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Fair Value (Tables)

12 Months Ended

Jun. 30, 2020

Fair Value of Financial Assets (Liabilities) and the Level Used to Measure Them

The following tables present information about financial assets and liabilities carried at fair value on a recurring basis:

	Fair value measurements
	As of June 30, 2020
	Total			Level 1			Level 2		Level 3
	(in millions)
Assets
Investments in equity securities	$	531		$	531	^(a)	$	-	$	-
Liabilities
Other		(6	)		-			-		(6)	^(b)
Redeemable noncontrolling interests		(305	)		-			-		(305)	^(b)
Total	$	220		$	531		$	-	$	(311)

	Fair value measurements
	As of June 30, 2019
	Total			Level 1			Level 2			Level 3
	(in millions)
Assets
Investments in equity securities	$	761		$	545	^(c)	$	216	⁽^d⁾	$	-
Redeemable noncontrolling interests		(189	)		-			-			(189)	^(b)
Total	$	572		$	545		$	216		$	(189)

^(a)	The investment categorized as Level 1 represents an investment in equity securities of Flutter with a readily determinable fair value (See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Flutter” for further discussion).

^(b)

The Company utilizes the market approach valuation technique for its Level 3 fair value measures. Inputs to such measures could include observable market data obtained from independent sources such as broker quotes and recent market transactions for similar assets. It is the Company’s policy to maximize the use of observable inputs in the measurement of its Level 3 fair value measurements. To the extent observable inputs are not available, the Company utilizes unobservable inputs based upon the assumptions market participants would use in valuing the liability. Examples of utilized unobservable inputs are future cash flows and long-term growth rates.

⁽^c⁾	The investment categorized as Level 1 represents an investment in equity securities of Roku with a readily determinable fair value, which was sold in March 2020 (See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Roku” for further discussion).

^(d)

The investment categorized as Level 2 represents an investment in equity securities of The Stars Group estimated using the quoted market price of The Stars Group common stock less a discount due to a lack of marketability (“DLOM”) as a result of certain transfer restrictions. The DLOM was derived based on the remaining term of the lock up period and the volatility of The Stars Group common stock. The investment in The Stars Group was transferred from Level 2 of the fair value hierarchy to Level 1 during the fourth quarter of fiscal 2020 as a result of The Stars Group equity securities being exchanged for Flutter equity securities upon the completion of the Combination in May 2020 and the removal of the transfer restrictions on the Company’s investment (See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Flutter” for further discussion).

Changes in Fair Value of Financial Liabilities on a Recurring Basis Using Level 3

The changes in redeemable noncontrolling interests classified as Level 3 measurements were as follows:

	For the years ended June 30,
	2020				2019				2018
	(in millions)
Beginning of year	$	(189	)		$	(275	)		$	(154	)
Acquisitions^(a)		(109	)			-				-
Net income		(33	)			(33	)			(41	)
Distributions		24				32				41
Accretion and other		2		^(b)		87		^(b)		(121	)
End of year	$	(305	)		$	(189	)		$	(275	)

^(a)	See Note 3—Acquisitions, Disposals and Other Transactions under the heading “Credible Acquisition.”

⁽^b⁾	As a result of the expiration of a portion of the put rights held by the sports network minority shareholder during fiscal 2020 and 2019, approximately $120 million and $200 million, respectively, was reclassified into equity.

Schedule of Fair Value and Carrying Value of Borrowings

	As of June 30,
	2020		2019
	(in millions)
Borrowings
Fair value	$	9,746	$	7,643
Carrying value	$	7,946	$	6,751