GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

The change in the net carrying amount of goodwill by reportable segment was as follows:



	Beauty, Hair and Personal Care			Grooming			Health Care			Fabric Care and Home Care			Baby, Feminine and Family Care			Corporate			Total Company
GOODWILL at JUNE 30, 2013 - Gross	$	17,094		$	21,775		$	6,185		$	1,973		$	4,828		$	4,922		$	56,777
Accumulated impairment losses at June 30, 2013	(431		)	(1,158		)	—			—			—			—			(1,589		)
GOODWILL at JUNE 30, 2013 - Net	16,663			20,617			6,185			1,973			4,828			4,922			55,188
Acquisitions and divestitures	—			—			—			(3		)	—			(2,445		)	(2,448		)
Goodwill impairment charges	—			—			—			—			—			—			—
Translation and other	377			322			95			11			82			77			964
GOODWILL at JUNE 30, 2014 - Gross	17,471			22,097			6,280			1,981			4,910			2,554			55,293
Accumulated impairment losses at June 30, 2014	(431		)	(1,158		)	—			—			—			—			(1,589		)
GOODWILL at JUNE 30, 2014 - Net	17,040			20,939			6,280			1,981			4,910			2,554			53,704
Acquisitions and divestitures	(136		)	—			(6		)	(3		)	—			(449		)	(594		)
Goodwill impairment charges	—			—			—			—			—			(2,064		)	(2,064		)
Translation and other	(1,506		)	(1,320		)	(398		)	(104		)	(361		)	(41		)	(3,730		)
GOODWILL at JUNE 30, 2015 - Gross	15,829			20,777			5,876			1,874			4,549			2,064			50,969
Accumulated impairment losses at June 30, 2015	(431		)	(1,158		)	—			—			—			(2,064		)	(3,653		)
GOODWILL at JUNE 30, 2015 - Net	$	15,398		$	19,619		$	5,876		$	1,874		$	4,549		$	—		$	47,316

During 2015, we determined that the estimated fair value of our Batteries reporting unit was less than its carrying amount, resulting in a series of impairment charges. The underlying fair value assessment was initially triggered by an agreement in September 2014 to sell the China-based battery joint venture and a related decision to pursue options to exit the remainder of the Batteries business. The agreement to sell the China-based battery joint venture was at a transaction value that was below the earnings multiple implied from the prior valuation of our Batteries business, which effectively eliminated our fair value cushion. As a result, the remaining business unit cash flows no longer supported the remaining carrying amount of the Batteries business. Due largely to these factors, we recorded an initial non-cash, before and after-tax impairment charge of $863 to reduce the carrying amount of goodwill for the Batteries business unit to its estimated fair value. These same factors resulted in a decline in the fair value of our Duracell trade name intangible asset below its carrying value. This resulted in a non-cash, before-tax impairment charge of $110 ($69 after tax) to reduce the carrying amount of this asset to its estimated fair value.

In November 2014, the Company reached an agreement to divest the Batteries business via a split transaction in which the Company will exchange a recapitalized Duracell Company for Berkshire Hathaway's (BH) shares of P&G stock (see Note 13). Based on the terms of the agreement and the value of BH's shares of P&G stock as of the transaction date and changes thereto through June 30, 2015, the Company recorded additional non-cash, before and after-tax impairment charges totaling $1.2 billion. All of the fiscal 2015 impairment charges in the Batteries business are included as part of discontinued operations. The Batteries goodwill is included in Corporate in the preceding table as of June 30, 2013 and 2014. The remaining Batteries goodwill at June 30, 2015 is reported in Assets held for sale in the Consolidated Balance Sheet. The remaining change in goodwill during fiscal 2015 was primarily due to currency translation across all reportable segments.

On July 31, 2014, the Company completed the divestiture of its Pet Care operations in North America, Latin America and other selected countries. In December 2014, the Company completed the divestiture of its Pet Care operations in the other markets, primarily the European union countries. The Pet Care business was accounted for as a discontinued operation as of June 30, 2014. As a result, the Pet Care goodwill is included in Corporate in the preceding table as of June 30, 2013. Pet Care goodwill and intangible assets at June 30, 2014 were reported in Assets held for sale in accordance with the accounting principles for discontinued operations. The remaining change in goodwill during fiscal 2014 was primarily due to currency translation across all reportable segments.

All of the goodwill and indefinite-lived intangible asset impairment charges that are not reflected in discontinued operations are included in Corporate for segment reporting.

The goodwill and intangible asset valuations are dependent on a number of significant estimates and assumptions, including macroeconomic conditions, overall category growth rates, competitive activities, cost containment and margin expansion and Company business plans. We believe these estimates and assumptions are reasonable and are comparable to those that would be used by other marketplace participants. However, actual events and results could differ substantially from those used in our valuations. To the extent such factors result in a failure to achieve the level of projected cash flows used to estimate fair value, we may need to record additional non-cash impairment charges in the future. We also considered the structure and value of the divestiture agreement with BH in the impairment testing for Batteries. If the value of BH’s shares of the Company declines further before the transaction closing date, we may need to record additional non-cash impairment charges as part of discontinued operations in the future.

Identifiable intangible assets were comprised of:



	2015					2014
Years ended June 30	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
INTANGIBLE ASSETS WITH DETERMINABLE LIVES
Brands	$	3,678	$	(2,200	)	$	4,154	$	(2,205	)
Patents and technology	2,627		(2,036		)	2,850		(2,082		)
Customer relationships	1,621		(659		)	2,002		(763		)
Other	307		(156		)	355		(164		)
TOTAL	$	8,233	$	(5,051	)	$	9,361	$	(5,214	)

INTANGIBLE ASSETS WITH INDEFINITE LIVES
Brands	23,647					26,696
TOTAL	$	31,880	$	(5,051	)	$	36,057	$	(5,214	)

Due to the divestiture of the Batteries and Pet Care businesses, intangible assets specific to the Batteries and Pet Care businesses are reported in Assets held for sale in accordance with the accounting principles for assets held for sale as of June 30, 2015 and 2014.

Amortization expense of intangible assets was as follows:



Years ended June 30	2015		2014		2013
Intangible asset amortization	$	457	$	514	$	528

Estimated amortization expense over the next five fiscal years is as follows:



Years ending June 30	2016		2017		2018		2019		2020
Estimated amortization expense	$	388	$	350	$	322	$	299	$	271

These estimates do not reflect the impact of future foreign exchange rate changes.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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