DISCONTINUED OPERATIONS

3 Months Ended

Sep. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

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

Discontinued Operations

On October 1, 2016, the Company completed the divestiture of four product categories to Coty, Inc. (“Coty”). The divestiture included 41 of the Company's beauty brands (“Beauty Brands”), including the global salon professional hair care and color, retail hair color, cosmetics and fine fragrance businesses, along with select hair styling brands. The value of the transaction is estimated at approximately $11.4 billion. The value is comprised of 105 million shares of common stock of the Company, which were tendered by shareholders of the Company and exchanged for shares of the newly formed entity holding the Beauty Brands immediately prior to the close of the transaction, valued at approximately $9.4 billion, and the assumption of $1.9 billion of debt by the entity holding the Beauty Brands.

Subsequent to the initial contract signing and prior to the completion of the merger, two of the fine fragrance brands, Dolce & Gabbana and Christina Aguilera, were excluded from the divestiture. These brands have been subsequently divested at amounts that approximated their adjusted carrying values.

In February 2016, the Company completed the divestiture of its Batteries business to Berkshire Hathaway (BH) via a split transaction, in which the Company exchanged Duracell, which the Company had infused with approximately $1.9 billion of additional cash, to repurchase all 52.5 million shares of P&G stock owned by BH. During fiscal 2016, the Company recorded a non-cash, before-tax goodwill and indefinite-lived asset impairment charge of $402 ($350 after-tax), to reduce the value to the total estimated proceeds based on the value of BH’s shares in P&G stock at the time of the impairment charges. The Company recorded an after-tax gain on the final transaction of $422 to reflect the final value of the BH’s shares in P&G stock. The total value of the transaction was $4.2 billion representing the value of the Duracell business and the cash infusion. The cash infusion was reflected as a purchase of treasury stock.

In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Beauty Brands and 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 Beauty Brands' balance sheet positions are presented as assets and liabilities held for sale in the Consolidated Balance Sheets. The Beauty Brands were historically part of the Company's Beauty reportable segment. The Batteries business was historically part of the Company's Fabric & Home Care reportable segment.

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 divestiture.

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

	Three Months Ended September 30
	2016			2015
Beauty Brands	$	(118	)	$	150
Batteries	—			(292		)
Net earnings/(loss) from discontinued operations	$	(118	)	$	(142	)

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
	2016			2015
Net sales	$	1,159		$	1,219
Cost of products sold	450			385
Selling, general and administrative expense	783			647
Interest expense	14			—
Other non-operating income/(loss), net	16			1
Earnings/(loss) from discontinued operations before income taxes	$	(72	)	$	188
Income taxes on discontinued operations	46			38
Net earnings/(loss) from discontinued operations	$	(118	)	$	150

The Beauty Brands incurred transition costs of $135 for the three months ended September 30, 2016, included in the above table.

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

	Beauty Brands
	Three Months Ended September 30
	2016		2015
NON-CASH OPERATING ITEMS
Depreciation and amortization	$	24	$	28
Gain on sale of business	13		—
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	$	38	$	18

The major components of assets and liabilities of the Beauty Brands held for sale are provided below.

	Beauty Brands
	September 30, 2016		June 30, 2016
Cash	$	387	$	40
Restricted cash	—		996
Accounts receivable	475		384
Inventories	500		494
Prepaid expenses and other current assets	178		126
Property, plant and equipment, net	627		629
Goodwill and intangible assets, net	4,426		4,411
Other noncurrent assets	478		105
Current assets held for sale	$	7,071	$	7,185
Accounts payable	$	171	$	148
Accrued and other liabilities	342		384
Noncurrent deferred tax liabilities	337		370
Long-term debt	1,887		996
Other noncurrent liabilities	393		445
Current liabilities held for sale	$	3,130	$	2,343

Prior to the transaction, Beauty Brands drew $1.9 billion of debt ($1.0 billion as of June 30, 2016), which as noted above, was used to fund a portion of the transaction. The proceeds were held by the Beauty Brands as of June 30, 2016. As of September 30, 2016 the funds are held by the Company and are reflected on the Consolidated Balance Sheet as Restricted cash until the anticipated legal closing activities are completed. Subsequent to closing, this cash will be used to retire P&G debt as part of a broader debt retirement program that was announced subsequent to September 30, 2016.

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

	Batteries
	Three Months Ended September 30, 2015
Net sales	$	506
Earnings before impairment charges and income taxes	93
Impairment charges	(402		)
Income tax (expense)/benefit	17
Net earnings/(loss) from discontinued operations	$	(292	)