DISCONTINUED OPERATIONS

3 Months Ended

Sep. 30, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

On July 9, 2015, the Company announced the signing of a definitive agreement to divest four product categories, comprised of 43 of its beauty brands (“Beauty Brands”), which will be merged with Coty, Inc. (“Coty”). While the ultimate form of the transaction has not yet been decided, the Company’s current preference is for a Reverse Morris Trust split-off transaction in which P&G shareholders could elect to participate in an exchange offer to exchange their P&G shares for Coty shares. The transaction includes the global salon professional hair care and color, retail hair color, cosmetics and fine fragrance businesses, along with select hair styling brands. The Company expects to close the transaction in the second half of calendar year 2016, pending regulatory approvals.

Coty’s offer for the Beauty Brands, which was accepted by the Company, was $12.5 billion. The final value of the transaction will be determined at closing. Based on Coty’s stock price and outstanding shares and equity grants as of September 30, 2015, the value of the transaction was approximately $13.0 billion. The value is comprised of approximately 413 million shares, or 52% of the diluted equity of the newly combined company, valued at approximately $11.1 billion and the assumption of debt of $1.9 billion by the entity holding the Beauty Brands immediately prior to close of the transaction. The assumed debt is expected to vary between $3.9 billion and $1.9 billion, depending on a $22.06 to $27.06 per share collar of Coty’s stock based on the trading price prior to the close of the transaction, but will be subject to other contractual valuation adjustments.

The Beauty Brands were historically part of the Company's Beauty reportable segment. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Beauty Brands are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Additionally, the Beauty Brands' balance sheet positions as of September 30, 2015 and June 30, 2015 are presented as assets and liabilities held for sale in the Consolidated Balance Sheets.

In November 2014, the Company reached an agreement to divest its Batteries business to Berkshire Hathaway (BH) via a split transaction, in which the Company will exchange a recapitalized Duracell Company for BH's shares of P&G stock. As of the date the transaction was signed, BH's shares were valued at approximately $4.7 billion. As of September 30, 2015, this value has declined to approximately $3.8 billion. The Company expects to contribute approximately $1.8 billion in cash to the Duracell Company in the pre-transaction recapitalization, subject to final working capital adjustments. The Company recorded goodwill and indefinite-lived asset impairment charges during the three months ended September 30, 2015 which reflected the total estimated proceeds from the divestiture transactions (see Note 4). Because the number of shares of P&G stock the Company will receive in the Batteries transaction is fixed, the total value to be received in the transaction will be based on the Company's share price as of the closing date, which is expected to occur early in calendar year 2016. Accordingly, any further increase or decrease in the Company's share price before the closing date will ultimately be reflected in Net earnings/(loss) from discontinued operations as a gain or loss.

The Batteries business had historically been part of the Company's Fabric Care and Home Care reportable segment. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Batteries business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Additionally, the Batteries balance sheet positions as of September 30, 2015 and June 30, 2015 are presented as assets and liabilities held for sale in the Consolidated Balance Sheets.

On July 31, 2014, the Company completed the divestiture of its Pet Care operations in North America, Latin America and other selected countries to Mars, Incorporated (Mars) for $2.9 billion in an all-cash transaction. Under the terms of the agreement, Mars acquired our branded pet care products and our manufacturing sites in the United States and assumed the majority of the employees working in the Pet Care business. The agreement included an option for Mars to acquire the Pet Care business in several additional countries, which were substantially completed as of June 30, 2015. The European Union countries were not included in the agreement with Mars. In December 2014, the Company completed the divestiture of its Pet Care operations in Western Europe to Spectrum Brands in an all-cash transaction. Under the terms of the agreement, Spectrum Brands acquired our branded pet care products and our manufacturing site in the Netherlands and assumed the majority of the employees working in the Western Europe Pet Care business. The one-time after-tax impact of these transactions is not material.

The Pet Care business was historically part of the Company’s Health Care reportable segment. In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Pet Care business are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

On July 1, 2015, the Company adopted ASU 2014-08, which included new reporting and disclosure requirements for discontinued operations. The new requirements are effective for discontinued operations occurring on or after the adoption date, which includes the Beauty Brands divestiture. All other discontinued operations prior to July 1, 2015 are reported based on the previous disclosure requirements for discontinued operations, including the Batteries and Pet Care divestitures.

