DEBT

12 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

DEBT

DEBT

The Company’s current and long-term debt and available financing consist of the following:

	Debt at June 30				Available financing at June 30, 2024
(In millions)	2024		2023		Committed		Uncommitted
5.150% Senior Notes, due May 15, 2053 ("2053 Senior Notes")	$	590	$	590	$	—	$	—
3.125% Senior Notes, due December 1, 2049 (“2049 Senior Notes”)	637		636		—		—
4.150% Senior Notes, due March 15, 2047 (“2047 Senior Notes”)	494		494		—		—
4.375% Senior Notes, due June 15, 2045 (“2045 Senior Notes”)	454		454		—		—
3.700% Senior Notes, due August 15, 2042 (“2042 Senior Notes”)	247		247		—		—
6.000% Senior Notes, due May 15, 2037 (“2037 Senior Notes”)	296		295		—		—
5.000% Senior Notes, due February 14, 2034 ("2034 Senior Notes)	644		—		—		—
5.75% Senior Notes, due October 15, 2033 (“October 2033 Senior Notes”)	198		198		—		—
4.650% Senior Notes, due May 15, 2033 ("May 2033 Senior Notes")	695		695		—		—
1.950% Senior Notes, due March 15, 2031 (“2031 Senior Notes”)	551		550		—		—
2.600% Senior Notes, due April 15, 2030 ("2030 Senior Notes")	595		589		—		—
2.375% Senior Notes, due December 1, 2029 (“2029 Senior Notes”)	644		643		—		—
4.375% Senior Notes, due May 15, 2028 ("2028 Senior Notes")	696		696		—		—
3.150% Senior Notes, due March 15, 2027 (“2027 Senior Notes”)	499		499		—		—
2.000% Senior Notes, due December 1, 2024 (“2024 Senior Notes”)	499		498		—		—
Commercial paper (1)	—		988		—		2,500
Other long-term borrowings	28		33		—		—
Other current borrowings	4		9		—		155
Revolving credit facility	—		—		2,500		—
	7,771		8,114		$	2,500	$	2,655
Less current debt including current maturities	(504)		(997)
	$	7,267	$	7,117

(1) As of June 30, 2023, commercial paper consisted of $1,000 million principal and unamortized debt discount of $12 million.

As of June 30, 2024, the Company’s long-term debt consisted of the following:

Notes(1)	Issue Date	Price		Yield		Principal		Unamortized Debt (Discount) Premium		Interest rate swap adjustments		Debt Issuance Costs		Semi-annual interest payments
($ in millions)
2053 Senior Notes	May 2023	99.455	%	5.186	%	$	600	$	(3)	$	—	$	(7)	May 15/November 15
2049 Senior Notes	November 2019	98.769		3.189		650		(7)		—		(6)		June 1/December 1
2047 Senior Notes(2)	February 2017	99.739		4.165		500		(1)		—		(5)		March 15/September 15
2045 Senior Notes(3)	June 2015	97.999		4.497		300		(5)		—		(3)		June 15/December 15
2045 Senior Notes(3)	May 2016	110.847		3.753		150		13		—		(1)		June 15/December 15
2042 Senior Notes	August 2012	99.567		3.724		250		(1)		—		(2)		February 15/August 15
2037 Senior Notes(4)	May 2007	98.722		6.093		300		(2)		—		(2)		May 15/November 15
2034 Senior Notes(5)	February 2024	99.689		5.040		650		(2)		—		(4)		February 14/August 14
October 2033 Senior Notes(6)	September 2003	98.645		5.846		200		(1)		—		(1)		April 15/October 15
May 2033 Senior Notes(7)	May 2023	99.897		4.663		700		(1)		—		(4)		May 15/November 15
2031 Senior Notes(8),(9)	March 2021	99.340		2.023		600		(2)		(44)		(3)		March 15/September 15
2030 Senior Notes(9)	April 2020	99.816		2.621		700		(1)		(101)		(3)		April 15/October 15
2029 Senior Notes(10)	November 2019	99.046		2.483		650		(4)		—		(2)		June 1/December 1
2028 Senior Notes	May 2023	99.897		4.398		700		(1)		—		(3)		May 15/November 15
2027 Senior Notes(11)	February 2017	99.963		3.154		500		—		—		(1)		March 15/September 15
2024 Senior Notes	November 2019	99.421		2.122		500		(1)		—		—		June 1/December 1

