COTY INC. (Form: 10-Q, Received: 11/05/2015 18:36:14)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015
				OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE TRANSITION PERIOD FROM TO
			COMMISSION FILE NUMBER

COTY INC.

(Exact name of registrant as specified in its charter)



Delaware		13-3823358
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

350 Fifth Avenue, New York, NY		10118
(Address of principal executive offices)		(Zip Code)

(212) 389-7300

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



	Large accelerated filer ý		Accelerated filer ¨
	Non-accelerated filer ¨		Smaller reporting company ¨
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

At November 3, 2015 , 85,001,383 shares of the registrant’s Class A Common Stock, $0.01 par value, and 262,062,370 shares of the registrant’s Class B Common Stock, $0.01 par value, were outstanding.

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COTY INC.

INDEX TO FORM 10-Q



		Page
Part I:	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2015 and 2014	1
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2015 and 2014	2
	Condensed Consolidated Balance Sheets as of September 30, 2015 and June 30, 2015	3
	Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interests for the three months ended September 30, 2015 and 2014	4
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2015 and 2014	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

Part II:	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39

Signatures		41

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PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data )

(Unaudited )



	Three Months Ended September 30,
	2015			2014
Net revenues	$	1,112.3		$	1,182.3
Cost of sales	443.7			482.2
Gross profit	668.6			700.1
Selling, general and administrative expenses	484.3			520.6
Amortization expense	19.2			18.9
Restructuring costs	62.1			40.5
Acquisition-related costs	15.8			—
Asset impairment charges	5.5			—
Operating income	81.7			120.1
Interest expense, net	16.0			19.6
Loss on early extinguishment of debt	—			88.8
Other income, net	(0.3		)	—
Income before income taxes	66.0			11.7
Benefit for income taxes	(67.1		)	(5.0		)
Net income	133.1			16.7
Net income attributable to noncontrolling interests	4.4			5.0
Net income attributable to redeemable noncontrolling interests	3.0			1.1
Net income attributable to Coty Inc.	$	125.7		$	10.6
Net income attributable to Coty Inc. per common share:
Basic	$	0.35		$	0.03
Diluted	0.34			0.03
Weighted-average common shares outstanding:
Basic	360.0			354.2
Diluted	369.9			364.3

See notes to Condensed Consolidated Financial Statements.

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COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)

(Unaudited)



	Three Months Ended September 30,
	2015			2014
Net income	$	133.1		$	16.7
Other comprehensive income (loss):
Foreign currency translation adjustment	(17.2		)	(79.9		)
Net unrealized derivative gains on cash flow hedges, net of taxes of $(0.8) and $(1.2), during the three months ended, respectively	4.5			6.4
Pension and other post-employment benefits, net of tax of nil and nil during the three months ended, respectively	0.2			—
Total other comprehensive loss, net of tax	(12.5		)	(73.5		)
Comprehensive income (loss)	120.6			(56.8		)
Comprehensive income attributable to noncontrolling interests:
Net income	4.4			5.0
Foreign currency translation adjustment	(0.5		)	—
Total comprehensive income attributable to noncontrolling interests	3.9			5.0
Comprehensive income attributable to redeemable noncontrolling interests:
Net income	3.0			1.1
Foreign currency translation adjustment	0.1			(0.2		)
Total comprehensive income attributable to redeemable noncontrolling interests	3.1			0.9
Comprehensive income (loss) attributable to Coty Inc.	$	113.6		$	(62.7	)

See notes to Condensed Consolidated Financial Statements.

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COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share data )

(Unaudited)



	September 30, 2015			June 30, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	416.0		$	341.3
Trade receivables—less allowances of $22.7 and $19.6, respectively	772.9			679.6
Inventories	585.9			557.8
Prepaid expenses and other current assets	178.4			191.0
Deferred income taxes	84.8			86.7
Total current assets	2,038.0			1,856.4
Property and equipment, net	483.6			500.2
Goodwill	1,528.7			1,530.7
Other intangible assets, net	1,888.6			1,913.6
Deferred income taxes	9.8			10.4
Other noncurrent assets	208.3			207.6
TOTAL ASSETS	$	6,157.0		$	6,018.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	773.1		$	748.4
Accrued expenses and other current liabilities	830.0			719.2
Short-term debt and current portion of long-term debt	41.9			28.8
Income and other taxes payable	32.6			22.4
Deferred income taxes	9.6			7.4
Total current liabilities	1,687.2			1,526.2
Long-term debt	2,750.6			2,605.9
Pension and other post-employment benefits	207.0			206.5
Deferred income taxes	334.5			352.6
Other noncurrent liabilities	200.0			256.7
Total liabilities	5,179.3			4,947.9
COMMITMENTS AND CONTINGENCIES (Note 17)
REDEEMABLE NONCONTROLLING INTERESTS	84.4			86.3
EQUITY:
Preferred Stock, $0.01 par value; 20.0 shares authorized; 1.9 issued and outstanding at September 30, 2015 and June 30, 2015	—			—
Class A Common Stock, $0.01 par value; 800.0 shares authorized, 135.1 and 134.0 issued and 94.5 and 98.8 outstanding at September 30, 2015 and June 30, 2015, respectively	1.4			1.3
Class B Common Stock, $0.01 par value; 262.0 shares authorized, issued and outstanding respectively, at September 30, 2015 and June 30, 2015	2.6			2.6
Additional paid-in capital	1,991.1			2,044.4
Accumulated deficit	(68.2		)	(193.9		)
Accumulated other comprehensive loss	(286.1		)	(274.0		)
Treasury stock—at cost, shares: 40.7 and 35.2 at September 30, 2015 and June 30, 2015, respectively	(766.3		)	(610.6		)
Total Coty Inc. stockholders’ equity	874.5			969.8
Noncontrolling interests	18.8			14.9
Total equity	893.3			984.7
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY	$	6,157.0		$	6,018.9

See notes to Condensed Consolidated Financial Statements.

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COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND

REDEEMABLE NONCONTROLLING INTERESTS

For the Three Months Ended September 30, 2015

(In millions, except per share data)

(Unaudited)



	Preferred Stock		Class A Common Stock			Class B Common Stock			Additional Paid-in			(Accumulated			Accumulated Other Comprehensive			Treasury Stock				Total Coty Inc. Stockholders’			Noncontrolling			Total			Redeemable Noncontrolling
	Shares	Amount	Shares	Amount		Shares	Amount		Capital			Deficit)			Loss			Shares	Amount			Equity			Interests			Equity			Interests
BALANCE—July 1, 2015	1.9	—	134.0	$	1.3	262.0	$	2.6	$	2,044.4		$	(193.9	)	$	(274.0	)	35.2	$	(610.6	)	$	969.8		$	14.9		$	984.7		$	86.3
Purchase of Class A Common Stock																		5.5	(155.7		)	(155.7		)				(155.7		)
Reclassification of Class A Common Stock from liability to APIC									13.8													13.8						13.8
Exercise of employee stock options and restricted stock units			1.1	0.1					9.8													9.9						9.9
Series A Preferred Share based compensation expense									0.4													0.4						0.4
Share-based compensation expense									9.0													9.0						9.0
Dividends ($0.25 per common share)									(89.9		)											(89.9		)				(89.9		)
Net income												125.7										125.7			4.4			130.1			3.0
Other comprehensive (loss) income															(12.1		)					(12.1		)	(0.5		)	(12.6		)	0.1
Distribution to noncontrolling interests, net																									—			—			(2.9		)
Change in dividend payable to redeemable noncontrolling interest holder																															1.5
Adjustment of redeemable noncontrolling interests to redemption value									3.6													3.6						3.6			(3.6		)
BALANCE—September 30, 2015	1.9	—	135.1	$	1.4	262.0	$	2.6	$	1,991.1		$	(68.2	)	$	(286.1	)	40.7	$	(766.3	)	$	874.5		$	18.8		$	893.3		$	84.4

See notes to Condensed Consolidated Financial Statements.

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COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND

REDEEMABLE NONCONTROLLING INTERESTS

For the Three Months Ended September 30, 2014

(In millions, except per share data)

(Unaudited)



	Class A Common Stock			Class B Common Stock			Additional Paid-in			(Accumulated			Accumulated Other Comprehensive			Treasury Stock				Total Coty Inc. Stockholders’			Noncontrolling		Total			Redeemable Noncontrolling
	Shares	Amount		Shares	Amount		Capital			Deficit)			Loss			Shares	Amount			Equity			Interests		Equity			Interests
BALANCE—July 1, 2014	125.1	$	1.2	263.7	$	2.6	$	1,926.9		$	(426.4	)	$	(85.1	)	34.9	$	(575.4	)	$	843.8		$	10.6	$	854.4		$	106.2
Reclassification of common stock and stock options to liability							(29.5		)											(29.5		)			(29.5		)
Exercise of employee stock options and restricted share units	1.0	—					7.8													7.8					7.8
Share-based compensation expense							0.1													0.1					0.1
Dividends ($0.20 per common share)							(71.8		)											(71.8		)			(71.8		)
Net income										10.6										10.6			5.0		15.6			1.1
Other comprehensive income													(73.3		)					(73.3		)	—		(73.3		)	(0.2		)
Distribution to noncontrolling interests, net																							—		—			(0.2		)
Dividend payable to redeemable noncontrolling interest holder																												(8.3		)
Redeemable noncontrolling interest purchase adjustment							—													—			—		—			(16.2		)
Adjustment of redeemable noncontrolling interests to redemption value							(3.1		)											(3.1		)			(3.1		)	3.1
BALANCE—September 30, 2014	126.1	$	1.2	263.7	$	2.6	$	1,830.4		$	(415.8	)	$	(158.4	)	34.9	$	(575.4	)	$	684.6		$	15.6	$	700.2		$	85.5

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COTY INC. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



	Three Months Ended September 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	133.1		$	16.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57.5			58.8
Asset impairment charges	5.5			—
Deferred income taxes	(97.4		)	(12.9		)
Provision for bad debts	0.8			1.6
Provision for pension and other post-employment benefits	3.1			5.6
Share-based compensation	9.5			0.1
Loss on early extinguishment of debt	—			88.8
Other	7.4			6.0
Change in operating assets and liabilities, net of effects from purchase of acquired companies:
Trade receivables	(104.7		)	(167.0		)
Inventories	(34.1		)	(46.0		)
Prepaid expenses and other current assets	11.9			3.1
Accounts payable	43.3			35.7
Accrued expenses and other current liabilities	44.5			56.3
Tax accruals	(10.2		)	(24.4		)
Other noncurrent assets	2.8			2.5
Other noncurrent liabilities	43.7			1.3
Net cash provided by operating activities	$	116.7		26.2
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(42.6		)	(59.9		)
Payments for business combinations	—			(0.6		)
Proceeds from sale of asset	0.1			0.1
Net cash used in investing activities	(42.5		)	(60.4		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt, original maturity more than three months	9.2			609.8
Repayments of short-term debt, original maturity more than three months	(5.9		)	(5.5		)
Net proceeds from short-term debt, original maturity less than three months	10.7			29.7
Proceeds from revolving loan facilities	195.0			152.0
Repayments of revolving loan facilities	(50.0		)	(341.5		)
Proceeds from issuance of long-term debt	—			0.9
Repayment of Senior Notes	—			(584.6		)
Net proceeds from issuance of Common Stock	9.8			7.8
Payments for purchases of Common Stock held as Treasury Stock	(155.7		)	—
Net proceeds from foreign currency contracts	1.9			3.5
Purchase of additional noncontrolling interests	—			(14.9		)
Distributions to redeemable noncontrolling interests	(2.9		)	(0.2		)
Payment of deferred financing fees	(5.5		)	(5.0		)
Net cash provided by (used in) financing activities	6.6			(148.0		)
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS	(6.1		)	(53.1		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	74.7			(235.3		)
CASH AND CASH EQUIVALENTS—Beginning of period	341.3			1,238.0
CASH AND CASH EQUIVALENTS—End of period	$	416.0		$	1,002.7
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the year for interest	$	12.8		$	18.8
Cash paid during the year for income taxes, net of refunds received	36.8			26.6
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
Accrued capital expenditure additions	$	25.6		$	35.6
Non-cash capital contribution associated with special share purchase transaction	13.8			—

See notes to Condensed Consolidated Financial Statements.

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COTY INC. & SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

(Unaudited)

1. DESCRIPTION OF BUSINESS

Coty Inc. and its subsidiaries (collectively, the “Company” or “Coty”) engage in the manufacturing, marketing and distribution of fragrances, color cosmetics and skin & body care related products in numerous countries throughout the world.

The Company operates on a fiscal year basis with a year-end of June 30 . Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “fiscal 2016 ” refer to the fiscal year ending June 30, 2016 .

The Company’s revenues generally increase during the second fiscal quarter as a result of increased demand associated with the holiday season. Accordingly, the Company’s financial performance, working capital requirements, cash flow and borrowings experience seasonal variability during the three to six months preceding this season.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited interim Condensed Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and include consolidated domestic and international subsidiaries. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited interim Condensed Consolidated Financial Statements and accompanying footnotes should be read in conjunction with the Company’s Consolidated Financial Statements as of and for the year ended June 30, 2015 . In the opinion of management, all adjustments, of a normal recurring nature, considered necessary for a fair presentation have been included in the Condensed Consolidated Financial Statements. The results of operations for the three months ended September 30, 2015 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2016 .

Related Parties

As of September 30, 2015, the Company is a majority-owned subsidiary of JAB Cosmetics B.V. (“JABC”). Both JABC and the shares of the Company are indirectly controlled by Lucresca SE, Agnaten SE and JAB Holdings B.V. (“JAB”). The Company does not generally enter into transactions with related parties other than certain share transactions with JABC and certain executives as described in Notes 14 and 15 .

