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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of financial assets and liabilities measured at fair value on a recurring basis

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2023:

(In millions)						Level 1						Level 2						Level 3						Total
Assets:
Money market funds						$	3,485					$	—					$	—					$	3,485
Foreign currency forward contracts						—						80						—						80
Interest rate-related derivatives						—						1						—						1
Total						$	3,485					$	81					$	—					$	3,566
Liabilities:
Cross-currency swap contracts						$	—					11						$	—					$	11
Foreign currency forward contracts						—						91						—						91
Interest rate-related derivatives						—						138						—						138
DECIEM stock options						—						—						73						73
Total						$	—					$	240					$	73					$	313

The following table presents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022:

(In millions)						Level 1						Level 2						Level 3						Total
Assets:
Money market funds						$	961					$	—					$	—					$	961
Foreign currency forward contracts						—						191						—						191
Interest rate-related derivatives						—						24						—						24
Total						$	961					$	215					$	—					$	1,176
Liabilities:
Foreign currency forward contracts						$	—					$	105					$	—					$	105
Interest rate-related derivatives						—						115						—						115
DECIEM stock options						—						—						74						74
Total						$	—					$	220					$	74					$	294

Schedule of estimated fair values of financial instruments

The estimated fair values of the Company’s financial instruments are as follows:

						March 31, 2023												June 30, 2022
(In millions)						Carrying Amount						Fair Value						Carrying Amount						Fair Value
Nonderivatives
Cash and cash equivalents						$	5,531					$	5,531					$	3,957					$	3,957
Current and long-term debt						7,371						7,034						5,412						5,139
DECIEM stock options						73						73						74						74
Derivatives
Cross-currency swap contracts - liability, net						(11)						(11)						—						—
Foreign currency forward contracts – liability, net						(11)						(11)						86						86
Interest rate-related derivatives – liability, net						(137)						(137)						(91)						(91)

Impairment charges measured at fair value on a nonrecurring basis, classified as Level 3

The following table presents the Company’s impairment charges for the nine months ended March 31, 2023 for certain of its nonfinancial assets measured at fair value on a nonrecurring basis, classified as Level 3, due to a change in circumstances that triggered an interim impairment test during the three months ended December 31, 2022:

(In millions)						Impairment charges						Date of Fair Value Measurement						Fair Value(1)
Other intangible assets, net (trademarks)
Dr.Jart+						$	100					November 30, 2022						$	330
Too Faced						86						November 30, 2022						186
Smashbox						21						December 31, 2022						—
Total						$	207											$	516

(1)See Note 2 - Goodwill and Other Intangible Assets for discussion of the valuation techniques used to measure fair value, the description of the inputs and information used to develop those inputs.

The following table presents the Company’s impairment charges for the nine months ended March 31, 2022 for certain of its nonfinancial assets measured at fair value on a nonrecurring basis, classified as Level 3, due to a change in circumstances that triggered an interim impairment test:

(In millions)						Impairment charges						Date of Fair Value Measurement						Fair Value(1)
Other intangible assets, net (trademarks)
GLAMGLOW						$	11					March 31, 2022						$	—
Dr.Jart+						205						February 28, 2022						486
Total						216												486
Total						$	216											$	486

(1)See Note 2 - Goodwill and Other Intangible Assets for discussion of the valuation techniques used to measure fair value, the description of the inputs and information used to develop those inputs.

Changes in DECEIM stock option liability

Changes in the DECIEM stock option liability for the nine months ended March 31, 2023 are included in Selling, general and administrative expenses in the accompanying consolidated statements of earnings and were as follows:

(In millions)						Fair Value
DECIEM stock option liability as of June 30, 2022						$	74
Changes in fair value, net of foreign currency remeasurements(1)						(2)
Translation adjustments and other, net						1
DECIEM stock option liability as of March 31, 2023						$	73

(1)Amount includes expense attributable to graded vesting of stock options which is not material for the nine months ended March 31, 2023.

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- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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