(1)The Senior Notes contain certain customary covenants, including limitations on indebtedness secured by liens.

(2)In November 2016, in anticipation of the issuance of the 2047 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $350 million at a weighted-average all-in rate of 3.01%. The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a gain in OCI of $3 million that is being amortized against interest expense over the life of the 2047 Senior Notes. As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the 2047 Senior Notes will be 4.17% over the life of the debt.

(3)In April and May 2015, in anticipation of the issuance of the 2045 Senior Notes in June 2015, the Company entered into a series of forward-starting interest rate swap agreements on a notional amount totaling $300 million at a weighted-average all-in rate of 2.38%. The forward-starting interest rate swap agreements were settled upon the issuance of the new debt and the Company recognized a gain in OCI of $18 million that will be amortized against interest expense over the life of the 2045 Senior Notes. As a result of the forward-starting interest rate swap agreements, the debt discount and debt issuance costs, the effective interest rate on the 2045 Senior Notes will be 4.216% over the life of the debt. In May 2016, the Company reopened this offering with the same terms and issued an additional $150 million for an aggregate amount outstanding of $450 million of 2045 Senior Notes.

(4)In April 2007, in anticipation of the issuance of the 2037 Senior Notes, the Company entered into a series of forward-starting interest rate swap agreements on a notional amount totaling $210 million at a weighted-average all-in rate of 5.45%. The forward-starting interest rate swap agreements were settled upon the issuance of the new debt and the Company recognized a loss in OCI of $1 million that is being amortized to interest expense over the life of the 2037 Senior Notes. As a result of the forward-starting interest rate swap agreements, the debt discount and debt issuance costs, the effective interest rate on the 2037 Senior Notes will be 6.181% over the life of the debt.

(5)In March 2022, in anticipation of the issuance of the 2034 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $300 million at a weighted average all-in rate of 2.02%. The treasury lock agreements were terminated in September 2022, and the Company recognized a gain in OCI of $31 million that is being amortized to interest expense over the life of the 2034 Senior Notes. As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the 2034 Senior Notes will be 4.53% over the life of the debt.

(6)In May 2003, in anticipation of the issuance of the 2033 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $195 million at a weighted-average all-in rate of 4.53%. The treasury lock agreements were settled upon the issuance of the new debt and the Company received a payment of $15 million that is being amortized against interest expense over the life of the 2033 Senior Notes. As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the 2033 Senior Notes will be 5.395% over the life of the debt.

(7)In December 2022 and March 2023, in anticipation of the issuance of the May 2033 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $575 million at a weighted-average all-in rate of 3.57%. The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a loss in OCI of $5 million that is being amortized to interest expense over the life of the May 2033 Senior Notes. As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the May 2033 Senior Notes will be 4.83% over the life of the debt.

(8)In March 2020, in anticipation of the issuance of the 2031 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $200 million at a weighted-average all-in rate of 0.84%. The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a gain in OCI of $11 million that is being amortized to interest expense over the life of the 2031 Senior Notes. As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the 2031 Senior Notes will be 1.89% over the life of the debt.

(9)The Company entered into interest rate swap agreements with a notional amount totaling $700 million and $300 million to effectively convert the fixed rate interest on its outstanding 2030 Senior Notes and 2031 Senior Notes to variable interest rates based on three months fallback rate SOFR plus a margin.