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, the market value of inventory, the fair value of acquired assets and liabilities associated with acquisitions, the fair value of share-based compensation, pension and other post-employment benefit costs, the fair value of the Company’s reporting units, and the assessment of goodwill, other intangible assets and long-lived assets for impairment, income taxes, derivatives and redeemable noncontrolling interests when calculating the impact on Earnings Per Share (“EPS”). Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the Condensed Consolidated Financial Statements in future periods.

Tax Information

The effective income tax rate for the three months ended September 30, 2015 and 2014 was (101.7)% and (42.7)% , respectively. The effective tax rate for the three months ended September 30, 2015 includes the net impact of the settlements with the Internal Revenue Service (“IRS”) as described below. The effective income tax rate for the three months ended September 30, 2014 includes the net impact of favorable tax audit resolutions in multiple jurisdictions.

During first quarter of fiscal year 2016, the Company reached final settlement with the IRS in connection with the 2004–2012 examination periods. The settlement primarily relates to the acquisition of the Calvin Klein fragrance business. In connection with the settlement, the Company recognized a tax benefit of approximately $193.9 of which $164.2 is mainly due

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to the recognition of additional deferred tax assets related to the basis of the Calvin Klein trademark, and approximately $29.7 resulted from the reduction of gross unrecognized tax benefits. Of the $193.9 tax benefit, $113.0 was offset by a valuation allowance due to on-going operating losses in the U.S.

The effective income tax rates vary from the U.S. federal statutory rate of 35% due to the effect of (i) jurisdictions with different statutory rates, (ii) adjustments to the Company’s unrealized tax benefits (“UTBs”) and accrued interest, (iii) non-deductible expenses, (iv) audit settlement and (v) valuation allowance changes.

As of September 30, 2015 and June 30, 2015 , the gross amount of UTBs was $190.1 and $342.6 , respectively. As of September 30, 2015 , the total amount of UTBs that, if recognized, would impact the effective income tax rate is $92.6 . As of September 30, 2015 and June 30, 2015 , the liability associated with UTBs, including accrued interest and penalties, was $79.4 and $182.9 , respectively, which was recorded in Income and other taxes payable and Other non-current liabilities in the Condensed Consolidated Balance Sheets. The total interest and penalties recorded in the Condensed Consolidated Statements of Operations related to UTBs for the three months ended September 30, 2015 and 2014 was $1.3 and $(0.9) , respectively. The total gross accrued interest and penalties recorded in the Condensed Consolidated Balance Sheets as of September 30, 2015 and June 30, 2015 was $7.4 and $15.2 , respectively. On the basis of the information available as of September 30, 2015 , it is reasonably possible that a decrease of up to $3.0 in UTBs may occur within 12 months as a result of projected resolutions of global tax examinations and a potential lapse of the applicable statutes of limitations.

Recently Issued Accounting Pronouncements

In April 2015, the FASB issued authoritative guidance on the treatment of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This amendment will be effective for the Company’s interim and annual consolidated financial statements for fiscal 2017 using a retrospective approach. Additionally, in August 2015, the FASB issued authoritative guidance related to the presentation and subsequent measurement of debt issuance costs related to line-of-credit arrangements. The Company is evaluating the impact these amendments will have on the Company’s Consolidated Financial Statements.

In September 2015, the FASB issued authoritative guidance related to adjustments within the measurement period for business combinations. The amendment requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendment requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendment also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments will be effective for the Company for fiscal 2017 using a prospective approach, with early adoption permitted. The Company is evaluating the impact this amendment will have on the Company’s Consolidated Financial Statements.

3. SEGMENT REPORTING

Operating segments include components of the enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has designated its Chief Executive Officer as the CODM. The Company’s operating and reportable segments are Fragrances, Color Cosmetics and Skin & Body Care (also referred to as “segments”). The reportable segments also represent the Company’s product groupings. The items within Corporate relate to corporate-based responsibilities and decisions and are not used by the CODM to measure the underlying performance of the segments. Corporate primarily includes a component of share-based compensation expense, restructuring costs and certain other expense items not attributable to ongoing operating activities of the segments.

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	Three Months Ended September 30,
SEGMENT DATA	2015			2014
Net revenues:
Fragrances	$	548.1		$	640.9
Color Cosmetics	390.9			344.1
Skin & Body Care	173.3			197.3
Total	$	1,112.3		$	1,182.3
Operating income (loss):
Fragrances	$	108.9		$	120.5
Color Cosmetics	57.7			42.5
Skin & Body Care	6.8			3.7
Corporate	(91.7		)	(46.6		)
Total	$	81.7		$	120.1
Reconciliation:
Operating income	$	81.7		$	120.1
Interest expense, net	16.0			19.6
Loss on early extinguishment of debt	—			88.8
Other income, net	(0.3		)	—
Income before income taxes	$	66.0		$	11.7

Within the Company’s reportable segments, product categories exceeding 5% of consolidated net revenues are presented below:



	Three Months Ended September 30,
PRODUCT CATEGORY	2015		2014
Fragrances:
Designer	38.0	%	41.1	%
Lifestyle	6.0		6.8
Celebrity	5.3		6.3
Total	49.3	%	54.2	%
Color Cosmetics:
Nail Care	15.1	%	13.7	%
Other Color Cosmetics	20.0		15.4
Total	35.1	%	29.1	%
Skin & Body Care:
Body Care	10.6	%	11.5	%
Skin Care	5.0		5.2
Total	15.6	%	16.7	%
Total	100.0	%	100.0	%

4. RESTRUCTURING COSTS

Restructuring costs for the three months ended September 30, 2015 and 2014 are presented below:

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	Three Months Ended September 30,
	2015		2014
Acquisition Integration Program	$	46.5	$	—
Organizational Redesign	15.6		40.8
Productivity Program	—		(0.2		)
Other ^(a)	—		(0.1		)
Total	$	62.1	$	40.5


^(a)	Other restructuring balance primarily relates to the Company’s China Optimization program.

Acquisition Integration Program

In the first quarter of fiscal 2016, the Company’s Board of Directors (the “Board”) approved an expansion to the Acquisition Integration Program in connection with the recent acquisition of the Bourjois brand. Actions and cash payments associated with the program were initiated after the acquisition of Bourjois and are expected to be substantially completed by the end of fiscal 2017. The Company anticipates the Acquisition Integration Program will result in pre-tax restructuring and related costs of approximately $67.0 , all of which will result in cash payments. The Company incurred $61.8 of restructuring costs life-to-date as of September 30, 2015, which have been recorded in Corporate.

The related liability balance and activity for the Acquisition Integration Program costs are presented below:



	Total Program Costs
Balance—July 1, 2015	$	15.3
Restructuring charges	46.5
Payments	(1.8		)
Effect of exchange rates	—
Balance—September 30, 2015	$	60.0

The Company currently estimates that the total remaining accrual of $60.0 will result in cash expenditures of approximately $14.9 and $45.1 in fiscal 2016 and 2017, respectively.

Organizational Redesign

During the fourth quarter of fiscal 2014, the Board approved a program associated with a new organizational structure (“Organizational Redesign”) that aims to reinforce the Company’s growth path and strengthen its position as a global leader in beauty. The Company anticipates that the Organizational Redesign will result in pre-tax restructuring and related costs of $145.0 to $180.0 , all of which will result in cash payments. The Company anticipates substantial completion of all project activities by the end of fiscal 2017, with the remaining costs primarily charged to Corporate. The Company incurred $87.2 of restructuring costs life-to-date as of September 30, 2015 , which have been recorded in Corporate.

The related liability balance and activity for the Organizational Redesign costs are presented below:



	Severance and Employee Benefits			Third-Party Contract Terminations		Other Exit Costs			Total Program Costs
Balance—July 1, 2015	$	32.0		—		$	0.1		$	32.1
Restructuring charges	16.1			0.3		0.3			16.7
Payments	(6.6		)	—		(0.3		)	(6.9		)
Changes in estimates	(1.1		)	—		—			(1.1		)
Effect of exchange rates	—			—		—			—
Balance—September 30, 2015	$	40.4		$	0.3	$	0.1		$	40.8

The Company currently estimates that the total remaining accrual of $40.8 will result in cash expenditures of $22.5 , $17.8 , and $0.5 in fiscal 2016, 2017, and 2018 respectively.

Productivity Program

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During the fourth quarter of fiscal 2013 , the Board approved a number of business integration and productivity initiatives aimed at enhancing long-term operating margins (the “Productivity Program”). Such activities primarily relate to integration of supply chain and selling activities within the Skin & Body Care segment, as well as certain commercial organization redesign activities, primarily in Europe and optimization of selected administrative support functions.

The Company anticipates that the Productivity Program will result in pre-tax restructuring and related costs of approximately $70.0 . The Company anticipates completing the implementation of all project activities by the end of fiscal 2016. The Company incurred $41.6 of restructuring costs life-to-date as of September 30, 2015 , which have been recorded in Corporate.

The related liability balance and activity for the Productivity Program costs are presented below:



	Severance and Employee Benefits			Third-Party Contract Terminations		Other Exit Costs		Total Program Costs
Balance—July 1, 2015	$	7.0		$	—	$	—	$	7.0
Restructuring charges	—			—		—		—
Payments	(1.0		)	—		—		(1.0		)
Changes in estimates	—			—		—		—
Effect of exchange rates	(0.1		)	—		—		(0.1		)
Balance—September 30, 2015	$	5.9		$	—	$	—	$	5.9

The Company currently estimates that the total remaining accrual of $5.9 will result in cash expenditures of approximately $5.1 , and $0.8 in fiscal 2016 and 2017.

5. BUSINESS COMBINATIONS

On April 1, 2015, the Company completed its purchase of 100% of the net assets of Bourjois from Chanel International B.V. (“CHANEL”) pursuant to the Stock Purchase Agreement, dated March 12, 2015, between the Company and CHANEL (the “Stock Purchase Agreement”) for a total purchase price of $376.8 .

The fair value of assets acquired and liabilities assumed from the Company’s acquisition of Bourjois was based on a preliminary valuation and the Company’s estimates and assumptions are subject to change within the measurement period. For the three months ended September 30, 2015 there were no adjustments to the fair value of the Bourjois assets acquired or liabilities assumed. As of September 30, 2015, the Company is still evaluating the fair value of certain intangible assets and finalizing the accounting for income taxes. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period in fiscal 2016.

Goodwill is deductible for tax purposes and is attributable to expected synergies. Goodwill of $148.7 , $11.1 , and $35.0 was allocated to the Color Cosmetics, Skin & Body Care, and Fragrances segments, respectively.

The Company recognized $0.7 of transaction-related costs associated with this acquisition for the three months ended September 30, 2015, which are included in Acquisition-related costs in the Condensed Consolidated Statement of Operations.

6. ACQUISITION-RELATED COSTS

Transaction-related costs represent costs directly related to acquiring a company, for both completed and/or contemplated acquisition offers and can include finder’s fees, legal, accounting, valuation, other professional or consulting fees, and other internal costs which can include compensation related expenses for dedicated internal resources. The Company recognized $15.8 in transaction-related costs for the three months ended September 30, 2015 which have been recorded in Acquisition-related costs in the Condensed Consolidated Statement of Operations. Of the $15.8 , $15.1 relates to the planned merger with The Procter & Gamble Company’s (“P&G”) fine fragrance, color cosmetics, and hair color businesses (the “P&G Specialty Beauty Business”), and $0.7 relates to costs associated with the Bourjois acquisition. The Company recognized no transaction-related costs during the three months ended September 30, 2014.

7. INVENTORIES

Inventories as of September 30, 2015 and June 30, 2015 are presented below:

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	September 30, 2015		June 30, 2015
Raw materials	$	146.1	$	160.9
Work-in-process	6.9		8.4
Finished goods	432.9		388.5
Total inventories	$	585.9	$	557.8

8. GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of September 30, 2015 and June 30, 2015 is presented below:



	Fragrances			Color Cosmetics			Skin & Body Care			Total
Gross balance at June 30, 2015	$	720.8		$	677.3		$	773.4		$	2,171.5
Accumulated impairments	—			—			(640.8		)	(640.8		)
Net balance at June 30, 2015	$	720.8		$	677.3		$	132.6		$	1,530.7

Changes during the period ended September 30, 2015:
Foreign currency translation	(0.6		)	(1.4		)	—			(2.0		)

Gross balance at September 30, 2015	$	720.2		$	675.9		$	773.4		$	2,169.5
Accumulated impairments	—			—			(640.8		)	(640.8		)
Net balance at September 30, 2015	$	720.2		$	675.9		$	132.6		$	1,528.7

Other Intangible Assets

Other intangible assets, net as of September 30, 2015 and June 30, 2015 are presented below:



	September 30, 2015		June 30, 2015
Indefinite-lived other intangible assets, net ^(a)	$	1,273.7	$	1,274.0
Finite-lived other intangible assets, net	614.9		639.6
Total Other intangible assets, net	$	1,888.6	$	1,913.6

^(a) The balance of the Indefinite-lived other intangible assets is comprised solely of trademarks, net of accumulated impairments of $188.6 as of September 30, 2015 and June 30, 2015 .

Intangible assets subject to amortization are presented below:

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	Cost		Accumulated Amortization			Accumulated Impairment			Net
June 30, 2015
License agreements	$	800.7	$	(501.1	)	$	—		$	299.6
Customer relationships	559.1		(232.8		)	—			326.3
Trademarks	119.1		(108.2		)	—			10.9
Product formulations	32.7		(29.9		)	—			2.8
Total	$	1,511.6	$	(872.0	)	$	—		$	639.6
September 30, 2015
License agreements	$	801.6	$	(509.8	)	$	—		$	291.8
Customer relationships	558.5		(242.9		)	(5.5		)	310.1
Trademarks	117.9		(107.5		)	—			10.4
Product formulations	32.6		(30.0		)	—			2.6
Total	$	1,510.6	$	(890.2	)	$	(5.5	)	$	614.9

Amortization expense totaled $19.2 and $18.9 for the three months ended September 30, 2015 and 2014 , respectively.

