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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended
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Mar. 31, 2021
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 2021 |  | June 30 2020 |  | Balance Sheet Location |  | March 31 2021 |  | June 30 2020
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency cash flow hedges |  | Prepaid expenses and other current assets |  | $ | 16 |  |  | $ | 26 |  |  | Other accrued liabilities |  | $ | 21 |  |  | $ | 3 |
Net investment hedges |  | Prepaid expenses and other current assets |  | 115 |  |  | 21 |  |  | Other accrued liabilities |  | — |  |  | 62 |
Interest rate-related derivatives |  | Prepaid expenses and other current assets |  | 7 |  |  | 15 |  |  | Other accrued liabilities |  | 15 |  |  | 3 |
Total Derivatives Designated as Hedging Instruments |  |  |  | 138 |  |  | 62 |  |  |  |  | 36 |  |  | 68 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | Prepaid expenses and other current assets |  | 5 |  |  | 40 |  |  | Other accrued liabilities |  | 108 |  |  | 15 |
Total derivatives |  |  |  | $ | 143 |  |  | $ | 102 |  |  |  |  | $ | 144 |  |  | $ | 83 |
(1)See Note 7 – 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 (Loss) |  | Amount of Gain (Loss) Reclassified from AOCI into Earnings (Loss)(1)
|  | Three Months Ended March 31 |  |  | Three Months Ended March 31
(In millions) |  | 2021 |  | 2020 |  |  | 2021 |  | 2020
Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 22 |  |  | $ | 46 |  |  | Net sales |  | $ | (7) |  |  | $ | 10 |
Interest rate-related derivatives |  | 11 |  |  | (2) |  |  | Interest expense |  | (1) |  |  | — |
|  | 33 |  |  | 44 |  |  |  |  | (8) |  |  | 10 |
Derivatives in Net Investment Hedging Relationships(2): |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts(3) |  | 125 |  |  | (20) |  |  |  |  | — |  |  | — |
Total derivatives |  | $ | 158 |  |  | $ | 24 |  |  |  |  | $ | (8) |  |  | $ | 10 |
(1)The amount reclassified into earnings (loss) 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 March 31, 2021 and 2020, the gain recognized in earnings (loss) from net investment hedges related to the amount excluded from effectiveness testing was $5 million and $12 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) |  | 2021 |  | 2020 |  |  | 2021 |  | 2020
Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | (43) |  |  | $ | 50 |  |  | Net sales |  | $ | (11) |  |  | $ | 29 |
Interest rate-related derivatives |  | 14 |  |  | (11) |  |  | Interest expense |  | (2) |  |  | — |
|  | (29) |  |  | 39 |  |  |  |  | (13) |  |  | 29 |
Derivatives in Net Investment Hedging Relationships(2): |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts(3) |  | (17) |  |  | (54) |  |  |  |  | — |  |  | — |
Total derivatives |  | $ | (46) |  |  | $ | (15) |  |  |  |  | $ | (13) |  |  | $ | 29 |
(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 nine months ended March 31, 2021 and 2020, the gain recognized in earnings from net investment hedges related to the amount excluded from effectiveness testing was $15 million and $37 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 (Loss) on Derivatives (1)
|  | Location of Gain (Loss) Recognized in Earnings (Loss) on Derivatives |  |  |  |  |  |  |  |
|  |  | Three Months Ended March 31 |  | Nine Months Ended March 31
(In millions) |  |  | 2021 |  | 2020 |  | 2021 |  | 2020
Derivatives in Fair Value Hedging Relationships: |  |  |  |  |  |  |  |  |  |
Interest rate swap contracts |  | Interest expense |  | $ | (18) |  |  | $ | 12 |  |  | $ | (23) |  |  | $ | 13 |
(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 | 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, 2021 |  | March 31, 2021
Current debt |  | $ | 451 |  |  | $ | 1 |
Long-term debt |  | 936 |  |  | (9) |
Total debt |  | $ | 1,387 |  |  | $ | (8) |
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
|  | 2021 |  | 2020
(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 (loss) in which the effects of fair value and cash flow hedges are recorded |  | $ | 3,864 |  |  | $ | 43 |  |  | $ | 3,345 |  |  | $ | 42 |
The effects of fair value and cash flow hedging relationships: |  |  |  |  |  |  |  |
Gain (loss) on fair value hedge relationships – interest rate contracts: |  |  |  |  |  |  |  |
Hedged item |  | Not applicable |  | 18 |  |  | Not applicable |  | (12) |
Derivatives designated as hedging instruments |  | Not applicable |  | (18) |  |  | Not applicable |  | 12 |
Gain (loss) on cash flow hedge relationships – interest rate contracts: |  |  |  |  |  |  |  |
Amount of loss reclassified from AOCI into earnings (loss) |  | Not applicable |  | (1) |  |  | Not applicable |  | — |
Gain (loss) on cash flow hedge relationships – foreign currency forward contracts: |  |  |  |  |  |  |  |
Amount of gain reclassified from AOCI into earnings (loss) |  | (7) |  |  | Not applicable |  | 10 |  |  | Not applicable
|  | Nine Months Ended March 31
|  | 2021 |  | 2020
(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 |  | $ | 12,279 |  |  | $ | 131 |  |  | $ | 11,864 |  |  | $ | 112 |
The effects of fair value and cash flow hedging relationships: |  |  |  |  |  |  |  |
Gain (loss) on fair value hedge relationships – interest rate contracts: |  |  |  |  |  |  |  |
Hedged item |  | Not applicable |  | 23 |  |  | Not applicable |  | (13) |
Derivatives designated as hedging instruments |  | Not applicable |  | (23) |  |  | Not applicable |  | 13 |
Gain (loss) on cash flow hedge relationships – interest rate contracts: |  |  |  |  |  |  |  |
Amount of loss reclassified from AOCI into earnings |  | Not applicable |  | (2) |  |  | Not applicable |  | — |
Gain (loss) on cash flow hedge relationships – foreign currency forward contracts: |  |  |  |  |  |  |  |
Amount of gain reclassified from AOCI into earnings |  | (11) |  |  | Not applicable |  | 29 |  |  | 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 (Loss) Recognized in Earnings (Loss) on Derivatives
|  | Location of Gain (Loss) Recognized in Earnings (Loss) on Derivatives |  | Three Months Ended March 31 |  | Nine Months Ended March 31
(In millions) |  |  | 2021 |  | 2020 |  | 2021 |  | 2020
Derivatives Not Designated as Hedging Instruments: |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | Selling, general and administrative |  | $ | (97) |  |  | $ | 49 |  |  | $ | (34) |  |  | $ | 52 |

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