(10)In April and May 2019, in anticipation of the issuance of the 2029 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $500 million at a weighted-average all-in rate of 2.50%. The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a loss in OCI of $33 million that is being amortized to interest expense over the life of the 2029 Senior Notes. As a result of the treasury lock agreements, as well as the debt discount and debt issuance costs, the effective interest rate on the 2029 Senior Notes will be 3.15% over the life of the debt.

(11)In November 2016, in anticipation of the issuance of the 2027 Senior Notes, the Company entered into a series of treasury lock agreements on a notional amount totaling $450 million at a weighted-average all-in rate of 2.37%. The treasury lock agreements were settled upon the issuance of the new debt, and the Company recognized a gain in OCI of $2 million that is being amortized against interest expense over the life of the 2027 Senior Notes. As a result of the treasury lock agreements, the debt discount and debt issuance costs, the effective interest rate on the 2027 Senior Notes will be 3.18% over the life of the debt.

In June 2024, the Company replaced its $2,500 million senior unsecured revolving credit facility that was set to expire in October 2026 with a new $2,500 million senior unsecured revolving credit facility (the “2024 Facility”). The 2024 Facility expires on June 7, 2029 unless extended for up to two additional years in accordance with the terms set forth in the agreement. Up to the equivalent of $750 million of the 2024 Facility is available for multi-currency loans. Interest rates on borrowings under the 2024 Facility will be based on prevailing market interest rates in accordance with the agreement. The costs incurred to establish the 2024 Facility were not material. The 2024 Facility has an annual fee of approximately $1 million, payable quarterly, based on the Company’s current credit ratings. The 2024 Facility contains a cross-default provision whereby a failure to pay other material financial obligations in excess of $175 million (after grace periods and absent a waiver from the lenders) would result in an event of default and the acceleration of the maturity of any outstanding debt under this facility. The 2024 Facility may be increased, at the election of the Company, by up to $500 million in accordance with the terms set forth in the agreement. At June 30, 2024, no borrowings were outstanding under the 2024 Facility.

In February 2024, the Company completed a public offering of $650 million aggregate principal amount of its 2034 Senior Notes. The Company used the proceeds from this offering for general corporate purposes, including funding a portion of the price to purchase the remaining interest in DECIEM, operating expenses, working capital, capital expenditures and redemptions and repayment of short-term or long-term borrowings, including outstanding commercial paper as it matured.

In June 2023, the Company decreased the size of its commercial paper program to $2,500 million and terminated the undrawn $2,000 million 364-Day Facility (as defined below).

In May 2023, the Company completed a public offering of $2,000 million, consisting of $700 million aggregate principal amount of its 2028 Senior Notes, $700 million aggregate principal amount of its May 2033 Senior Notes and $600 million aggregate principal amount of its 2053 Senior Notes. The Company used proceeds from this offering for general corporate purposes, including to repay outstanding commercial paper as it matured.

In January 2023, the Company entered into a $2,000 million senior unsecured revolving credit facility (the “364-Day Facility”) to support the Company's commercial paper program and for general corporate purposes, including to finance the Company's fiscal 2023 fourth quarter TOM FORD Acquisition. In January 2023, in connection with the 364-Day Facility, the Company increased its commercial paper program under which it may issue commercial paper in the United States from $2,500 million to $4,500 million.

On August 15, 2022, the Company repaid the outstanding principal balance of its $250 million 2.35% Senior Notes with cash from operations.

The Company maintains uncommitted credit facilities in various regions throughout the world. Interest rate terms for these facilities vary by region and reflect prevailing market rates for companies with strong credit ratings. During fiscal 2024 there were no amounts outstanding and in fiscal 2023, the average amount outstanding was approximately $1 million, and the annualized weighted-average interest rate incurred was approximately 5.4%.

Refer to Note 17 – Commitments and Contingencies for the Company’s projected debt service payments as of June 30, 2024 and over the next five fiscal years.