In conjunction with the Company’s analysis of its go-to-market strategy in Southeast Asia during the first quarter of fiscal 2016, the Company evaluated future cash flows for this asset group and determined that the carrying value exceeded the undiscounted cash flows. As a result, the Company evaluated the fair value of the long-lived assets in the asset group, through an analysis of discounted future cash flows, and determined that the customer relationships were fully impaired and thus recorded $5.5 of asset impairment charges in the Condensed Consolidated Statements of Operations for the three months ended September 30, 2015.

9. DEBT



	September 30, 2015			June 30, 2015
Short-term debt	$	23.3		$	22.1
2015 Credit Agreement due March 2018	800.0			800.0
Coty Inc. Credit Facility
2013 Term Loan due March 2018	1,050.0			1,050.0
Incremental Term Loan due April 2018	625.0			625.0
Revolving Loan Facility due April 2018	293.5			136.5
Other long-term debt and capital lease obligations	0.7			1.1
Total debt	2,792.5			2,634.7
Less: Short-term debt and current portion of long-term debt	(41.9		)	(28.8		)
Total Long-term debt	$	2,750.6		$	2,605.9

2015 Credit Agreement

On March 24, 2015, the Company entered into a Credit Agreement (the “2015 Credit Agreement”) which provides for a term loan of $800.0 (the “2015 Term Loan”), payable in full on March 31, 2018. The terms of the 2015 Term Loan are substantially the same as those of the term loan existing under the 2013 Credit Agreement, as defined below, after giving effect to the 2015 Amendment as discussed below.

Coty Inc. Credit Facility

On March 24, 2015, the Company entered into an amendment (“2015 Amendment”) to the 2013 Credit Agreement. The 2015 Amendment amends, among other things, the financial covenants in the 2013 Credit Agreement. After giving effect to the 2015 Amendment, the 2013 Credit Agreement permits the Company to maintain a quarterly base leverage ratio, as defined therein, equal to or less than 3.95 to 1.0 for each fiscal quarter through to December 31, 2015. After December 31, 2015, the quarterly base leverage ratio steps down to 3.75 to 1.0 through the period ending December 31, 2016, and to 3.50 to 1.0 through maturity of the facility.

On June 25, 2014, the Company entered into the Incremental Term Loan Amendment (“Incremental Amendment”) to the 2013 Credit Agreement. The Incremental Amendment provides for an incremental term loan of $625.0 ( the “Incremental Term

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Loan”) that has substantially the same terms and conditions as the 2013 Term Loan, except with respect to principal repayments. The Incremental Term Loan is payable in full on April 2, 2018.

On April 2, 2013, the Company refinanced its then-existing credit facility by entering into a Credit Agreement (the “2013 Credit Agreement”) which provides a term loan of $1,250.0 (the “2013 Term Loan”), which expires on March 31, 2018. The 2013 Credit Agreement additionally provides a revolving loan facility of $1,250.0 (the “2013 Revolving Loan Facility”) expiring on April 2, 2018, which includes up to $80.0 in swingline loans. Quarterly repayments for the 2013 Term Loan will commence on October 1, 2016 and will total $175.0 , and $875.0 in fiscal years 2017, and 2018 respectively.

As of September 30, 2015, the Company is in compliance with all financial covenants within the credit agreements and related amendments as described above.

Senior Notes

On September 29, 2014, the Company prepaid its then existing Series A notes due June 2017, Series B notes due June 2020, and Series C notes due June 2022 (collectively the “Senior Notes”). The prepayment included the principal amount of Senior Notes of $500.0 , accrued interest of $8.0 and a make-whole amount of $84.6 . In connection with the prepayment, the Company incurred a loss on early extinguishment of debt of $88.8 , which included the make-whole amount and the write-off of $4.2 of deferred financing fees related to the Senior Notes.

10. INTEREST EXPENSE, NET

Interest expense, net for the three months ended September 30, 2015 and 2014 is presented below:



	Three Months Ended September 30,
	2015			2014
Interest expense	$	15.0		$	19.4
Foreign exchange losses, net of derivative contracts	1.5			1.3
Interest income	(0.5		)	(1.1		)
Total interest expense, net	$	16.0		$	19.6

11. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost for pension plans and other post-employment benefit plans recognized in the Condensed Consolidated Statements of Operations are presented below for the three months ended September 30, 2015 and 2014 :



	Three Months Ended September 30,
	Pension Plans												Other Post- Employment
	U.S.						International						Benefits					Total
	2015			2014			2015			2014			2015			2014		2015			2014
Service cost	$	—		$	—		$	1.7		$	1.5		$	0.3		$	0.6	$	2.0		$	2.1
Interest cost	0.8			0.9			0.9			1.2			0.5			1.0		2.2			3.1
Expected return on plan assets	(0.6		)	(0.8		)	(0.3		)	(0.3		)	—			—		(0.9		)	(1.1		)
Amortization of prior service (credit) cost	—			—			0.1			0.1			(1.4		)	—		(1.3		)	0.1
Amortization of net loss	0.3			0.5			0.8			0.9			—			—		1.1			1.4
Net periodic benefit cost (credit)	$	0.5		$	0.6		$	3.2		$	3.4		$	(0.6	)	$	1.6	$	3.1		$	5.6

In June 2015, the Board approved the termination of the U.S. Del Labs pension plan with a proposed plan termination date of September 30, 2015. On July 31, 2015, the Company filed a determination letter request with the IRS to approve the termination of the U.S. Del Labs pension plan. As of September 30, 2015, the Company has not received notification from the IRS in response to the determination letter request. The Company expects the termination of the plan will be completed during fiscal 2017. The Company intends to fully fund the plan to provide for all plan benefits prior to the date assets are distributed with the plan termination. Settlement gain or loss, if any, resulting from the termination will be recognized at that time.

12. FAIR VALUE MEASUREMENT

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The following fair value hierarchy is used in selecting inputs for those assets and liabilities measured at fair value and distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:

Level 1 —Valuation based on quoted market prices in active markets for identical assets or liabilities;

Level 2 —Valuation based on inputs other than Level 1 inputs that are observable for the assets or liabilities either directly or indirectly;

Level 3 —Valuation based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and supported by little or no observable market activity.

The financial assets and liabilities that the Company measures at fair value on a recurring basis based on the fair value hierarchy, as of September 30, 2015 and June 30, 2015 are presented below:



	Level 1				Level 2				Level 3
	September 30, 2015		June 30, 2015		September 30, 2015		June 30, 2015		September 30, 2015			June 30, 2015
Financial assets and liabilities
Recurring fair value measurements
Assets:
Foreign exchange contracts	$	—	$	—	$	9.7	$	12.4	$	—		$	—
Liabilities:
Foreign exchange contracts	$	—	$	—	$	2.4	$	6.3	$	—		$	—
Contingent consideration - business combination	—		—		—		—		0.8			0.9
Total Liabilities	$	—	$	—	$	2.4	$	6.3	$	0.8		$	0.9
Total recurring fair value measurements	$	—	$	—	$	7.3	$	6.1	$	(0.8	)	$	(0.9	)

The fair values of the Company’s financial instruments estimated as of September 30, 2015 and June 30, 2015 are presented below:



	September 30, 2015				June 30, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Coty Inc. Credit Agreements	$	2,768.5	$	2,771.6	$	2,611.5	$	2,614.2
Dividends payable	2.3		1.8		1.4		1.1

The Company has concluded that the carrying amounts of cash and cash equivalents, trade receivables, accounts payable, certain accrued expenses, short-term debt, and current portion of long-term debt approximate their fair values due to their short-term nature.

The following methods and assumptions were used to estimate the fair value of the Company’s other financial instruments for which it is practicable to estimate that value:

Foreign exchange contracts —The Company uses currency spot and forward rates to value the foreign exchange contracts, which were obtained from an independent pricing service. Based on the assumptions used to value foreign exchange contracts at fair value, these assets and/or liabilities are categorized as Level 2 in the fair value hierarchy.

Contingent consideration - business combination — The Company uses an industry standard valuation model within the option pricing framework to value the contingent consideration. The inputs used to measure the fair value included weighted net sales projections through the settlement date of the contingent consideration, revenue volatility using comparable companies’ historical performance and a present value calculation to discount the expected settlement. Based on the assumptions used to value the contingent consideration, these liabilities are categorized as Level 3 in the fair value hierarchy.

Coty Inc. Credit Agreements — The Company uses the income approach to value each of the aforementioned debt instruments. The Company uses a present value calculation to discount interest payments and the final maturity payment on these liabilities using a discounted cash flow model based on observable inputs. The Company discounts these debt instruments

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based on what the current market rates would offer the Company as of the reporting date. Based on the assumptions used to value these liabilities at fair value, these debt instruments are categorized as Level 2 in the fair value hierarchy.

Dividends payable — The Company uses the income approach to value the long-term portion of dividends payable by utilizing a present value calculation to discount future payments using a discounted cash flow model based on observable inputs. The Company discounts the liability based on an internally developed discount rate as of the reporting date. Based on the assumptions used to value the long-term portion of dividends payable at fair value, this debt is categorized as Level 3 in the fair value hierarchy.

13. DERIVATIVE INSTRUMENTS

The Company is exposed to foreign currency exchange fluctuations through its global operations. The Company may reduce its exposure to fluctuations in the cash flows associated with changes in foreign exchange rates by creating offsetting positions through the use of derivative instruments. The Company expects that through hedging, any gain or loss on the derivative instruments would generally offset the expected increase or decrease in the value of the underlying forecasted transactions. The Company entered into derivatives for which hedge accounting treatment has been applied during fiscal 2016 and 2015 which the Company anticipates realizing in the Condensed Consolidated Statements of Operations in fiscal 2016 and 2017. The Company also continued to use certain derivatives as economic hedges of foreign currency exposure on firm commitments and forecasted transactions, which do not qualify for hedge accounting. Although these derivatives were not designated for hedge accounting, the overall objective of mitigating foreign currency exposure is the same for all derivative instruments. The Company does not enter into derivative financial instruments for trading or speculative purposes, nor is the Company a party to leveraged derivatives.

For derivatives accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of specific underlying forecasted transactions, the risk management objective and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses both at inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. Additionally, all of the master agreements governing the Company’s derivative contracts contain standard provisions that could trigger early termination of the contracts in certain circumstances which would require the Company to discontinue hedge accounting, including if the Company were to merge with another entity and the creditworthiness of the surviving entity were to be “materially weaker” than that of the Company prior to the merger. As of September 30, 2015 , foreign exchange forward contracts in net liability positions that contained credit-risk-related features were $2.4 .

The Company enters into foreign exchange forward contracts to hedge anticipated transactions for periods consistent with the Company’s identified exposures to minimize the effect of foreign exchange rate movements on revenues, costs and on the cash flows that the Company receives from foreign subsidiaries and third parties where there is a high probability that anticipated exposures will materialize. The foreign exchange forward contracts used to hedge anticipated transactions have been designated as foreign exchange cash-flow hedges and have varying maturities through the end of June 2016. Hedge effectiveness of foreign exchange forward contracts is based on the forward-to-forward hypothetical derivative methodology and includes all changes in value.

The ineffective portion of foreign exchange forward contracts is recorded in current-period earnings. For hedge contracts that are no longer deemed highly effective, hedge accounting is discontinued and gains and losses accumulated in Other comprehensive income (loss) (“OCI”) are reclassified to earnings when the underlying forecasted transaction occurs. If it is no longer probable that the forecasted transaction will occur, then any gains or losses in accumulated OCI (“AOCI”) are reclassified to current-period earnings. As of September 30, 2015, all of the Company’s foreign exchange forward contracts designated as hedges were highly effective.

The Company also attempts to minimize credit exposure to counterparties by entering into derivative contracts with counterparties that are major financial institutions and utilizing master netting arrangements. Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the fair value of contracts in net asset positions under master netting arrangements, which totaled $9.7 at September 30, 2015 . Accordingly, management of the Company believes risk of material loss under these hedging contracts is remote.

Quantitative Information

Derivatives are recognized in the balance sheet at their fair values. The following table presents the fair value of derivative instruments outstanding at September 30, 2015 and June 30, 2015 :

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	Asset					Liability
	Balance Sheet Classification	Fair Value				Balance Sheet Classification	Fair Value
		September 30, 2015		June 30, 2015			September 30, 2015		June 30, 2015
Derivatives designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other current assets	$	8.9	$	6.8	Accrued expenses and other current liabilities	$	1.2	$	4.8
Total derivatives designated as hedges		$	8.9	$	6.8		$	1.2	$	4.8
Derivatives not designated as hedges:
Foreign exchange forward contracts	Prepaid expenses and other current assets	$	0.8	$	5.6	Accrued expenses and other current liabilities	$	1.2	$	1.5
Total derivatives not designated as hedges		$	0.8	$	5.6		$	1.2	$	1.5
Total derivatives		$	9.7	$	12.4		$	2.4	$	6.3

The table below presents the gross amount of foreign exchange contract hedges recorded as assets and liabilities in Prepaid expenses and other current assets and Accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet, respectively, as of September 30, 2015 :



										Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
	Gross Amounts Recognized			Gross Amounts Offset in the Condensed Consolidated Statement of Operations			Net Amount Presented in the Condensed Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
Assets	$	11.1		$	(1.4	)	$	9.7		$	—	$	—	$	9.7
Liabilities	$	(2.9	)	$	0.5		$	(2.4	)	$	—	$	—	$	(2.4	)

The table below presents the gross amount of foreign exchange contract hedges recorded as assets and liabilities in Prepaid expenses and other current assets and Accrued expenses and other current liabilities in the Consolidated Balance Sheet, respectively, as of June 30, 2015 :



										Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
	Gross Amounts Recognized			Gross Amounts Offset in the Condensed Consolidated Statement of Operations			Net Amount Presented in the Condensed Consolidated Balance Sheets			Financial Instruments		Cash Collateral Received		Net Amount
Assets	$	16.1		$	(3.7	)	$	12.4		$	—	$	—	$	12.4
Liabilities	$	(6.5	)	$	0.2		$	(6.3	)	$	—	$	—	$	(6.3	)

The amount of gains and losses related to the Company’s derivative financial instruments not designated as hedging instruments during the three months ended September 30, 2015 and 2014 is presented below:



Condensed Consolidated Statements of Operations Classification of Gain (Loss) Recognized in Operations	Gain (Loss) Recognized in Operations Three Months Ended September 30,
	2015			2014
Interest expense, net	$	(2.8	)	$	1.8
Selling, general and administrative	$	1.3		$	0.9

As of September 30, 2015 and June 30, 2015 , the Company had foreign exchange forward contracts not designated as hedges with a notional value of $710.4 and $1,297.6 , respectively, which mature at various dates through June 2016.

