XML 58 R28.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

DERIVATIVE INSTRUMENTS | 12 Months Ended
--- | ---
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS Foreign Exchange Risk The Company is exposed to foreign currency exchange fluctuations through its global operations. The Company reduces its exposure to fluctuations in foreign exchange rates by creating offsetting positions through the use of derivative instruments, including forward foreign exchange contracts and 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. In September 2019, the Company entered into cross-currency swap contracts in the notional amount of $550.0 and designated these cross-currency swaps as hedges of its net investment in certain foreign subsidiaries. In September 2020, the Company terminated these net investment cross currency swap derivatives in exchange for cash payment of $37.6. The related loss from this termination is included in AOCI/(L) until the sale or substantial liquidation of the underlying investments. As of June 30, 2024 and 2023, the notional amounts of the outstanding forward foreign exchange contracts designated as cash flow hedges were $22.3 and $28.0, respectively. The Company also uses certain derivatives not designated as hedging instruments consisting primarily of foreign currency forward contracts and cross currency swaps to hedge intercompany transactions and foreign currency denominated external debt. Although these derivatives were not designated for hedge accounting, the overall objective of mitigating foreign currency exposure is the same for all derivative instruments. For derivatives not designated as hedging instruments, changes in fair value are recorded in the line item in the Consolidated Statements of Operations to which the derivative relates. As of June 30, 2024 and 2023, the notional amounts of these outstanding non-designated foreign currency forward and cross currency forward contracts were $1,797.6 and $1,653.5, respectively. Interest Rate Risk The Company is exposed to interest rate fluctuations related to its variable rate debt instruments. The Company reduces 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 impact of increases 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. In fiscal 2022, the Company terminated certain existing interest rate swaps with notional amounts of $200.0 in exchange for cash payment of $1.9. The related loss from this termination is included in Interest expense, net, within the Consolidated Statement of Operations. As of June 30, 2023, the Company had interest rate swap contracts designated as effective hedges in the notional amount of $200.0, which were fully terminated in December 2023 for a cash receipt of $2.1. The Company had no outstanding interest rate swap contracts as of June 30, 2024. As the forecasted interest expense under the original swap agreements is still probable, the related gain in accumulated other comprehensive income (loss) ("AOCI/L") will be amortized over the remaining life of the swaps. These interest rate swaps had been designated and qualified as cash flow hedges and were highly effective prior to termination. Net Investment Hedge Foreign currency gains and losses on borrowings designated as a net investment hedge, except ineffective portions, are reported in the cumulative translation adjustment (“CTA”) component of AOCI/(L), along with the foreign currency translation adjustments on those investments. As of June 30, 2024 and 2023, the nominal exposures of foreign currency denominated borrowings designated as net investment hedges were €1,611.6 million and €701.3 million, respectively. The designated hedge amounts were considered highly effective. Forward Repurchase Contracts In June 2022, December 2022, and November 2023, the Company entered into certain forward repurchase contracts to start hedging for potential $200.0, $196.0, and $294.0 share buyback programs, in 2024, 2025, and 2026, respectively. These forward repurchase contracts are accounted for at fair value, with changes in the fair value recorded in Other expense (income), net in the Consolidated Statements of Operations. In February 2024, the Company elected to physically settle the June 2022 Forward for a cash payment of $200.0 in exchange for 27.0 million shares of its Class A Common Stock. Refer to Note 21—Equity and Convertible Preferred Stock. Derivative and non-derivative financial instruments which are designated as hedging instruments: The accumulated gain (loss) on foreign currency borrowings classified as net investment hedges in the foreign currency translation adjustment component of AOCI/(L) was $14.6 and $(12.2) as of June 30, 2024 and 2023, respectively. The accumulated loss on cross currency swaps designated as net investment hedges in the foreign currency translation adjustment component of AOCI/(L) was $(37.6) as of June 30, 2024 and 2023. The amount of gains and losses recognized in OCI in the 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 | Fiscal Year Ended June 30,
| 2024 |  | 2023 |  | 2022
Foreign exchange forward contracts | $ | 2.0 |  |  | $ | (3.7) |  |  | $ | (1.0) |
Interest rate swap contracts | (0.1) |  |  | 5.4 |  |  | 13.9 |
Net investment hedges | 26.8 |  |  | (53.9) |  |  | 36.3 |
The accumulated gain on derivative instruments classified as cash flow hedges in AOCI/(L), net of tax, was $2.1 and $0.7 as of June 30, 2024 and 2023, respectively. The estimated net gain 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 $2.0. As of June 30, 2024, 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 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 |  | Fiscal Year Ended June 30,
|  | 2024 |  |  | 2023 |  |  | 2022
|  |  | Cost of sales |  | Interest expense, net |  |  |  | Cost of sales |  | Interest expense, net |  |  |  | Cost of sales |  | Interest expense, net
Foreign exchange forward contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain reclassified from AOCI into income |  |  | $ | (2.6) |  |  | $ | — |  |  |  |  | $ | (1.6) |  |  | $ | — |  |  |  |  | $ | 1.7 |  |  | $ | — |
Interest rate swap contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of loss reclassified from AOCI into income |  |  | — |  |  | 2.0 |  |  |  |  | — |  |  | 8.3 |  |  |  |  | — |  |  | (13.0) |
Derivatives not designated as hedging instruments: The amount of gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments is presented below:
Consolidated Statements of Operations Classification of Gain (Loss) Recognized in Operations | Fiscal Year Ended June 30,
|  | 2024 |  | 2023 |  | 2022
Foreign exchange contracts | Selling, general and administrative expenses | $ | 0.1 |  |  | $ | (5.1) |  |  | $ | (0.1) |
Foreign exchange contracts | Interest income (expense), net | (30.1) |  |  | (69.3) |  |  | 2.7 |
Foreign exchange and forward repurchase contracts | Other income (expense), net | (124.2) |  |  | 168.7 |  |  | 18.4 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration