DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Dec. 31, 2019

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


	Asset Derivatives					Liability Derivatives
		Fair Value ⁽¹⁾					Fair Value ⁽¹⁾
	Balance Sheet	December 31		June 30		Balance Sheet	December 31		June 30
(In millions)	Location	2019		2019		Location	2019		2019
Derivatives Designated as Hedging Instruments
Foreign currency cash flow hedges	Prepaid expenses and other current assets	$	16	$	23	Other accrued liabilities	$	9	$	4
Net investment hedges	Prepaid expenses and other current assets		—		—	Other accrued liabilities		19		—
Interest rate-related derivatives	Prepaid expenses and other current assets		3		3	Other accrued liabilities		1		26

Total Derivatives Designated as Hedging Instruments			19		26			29		30

Derivatives Not Designated as Hedging Instruments
Foreign currency forward contracts	Prepaid expenses and other current assets		31		4	Other accrued liabilities		3		2

Total Derivatives		$	50	$	30		$	32	$	32

(1)	See Note 8 – 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


	Amount of Gain or (Loss)					Amount of Gain or (Loss)
	Recognized in OCI on					Reclassified from AOCI into
	Derivatives				Location of Gain or	Earnings⁽¹⁾
	Three Months Ended				(Loss) Reclassified	Three Months Ended
	December 31				from AOCI into	December 31
(In millions)	2019		2018		Earnings	2019		2018
Derivatives in Cash Flow Hedging Relationships:

Foreign currency forward contracts	$	(21)	$	13	Net sales	$	6	$	4
Interest rate-related derivatives		5		—	Interest expense		—		—
		(16)		13	Total derivatives	$	6	$	4
Derivatives in Net Investment Hedging Relationships⁽²⁾:
Foreign currency forward contracts⁽³⁾		(37)		—
Total derivatives	$	(53)	$	13

(1)	The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because probable forecasted transactions will no longer occur by the end of the original time period was not material.

(2)	During the three months ended December 31, 2019, the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $13 million.

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


	Amount of Gain or (Loss)					Amount of Gain or (Loss)
	Recognized in OCI on					Reclassified from AOCI into
	Derivatives				Location of Gain or	Earnings⁽¹⁾
	Six Months Ended				(Loss) Reclassified	Six Months Ended
	December 31				from AOCI into	December 31
(In millions)	2019		2018		Earnings	2019		2018
Derivatives in Cash Flow Hedging Relationships:

Foreign currency forward contracts	$	4	$	16	Net sales	$	19	$	7
Interest rate-related derivatives		(9)		—	Interest expense		—		—
		(5)		16	Total derivatives	$	19	$	7
Derivatives in Net Investment Hedging Relationships⁽²⁾:
Foreign currency forward contracts⁽³⁾		(34)		—
Total derivatives	$	(39)	$	16

(1)	The amount reclassified into earnings as a result of the discontinuance of cash flow hedges because probable forecasted transactions will no longer occur by the end of the original time period was not material.

(2)	During the six months ended December 31, 2019, the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $25 million.

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

Amount of Gain or (Loss) Recognized in Earnings on

Derivatives ⁽¹⁾

Location of Gain or (Loss)

Three Months Ended

Six Months Ended

Recognized in Earnings on

December 31

(In millions)

Derivatives

2019

2018

2019

2018

Derivatives in Fair Value Hedging Relationships:

Interest rate swap contracts

Interest expense

(1)

(1)	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


(In millions)
			Cumulative Amount of Fair
			Value Hedging Gain/(Loss)
Line Item in the Consolidated Balance Sheets in	Carrying Amount of the		Included in the Carrying Amount
Which the Hedged Item is Included	Hedged Liabilities		of the Hedged Liability
	December 31, 2019		December 31, 2019
Current debt	$	250	$	—
Long-term debt		701		2
Total debt	$	951	$	2

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

Three Months Ended December 31

2019

2018

Interest

(In millions)

Net Sales

expense

Net Sales

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

4,624

4,005

The effects of fair value and cash flow hedging relationships:

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

Hedged item

Not applicable

(1)

Not applicable

Derivatives designated as hedging instruments

Not applicable

(11)

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

Amount of gain reclassified from AOCI into earnings

Not applicable


	Six Months Ended December 31
	2019				2018
(In millions)	Net Sales		Interest expense		Net Sales		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	$	8,519	$	70	$	7,529	$	69

The effects of fair value and cash flow hedging relationships:
Gain (loss) on fair value hedge relationships – interest rate contracts:
Hedged item		Not applicable		1		Not applicable		9
Derivatives designated as hedging instruments		Not applicable		(1)		Not applicable		(9)

Gain (loss) on cash flow hedge relationships – foreign currency forward contracts:
Amount of gain reclassified from AOCI into earnings		19		Not applicable		7		Not applicable

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

Amount of Gain or (Loss)

Recognized in Earnings on

Derivatives

Location of Gain or (Loss)

Three Months Ended

Six Months Ended

Recognized in Earnings on

December 31

(In millions)

Derivatives

2019

2018

2019

2018

Derivatives Not Designated as Hedging Instruments:

Foreign currency forward contracts

Selling, general and administrative

(12)