The accumulated gain (loss) on derivative instruments classified as cash flow hedges in AOCI, net of tax, was $4.4 and $(0.1) as of September 30, 2015 and June 30, 2015 , respectively. The estimated net gain related to these effective hedges that is expected to be reclassified from AOCI into earnings, net of tax, within the next twelve months is $4.3 .

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The amount of gains and losses reclassified from AOCI to the Condensed Consolidated Statements of Operations related to the Company’s derivative financial instruments which are designated as hedging instruments during the three months ended September 30, 2015 and 2014 is presented below:



Condensed Consolidated Statements of Operations Classification of Gain (Loss) Reclassified from AOCI/(L)	Gain (Loss) Recognized in Operations Three Months Ended September 30,
	2015		2014
Net revenue	$	1.4	$	—

As of September 30, 2015 , the Company had foreign exchange forward contracts designated as effective hedges in the notional amount of $202.4 , which mature at various dates through June 2016. The foreign currencies of the counterparties in the hedged foreign exchange forward contracts (notional value stated in U.S. dollars) are principally the British Pound ($71.9) , Euro ($80.9) , Australian Dollar ($13.2) , Canadian Dollar ($21.9) , and Russian Ruble ($7.1) . As of June 30, 2015 , the Company had a notional value of $277.0 in foreign exchange forward contracts designated as effective hedges.

14. EQUITY

Common Stock

As of September 30, 2015 , the Company’s common stock consisted of Class A Common Stock, and Class B Common Stock each with a par value of $0.01 . Class A and Class B Common Stock are identical in all respects except for voting rights, certain conversion rights, and transfer restrictions in respect to the shares of Class B Common Stock. The holders of Class A Common Stock are entitled to one vote per share and the holders of Class B Common Stock are entitled to ten votes per share. Holders of Class A and Class B Common Stock are entitled to pro rata distribution of dividends if and when declared by the Board. As of September 30, 2015 , total authorized shares of Class A Common Stock and Class B Common Stock are 800.0 million and 262.0 million , respectively, and total outstanding shares of Class A and Class B Common Stock are 94.5 million and 262.0 million , respectively.

In fiscal 2015, the Company recognized compensation expense of $13.9 million and a related liability for 1.4 million shares which its parent JABC agreed to repurchase from an individual originally intended to become an executive of the Company. From June 30, 2015 until the date the liability was settled by JABC, the value of the obligation declined $0.1 and was recorded as a reduction of stock compensation expense. On July 8, 2015 JABC repurchased the shares and the settlement of the liability of $13.8 is considered a non-cash capital contribution to the Company and therefore was recorded in Additional paid-in capital.

Preferred Stock

As of September 30, 2015 , the Company’s preferred stock consisted of Series A Preferred Stock with a par value of $0.01 . The Series A Preferred Stock is not entitled to receive any dividends and has no voting rights except as required by law. As of September 30, 2015 , total authorized shares of preferred stock are 20.0 million and total outstanding shares of Series A Preferred Stock are 1.9 million . The outstanding 1.9 million Series A Preferred Stock generally vest on April 15, 2020. Under the terms provided in the various subscription agreements, the holders of the vested Series A Preferred Stock are entitled to exchange the Series A Preferred Stock at the election of the Company into either: (i) cash equal to the market value of a share of Class A Common Stock on the date of conversion less $27.97 or (ii) the number of whole shares whose value is equal to the aggregate market value of a share of Class A Common Stock on the date of conversion less $27.97 . If the holder does not exchange the vested Series A Preferred Stock by a certain expiration date, the Company must automatically exchange the Series A Preferred Stock into cash for the pro-rata portion of the grants attributable to services rendered by the holder within the United States. Therefore, these grants are accounted for using the liability plan accounting at issuance. As a holder provides service outside the U.S., a pro-rata portion of the grants are converted to equity awards to the extent the Company is not required to settle the award in cash, which are measured and fixed at the quarter end date that such services are provided, based on the estimated fair value of the award and recognized on a straight-line basis, net of estimated forfeitures, over the employee’s requisite service period. As of September 30, 2015, the Company classified $0.4 Series A Preferred Stock as equity,

and $0.1 as a liability recorded in Other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

Accumulated Other Comprehensive Income (Loss)

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	(Losses) Gains on Cash Flow Hedges			Pension and Other Post-Employment Benefit Plans			Foreign Currency Translation Adjustments			Total
Balance—July 1, 2015	$	(0.1	)	$	(24.6	)	$	(249.3	)	$	(274.0	)
Other comprehensive income (loss) before reclassifications	5.7			0.2			(16.8		)	(10.9		)
Less: Net amounts reclassified from AOCI	1.2			—			—			1.2
Net current-period other comprehensive income (loss)	4.5			0.2			(16.8		)	(12.1		)
Balance—September 30, 2015	$	4.4		$	(24.4	)	$	(266.1	)	$	(286.1	)

Treasury Stock

On August 13, 2015, the Company’s Board of Directors authorized the Company to repurchase up to $700.0 of its Class A Common Stock, inclusive of any amounts remaining under the Company’s previously announced share repurchase program (the “Repurchase Program”). Repurchases will be made from time to time at the Company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its common stock, and general market conditions. No time has been set for the completion of the Repurchase Program and the program may be suspended or discontinued at any time.

In connection with the Company’s Repurchase Program, the Company repurchased 5.5 million shares of its Class A Common Stock during the three months ended September 30, 2015 . The shares were purchased in multiple transactions at prices ranging from $26.91 to $30.23 . The aggregate fair value of shares repurchased during the three months ended September 30, 2015 was $155.7 , and was recorded as an increase to Treasury stock in the Company’s Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interests.

Dividend s

On September 11, 2015, the Company declared a cash dividend of $0.25 per share, or $90.1 on its Class A and Class B Common Stock, RSUs and Phantom units. Of the $90.1 , $89.0 was paid on October 15, 2015 to holders of record of Class A and Class B Common Stock on October 1, 2015 and was recorded as a decrease to APIC in the Condensed Consolidated Balance Sheet as of September 30, 2015 . The remaining $1.1 is payable upon settlement of the RSUs and Phantom units outstanding as of October 1, 2015, and is recorded as Other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

Additionally, the Company reduced the dividend accrual recorded in a prior period by $0.2 to adjust for accrued dividends on RSUs no longer expected to vest, which was recorded as an increase to APIC in the Condensed Consolidated Balance Sheet as of September 30, 2015 . Total accrued dividends on unvested RSUs and Phantom Units of $2.3 are included in Other noncurrent liabilities in the Condensed Consolidated Balance Sheet as of September 30, 2015 .

15. SHARE-BASED COMPENSATION PLANS

The Company has various share-based compensation programs (the “Plans”) under which awards, including non-qualified stock options, Series A Preferred Stock, RSUs and other share-based awards, may be granted or shares of Class A Common Stock may be purchased. As of September 30, 2015 , approximately 18.8 million shares of the Company’s Class A Common Stock were reserved and available to be granted pursuant to these Plans.

Total share-based compensation expense of $11.7 and $1.3 for the three months ended September 30, 2015 and 2014, respectively, is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. As of September 30, 2015 , the total unrecognized share-based compensation expense related to unvested stock options, Series A Preferred Stock, and restricted and other share awards is $8.6 , $9.0 and $44.5 , respectively. The unrecognized share-based compensation expense related to unvested stock options, Series A Preferred stock, and restricted and other share awards is expected to be recognized over a weighted-average period of 1.99 , 4.55 and 3.16 years, respectively.

Nonqualified Stock Options

Nonqualified stock options generally become exercisable 5 years from the date of the grant and have a 5 -year exercise period from the date the grant becomes fully vested for a total contractual life of 10 years .

The Company’s outstanding nonqualified stock options as of September 30, 2015 and activity during the three months then ended are presented below:

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	Shares (in millions)		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Outstanding at July 1, 2015	14.0		$	11.32
Exercised	(1.1	)	8.99
Canceled or expired	(0.1	)	10.40
Outstanding at September 30, 2015	12.8		$	11.53
Vested and expected to vest at September 30, 2015	10.2		$	9.89	$	175.1	4.49
Exercisable at September 30, 2015	5.9		$	8.79	$	107.2	3.40

The Company did not grant any nonqualified stock options during the three months ended September 30, 2015. The grant prices of the outstanding options as of September 30, 2015 ranged from $6.00 to $24.13 . The grant prices for exercisable options ranged from $6.00 to $10.50 .

A summary of the total intrinsic value of stock options exercised for the three months ended September 30, 2015 and 2014 is presented below:



	September 30,
	2015		2014
Intrinsic value of options exercised	$	21.2	$	10.0

The share-based compensation expense recognized on the nonqualified stock options was $2.7 and $2.0 during the three months ended September 30, 2015 and 2014, respectively.

Series A Preferred Stock

Shares of Series A Preferred Stock generally become exercisable 5 years from the date of the grant and have a 2 -year exercise period from the date the grant becomes fully vested for a total contractual life of 7 years. The Company did not grant any shares of Series A Preferred stock during the three months ended September 30, 2015.

The Series A Preferred Stock are accounted for partially as a liability as of September 30, 2015 and the Company recognized $0.5 and no expense for the three months ended September 30, 2015, and 2014, respectively.

Restricted Share Units

During the three months ended September 30, 2015 and 2014 , the Company granted 1.0 million and 1.6 million RSUs under the Omnibus LTIP. The share-based compensation expense (income) recorded in connection with the RSUs was $0.6 and $(0.2) for the three months ended September 30, 2015 and 2014 , respectively.

The Company’s outstanding RSUs as of September 30, 2015 and activity during the three months then ended are presented below:



	Shares (in millions)		Aggregate Intrinsic Value		Weighted Average Grant Date Fair Value
Outstanding at July 1, 2015	4.3
Granted	1.0
Settled	—
Canceled	(0.2	)
Outstanding at September 30, 2015	5.1
Vested and expected to vest at September 30, 2015	3.6		$	97.6	$	3.29

Phantom Units

On July 21, 2015, the Company’s Board of Directors granted Lambertus J.H. Becht (“Mr. Becht”), the Company’s Chairman of the Board and interim Chief Executive Officer, an award of 300,000 phantom units, in consideration of Mr. Becht’s increased and continuing responsibilities as interim Chief Executive Officer of the Company. At the time of grant, the phantom units had a value of $8.1 based on the closing price of the Company’s Class A Common Stock on July 21, 2015, and each phantom unit has an economic value equivalent to one share of the Company’s Class A Common Stock settleable in cash

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or shares at the election of Mr. Becht. The award to Mr. Becht was made outside of the Company’s Equity and Long-Term Incentive Plan. On July 24, 2015 Mr. Becht elected to receive payment of the phantom units in the form of shares of Class A Common Stock and the phantom units were valued at $8.0 . The phantom units will be settled in shares of Class A Common Stock on the fifth anniversary of the grant date or, in the event of a change of control or Mr. Becht’s death or disability, immediately.

The Company recognized $8.0 of share-based compensation expense during the three months ended September 30, 2015 as there are no service or performance conditions with respect to the phantom units. No phantom units were awarded during the three months ended September 30, 2014.

Restricted Shares

Share-based compensation expense (income) recorded in connection with restricted shares was nil and $(0.5) for the three months ended September 30, 2015 and 2014 , respectively.

Special Share Purchase Transaction

16. NET INCOME ATTRIBUTABLE TO COTY INC. PER COMMON SHARE

Reconciliation between the numerators and denominators of the basic and diluted EPS computations is presented below:



	Three Months Ended September 30,
	2015		2014
	(in millions, except per share data)
Net income attributable to Coty Inc.	$	125.7	$	10.6
Weighted-average common shares outstanding—Basic	360.0		354.2
Effect of dilutive stock options and Series A Preferred Stock ^(a)	6.7		8.4
Effect of restricted stock and RSUs ^(b)	3.2		1.7
Weighted-average common shares outstanding—Diluted	$	369.9	$	364.3
Net income attributable to Coty Inc. per common share:
Basic	$	0.35	$	0.03
Diluted	0.34		0.03


^(a)	For the three months ended September 30, 2015 , outstanding stock options and Series A Preferred Stock to purchase 3.6 million shares of common stock were excluded from the computation of diluted EPS as their inclusion would be anti-dilutive. For the three months ended September 30, 2014 , no options were excluded in the computation of EPS.