The following table summarizes total Net earnings/(loss) from discontinued operations and reconciles to the Consolidated Statements of Earnings:

	Three Months Ended September 30
	2015			2014
Beauty Brands	$	150		$	124
Batteries	(292		)	(837		)
Pet Care	—			17
Net earnings/(loss) from discontinued operations	$	(142	)	$	(696	)

The following table summarizes total assets and liabilities held for sale and reconciles to the Consolidated Balance Sheets:

	September 30, 2015						June 30, 2015
	Beauty Brands		Batteries		Total		Beauty Brands		Batteries		Total
Current assets held for sale	$	6,132	$	3,228	$	9,360	$	922	$	3,510	$	4,432
Noncurrent assets held for sale	—		—		—		5,204		—		5,204
Total assets held for sale	$	6,132	$	3,228	$	9,360	$	6,126	$	3,510	$	9,636
Current liabilities held for sale	$	1,039	$	1,183	$	2,222	$	356	$	1,187	$	1,543
Noncurrent liabilities held for sale	—		—		—		717		—		717
Total liabilities held for sale	$	1,039	$	1,183	$	2,222	$	1,073	$	1,187	$	2,260

The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Beauty Brands:

	Beauty Brands
	Three Months Ended September 30
	2015		2014
Net Sales	$	1,219	$	1,415
Cost of products sold	385		475
Selling, general and administrative expense	647		795
Other non-operating income, net	1		8
Earnings on discontinued operations before income taxes	$	188	$	153
Income taxes on discontinued operations	38		29
Net earnings from discontinued operations	$	150	$	124

The following is selected financial information included in cash flows from discontinued operations for the Beauty Brands:

	Beauty Brands
	Three Months Ended September 30
	2015			2014
SIGNIFICANT NON-CASH OPERATING ITEMS
Depreciation and amortization	$	28		$	32
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	$	(18	)	$	(22	)

The major components of assets and liabilities of the Beauty Brands held for sale were as follows:

	Beauty Brands
	September 30, 2015 (1)		June 30, 2015
Cash	$	10	$	9
Accounts receivable	364		293
Inventories	533		476
Prepaid expenses and other assets	47		144
Property, plant and equipment, net (2)	597		613
Goodwill and intangible assets, net (2)	4,512		4,513
Other noncurrent assets (2)	69		78
Total current assets held for sale	$	6,132	$	922
Total noncurrent assets held for sale	—		5,204
Total assets held for sale	$	6,132	$	6,126
Accounts payable	$	129	$	118
Accrued and other liabilities	183		238
Noncurrent deferred tax liabilities (2)	358		352
Other noncurrent liabilities (2)	369		365
Total current liabilities held for sale	$	1,039	$	356
Total noncurrent liabilities held for sale	—		717
Total liabilities held for sale	$	1,039	$	1,073

⁽¹⁾  The Company expects the Beauty Brands transaction to close in the second half of calendar year 2016.  Therefore, for the three months ended September 30, 2015, all assets and liabilities held for sale are reported as current assets and liabilities held for sale on the Consolidated Balance Sheets.

⁽²⁾  Amounts as of June 30, 2015 are reflected as part of the noncurrent assets and liabilities held for sale.

The following is selected financial information included in Net earnings/(loss) from discontinued operations for the Batteries and Pet Care businesses:

	Three Months Ended September 30
	2015			2014
	Batteries			Batteries			Pet Care			Total
Net sales	$	506		$	606		$	163		$	769
Earnings before impairment charges and income taxes	93			136			19			155
Impairment charges	(402		)	(973		)	—			(973		)
Income tax (expense)/benefit	17			—			(6		)	(6		)
Gain on sale before income taxes	—			—			193			193
Income tax expense on sale	—			—			(189		)	(189		)
Net earnings/(loss) from discontinued operations	$	(292	)	$	(837	)	$	17		$	(820	)

The major components of current assets and current liabilities of the Batteries business held for sale were as follows:

	Batteries
	September 30, 2015		June 30, 2015
Cash	$	22	$	25
Accounts Receivable	256		245
Inventories	355		304
Prepaid expenses and other current assets	28		28
Property, plant and equipment, net	500		496
Goodwill and intangible assets, net	2,041		2,389
Other noncurrent assets	26		23
Total current assets held for sale	$	3,228	$	3,510
Accounts payable	$	199	$	195
Accrued and other liabilities	212		194
Long-term debt	25		18
Noncurrent deferred tax liabilities	747		780
Total current liabilities held for sale	$	1,183	$	1,187