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RETIREMENT BENEFIT OBLIGATIONS
 12 Months Ended
Jun. 30, 2026
Retirement Benefits [Abstract]  
RETIREMENT BENEFIT OBLIGATIONS
NOTE 17. RETIREMENT BENEFIT OBLIGATIONS
The Company’s employees participate in various defined benefit pension and postretirement plans sponsored by the Company and its subsidiaries. Plans in the U.S., U.K., Australia, and other foreign plans are accounted for as defined benefit pension plans. Accordingly, the funded and unfunded position of each plan is recorded in the Balance Sheets. Actuarial gains and losses that have not yet been recognized through net income are recorded in Accumulated other comprehensive loss, net of taxes, until they are amortized as a component of net periodic benefit cost. The determination of benefit obligations and the recognition of expenses related to the plans are dependent on various assumptions. The major assumptions primarily relate to discount rates, expected long-term rates of return on plan assets and mortality rates. Management develops each assumption using relevant company experience in conjunction with market-related data for each individual country in which such plans exist. The funded status of the plans can change from year to year, but the assets of the funded plans have been sufficient to pay all benefits that came due in each of fiscal 2026, 2025 and 2024.
Summary of Funded Status
The Company uses a June 30 measurement date for all pension and postretirement benefit plans. The combined domestic and foreign pension and postretirement benefit plans resulted in a net pension and postretirement benefits asset (liability) of $62 million and $38 million at June 30, 2026 and 2025, respectively. The Company recognized these amounts in the Balance Sheets at June 30, 2026 and 2025 as follows:
Pension Benefits
DomesticForeign
Postretirement benefits
Total
20262025202620252026202520262025
(in millions)
Other non-current assets$3 $— $166 $165 $— $— $169 $165 
Other current liabilities(1)— (3)(3)(6)(7)(10)(10)
Retirement benefit obligations(6)(19)(47)(50)(44)(48)(97)(117)
Net asset (liability) recognized
$(4)$(19)$116 $112 $(50)$(55)$62 $38 
The following table sets forth the change in the projected benefit obligation, change in the fair value of the Company’s plan assets and funded status:
Pension Benefits
DomesticForeign
Postretirement Benefits
Total
As of June 30,
20262025202620252026202520262025
(in millions)
Projected benefit obligation, beginning of the year
$220 $228 $598 $590 $55 $56 $873 $874 
Service cost— — 1 1 — — 1 1 
Interest cost10 12 29 29 2 3 41 44 
Benefits paid(22)(26)(42)(40)(5)(7)(69)(73)
Settlements(a)
— — (3)(6)— — (3)(6)
Actuarial (gain) loss
— 6 (10)(20)(2)2 (12)(12)
Foreign exchange rate changes— — (20)44 — 1 (20)45 
Projected benefit obligation, end of the year
208 220 553 598 50 55 811 873 
Change in the fair value of plan assets for the Company’s benefit plans:
Fair value of plan assets, beginning of the year
201 200 710 686 — — 911 886 
Actual return on plan assets15 10 24 14 — — 39 24 
Employer contributions10 17 4 3 — — 14 20 
Benefits paid(22)(26)(42)(40)— — (64)(66)
Settlements(a)
— — (3)(6)— — (3)(6)
Foreign exchange rate changes— — (24)53 — — (24)53 
Fair value of plan assets, end of the year
204 201 669 710 — — 873 911 
Funded status$(4)$(19)$116 $112 $(50)$(55)$62 $38 
(a)Amounts related to payments made to former employees of the Company in full settlement of their pension benefits.
Amounts recognized in Accumulated other comprehensive loss consist of:
Pension Benefits
DomesticForeign
Postretirement Benefits
Total
As of June 30,
20262025202620252026202520262025
(in millions)
Actuarial losses (gains)$109 $118 $314 $331 $(8)$(6)$415 $443 
Prior service cost (benefit)— — 6 7 (15)(20)(9)(13)
Net amounts recognized$109 $118 $320 $338 $(23)$(26)$406 $430 
Accumulated pension benefit obligations as of June 30, 2026 and 2025 were $759 million and $818 million, respectively.
Below is information about funded and unfunded pension plans:
Domestic Pension Benefits
Funded PlansUnfunded PlansTotal
As of June 30,
202620252026202520262025
(in millions)
Projected benefit obligation$201 $213 $7 $7 $208 $220 
Accumulated benefit obligation201 213 7 7 208 220 
Fair value of plan assets204 201 — — 204 201 
Foreign Pension Benefits
Funded PlansUnfunded PlansTotal
As of June 30,
202620252026202520262025
(in millions)
Projected benefit obligation$503 $545 $50 $53 $553 $598 
Accumulated benefit obligation501 545 50 53 551 598 
Fair value of plan assets669 710 — — 669 710 
The accumulated benefit obligations exceeds the fair value of plan assets for all unfunded pension plans.
Summary of Net Periodic Benefit Costs
The Company recorded $3 million, $10 million and $28 million in net periodic benefit costs in the Statements of Operations for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. The Company utilizes the full yield-curve approach to estimate the service and interest cost components of net periodic benefit costs for its pension and other postretirement benefit plans.