^(b)	For the three months ended September 30, 2015 and 2014, zero and 1.6 million RSUs outstanding, respectively, were excluded from the computation of diluted EPS as their inclusion would be anti-dilutive.

17. COMMITMENTS AND CONTINGENCIES

Planned Merger with Procter and Gamble Specialty Beauty Business

On July 9, 2015 Coty announced the signing of a definitive agreement to merge the P&G Specialty Beauty Business, comprised of 43 beauty brands, into the Company through a Reverse Morris Trust transaction.

The Company’s transaction proposal valued the P&G Specialty Beauty Business at $12.5 billion, based on the number of the Company’s basic Class A and Class B Common shares outstanding (i.e., excluding the impact of the Company’s outstanding equity awards) and an average Company trading price at the time of the proposal. The actual transaction value will be known at closing based on the Company’s then current share price and fully diluted share count, as well as, the final level of assumed debt. The aggregate consideration in the transaction will consist of shares in the combined company issued to

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participating P&G shareholders, as well, as the assumption of debt of the P&G Specialty Beauty Business. The share issuance is structured to result in P&G shareholders receiving 52% of all outstanding shares in the combined company on a fully diluted basis. The Company’s proposal valued this equity component at approximately $9.6 billion at the time the proposal was submitted. The remaining consideration of $2.9 billion in assumed debt from the P&G Specialty Beauty Business is subject to a $1.0 billion adjustment within a collar based on the trading price of the Company’s stock (range of $22.06 to $27.06 per share) prior to the close of the transaction as well as other contractual valuation adjustments. The assumed debt is expected to be between approximately $1.9 billion and $3.9 billion .

As of September 30, 2015, the estimated value of the transaction was approximately $13.0 billion based on Coty’s stock price and outstanding Class A and Class B Common shares and equity grants as of September 30, 2015. The value is comprised of approximately 413 million shares which represents 52% of the diluted equity of the combined company, valued at approximately $ 11.1 billion and the assumption of $1.9 billion in debt from the P&G Specialty Beauty Business. The transaction is expected to close in the second half of calendar year 2016, subject to regulatory clearances, works council consultations, and other customary conditions. The final value of the transaction will be determined at the date of closing.

Noncontrolling Interests

The Company has the right to purchase the noncontrolling interests in certain subsidiaries from the noncontrolling interest holders (each such right, a “Call right”) at certain points in time. In December 2014, the Company gave notice of intent to exercise its Call right for 14% of a certain Singapore subsidiary from the noncontrolling interest holder at an estimated purchase price of approximately $10.6 for this 14% . In addition, on September 29, 2015, the Company gave notice of intent to exercise its option to terminate the Shareholders’ Agreement with the noncontrolling interest holder and to purchase the remaining 35% of the noncontrolling interest holder’s interest in the Singapore subsidiary at an estimated purchase price of approximately $29.2 .

Legal Matters

The Company is involved, from time to time, in litigation, other regulatory actions and other legal proceedings incidental to the business. Other than as described below, management believes that the outcome of current litigation will not have a material adverse impact on the Company’s results of operations, financial condition, or cash flows. However, management’s assessment of the Company’s current litigation, regulatory actions and other legal proceedings could change in light of the discovery of facts with respect to litigation, regulatory actions or other proceedings pending against the Company not presently known to the Company or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation, regulatory actions and legal proceedings.

During fiscal 2014, two putative class action complaints were filed in the United States District Court for the Southern District of New York against the Company, its directors and certain of its executive officers, and the underwriters of the initial public offering (“IPO”), alleging violations of the federal securities laws in connection with the Company's IPO. Those lawsuits were consolidated under the caption In re Coty Inc. Securities Litigation, and following the court’s appointment of lead plaintiffs and lead counsel, a consolidated and amended complaint (the “Securities Complaint”) was filed on July 7, 2014. The Securities Complaint asserts claims against the Company, its directors, and certain of its executive officers, under Sections 11, 12 and 15 of the Securities Act of 1933, as amended (the “Securities Act”), and seeks, on behalf of persons who purchased the Company’s Class A Common Stock in the IPO, damages of an unspecified amount and equitable or injunctive relief.

On September 9, 2014, Plaintiffs voluntarily dismissed their claims against the underwriter defendants without prejudice. The Securities Complaint was further amended on October 18, 2014. The Company has filed a motion to dismiss the Securities Complaint, which has been fully briefed since December 2014. The motion to dismiss is currently pending. The Company believes the Securities Complaint is without merit and intends to vigorously defend it.

On January 14, 2013, the Company voluntarily disclosed to the U.S. Department of Commerce’s Bureau of Industry and Security’s Office of Antiboycott Compliance (“OAC”) additional results of the Company’s internal due diligence review with respect to exports from its majority owned subsidiary in the UAE (the “UAE Subsidiary”). In particular, the Company disclosed information relating to overall compliance with U.S. antiboycott laws, including with respect to the inclusion of a legend on invoices, confirming that the corresponding goods did not contain materials of Israeli origin. A number of the invoices involved U.S. origin goods. The Company believes inclusions of this legend may constitute violations of U.S. antiboycott laws. On June 28, 2013, the Company voluntarily disclosed to the OAC the final results of the Company’s internal due diligence review. The disclosure addressed the above described findings and the remedial actions the Company has taken to date. The Company cannot predict when the OAC will complete its review.

Penalties for EAR violations can be significant and civil penalties can be imposed on a strict liability basis, without any showing of knowledge or willfulness. OAC has wide discretion to settle claims for violations. The Company believes that a penalty or penalties could be imposed from its voluntary disclosures, and that such penalty or penalties would result in a material loss is reasonably possible. Irrespective of any penalty, the Company could suffer other adverse effects on its business

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as a result of any violations or the potential violations, including legal costs and harm to its reputation, and the Company also will incur costs associated with its efforts to improve its compliance procedures. The Company has not established a reserve for potential penalties and does not know whether OAC will assess a penalty or what the amount of any penalty would be, if a penalty or penalties were assessed.

18. SUBSEQUENT EVENTS

New Credit Agreement

On October 27, 2015 (the “Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement provides for senior secured credit facilities (the “Senior Secured Facilities”) in the aggregate principal amount of $4.5 billion comprised of (i) a five year revolving credit facility in an aggregate principal amount up to $1.5 billion , (ii) a $1.75 billion term loan A facility and (iii) a $1.25 billion term loan B facility.

The proceeds of the term loan facilities were used to refinance the 2013 Term Loan, the 2013 Revolving Loan Facility, the Incremental Term Loan and the 2015 Term Loan. The revolving credit facility will also be used for working capital needs and other general corporate purposes.

The interest rate applicable to borrowings under the revolving credit facility and the term loan A facility will accrue at a rate equal to, at the Company’s option, either LIBOR plus a margin ranging from 1.00% to 2.00% per annum or a base rate plus a margin ranging from 0.00% to 1.00% per annum, based on the Company’s net leverage ratio, as defined in the Credit Agreement.

The interest rate applicable to borrowings under the term loan B facility will accrue at a rate equal to (a) for U.S. dollar term loans, at the Company’s option, either LIBOR (subject to a 0.75% floor) plus a margin of 3.00% or a base rate plus a margin of 2.00% , and (b) for Euro term loans, EURIBOR (subject to a 0.75% floor) plus a margin of 2.75% . The Company will pay to the revolving lenders an unused commitment fee calculated at a rate ranging from 0.25% to 0.50% per annum, based on the Company’s net leverage ratio, as defined in the Credit Agreement.

Quarterly repayments for the term loan A facility and term loan B facility will commence on June 30, 2016 and will continue to be made in quarterly installments of 1.25% and 0.25% of the original principal amount, respectively. The revolving credit facility and term loan A facility will mature in October 2020 and the term loan B facility will mature in October 2022.

Acquisition of Hypermarcas Beauty Business

On November 2, 2015, the Company entered into a definitive agreement to acquire the personal care and beauty business of Hypermarcas S.A. (the “Beauty Business”) for approximately $1.0 billion ( 3.8 billion Brazilian Reais) in cash. The acquisition is expected to strengthen the Company’s position in the Brazilian beauty and personal care market. The transaction will be funded with a combination of cash on hand and available debt facilities and is expected to be closed in two stages by end of March 2016.

Share Repurchase

In connection with the Repurchase Program, the Company repurchased $11.1 million shares of the Company’s Class A Common Stock in multiple transactions from October 1, 2015 through November 4, 2015 at prices ranging from $25.51 to $29.86 per share. The aggregate fair value of all shares repurchased during this period was $312.2 . As a result, $232.1 remains for additional repurchases under the current authorization.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of Coty Inc. and its consolidated subsidiaries, should be read in conjunction with the information contained in the Condensed Consolidated Financial Statements and related notes included elsewhere in this document, and in our other public filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (“Fiscal 2015 Form 10-K”). When used in this discussion, the terms “Coty,” the “Company,” “we,” “our,” or “us” mean, unless the context otherwise indicates, Coty Inc. and its majority and wholly-owned subsidiaries. The following discussion contains forward-looking statements. See Part II — Item 1A. Risk Factors of our Fiscal 2015 Form 10-K for a discussion on the uncertainties, risks and assumptions associated with these statements, as well as any updates to such discussion as may be included in subsequent reports we file with the SEC. Actual results may differ materially from those contained in any forward-looking statements. The following discussion includes certain non-GAAP financial measures. See “Overview—Non-GAAP Financial Measures” for a discussion of non-GAAP financial measures and how they are calculated.

All dollar amounts in the following discussion are in millions of United States (“U.S.”) dollars, unless otherwise indicated.

OVERVIEW

We are a leading global beauty company. We manufacture and market beauty products in the Fragrances, Color Cosmetics and Skin & Body Care segments with distribution in over 130 countries and territories across both prestige and mass markets. We continue to operate in a challenging market environment particularly in mass fragrance in Western Europe and the U.S. We are focused on growing our ten power brands around the world through innovation, strong support levels and excellence in market execution. With respect to our non-power brands, we expect to see a gradual decline of those brands which are later in their lifecycle. We are also focused on expanding our geographic footprint into emerging markets and diversifying our distribution channels within existing geographies to increase market presence.

Non-GAAP Financial Measures

Adjusted Operating Income, Adjusted Income Before Income Taxes, Adjusted Net Income Attributable to Coty Inc. and Adjusted Net Income Attributable to Coty Inc. per Common Share are non-GAAP financial measures which we believe better enable management and investors to analyze and compare the underlying business results from period to period.

These non-GAAP financial measures should not be considered in isolation, or as a substitute for or superior to, financial measures calculated in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of our business as determined in accordance with GAAP. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis, and we provide reconciliations from the most directly comparable GAAP financial measures to the non-GAAP financial measures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

Adjusted Operating Income, Adjusted Income Before Income Taxes, Adjusted Net Income Attributable to Coty Inc. and Adjusted Net Income Attributable to Coty Inc. per Common Share provide an alternative view of performance used by management and we believe that an investor’s understanding of our performance is enhanced by disclosing these adjusted performance measures. In addition, our financial covenant compliance calculations under our debt agreements are substantially derived from these adjusted performance measures. The following are examples of how these adjusted performance measures are utilized by management:


•	senior management receives a monthly analysis of our operating results that are prepared on an adjusted performance basis;


•	strategic plans and annual budgets are prepared on an adjusted performance basis; and


•	senior management’s annual compensation is calculated, in part, using adjusted performance measures.

Adjusted Operating Income

We define Adjusted Operating Income as operating income adjusted for the following:


•	Share-based compensation adjustment:

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•	For grants issued prior to June 12, 2013, the effective date of the share-based compensation plan amendments, the component of share-based compensation expense adjustment represents the difference between the grant date fair value and the fair value at June 12, 2013 using equity plan accounting.

•

Future adjustments for share-based compensation will consist of the difference between expense under equity plan accounting based on the grant date fair value and total estimated share-based compensation expense, which is based on (i) the fair value on June 12, 2013 for nonqualified stock option awards and restricted stock units (“RSUs”) and (ii) all costs associated with the special incentive awards granted in fiscal 2012 and 2011. The estimated aggregate expense is approximately $4, $1, and $0 for the fiscal years ended June 30, 2016, 2017, and 2018 respectively.


•	Share-based compensation adjustment may also include special transactions. Refer to “Management Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Fiscal 2015 Form 10-K for a full discussion of the share-based compensation adjustment.


•	Other adjustments, which include:


•	asset impairment charges;


•	restructuring costs and business structure realignment programs;


•	acquisition-related costs and certain acquisition accounting impacts; and


•	other adjustments that we believe investors may find useful.

Adjusted Net Income and Net Income per Common Share Attributable to Coty Inc.

We define Adjusted Net Income Attributable to Coty Inc. as net income attributable to Coty Inc. adjusted for the following:


•	adjustment made to reconcile operating income to Adjusted Operating Income, net of the income tax effect thereon (see Adjusted Operating Income);


•	certain interest, other (income) expense and other adjustments, net of the income tax effect thereon, that we do not consider indicative of our performance; and


•	certain tax effects that are not indicative of our performance.

Adjusted basic and diluted Net Income Attributable to Coty Inc. per Common Share is calculated as:


•	Adjusted Net Income Attributable to Coty Inc. divided by


•	Adjusted weighted-average basic and diluted common shares using the treasury stock method.

Constant Currency

We operate on a global basis, with the majority of our net revenues generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect our results of operations. Therefore, to supplement financial results presented in accordance with GAAP, certain financial information is presented excluding the impact of foreign currency exchange translations to provide a framework for assessing how our underlying businesses performed excluding the impact of foreign currency exchange translations (“constant currency”). Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We calculate constant currency information by translating current and prior-period results for entities reporting in currencies other than U.S. dollars into U.S. dollars using prior year foreign currency exchange rates. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate. The constant currency information we present may not be comparable to similarly titled measures reported by other companies.

