Discontinued Operations

6 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Discontinued Operations

During the quarter ended September 30, 2014, the Company reached an agreement to sell its interest in a China-based battery joint venture. This transaction closed during the quarter ended December 31, 2014, resulting in proceeds of approximately $560. In November 2014, the Company reached an agreement to divest the remainder of 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. 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 six months ended December 31, 2014 which reflected the total estimated proceeds from the divestiture transactions (see Note 4). Since the number of shares of P&G stock the Company will receive in the Duracell 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 by the end of calendar 2015. Accordingly, any increase or decrease in the Company's share price between the transaction signing and closing dates will ultimately be reflected in earnings from discontinued operations as a gain or loss on divestiture.

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 December 31, 2014 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, our manufacturing facilities in the United States and the majority of the employees working in the Pet Care business. The agreement includes the acquisition of the Pet Care business in several additional countries, pending the receipt of necessary regulatory approvals. 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, our manufacturing facility in the Netherlands, and the majority of the employees working in the Western Europe Pet Care business. The one-time impact of these transactions is not material.

The Pet Care business had historically been 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. Additionally, the Pet Care balance sheet positions as of December 31, 2014 and June 30, 2014 are presented as Assets and Liabilities held for sale in the Consolidated Balance Sheets.

Following is selected financial information included in net earnings from discontinued operations for the Pet Care and Batteries businesses:

	Three Months Ended December 31
	2014									2013
	Pet Care			Batteries			Total			Pet Care			Batteries			Total
Net sales	$	72		$	782		$	854		$	383		$	798		$	1,181
Earnings before impairment charges and income taxes	(5		)	257			252			29			220			249
Impairment charges	—			(740		)	(740		)	—			—			—
Income tax expense	—			(103		)	(103		)	(11		)	(63		)	(74		)
Gain on sale before income taxes	13			—			13			—			—			—
Income tax expense on sale	1			—			1			—			—			—
Net earnings from discontinued operations	$	9		$	(586	)	$	(577	)	$	18		$	157		$	175

	Six Months Ended December 31
	2014									2013
	Pet Care			Batteries			Total			Pet Care			Batteries			Total
Net sales	$	235		$	1,388		$	1,623		$	758		$	1,454		$	2,212
Earnings before impairment charges and income taxes	14			393			407			60			370			430
Impairment charges	—			(1,713		)	(1,713		)	—			—			—
Income tax expense	(6		)	(103		)	(109		)	(24		)	(108		)	(132		)
Gain on sale before income taxes	205			—			205			—			—			—
Income tax expense on sale	(187		)	—			(187		)	—			—			—
Net earnings from discontinued operations	$	26		$	(1,423	)	$	(1,397	)	$	36		$	262		$	298

The major components of assets and liabilities of the Pet Care and Batteries businesses held for sale were as follows:

	December 31, 2014				June 30, 2014
	Pet Care		Batteries		Pet Care
Cash	$	—	$	32	$	—
Accounts receivable	—		328		—
Inventories	16		317		122
Prepaid expenses and other current assets	—		27		14
Property, plant and equipment, net	—		472		441
Goodwill and intangible assets, net	—		2,941		2,258
Other noncurrent assets	—		20		14
Total assets held for sale	$	16	$	4,137	$	2,849
Accounts payable	$	—	$	169	$	63
Accrued and other liabilities	—		225		13
Long-term debt	—		32		—
Noncurrent deferred tax liabilities	—		811		584
Total liabilities held for sale	$	—	$	1,237	$	660