The amortization of amounts related to unrecognized prior service costs (credits), deferred losses and settlements, curtailments and other were reclassified out of Other comprehensive income as a component of net periodic benefit costs. The components of net periodic benefit costs were as follows:
Pension Benefits
Domestic
Foreign
Postretirement Benefits
Total
For the fiscal years ended June 30,
202620252024202620252024202620252024202620252024
(in millions)
Service cost benefits earned during the period
$— $— $— $1 $1 $1 $— $— $— $1 $1 $1 
Interest costs on projected benefit obligations
10 12 13 29 29 33 2 3 3 41 44 49 
Expected return on plan assets
(11)(11)(12)(44)(40)(37)— — — (55)(51)(49)
Amortization of deferred losses
5 5 5 15 15 15 — — — 20 20 20 
Amortization of prior service credits
— — — — — — (4)(4)(4)(4)(4)(4)
Settlements, curtailments and other
— — — — — 11 — — — — — 11 
Net periodic benefit costs (income) – Total$4 $6 $6 $1 $5 $23 $(2)

$(1)$(1)$3 $10 $28 
Pension Benefits
Domestic
Foreign
Postretirement Benefits
For the fiscal years ended June 30,
202620252024202620252024202620252024
Additional information
Weighted-average assumptions used to determine benefit obligations
Discount rate5.6%5.5%5.6%5.8%5.5%5.2%5.4%5.3%5.5%
Rate of increase in future compensationN/AN/AN/A2.6%2.6%2.9%N/AN/AN/A
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate for PBO5.5%5.6%5.4%5.5%5.2%5.4%5.3%5.5%5.5%
Discount rate for service cost
N/AN/AN/A4.6%5.3%5.4%N/A5.6%5.5%
Discount rate for interest on PBO
5.0%5.5%5.5%5.1%5.1%5.7%4.9%5.4%5.6%
Expected return on plan assets6.0%5.8%6.0%6.5%5.9%5.4%N/AN/AN/A
Rate of increase in future compensationN/AN/AN/A2.6%2.9%3.9%N/AN/AN/A
The following assumed health care cost trend rates as of June 30 were also used in accounting for postretirement benefits:
Postretirement benefits
20262025
Health care cost trend rate8.0 %6.6 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)5.0 %5.4 %
Year that the rate reaches the ultimate trend rate20412031
The following table sets forth the estimated benefit payments for the next five fiscal years, and in aggregate for the five fiscal years thereafter. The expected benefits are estimated based on the same assumptions used to measure the Company’s benefit obligation at the end of the fiscal year and include benefits attributable to estimated future employee service:
Expected Benefit Payments
Pension Benefits
Postretirement Benefits
Total
DomesticForeign
(in millions)
Fiscal Year
2027$20 $48 $6 $74 
202819 46 6 71 
202919 45 5 69 
203018 45 5 68 
203117 46 5 68 
2032 to 203680 216 19 315 
Plan Assets
The Company applies the provisions of ASC 715, which requires disclosures including: (i) investment policies and strategies; (ii) the major categories of plan assets; (iii) the inputs and valuation techniques used to measure plan assets; (iv) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period; and (v) significant concentrations of risk within plan assets.
The table below presents the Company’s plan assets by level within the fair value hierarchy, as described in Note 2—Summary of Significant Accounting Policies, as of June 30, 2026 and 2025:
20262025
Fair Value Measurements at Reporting Date Using
Total
Fair
Value
Fair Value Measurements at Reporting Date Using
Total
Fair
Value
Level 1Level 2Level 3NAVLevel 1Level 2Level 3NAV
(in millions)
Assets
Pooled funds:(a)
Domestic equity funds$— $— $— $26 $26 $— $— $— $35 $35 
International equity funds— — — 16 16 — 19 — 20 39 
Domestic fixed income funds— — — 132 132 — — — 111 111 
International fixed income funds— 513 — 94 607 — 533 — 119 652 
Balanced funds— 29 — — 29 — 28 — — 28 
Other11 28 6 18 63 16 5 6 19 46 
Total$11 $570 $6 $286 $873 $16 $585 $6 $304 $911 
(a)Open-ended pooled funds that are registered and/or available to the general public are valued at the daily published net asset value (“NAV”). Other pooled funds are valued at the NAV provided by the fund issuer.
The Company’s investment strategy for its pension plans is to maximize the long-term rate of return on plan assets within an acceptable level of risk in order to minimize the cost of providing pension benefits while maintaining adequate funding levels. The Company’s practice is to conduct a periodic strategic review of its asset allocation. The Company’s current broad strategic targets are to have a pension asset portfolio comprised of 5% equity securities, 87% fixed income securities and 8% in cash and other investments. In developing the expected long-term rate of return, the Company considered the pension asset portfolio’s past average rate of returns and future return expectations of the various asset classes. A portion of the other allocation is reserved in cash to provide for expected benefits to be paid in the short term. The Company’s equity portfolios are managed in such a way as to target optimal diversity. The Company’s fixed income portfolio is investment grade in the aggregate. The Company does not manage any assets internally.
The Company’s benefit plan weighted-average asset allocations, by asset category, are as follows:
Pension Assets
As of June 30,
20262025
Asset Category
Equity securities6 %10 %
Debt securities89 %84 %
Cash and other5 %6 %
Total100 %100 %
Required pension plan contributions for the next fiscal year are expected to be approximately $1 million; however, actual contributions may be affected by pension asset and liability valuation changes during the year. The Company will continue to make voluntary contributions as necessary to improve funded status.