THREE MONTHS ENDED SEPTEMBER 30, 2015 AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2014

NET REVENUES

In the three months ended September 30, 2015 , net revenues decreased 6% , or $70.0 , to $1,112.3 from $1,182.3 in the three months ended September 30, 2014 . The decrease was primarily the result of a negative foreign currency exchange translations impact of 9%, partially offset by an increase in unit volume of 8%, and a negative price and mix impact of 5%. In the three months ended June 30, 2015, we completed the acquisition of the Bourjois cosmetics brand (“Bourjois acquisition”). The impact to net revenues from the Bourjois acquisition affected our Color Cosmetics segment primarily in EMEA. In fiscal 2014, we announced the discontinuation of our TJoy brand and the reorganization of our mass business in China (“China Optimization”). Excluding the negative impact of foreign currency exchange translations, the Bourjois acquisition, and the

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discontinuation of TJoy and China Optimization, total net revenues in the three months ended September 30, 2015 decreased 2% due to a negative price and mix impact of 2%.

Net Revenues by Segment



	Three Months Ended September 30,
(in millions)	2015		2014		Change %
NET REVENUES
Fragrances	548.1		$	640.9	(14	%)
Color Cosmetics	390.9		344.1		14	%
Skin & Body Care	173.3		197.3		(12	%)
Total	$	1,112.3	$	1,182.3	(6	%)

Fragrances

In the three months ended September 30, 2015 , net revenues of Fragrances decreased 14% , or $92.8 , to $548.1 from $640.9 in the three months ended September 30, 2014 . The decrease was primarily the result of a negative foreign currency exchange translations impact of 6%, a negative price and mix impact of 5%, and a decrease in unit volume of 3%. Excluding the negative impact of foreign currency exchange translations, net revenues of Fragrances decreased 8% in part due to a lower level of launch activities in the three months ended September 30, 2015 as compared to the three months ended September 30, 2014 . The decrease in the segment reflects lower net revenues from Calvin Klein, Marc Jacobs, Davidoff and from existing brands that are later in their lifecycles . Lower net revenues in Calvin Klein primarily reflect declines in existing product lines and the negative impact of foreign currency exchange, partly offset by incremental net revenues from the Calvin Klein Eternity Now franchise. Net revenues in Marc Jacobs declined primarily due to a lower level of launch activity, reflecting the later timing of Marc Jacobs Decadence launch in this fiscal quarter as compared to the launch of Marc Jacobs Daisy Dream in prior year, and declines in existing product lines. Partially offsetting these declines were incremental net revenues from Nautica , in part due to different phasing of orders, the launch of Miu Miu , and growth in Brazil resulting from our commercial distributor relationship with Avon. The negative price and mix impact is primarily due to higher volumes of lower-priced fragrance products and lower relative volumes of higher-priced products.

Color Cosmetics

In the three months ended September 30, 2015 , net revenues of Color Cosmetics increased 14% , or $46.8 , to $390.9 from $344.1 in the three months ended September 30, 2014 . The increase was primarily the result of an increase in unit volume of 16% and a positive price and mix impact of 9%, partially offset by a negative foreign currency exchange translations impact of 11%. The Bourjois acquisition positively impacted net revenues by 14%, generating 16% of the unit volume increase partially offset by a negative 2% foreign currency exchange translations impact. Excluding the impact to net revenues from the Bourjois acquisition and the negative impact of foreign currency exchange translations, net revenues of Color Cosmetics increased 9% reflecting a positive price and mix impact of 9%. Despite a decline in the U.S. retail nail market in the three months ended September 30, 2015 , Sally Hansen net revenues increased in the U.S. due to continued success of Sally Hansen Miracle Gel reflecting enhanced product offering. The introduction of Sally Hansen Miracle Gel in EMEA also contributed to the growth in Sally Hansen . Segments results were partially offset by lower net revenues from Rimmel, New York Color, Astor, and OPI . Lower net revenues from Rimmel primarily reflect the negative impact of foreign currency exchange translations, partially offset by the incremental net revenues from the launch of Rimmel Supercurler mascara along with growth from existing products. Lower net revenues in New York Color reflect declining sales in the U.S. Net revenues from OPI were negatively impacted by foreign currency exchange translations and a decline in Nicole by OPI in the U.S., partially offset by the success of new launch OPI Infinite Shine and incremental net revenues in China. Results in Astor reflect the negative impact of foreign currency exchange translations. The positive price and mix impact primarily reflects higher relative volumes of higher-priced products, such as Sally Hansen and Rimmel .

Skin & Body Care

In the three months ended September 30, 2015 , net revenues of Skin & Body Care decreased 12% , or $24.0 , to $173.3 from $197.3 in the three months ended September 30, 2014 . The decrease in the segment was primarily the result of a negative foreign currency exchange translations impact of 11% and a negative price and mix impact of 3%, partially offset by an increase in unit volume of 2%. Excluding the impact of foreign currency exchange translations, net revenues of Skin & Body Care decreased 1%, reflecting lower net revenues from Playboy and philosophy . Lower net revenues from Playboy were

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primarily due to a negative impact from foreign currency exchange translations, declines in existing product lines and lower net revenues in Brazil, reflecting a planned shift towards fragrances in our product offerings, partially offset by incremental net revenues from the launch of the Playboy Play It Wild franchise. The decrease in philosophy reflects lower net revenues in the U.S. primarily due to different timing of promotional activities as shipments for a key customer were shifted to the second quarter of fiscal 2016. Results for adidas were negatively impacted by foreign currency exchange translations. Excluding the impact of foreign currency exchange translations, net revenues in adidas increased reflecting strong growth in EMEA due to recent launches such as adidas UEFA Champions League Edition , the Born Original franchise , and Climacool toiletries , partially offset by a decline in Brazil. The negative price and mix impact for the segment primarily reflects lower relative volume of higher-priced philosophy products and higher relative volume of lower-priced adidas products.

Net Revenues by Geographic Regions

In addition to our reporting segments, management also analyzes our net revenues by geographic region. We define our geographic regions as Americas (comprising North, Central and South America), EMEA (comprising Europe, the Middle East and Africa), and Asia Pacific (comprising Asia and Australia).



	Three Months Ended September 30,
(in millions)	2015		2014		Change %
NET REVENUES
Americas	$	423.2	$	447.3	(5	%)
EMEA	557.3		593.9		(6	%)
Asia Pacific	131.8		141.1		(7	%)
Total	$	1,112.3	$	1,182.3	(6	%)

Americas

In the three months ended September 30, 2015 , net revenues in the Americas decreased 5% , or $24.1 , to $423.2 from $447.3 in the three months ended September 30, 2014 . Excluding the negative impact of foreign currency exchange translations of 2%, net revenues in the Americas decreased 3%. The decline in the region reflects lower net revenues in Brazil, Canada, the U.S., and the travel retail business. The decline in Brazil reflects lower net revenues from the Skin & Body Care segment as discussed in “Skin & Body Care” above, partially offset by the growth in the Fragrance segment. In addition, net revenues in Brazil were adversely impacted by foreign currency exchange translations as well as overall economic weakness. Lower net revenues in Canada primarily reflect the adverse impact of foreign currency exchange translations. Lower net revenues in the U.S. were primarily driven by declines in Calvin Klein, as well as philosophy due to different timing of promotional activities at a key customer. Celebrity fragrance brands that are late in their lifecycles, Davidoff, New York Color, and Nicole by OPI also contributed to the net revenues declines in the U.S. Partially offsetting these decreases was growth from Sally Hansen in the U.S., achieved despite an aforementioned decline in the retail nail market. The decline in our travel retail business was driven by Calvin Klein , as incremental net revenues from new launches could not offset the decline from existing product lines reflecting an overall weakness in fragrances market trends.

EMEA

In the three months ended September 30, 2015 , net revenues in EMEA decreased 6% , or $36.6 , to $557.3 from $593.9 in the three months ended September 30, 2014 . Excluding the negative impact of foreign currency exchange translations of 13% and the impact of the Bourjois acquisition, net revenues in EMEA decreased 3%. The decline in the region reflects lower net revenues in the U.K., Germany, Eastern Europe, our travel retail business, and Southern Europe. Net revenues in the U.K. were negatively affected by foreign currency exchange translations, declines from Calvin Klein and Marc Jacobs as incremental net revenues from new launches could not offset the decline from existing product lines, as well as an ongoing increased level of promotional and discounted pricing activity reflecting a competitive retail environment. Results in Germany and Eastern Europe were adversely affected by the negative impact of foreign currency exchange translations. Excluding the impact of foreign currency exchange translations and the Bourjois acquisition, Germany net revenues increased reflecting the introduction of Sally Hansen Miracle Gel as well as growth from Manhattan and adidas, partially offset by decline in Fragrances. Excluding the impact of foreign currency exchange translations and the Bourjois acquisition, Eastern Europe net revenues increased reflecting growth from Rimmel, adidas, and Sally Hansen. The decline in our travel retail business primarily reflects the negative impact of foreign currency exchange as well as lower net revenues from power brands. Southern Europe also contributed to the decline in the region. Excluding the impact of foreign currency exchange translations and the Bourjois acquisition, the decline in Southern Europe reflects lower net revenues from Fragrances partially offset by strong growth from

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Rimmel . Partially offsetting the decline in the region were incremental net revenues from our recently formed subsidiary in the Middle East.

Asia Pacific

In the three months ended September 30, 2015 , net revenues in Asia Pacific decreased 7% , or $9.3 , to $131.8 from $141.1 in the three months ended September 30, 2014 . Excluding the negative impact of foreign currency exchange translations of 11%, net revenues in Asia Pacific increased 4%. The decline in the region primarily reflects lower net revenues in China, Australia, and the travel retail business, partly offset by growth in the regional export business. Amid signs of weakness in the Chinese economy, net revenues in China declined reflecting lower net revenues from power brands such as Calvin Klein and Marc Jacobs. Net revenues in Australia were affected by the negative impact of foreign currency exchange translations. Excluding this impact, net revenues in Australia increased primarily driven by growth from Rimmel, Calvin Klein and from celebrity brands such as Katy Perry, Beyoncé, David Beckham along with incremental net revenues from the launch of Miu Miu. Lower net revenues in our travel retail business primarily reflect declines in Marc Jacobs, in part due to a lower level of launch activity in the three months ended September 30, 2015 as compared to the three months ended September 30, 2014 , and a difficult retail environment in the region. Net revenues in Southeast Asia were adversely impacted by negative foreign exchange translations. However, excluding this impact, net revenues in Southeast Asia increased reflecting growth in Fragrance and Color Cosmetics segments. Partially offsetting the regional decline was growth from our regional export business, primarily reflecting high net revenues from Calvin Klein and Nautica , in part due to different phasing of orders.

COST OF SALES

In the three months ended September 30, 2015 , cost of sales decreased 8% , or $38.5 , to $443.7 from $482.2 in the three months ended September 30, 2014 . Cost of sales as a percentage of net revenues decreased to 39.9% in the three months ended September 30, 2015 from 40.8% in the three months ended September 30, 2014 , resulting in a gross margin improvement of approximately 90 basis points. The cost of sales includes the negative impact of acquisition-related costs related to the Bourjois acquisition in the three months ended September 30, 2015 and the impact of the revaluation of inventory buyback associated with the conversion from distributor to subsidiary distribution model in a select emerging market and China Optimization in the three months ended September 30, 2014 . Excluding the impact of these items, gross margin in the three months ended September 30, 2015 improved approximately 70 basis points primarily reflecting continued contribution from our supply chain savings program, reported in cost of sales.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

In the three months ended September 30, 2015 , selling, general and administrative expenses decreased 7% , or $36.3 , to $484.3 from $520.6 in the three months ended September 30, 2014 . Selling, general and administrative expenses as a percentage of net revenues decreased to 43.5% in the three months ended September 30, 2015 from 44.0% in the three months ended September 30, 2014 . Selling, general and administrative expenses include business realignment costs, share-based compensation expense adjustment, and China Optimization costs. See “Adjusted Operating Income.” Excluding the items described above, selling, general and administrative expenses decreased 8% , or $40.4 , to $478.5 from $518.9 in the three months ended September 30, 2014 and decreased as a percentage of net revenues to 43.0% from 43.9% . This decrease of approximately 90 basis points primarily reflects lower advertising and consumer promotion spending and lower administrative costs, partially offset by higher share-based compensation expenses. The decrease in advertising and consumer promotion spending primarily reflects the positive impact of foreign currency exchange translations, our strategic focus on improving spend efficiency, and a lower level of launch activity in the three months ended September 30, 2015 as compared to the three months ended September 30, 2014 . Lower administrative costs primarily reflect the positive impact of foreign currency exchanges translations and savings from our Organizational Redesign, partially offset by added costs related to the Bourjois business that were not in the three months ended September 30, 2014 . Higher share-based compensation expenses primarily reflect the impact from the issuance of new grants and an increase in fringe benefit expense resulting from a higher level of options exercises.

OPERATING INCOME

In the three months ended September 30, 2015 , operating income decreased 32% , or $38.4 , to $81.7 from $120.1 in the three months ended September 30, 2014 . Operating margin, or operating income as a percentage of net revenues, decreased to 7.3% of net revenues in the three months ended September 30, 2015 as compared to 10.2% in the three months ended September 30, 2014 . This margin decline reflects approximately 220 basis points related to higher restructuring costs, approximately 140 basis points related to acquisition-related costs in the three months ended September 30, 2015 , approximately 50 basis points related to asset impairment charges in the three months ended September 30, 2015 , and

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approximately 10 basis points related to higher amortization expense, partially offset by approximately 90 basis points related to lower cost of sales and approximately 50 basis points related to lower selling, general and administrative expenses.

