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DERIVATIVE INSTRUMENTS | 3 Months Ended
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Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS Foreign Exchange Risk Management The Company is exposed to foreign currency exchange fluctuations through its global operations. The Company may reduce its exposure to fluctuations in the cash flows associated with changes in foreign exchange rates by creating offsetting positions through the use of derivative instruments and also by designating foreign currency denominated borrowings and cross-currency swaps as hedges of net investments in foreign subsidiaries. The Company expects that through hedging, any gain or loss on the derivative instruments would generally offset the expected increase or decrease in the value of the underlying forecasted transactions. The Company entered into foreign exchange forward contracts for which hedge accounting treatment has been applied, which the Company anticipates realizing in the Condensed Consolidated Statements of Operations through fiscal 2021. In September 2020, the Company terminated its existing net investment cross currency swap derivatives with notional amount of $550.0 in exchange for cash payment of $37.6. Cash paid due to the termination of the cross currency swap derivatives is included in investing activities in the Condensed Consolidated Statements of Cash Flows. The related loss from this termination is included in AOCI/(L) until the sale or substantial liquidation of the underlying net investments. Interest Rate Risk Management The Company is exposed to interest rate fluctuations related to its variable rate debt instruments. The Company may reduce its exposure to fluctuations in the cash flows associated with changes in the variable interest rates by entering into offsetting positions through the use of derivative instruments, such as interest rate swap contracts. The interest rate swap contracts result in recognizing a fixed interest rate for the portion of the Company’s variable rate debt that was hedged. This will reduce the negative and positive impacts of changes in the variable rates over the term of the contracts. Hedge effectiveness of interest rate swap contracts is based on a long-haul hypothetical derivative methodology and includes all changes in value. During September 2019, the Company entered into incremental interest rate swap contracts in the notional amount of $1,000.0, which extended the maturity of the interest rate swap portfolio from 2021 through 2023. These interest rate swaps are designated and qualify as cash flow hedges. As of September 30, 2020 and June 30, 2020, the Company had interest rate swap contracts designated as effective hedges in the notional amount of $3,000.0 and $3,000.0, respectively. Derivative and non-derivative financial instruments which are designated as hedging instruments: The accumulated gain on foreign currency borrowings classified as net investment hedges in the foreign currency translation adjustment component of AOCI/(L) was $88.8 and $261.9 as of September 30, 2020 and June 30, 2020, respectively. The accumulated loss on derivative instruments classified as net investment hedges in the foreign currency translation adjustment component of AOCI/(L) was $(37.6) and $(12.5) as of September 30, 2020 and June 30, 2020, respectively. The amount of gains and losses recognized in Other comprehensive income (loss) (“OCI”) in the Condensed Consolidated Balance Sheets related to the Company’s derivative and non-derivative financial instruments which are designated as hedging instruments is presented below:
Gain (Loss) Recognized in OCI | Three Months Ended September 30, |  |
| 2020 |  | 2019 |  |  |  |
Foreign exchange forward contracts | $ | (1.2) |  |  | $ | 0.4 |  |  |  |  |
Interest rate swap contracts | 0.2 |  |  | (0.5) |  |  |  |  |
Cross-currency swap contracts | (25.1) |  |  | 3.9 |  |  |  |  |
Net investment hedge | (173.1) |  |  | 157.3 |  |  |  |  |
The accumulated loss on derivative instruments classified as cash flow hedges in AOCI/(L), net of tax, was $(37.3) and $(43.0) as of September 30, 2020 and June 30, 2020, respectively. The estimated net loss related to these effective hedges that is expected to be reclassified from AOCI/(L) into earnings, net of tax, within the next twelve months is $(23.4). As of September 30, 2020, all of the Company’s remaining foreign currency forward contracts designated as hedges were highly effective. The amount of gains and losses reclassified from AOCI/(L) to the Condensed Consolidated Statements of Operations related to the Company’s derivative financial instruments which are designated as hedging instruments is presented below:
Location and Amount of Gain (Loss) Recognized in Income on Cash Flow Hedging Relationships | Three Months Ended September 30, |  |
| 2020 |  | 2019 |  |  |  |
| Net revenues |  |  |  | Interest expense, net |  | Net revenues |  |  |  | Interest expense, net |  |  |  |  |  |  |  |
Foreign exchange forward contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from AOCI into income | $ | 1.0 |  |  |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | — |  |  |  |  |  |  |  |  |
Interest rate swap contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from AOCI into income | — |  |  |  |  | (9.8) |  |  | — |  |  |  |  | 0.9 |  |  |  |  |  |  |  |  |
Derivatives not designated as hedging: The amount of gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments is presented below:
Condensed Consolidated Statements of Operations Classification of Gain (Loss) Recognized in Operations | Three Months Ended September 30, |  |  |  |
|  | 2020 |  | 2019 |  |  |  |  |  |  |  |
Foreign exchange contracts | Selling, general and administrative expenses | $ | 0.1 |  |  | $ | (0.5) |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Interest expense, net | 5.3 |  |  | 4.7 |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Other expense, net | (0.3) |  |  | (0.1) |  |  |  |  |  |  |  |  |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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