1)
	Nine Months Ended March 31					Nine Months Ended March 31
(In millions)	2024		2023			2024		2023
Derivatives in Cash Flow Hedging Relationships:
Foreign currency forward contracts	$	28	$	7	Net sales	$	36	$	59
Interest rate-related derivatives	—		1		Interest expense	(1)		(1)
	28		8			35		58
Derivatives in Net Investment Hedging Relationships(2):
Foreign currency forward contracts(3)	(6)		(38)			—		—
Total derivatives	$	22	$	(30)		$	35	$	58

(1)The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because it is probable that forecasted transactions will not occur by the end of the original time period was not material.

(2)During the nine months ended March 31, 2024 and 2023, the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $13 million and $19 million, respectively.

(3)Included within translation adjustments as a component of AOCI on the Company’s consolidated balance sheets.

		Amount of Gain (Loss) Recognized in Earnings on Derivatives
	Location of Gain (Loss) Recognized in Earnings on Derivatives
		Three Months Ended March 31				Nine Months Ended March 31
(In millions)		2024		2023		2024		2023
Derivatives in Fair Value Hedging Relationships:
Cross-currency swap contracts (1)	Selling, general and administrative	$	30	$	1	$	19	$	1
Interest rate swap contracts (2)	Interest expense	$	(17)	$	18	$	3	$	(17)

(1)Changes in the fair value representing hedge components included in the assessment of effectiveness of the cross-currency swap contracts are exactly offset by the change in the fair value of the underlying intercompany foreign currency denominated debt. The gain recognized in earnings from cross-currency swap contracts related to the amount excluded from effectiveness testing during the three months ended March 31, 2024 and 2023 was $5 million and $4 million, respectively, and for the nine months ended March 31, 2024 and 2023 was $14 million and $4 million, respectively.

(2)Changes in the fair value of the interest rate swap agreements are exactly offset by the change in the fair value of the underlying long-term debt.

Schedule of cumulative amount of fair value hedging adjustments for designated and qualifying hedged items

Additional information regarding the cumulative amount of fair value hedging gain (loss) recognized in earnings for items designated and qualifying as hedged items in fair value hedges is as follows:

(In millions)
Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included	Carrying Amount of the Hedged Liabilities		Cumulative Amount of Fair Value Hedging Gain (Loss) Included in the Carrying Amount of the Hedged Liability
	March 31, 2024		March 31, 2024
Long-term debt	$	845	$	(148)
Intercompany debt	$	—	$	62

Schedule of effects of fair value and cash flow hedging relationships for designated and qualified hedging instruments

Additional information regarding the effects of fair value and cash flow hedging relationships for derivatives designated and qualifying as hedging instruments is as follows:

Three Months Ended March 31

2024

2023

(In millions)

Net Sales

Selling, General and Administrative

Interest Expense

Net Sales

Selling, General and Administrative

Interest Expense

Total amounts of income and expense line items presented in the consolidated statements of earnings in which the effects of fair value and cash flow hedges are recorded

$

3,940

$

2,284

$

94

$

3,751

$

2,281

$

58

The effects of fair value and cash flow hedging relationships:

Gain (loss) on fair value hedge relationships – interest rate contracts:

Hedged item

N/A

N/A

17

N/A

N/A

(18)

Derivatives designated as hedging instruments

N/A

N/A

(17)

N/A

N/A

18

Gain (loss) on fair value hedge relationships – cross-currency swap contracts:

Hedged item

N/A

(30)

N/A

N/A

(1)

N/A

Derivatives designated as hedging instruments

N/A

30

N/A

N/A

1

N/A

Loss on cash flow hedge relationships – interest rate contracts:

Amount of loss reclassified from AOCI into earnings

N/A

N/A

—

N/A

N/A

(1)

Gain on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain reclassified from AOCI into earnings

15

N/A

N/A

22

N/A

N/A

N/A (Not applicable)

Nine Months Ended March 31

2024

2023

(In millions)

Net Sales

Selling, General and Administrative

Interest Expense

Net Sales

Selling, General and Administrative

Interest Expense

Total amounts of income and expense line items presented in the consolidated statements of earnings in which the effects of fair value and cash flow hedges are recorded

$

11,737

$

7,177

$

287

$

12,301

$

7,155

$

156

The effects of fair value and cash flow hedging relationships:

Gain (loss) on fair value hedge relationships – interest rate contracts:

Hedged item

N/A

N/A

(3)

N/A

N/A

17

Derivatives designated as hedging instruments

N/A

N/A

3

N/A

N/A

(17)

Gain (loss) on fair value hedge relationships – cross-currency swap contracts:

Hedged item

N/A

(19)

N/A

N/A

(1)

N/A

Derivatives designated as hedging instruments

N/A

19

N/A

N/A

1

N/A

Loss on cash flow hedge relationships – interest rate contracts:

Amount of loss reclassified from AOCI into earnings

N/A

N/A

(1)

N/A

N/A

(1)

Gain on cash flow hedge relationships – foreign currency forward contracts:

Amount of gain reclassified from AOCI into earnings

36

N/A

N/A

59

N/A

N/A

N/A (Not applicable)

Schedule of gains and losses related to derivative financial instruments not designated as hedging instruments

The amount of gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments are presented as follows:

		Amount of Gain Recognized in Earnings on Derivatives
	Location of Gain Recognized in Earnings on Derivatives	Three Months Ended March 31				Nine Months Ended March 31
(In millions)		2024		2023		2024		2023
Derivatives Not Designated as Hedging Instruments:
Foreign currency forward contracts	Selling, general and administrative	$	18	$	4	$	31	$	21

Schedule of Offsetting Assets

The following table provides information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties:

	As of March 31, 2024						As of June 30, 2023
(In millions)	Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet		Contracts Subject to Netting		Net Amounts of Assets / (Liabilities)		Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet		Contracts Subject to Netting		Net Amounts of Assets / (Liabilities)
Derivative Financial Contracts
Derivative assets	$	102	$	(36)	$	66	$	98	$	(53)	$	45
Derivative liabilities	(163)		36		(127)		(199)		53		(146)
Total	$	(61)	$	—	$	(61)	$	(101)	$	—	$	(101)

Schedule of Offsetting Liabilities

The following table provides information as if the Company had elected to offset the asset and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination as stipulated by the terms of netting arrangements with each of the counterparties:

	As of March 31, 2024						As of June 30, 2023
(In millions)	Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet		Contracts Subject to Netting		Net Amounts of Assets / (Liabilities)		Gross Amounts of Assets / (Liabilities) Presented in Balance Sheet		Contracts Subject to Netting		Net Amounts of Assets / (Liabilities)
Derivative Financial Contracts
Derivative assets	$	102	$	(36)	$	66	$	98	$	(53)	$	45
Derivative liabilities	(163)		36		(127)		(199)		53		(146)
Total	$	(61)	$	—	$	(61)	$	(101)	$	—	$	(101)