RISK MANAGEMENT ACTIVITIES AND FAIR VALUE MEASUREMENTS

3 Months Ended

Sep. 30, 2017

Risk Management Activities and Fair Value Measurements [Abstract]

Risk Management And Fair Value [Text Block]

Risk Management Activities and Fair Value Measurements

As a multinational company with diverse product offerings, we are exposed to market risks, such as changes in interest rates, currency exchange rates and commodity prices. There have been no significant changes in our risk management policies or activities during the three months ended September 30, 2017.

The Company has not changed its valuation techniques used in measuring the fair value of any financial assets and liabilities during the period. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers between levels during the periods presented. Also, there was no significant activity within the Level 3 assets and liabilities during the periods presented. There were no significant assets or liabilities that were remeasured at fair value on a non-recurring basis for the three months ended September 30, 2017.

The following table sets forth the Company’s financial assets as of September 30, 2017 and June 30, 2017 that are measured at fair value on a recurring basis during the period:



	Fair Value Asset
	September 30, 2017		June 30, 2017
Investments
U.S. government securities	$	7,188	$	6,297
Corporate bond securities	3,795		3,271
Other investments	132		132
Total	$	11,115	$	9,700

Investment securities are presented in Available-for-sale investment securities and Other noncurrent assets. The amortized cost of U.S. government securities with maturities less than one year was $2,646 as of September 30, 2017 and $2,494 as of June 30, 2017. The amortized cost of U.S. government securities with maturities between one and five years was $4,569 as of September 30, 2017 and $3,824 as of June 30, 2017. The amortized cost of Corporate bond securities with maturities of less than a year was $786 as of September 30, 2017 and $730 as of June 30, 2017. The amortized cost of Corporate bond securities with maturities between one and five years was $3,012 as of September 30, 2017 and $2,547 as of June 30, 2017. The Company's investments measured at fair value are generally classified as Level 2 within the fair value hierarchy. There are no material investment balances classified as Level 1 or Level 3 within the fair value hierarchy, or using net asset value as a practical expedient. Fair values are generally estimated based upon quoted market prices for similar instruments.

The fair value of long-term debt was $23,648 and $21,396 as of September 30, 2017 and June 30, 2017, respectively. This includes the current portion ($1,853 and $1,694 as of September 30, 2017 and June 30, 2017, respectively) of debt instruments. Certain long-term debt is recorded at fair value. Certain long-term debt is not recorded at fair value on a recurring basis but is measured at fair value for disclosure purposes. Long-term debt with fair value of $1,854 and $1,716 as of September 30, 2017 and June 30, 2017, respectively, is classified as Level 2 within the fair value hierarchy. All remaining long-term debt is classified as Level 1 within the fair value hierarchy. Fair values are generally estimated based on quoted market prices for identical or similar instruments.

The following table sets forth the notional amounts and fair values of qualifying and non-qualifying financial instruments used in hedging transactions as of September 30, 2017 and June 30, 2017:



	Notional Amount				Derivative Fair Value Asset/(Liability)
	September 30, 2017		June 30, 2017		September 30, 2017			June 30, 2017
Derivatives in Fair Value Hedging Relationships
Interest rate contracts ⁽¹⁾	$	4,612	$	4,552	$	175		$	178
Derivatives in Net Investment Hedging Relationships
Foreign exchange contracts	$	8,749	$	6,102	$	(184	)	$	(163	)
Derivatives Not Designated as Hedging Instruments
Foreign currency contracts	$	5,754	$	4,969	$	(68	)	$	18


⁽¹⁾	The fair value of the derivative asset/liability directly offsets the cumulative amount of the fair value hedging adjustment included in the carrying amount of the underlying debt obligation. The carrying amount of the underlying debt obligation, net of the fair value adjustment, was $4,764 as of September 30, 2017 and $4,705 as of June 30, 2017, respectively.

All derivative assets are presented in Prepaid expenses and other current assets or Other noncurrent assets. All derivative liabilities are presented in Accrued and other liabilities or Other noncurrent liabilities. The total notional amount of contracts outstanding at the end of the period is indicative of the Company's derivative activity during the period. The increase in the notional balance

of net investment hedges primarily reflects a movement into lower yielding foreign currency swaps. All of the Company's derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy.



	Amount of Gain/(Loss) Recognized in AOCI on Derivatives
	September 30, 2017			June 30, 2017
Derivatives in Net Investment Hedging Relationships
Foreign exchange contracts	$	(115	)	$	(104	)

The amounts of gains and losses on qualifying and non-qualifying financial instruments used in hedging transactions for the three months ended September 30, 2017 and 2016 are as follows:



	Amount of Gain/(Loss) Reclassified from AOCI into Earnings
	Three Months Ended September 30
	2017			2016
Derivatives in Cash Flow Hedging Relationships ⁽¹⁾
Foreign currency contracts	—			(8		)

	Amount of Gain/(Loss) Recognized in Earnings
	Three Months Ended September 30
	2017			2016
Derivatives in Fair Value Hedging Relationships ⁽²⁾
Interest rate contracts	$	(3	)	$	(28	)
Debt	3			28
Total	$	—		$	—
Derivatives Not Designated as Hedging Instruments⁽³⁾
Foreign currency contracts	$	(1	)	$	(8	)


⁽¹⁾	The gain or loss on cash flow hedging relationships is reclassified from AOCI into net income in the same period during which the related item affects earnings. Such amounts related to foreign currency contracts are included in the Consolidated Statements of Earnings in Selling, general and administrative expense (SG&A).


⁽²⁾	The gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are both recognized in the Consolidated Statements of Earnings in Interest expense.

⁽³⁾

The gain or loss on foreign currency contracts not designated as hedging instruments is included in the Consolidated Statements of Earnings in SG&A. This gain or loss substantially offsets the foreign currency mark-to-market impact of the related exposure.