PENSION, DEFERRED COMPENSATION AND POST-RETIREMENT BENEFIT PLANS (Tables)

12 Months Ended

Jun. 30, 2020

Schedule of components of net periodic benefit cost for pension and other post-retirement benefit plans

The significant components of the above mentioned plans as of and for the years ended June 30 are summarized as follows:


	Pension Plans													Other than Pension Plans
	U.S.						International						Post-retirement
(In millions)	2020		2019		2020		2019		2020		2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	966	$	896	$	631	$	588	$	183	$	170
Service cost	39		38		36		30		3		3
Interest cost	35		37		11		13		6		7
Plan participant contributions	—		—		6		5		—		1
Actuarial loss (gain)	101		68		(12)		51		6		10
Foreign currency exchange rate impact	—		—		(1)		(18)		(1)		(1)
Benefits, expenses, taxes and premiums paid	(59)		(73)		(32)		(31)		(7)		(7)

Settlements	—		—		(3)		(7)		—		—

Benefit obligation at end of year	$	1,082	$	966	$	636	$	631	$	190	$	183

Change in plan assets:
Fair value of plan assets at beginning of year	$	832	$	838	$	577	$	561	$	31	$	34
Actual return on plan assets	109		48		43		32		3		2
Foreign currency exchange rate impact	—		—		(4)		(16)		—		—
Employer contributions	48		19		25		33		—		1
Plan participant contributions	—		—		6		5		—		1
Settlements	—		—		(4)		(7)		—		—
Benefits, expenses, taxes and premiums paid from plan assets	(59)		(73)		(32)		(31)		(7)		(7)
Fair value of plan assets at end of year	$	930	$	832	$	611	$	577	$	27	$	31

Funded status	$	(152)	$	(134)	$	(25)	$	(54)	$	(163)	$	(152)

Amounts recognized in the Balance Sheet consist of:
Other assets	$	—	$	2	$	127	$	103	$	—	$	—
Other accrued liabilities	(23)		(24)		(4)		(3)		—		—
Other noncurrent liabilities	(129)		(112)		(148)		(154)		(163)		(152)
Funded status	(152)		(134)		(25)		(54)		(163)		(152)
Accumulated other comprehensive loss	283		253		24		68		17		13
Net amount recognized	$	131	$	119	$	(1)	$	14	$	(146)	$	(139)

Net periodic benefit costs and weighted-average assumptions


	Pension Plans																									Other than Pension Plans
	U.S.													International											Post-retirement
($ in millions)	2020			2019			2018			2020		2019		2018		2020			2019			2018
Components of net periodic benefit cost:
Service cost	$	39		$	38		$	37		$	36	$	30	$	30	$	3		$	3		$	3
Interest cost	35			37			33			11		13		13		6			7			7
Expected return on assets	(53)			(55)			(53)			(14)		(14)		(15)		(2)			(2)			(3)
Amortization of:
Actuarial loss	15			11			14			6		3		5		—			—			—
Prior service cost	—			1			—			—		(1)		—		—			—			1
Settlements	—			—			—			—		1		—		—			—			—
Special termination benefits	—			—			—			—		—		1		—			—			—
Net periodic benefit cost	$	36		$	32		$	31		$	39	$	32	$	34	$	7		$	8		$	8
Weighted-average assumptions used to determine benefit obligations at June 30:
Discount rate	2.50 – 3.00%			3.40 – 3.80%			4.10 – 4.30%			0.50 – 7.00%		0.25 – 8.50%		.50 – 7.50		2.70 – 9.00%			3.25 – 9.75%			3.75 – 9.75%
Rate of compensation increase	2.50 – 8.00%			2.50 – 8.00%			2.50 – 8.00%			1.00 – 5.50%		1.00 – 5.50%		1.00– 5.50		N/A			N/A			N/A
Weighted-average assumptions used to determine net periodic benefit cost for the year ended June 30:
Discount rate	3.40 – 3.80%			4.10 – 4.30%			3.40 – 3.90%			.25 – 8.50%		.50– 7.50%		.50 – 6.75%		3.25 – 9.75%			3.75 – 9.75%			3.70 – 9.75%
Expected return on assets	6.75		%	6.75		%	7.00		%	1.50 – 8.50%		1.50 – 7.50%		1.75 – 6.75%		6.75		%	6.75		%	7.00		%
Rate of compensation increase	2.50 – 8.00%			2.50 – 8.00%			3.00– 7.00%			1.00 – 5.50%		1.00 – 5.50%		1.00 – 5.50%		N/A			N/A			N/A

