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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
)