Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2020

Summary of Assets and Liabilities Measured At Fair Value on Recurring Basis

The following table summarizes those assets and liabilities measured at fair value on a recurring basis:


	As of March 31, 2020								As of June 30, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)
Assets:
Foreign currency derivatives - cash flow hedges	$	—	$	4	$	—	$	4	$	—	$	1	$	—	$	1
Cross currency interest rate derivatives - fair value hedges		—		30		—		30		—		29		—		29
Cross currency interest rate derivatives - economic hedges		—		—		—		—		—		12		—		12
Cross currency interest rate derivatives - cash flow hedges		—		120		—		120		—		116		—		116
Equity securities (a)		54		—		125		179		74		—		113		187

Total assets	$	54	$	154	$	125	$	333	$	74	$	158	$	113	$	345

Liabilities:
Interest rate derivatives - cash flow hedges		—		15		—		15		—		20		—		20
Mandatorily redeemable noncontrolling interests		—		—		—		—		—		—		11		11
Cross currency interest rate derivatives - cash flow hedges		—		17		—		17		—		18		—		18

Total liabilities	$	—	$	32	$	—	$	32	$	—	$	38	$	11	$	49

(a)	See Note 5 —Investments.

Summary of Equity Securities Classified as Level 3

A rollforward of the Company’s equity securities classified as Level 3 is as follows:


	For the nine months ended March 31,
	2020			2019
	(in millions)
Balance - beginning of period (a)	$	113		$	127
Additions (b)		17			7
Sales		—			(10	)
Measurement adjustments		(3	)		—
Foreign exchange and other		(2	)		(9	)

Balance - end of period	$	125		$	115

(a)	As a result of the adoption of ASU 2016-01 during the first quarter of fiscal 2019, the cumulative net unrealized gains (losses) for these investments contained within Accumulated o ther comprehensive loss were reclassified through Accumulated deficit as of July 1, 2018.

(b)	Includes purchases of equity securities as well as the equity securities received as consideration for the sale of Unruly to Tremor in the third quarter of fiscal 2020.

Summary of Mandatorily Redeemable Noncontrolling Interest Liabilities Classified Level 3

A rollforward of the Company’s mandatorily redeemable noncontrolling interest liabilities classified as Level 3 is as follows:


	For the nine months ended March 31,
	2020			2019
	(in millions)
Balance - beginning of period	$	12		$	12
Payments (a)		(11	)		—
Accretion		—			1
Foreign exchange movements		—			(1	)
Other		(1	)		—

Balance - end of period	$	—		$	12

(a)	In July 2019, REA Group acquired the remaining 19.7% interest in Smartline Home Loans Pty Limited for approximately $11 million, increasing REA Group’s ownership to 100%.

Summary of Hedges Classified as Current or Non-Current in Balance Sheets Based on Maturity Dates

Hedges are classified as current or

non-current

in the Balance Sheets based on their maturity dates. Refer to the table below for further details:


			As of			As of
	Balance Sheet Location		March 31, 2020			June 30, 2019
			(in millions)
Foreign currency derivatives - cash flow hedges		Other current assets	$	4		$	1
Cross currency interest rate derivatives - fair value hedges		Other current assets		—			8
Cross currency interest rate derivatives - economic hedges		Other current assets		—			12
Cross currency interest rate derivatives - cash flow hedges		Other current assets		—			33
Cross currency interest rate derivatives - fair value hedges		Other non-current assets		30			21
Cross currency interest rate derivatives - cash flow hedges		Other non-current assets		120			83
Interest rate derivatives - cash flow hedges		Other current liabilities		—			(2	)
Interest rate derivatives - cash flow hedges		Other non-current liabilities		(15	)		(18	)
Cross currency interest rate derivatives - cash flow hedges		Other non-current liabilities		(17	)		(18	)

Financial Instruments and Fair Value Measurements - Summary of Derivative Instruments Designated as Cash Flow Hedges

The following tables present the impact that changes in the fair values of derivatives designated as cash flow hedges had on Accumulated other comprehensive loss and the Statement of Operations during the three and nine months ended March 31, 2020 and 2019.


	Gain (loss) recognized in Accumulated						(Gain) loss reclassified from Accumulated
	Other Comprehensive Loss for the three months ended						Other Comprehensive Loss for the three months ended					Income statement
	March 31,						March 31,					location
	2020			2019			2020			2019
	(in millions)
Derivative instruments designated as cash flow hedges:
Foreign currency derivatives - cash flow hedges	$	5		$	(2	)	$	(1	)	$	—	Operating expenses
Cross currency interest rate derivatives - cash flow hedges		43			(9	)		(33	)		7	Interest expense, net
Interest rate derivatives - cash flow hedges		(3	)		(4	)		1			2	Interest expense, net

Total	$	45		$	(15	)	$	(33	)	$	9


	Gain (loss) recognized in Accumulated						(Gain) loss reclassified from Accumulated
	Other Comprehensive Loss for the nine months ended						Other Comprehensive Loss for the nine months ended						Income statement
	March 31,						March 31,						location
	2020			2019			2020			2019
	(in millions)
Derivative instruments designated as cash flow hedges:
Foreign currency derivatives - cash flow hedges	$	3		$	2		$	(3	)	$	(2	)	Operating expenses
Cross currency interest rate derivatives - cash flow hedges		35			7			(30	)		(5	)	Interest expense, net
Interest rate derivatives - cash flow hedges		(6	)		(6	)		(4	)		6		Interest expense, net

Total	$	32		$	3		$	(37	)	$	(1	)

Schedule of FairValue Hedging Relationship By Balance Sheet

The following sets forth the effect of fair value hedging relationships on hedged items in the Balance Sheets as of March 31, 2020:


	As of
	March 31, 2020
	(in millions)
Borrowings:
Carrying amount of hedged item	$	72
Cumulative hedging adjustments included in the carrying amount		5