Impact of one-percentage-point change in assumed health care cost trend rates

A 100 basis-point change in assumed health care cost trend rates for fiscal 2020 would have had the following effects:


(In millions)	100 Basis-Point Increase		100 Basis-Point Decrease
Effect on total service and interest costs	$	1	$	(1)
Effect on post-retirement benefit obligations	$	13	$	(11)

Amounts recognized in AOCI (before tax)

Amounts recognized in AOCI (before tax) as of June 30, 2020 are as follows:


	Pension Plans						Other than Pension Plans
(In millions)	U.S.		International		Post-retirement		Total
Net actuarial losses, beginning of year	$	252	$	74	$	13	$	339
Actuarial losses recognized	45		(40)		4		9
Amortization and settlements included in net periodic benefit cost	(15)		(6)		—		(21)
Translation adjustments	—		2		—		2
Net actuarial losses, end of year	282		30		17		329

Net prior service cost, beginning of year	1		(6)		—		(5)
Amortization included in net periodic benefit cost	—		—		—		—
Net prior service cost, end of year	1		(6)		—		(5)
Total amounts recognized in AOCI	$	283	$	24	$	17	$	324

Amounts in AOCI expected to be amortized as components of net periodic benefit cost during next fiscal year

Amounts in AOCI expected to be amortized as components of net periodic benefit cost during fiscal 2021 are as follows:


	Pension Plans						Other than Pension Plans
(In millions)	U.S.		International		Post-retirement
Net prior service cost (credit)	$	—	$	(1)	$	—
Net actuarial losses	$	20	$	4	$	—

Projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the company's pension plans

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company’s pension plans at June 30 are as follows:


	Pension Plans
	Retirement Growth Account						Restoration						International
(In millions)	2020		2019		2020		2019		2020		2019
Projected benefit obligation	$	940	$	830	$	142	$	136	$	636	$	631
Accumulated benefit obligation	$	887	$	784	$	124	$	120	$	576	$	569
Fair value of plan assets	$	930	$	832	$	—	$	—	$	611	$	577

Expected cash flows

The expected cash flows for the Company’s pension and post-retirement plans are as follows:


	Pension Plans					Other than Pension Plans
(In millions)	U.S.		International		Post-retirement
Expected employer contributions for year ending June 30, 2021	$	—	$	31	—
Expected benefit payments for year ending June 30,
2021	67		25		8
2022	54		26		8
2023	52		28		9
2024	52		27		9
2025	53		29		10
Years 2026 – 2030	287		145		57

Target asset allocation

The Company’s target asset allocation at June 30, 2020 is as follows:


	Pension Plans						Other than Pension Plans
	U.S.		International		Post-retirement
Equity	42	%	12	%	42	%
Debt securities	47	%	65	%	47	%
Other	11	%	23	%	11	%
	100	%	100	%	100	%

Fair values of the company's pension and post-retirement plan assets by asset category

The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category as of June 30, 2020:


(In millions)	Level 1		Level 2		Level 3		Assets Measured at NAV		Total
Cash and cash equivalents	$	2	$	—	$	—	$	—	$	2
Short term investment funds	—		7		—		6		13
Government and agency securities	—		152		—		—		152

Commingled funds	386		666		—		207		1,259
Insurance contracts	—		—		49		—		49
Limited partnerships and hedge fund investments	—		—		—		93		93
Total	$	388	$	825	$	49	$	306	$	1,568

The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category as of June 30, 2019:


(In millions)	Level 1		Level 2		Level 3		Assets Measured at NAV		Total
Cash and cash equivalents	$	6	$	—	$	—	$	—	$	6
Short term investment funds	—		19		—		5		24
Government and agency securities	—		112		—		—		112

Commingled funds	347		590		—		212		1,149
Insurance contracts	—		—		49		—		49
Limited partnerships and hedge fund investments	—		—		—		100		100
Total	$	353	$	721	$	49	$	317	$	1,440

Changes in Level 3 plan assets

The following table presents the changes in Level 3 plan assets for fiscal 2020:


(In millions)	Insurance Contracts

Balance as of June 30, 2019	$	49
Actual return on plan assets:
Relating to assets still held at the reporting date	2
Purchases, sales, issuances and settlements, net	(2)
Foreign exchange impact	—
Balance as of June 30, 2020	$	49