Operating Income by Segment



	Three Months Ended September 30,
(in millions)	2015			2014			Change %
OPERATING INCOME (LOSS)
Fragrances	$	108.9		$	120.5		(10	%)
Color Cosmetics	57.7			42.5			36	%
Skin & Body Care	6.8			3.7			84	%
Corporate	(91.7		)	(46.6		)	(97	%)
Total	$	81.7		$	120.1		(32	%)

Fragrances

In the three months ended September 30, 2015 , operating income for Fragrances decreased 10% , or $11.6 , to $108.9 from $120.5 in the three months ended September 30, 2014 . Operating margin increased to 19.9% of net revenues in the three months ended September 30, 2015 as compared to 18.8% in the three months ended September 30, 2014 , primarily driven by lower selling, general and administrative expenses as a percentage of net revenues, partially offset by higher cost of sales as a percentage of net revenues.

Color Cosmetics

In the three months ended September 30, 2015 , operating income for Color Cosmetics increased 36% , or $15.2 , to $57.7 from $42.5 in the three months ended September 30, 2014 . Operating margin increased to 14.8% of net revenues in the three months ended September 30, 2015 as compared to 12.4% in the three months ended September 30, 2014 , primarily reflecting lower selling, general and administrative expenses and lower cost of sales as percentages of net revenues.

Skin & Body Care

In the three months ended September 30, 2015 , operating income for Skin & Body Care increased $3.1 , to $6.8 from $3.7 in the three months ended September 30, 2014 . Operating margin increased to 3.9% of net revenues in the three months ended September 30, 2015 as compared to 1.9% in the three months ended September 30, 2014 . Operating income in the three months ended September 30, 2014 includes an expense of $1.7 related to China Optimization.

Excluding income related to China Optimization in the three months ended September 30, 2014 , operating income increased $1.4 , to $6.8 from $5.4 in the three months ended September 30, 2014 . Operating margin increased to 3.9% of net revenues in the three months ended September 30, 2015 as compared to 2.7% in the three months ended September 30, 2014 , primarily driven by lower cost of sales as a percentage of net revenues, partially offset by higher selling, general and administrative expenses as a percentage of net revenues.

Corporate

Corporate primarily includes corporate expenses not directly related to our operating activities. These items are included in Corporate since we consider them to be Corporate responsibilities, and these items are not used by our management to measure the underlying performance of the segments.

In the three months ended September 30, 2015 , operating loss for Corporate was $91.7 compared to $46.6 in the three months ended September 30, 2014 , as described under “Adjusted Operating Income” below.

Adjusted Operating Income

We believe that Adjusted Operating Income further enhances an investor’s understanding of our performance. See “Overview—Non-GAAP Financial Measures.” Reconciliation of reported operating income to Adjusted Operating Income is presented below:

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	Three Months Ended September 30,
(in millions)	2015			2014			Change %
Reported Operating Income	$	81.7		$	120.1		(32	%)
% of Net revenues	7.3		%	10.2		%
Restructuring and other business realignment costs	67.0			41.3			62	%
Acquisition-related costs ^(a)	18.3			4.7			>100%
Asset impairment charges	5.5			—			N/A
Share-based compensation expense adjustment	0.9			0.6			50	%
China Optimization	—			0.4			(100	%)
Total adjustments to Reported Operating Income	91.7			47.0			95	%
Adjusted Operating Income	$	173.4		$	167.1		4	%
% of Net revenues	15.6		%	14.1		%


^(a)	Acquisition-related costs include items in addition to the amounts recorded in acquisition-related costs of $15.8 in the three months ended September 30, 2015 and nil in the three months ended September 30, 2014 , in the Condensed Consolidated Statements of Operations. See “Acquisition-Related Costs.”

In the three months ended September 30, 2015 , Adjusted Operating Income increased 4% , or $6.3 , to $173.4 from $167.1 in the three months ended September 30, 2014 . Adjusted operating margin increased to 15.6% of net revenues in the three months ended September 30, 2015 as compared to 14.1% in the three months ended September 30, 2014 , primarily reflecting lower cost of sales and lower selling, general and administrative expenses, as described under “Cost of Sales” and “Selling, General and Administrative Expenses,” respectively. Excluding the impact of foreign currency exchange translations, Adjusted Operating Income increased 12% .

Restructuring and Other Business Realignment Costs

In the first quarter of fiscal 2016, our Board of Directors approved an expansion to the Acquisition Integration Program in connection with the recent acquisition of the Bourjois brand. Actions and cash payments associated with the program were initiated after the acquisition of Bourjois and are expected to be substantially completed by the end of fiscal 2017. We anticipate the Acquisition Integration Program will result in pre-tax restructuring and related costs of approximately $67.0 , all of which will result in cash payments. We’ve incurred $61.8 of restructuring costs life-to-date as of September 30, 2015, which have been recorded in Corporate. We currently estimate that the total remaining accrual of $60.0 will result in cash expenditures of approximately $14.9 and $45.1 in fiscal 2016 and 2017, respectively.

In the three months ended September 30, 2015 , we incurred restructuring and other business structure realignment costs of $67.0 , as follows:


•	We incurred restructuring costs of $62.1 , included in restructuring costs in the Condensed Consolidated Statements of Operations, which consist of Acquisition Integration Program and Organizational Redesign.


•	We incurred business structure realignment costs of $4.9 primarily related to our Organizational Redesign and certain other programs, included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

In the three months ended September 30, 2014 , we incurred restructuring and other business structure realignment costs of $41.3 , as follows:


•	We incurred restructuring costs of $40.5 , included in restructuring costs in the Condensed Consolidated Statements of Operations, which primarily relates to the Organizational Redesign.


•	We incurred business structure realignment costs of $0.8 primarily related to certain programs, included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

In all reported periods, all restructuring and other business realignment costs were reported in Corporate.

Acquisition-Related Costs

In the three months ended September 30, 2015 , we incurred acquisition-related costs of $18.3 . These costs primarily consist of legal and consulting fees associated with the planned merger with The Procter & Gamble Company’s (“P&G”) fine fragrance, color cosmetics, and hair color businesses (the “P&G Specialty Beauty Business”) and the Bourjois acquisition of $15.1 and $0.7 , respectively, included in the Condensed Consolidated Statements of Operations. Also included in connection

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with the Bourjois acquisition are $2.5 of costs related to acquisition accounting impacts of revaluation of acquired inventory, included in cost of sales in the Condensed Consolidated Statements of Operations.

In the three months ended September 30, 2014 , we incurred acquisition-related costs of $4.7 related to the revaluation of inventory buyback associated with the conversion from distributor to subsidiary distribution model in a select emerging market, included in cost of sales in the Condensed Consolidated Statements of Operations.

In all reported periods, all acquisition-related costs were reported in Corporate.

Asset Impairment Charges

In the three months ended September 30, 2015 , asset impairment charges of $5.5 were reported in the Condensed Consolidated Statements of Operations. The impairment represents the write-off of long-lived assets in Southeast Asia consisting of customer relationships reported in Corporate.

In the three months ended September 30, 2014 , we did not incur any asset impairment charges.

Share-Based Compensation Adjustment

Share-based compensation expense adjustment included in the calculation of Adjusted Operating Income was $0.9 and $0.6 in the three months ended September 30, 2015 and 2014 , respectively. The increase in the share-based compensation expense adjustment primarily reflects a decrease in the actual and expected forfeiture rate reflecting the impact of our Organizational Redesign.

Senior management evaluates operating performance of our segments based on the share-based expense calculated under equity plan accounting for the recurring stock option awards, share-based awards, and director-owned and employee-owned shares, and we follow the same treatment of the share-based compensation for the financial covenant compliance calculations under our debt agreements. See “Overview—Non-GAAP Financial Measures.” Share-based compensation expense calculated under equity plan accounting for the recurring nonqualified stock option awards and director-owned and employee-owned shares, restricted shares, and RSUs is reflected in the operating results of the segments. Share-based compensation adjustment is included in Corporate. See Note 3, “Segment Reporting” in our notes to the Condensed Consolidated Financial Statements.

China Optimization

In the three months ended September 30, 2014 , we incurred costs of $0.4 related to China Optimization, which consists of costs of $1.7 in the Skin & Body Care segment and income of $1.3 in the Color Cosmetics segment. China Optimization costs primarily reflect the refinement in estimates.

INTEREST EXPENSE, NET

In the three months ended September 30, 2015 , interest expense, net was $16.0 as compared with $19.6 in the three months ended September 30, 2014 . This decrease is primarily due to lower interest rates on long-term debt resulting in savings of $5.1, partially offset by higher deferred financing costs of $0.8 and lower interest income of $0.7.

LOSS ON EARLY EXTINGUISHMENT OF DEBT

In the three months ended September 30, 2014 , we incurred $88.8 in losses on the early extinguishment of debt in conjunction with the repurchase of our Senior Notes as described in “Financial Condition—Liquidity and Capital Resources” below.

INCOME TAXES

The effective income tax rate for the three months ended September 30, 2015 and 2014 was (101.7%) and (42.7%) respectively. The effective income tax rate for the three months ending on September 30, 2015 includes the net impact of the settlements with the Internal Revenue Service (“IRS”) as described below. The effective income tax rate for the three months ending on September 30, 2014 includes the net impact of favorable tax audit resolutions in multiple jurisdictions.

During first quarter of fiscal year 2016, we reached final settlement with the IRS in connection with the 2004–2012 examination periods. The settlement primarily relates to the acquisition of the Calvin Klein fragrance business. In connection with the settlement, we recognized a tax benefit of approximately $193.9 of which $164.2 is mainly due to the recognition of

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additional deferred tax assets related to the basis of the Calvin Klein trademark, and approximately $29.7 resulted from the reduction of gross unrecognized tax benefits. Of the $193.9 tax benefit, $113.0 was offset by a valuation allowance due to on-going operating losses in the U.S.

The effective income tax rates vary from the U.S. federal statutory rate of 35% due to the effect of (i) jurisdictions with different statutory rates, (ii) adjustments to our unrealized tax benefits (“UTBs”) and accrued interest, (iii) non-deductible expenses, (iv) audit settlement and (v) valuation allowance changes. Our effective tax rate could fluctuate significantly and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.

Reconciliation of Reported Income Before Income Taxes to Adjusted Income Before Income Taxes and Effective Tax Rates:



	Three Months Ended September 30, 2015							Three Months Ended September 30, 2014
(in millions)	Income Before Income Taxes		Benefit for Income Taxes			Effective Tax Rate		Income Before Income Taxes		(Benefit) Provision for Income Taxes			Effective Tax Rate
Reported Income Before Income Taxes	$	66.0	$	(67.1	)	(101.7	%)	$	11.7	$	(5.0	)	(42.7	%)
Adjustments to Reported Operating Income ^(a)	91.7		(2.3		)			47.0		14.5
Other Adjustments ^(b)	—		—					$	88.8	$	27.3
Adjusted Income Before Income Taxes	$	157.7	$	(69.4	)	(44.0	%)	$	147.5	$	36.8		24.9	%


^(a)	See “Reconciliation of Operating Income to Adjusted Operating Income.”


^(b)	See “Reconciliation of Net Income Attributable to Coty Inc. to Adjusted Net Income Attributable to Coty Inc.”

The adjusted effective tax rate was (44.0%) compared to 24.9% in the prior-year period. The differences were primarily due to the net impact of the settlements with the IRS. Cash paid during the quarter for income taxes of $36.8 and $26.6 , represents 23.3% and 18.0% of Adjusted income before income taxes for the three months ended September 30, 2015 and 2014 , respectively.

NET INCOME ATTRIBUTABLE TO COTY INC.

In the three months ended September 30, 2015 , net income attributable to Coty Inc. increased $115.1 , to $125.7 , from $10.6 in the three months ended September 30, 2014 . This increase primarily reflects the aforementioned tax benefit for the settlement with the IRS and $88.8 in losses on the early extinguishment of debt incurred in the three months ended September 30, 2014 , partially offset by lower operating income in the three months ended September 30, 2015 .

We believe that Adjusted Net Income Attributable to Coty Inc. provides an enhanced understanding of our performance. See “Overview—Non-GAAP Financial Measures.”

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	Three Months Ended September 30,
(in millions)	2015			2014			Change %
Reported Net Income Attributable to Coty Inc.	$	125.7		$	10.6		>100%
% of Net revenues	11.3		%	0.9		%
Adjustments to Reported Operating Income ^(a)	91.7			47.0			95	%
Loss on early extinguishment of debt ^(b)	—			88.8			(100	%)
Adjustments to noncontrolling interest expense ^(c)	—			(1.6		)	(100	%)
Change in tax provision due to adjustments to Reported Net Income Attributable to Coty Inc.	2.3			(41.8		)	>100%
Adjusted Net Income Attributable to Coty Inc.	$	219.7		$	103.0		>100%
% of Net revenues	19.8		%	8.7		%
Per Share Data
Adjusted weighted-average common shares
Basic	360.0			354.2
Diluted	369.9			364.3
Adjusted Net Income attributable to Coty Inc. per common share
Basic	$	0.61		$	0.29
Diluted	0.59			0.28


^(a)	See “Reconciliation of Operating Income to Adjusted Operating Income.”


^(b)	Loss on early extinguishment of debt associated with repurchase of our Senior Notes. Included in loss on early extinguishment of debt in the Condensed Consolidated Statements of Operations.


^(c)	Noncontrolling interest expense in the three months ended September 30, 2014 was related to the revaluation of inventory buyback associated with the conversion from a distributor to subsidiary distribution model in a select emerging market and is included in net income attributable to noncontrolling interests in the Condensed Consolidated Statements of Operations.

FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of funds include cash generated from operations, borrowings from issuance of debt and committed and uncommitted lines of credit provided by banks and lenders in the U.S. and abroad. As of September 30, 2015 , we had cash and cash equivalents of $416.0 compared with $341.3 at June 30, 2015 .

Our cash flows are subject to seasonal variation throughout the year, including demands on cash made during our first fiscal quarter in anticipation of higher global sales during the second quarter and strong cash generation in the second fiscal quarter as a result of increased demand by retailers associated with the holiday season. Our principal uses of cash are to fund planned operating expenditures, capital expenditures, interest payments, acquisitions, dividends, share repurchases and any principal payments on debt. The working capital movements are based on the sourcing of materials related to the production of our Fragrances, Color Cosmetics, and Skin & Body Care products.

As a result of the cash on hand, our ability to generate cash from operations and through access to our revolving credit facility and other lending sources, we believe we have sufficient liquidity to meet our ongoing needs on both a near term and long-term basis.

Debt



	September 30, 2015			June 30, 2015
Short-term debt	$	23.3		$	22.1
2015 Credit Agreement due March 2018	800.0			800.0
Coty Inc. Credit Facility
2013 Term Loan due March 2018	1,050.0			1,050.0
Incremental Term Loan due April 2018	625.0			625.0
Revolving Loan Facility due April 2018	293.5			136.5
Other long-term debt and long-term capital lease obligations	0.7			1.1
Total debt	2,792.5			2,634.7
Less: Short-term debt and current portion of long-term debt	(41.9		)	(28.8		)
Total Long-term debt	$	2,750.6		$	2,605.9

2015 Credit Agreement

On March 24, 2015, we entered into a Credit Agreement (the “2015 Credit Agreement”) which provides for a term loan of $800.0 (the “2015 Term Loan”), payable in full on March 31, 2018. The terms of the 2015 Term Loan are substantially the same as those of the term loan existing under the 2013 Credit Agreement, after giving effect to the 2015 Amendment as discussed below.

Coty Inc. Credit Facility

On March 24, 2015, we entered into an amendment (“2015 Amendment”) to the 2013 Credit Agreement. The 2015 Amendment amends, among other things, the financial covenants in the 2013 Credit Agreement. After giving effect to the 2015 Amendment, the 2013 Credit Agreement permits us to maintain a quarterly base leverage ratio, as defined therein, equal to or less than 3.95 to 1.0 for each fiscal quarter through to December 31, 2015. After December 31, 2015, the quarterly base leverage ratio steps down to 3.75 to 1.0 through the period ending December 31, 2016, and to 3.50 to 1.0 through maturity of the facility.

On June 25, 2014, we entered into the Incremental Term Loan Amendment (“Incremental Amendment”) to the 2013 Credit Agreement. The Incremental Amendment provides for an incremental term loan of $625.0 ( the “Incremental Term Loan”), and has substantially the same terms and conditions as those of the 2013 Term Loan, except with respect to principal repayments. The Incremental Term Loan is payable in full on April 2, 2018.

On April 2, 2013, we refinanced our then-existing credit facility by entering into a Credit Agreement (the “2013 Credit Agreement”) which provides a term loan of $1,250.0 (the “2013 Term Loan”), which expires on March 31, 2018. The 2013 Credit Agreement additionally provides a revolving loan facility of $1,250.0 (the “2013 Revolving Loan Facility”) expiring on April 2, 2018, which includes up to $80.0 in swingline loans. Quarterly repayments for the 2013 Term Loan will commence on October 1, 2016 and will total $175.0 , and $875.0 in fiscal years 2017, and 2018 respectively.

As of September 30, 2015, we are in compliance with all financial covenants within the credit agreements and related amendments as described above.

Business Combinations

Pending Transaction with P&G Specialty Beauty Business

On July 9, 2015 we announced the signing of a definitive agreement to merge the P&G Specialty Beauty Business, comprised of 43 beauty brands, into us through a Reverse Morris Trust transaction.

Our transaction proposal valued the P&G Specialty Beauty Business at $12.5 billion, based on the number of our basic Class A and Class B Common shares outstanding (i.e., excluding the impact of our outstanding equity awards) and an average trading price of our stock at the time of the proposal. The actual transaction value will be known at closing based on the our then current share price and fully diluted share count, as well as, the final level of assumed debt. The aggregate consideration in the transaction will consist of shares in the combined company issued to participating P&G shareholders, as well as, the assumption of debt of the P&G Specialty Beauty Business. The share issuance is structured to result in P&G shareholders receiving 52% of all outstanding shares in the combined company on a fully diluted basis. Our proposal valued this equity component at approximately $9.6 billion at the time the proposal was submitted. The remaining consideration of $2.9 billion in assumed debt from the P&G Specialty Beauty Business is subject to a $1 billion adjustment within a collar based on the trading price of the our stock (range of $22.06 to $27.06 per share) prior to the close of the transaction as well as other contractual valuation adjustments. The assumed debt is expected to be between approximately $1.9 billion and $3.9 billion.

As of September 30, 2015, the estimated value of the transaction was approximately $13.0 billion based on our stock price and outstanding Class A and Class B Common shares and equity grants as of September 30, 2015. The value is comprised of approximately 413 million shares which represents 52% of the diluted equity of the combined company, valued at approximately $11.1 billion and the assumption of $1.9 billion in debt from the P&G Specialty Beauty Business. The transaction is expected to close in the second half of calendar year 2016, subject to regulatory clearances, works council consultations, and other customary conditions. The final value of the transaction will be determined at the date of closing.

Acquisition of Hypermarcas Beauty Business

On November 2, 2015, we entered into a definitive agreement to acquire the personal care and beauty business of Hypermarcas S.A. (the “Beauty Business”) for approximately $1.0 billion (3.8 billion Brazilian Reais) in cash. The acquisition is expected to strengthen our position in the Brazilian beauty and personal care market. The transaction will be funded with a combination of cash on hand and available debt facilities and is expected to be closed in two stages by end of March 2016.

Cash Flows



	Three Months Ended September 30,
	2015			2014
Condensed Consolidated Statements of Cash Flows Data: (in millions)
Net cash provided by operating activities	$	116.7		$	26.2
Net cash used in investing activities	(42.5		)	(60.4		)
Net cash provided by (used in) financing activities	6.6			(148.0		)

Net cash provided by operating activities

Net cash provided by operating activities was $116.7 and $26.2 for the three months ended September 30, 2015 and 2014 , respectively. The increase in operating cashflows of $90.5 is primarily due to timing of trade receivable collections and working capital needs associated with year over year key initiatives.

Net cash used in investing activities

Net cash used in investing activities was $42.5 and $60.4 for the three months ended September 30, 2015 and 2014 , respectively. The decrease in cash outflows is primarily driven by lower cash payments for capital projects of $17.3 and the prior year payment associated with business combinations of $0.6 which did not occur in the current year.

Net cash provided by (used in) financing activities

Net cash provided by (used in) financing activities was $6.6 and $(148.0) for the three months ended September 30, 2015 and 2014 , respectively. The decrease in financing cash outflows of $154.6 is primarily attributable to debt related transactions during the three months ended September 30, 2015 that resulted in net cash inflows of $159.0 compared to net cash outflows of $139.2 in the three months ended September 30, 2014. Cash inflows from debt transactions are primarily driven by net proceeds in the current year of $145.0 compared to net payments in the prior year of $189.5 from our 2013 Revolving Loan Facility, and the prior year repurchase of Senior Notes and related make-whole payments of $584.6 which were only partially offset in the prior year by cash proceeds of $600.0 from short term debt borrowings. The year over year increase in cash inflows from debt related transactions of $298.2, the prior year payment for the purchase of additional noncontrolling interests of $14.9 which did not reoccur in the current year, and slightly higher proceeds of $2.0 from the issuance of Common Stock were only partially offset by cash outflows of $155.7 for the purchase of treasury shares, higher distributions to redeemable noncontrolling interest partners $2.7 and higher payments of deferred financing fees of $0.5 during the three months ended September 30, 2015.

Dividends

On September 11, 2015, we declared a cash dividend of $0.25 per share, or $90.1 on our Class A and Class B Common Stock, RSUs and Phantom units. Of the $90.1 , $89.0 was paid on October 15, 2015 to holders of record of Class A and Class B Common Stock on October 1, 2015 and was recorded as a decrease to APIC in the Condensed Consolidated Balance Sheet as of September 30, 2015 . The remaining $1.1 is payable upon settlement of the RSUs and Phantom units outstanding as of October 1, 2015, and is recorded as Other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

Share Repurchase

On August 13, 2015, our Board of Directors authorized us to repurchase up to $700.0 of our Class A Common Stock, inclusive of any amounts remaining under our previously announced share repurchase program (the “Repurchase Program”). Repurchases will be made from time to time at our discretion, based on ongoing assessments of the capital needs of our business, the market price of our common stock, and general market conditions. No time has been set for the completion of the Repurchase Program and the program may be suspended or discontinued at any time.

In connection with our Repurchase Program, we repurchased 5.5 million shares of our Class A Common Stock during the three months ended September 30, 2015 . The shares were purchased in multiple transactions at prices ranging from $26.91 to $30.23 . The aggregate fair value of shares repurchased during the three months ended September 30, 2015 was $155.7 , and was recorded as an increase to Treasury stock in our Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interests.

Commitments and Contingencies

We have the right to purchase the noncontrolling interests in certain subsidiaries from the noncontrolling interest holders (each such right, a “Call right”) at certain points in time. In December 2014, we gave notice of intent to exercise its Call right for 14% of a certain Singapore subsidiary from the noncontrolling interest holder at an estimated purchase price of approximately $10.6 for this 14% . In addition, on September 29, 2015, we gave notice of intent to exercise its option to terminate the Shareholders’ Agreement with the noncontrolling interest holder and to purchase the remaining 35% of the noncontrolling interest holder’s interest in the Singapore subsidiary at an estimated purchase price of approximately $29.2 .

Off-Balance Sheet Arrangements

We had undrawn letters of credit of $4.6 and $4.1 as of September 30, 2015 and June 30, 2015, respectively.

Critical Accounting Policies

We believe that the critical accounting policies listed below involve our more significant judgments, assumptions and estimates and, therefore, could have the greatest potential impact on our condensed consolidated financial statements:


•	Revenue Recognition


•	Goodwill, Other Intangible Assets and Long-Lived Assets


•	Pension and Other Post-Employment Benefit Costs


•	Share-Based Compensation


•	Income Taxes

As of September 30, 2015 , there have been no material changes to the items disclosed as critical accounting policies and estimates in “Management Discussion and Analysis of Financial Condition and Results of Operations” in Part II—Item 7 of our Fiscal 2015 Form 10-K.

Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, our future operations and financial performance; expected growth; our ability to support our planned business operation on a near- and long-term basis. These forward-looking statements are generally identified by words or phrases, such as “anticipate”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”, “continue”, “target”, “aim” and similar words or phrases.

Reported results should not be considered an indication of future performance, and actual results may differ materially from the results predicted due to risks and uncertainties including:


•	our ability to achieve our global business strategy and compete effectively in the beauty industry;


•	our ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products;


•	our ability to identify suitable acquisition targets and managerial, integration, operational and financial risks associated with those acquisitions, including our recent acquisitions of Bourjois and Beamly and our expected transactions with the P&G Specialty Beauty Business and Hypermarcas S.A.;


•	risks related to our international operations, including reputational, regulatory, economic and foreign political risks, such as the political instability in Eastern Europe and the Middle East, the debt crisis and the economic environment in Europe and fluctuations in currency exchange rates;


•	dependence on certain licenses, entities performing outsourced functions and third-party suppliers;


•	our and our brand partners’ and licensors’ ability to obtain, maintain and protect the intellectual property rights used in our products and our abilities to protect our respective reputations;


•	our ability to implement the Organizational Redesign restructuring program as planned and the success of the program in delivering anticipated improvements and efficiencies;


•	administrative, development and other difficulties in meeting the expected timing of market expansions, product launches and marketing efforts;


•	global political and/or economic uncertainties or disruptions, including a general economic downturn, a sudden disruption in business conditions affecting consumer purchases of our products and volatility in the financial markets;


•	our ability to manage seasonal variability;


•	consolidation among retailers, shifts in consumers’ preferred distribution channels, and other changes in the retail environment in which we sell our products;


•	disruptions in operations;


•	increasing dependency on information technology and our ability to protect against service interruptions, data corruption, cyber-based attacks or network security breaches;


•	changes in laws, regulations and policies that affect our business or products;


•	market acceptance of new product introductions; and


•	the illegal distribution and sale by third parties of counterfeit versions of our products.

More information about potential risks and uncertainties that could affect our business and financial results is included under Item 1A. Risk Factors in our Fiscal 2015 Form 10-K .

We assume no responsibility to update forward-looking statements made herein or otherwise.

Industry, Ranking and Market Data

Unless otherwise indicated, information contained in this Quarterly Report on Form 10-Q concerning our industry and the market in which we operate, including our general expectations about our industry, market position, market opportunity and market size, is based on data from various sources including internal data and estimates as well as third-party sources widely available to the public such as independent industry publications (including Euromonitor International Ltd), government publications, reports by market research firms or other published independent sources and on our assumptions based on that data and other similar sources. We did not fund and are not otherwise affiliated with the third-party sources that we cite. Industry publications and other published sources generally state that the information contained therein has been obtained from third-party sources believed to be reliable. Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and management’s understanding of industry conditions, and such information has not been verified by any independent sources. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we believe the market, industry and other information included in this Quarterly Report on Form 10-Q to be the most recently available and to be generally reliable, such information is inherently imprecise and we have not independently verified any third-party information or verified that more recent information is not available.

We refer to North America, Western Europe and Japan as “developed markets,” and all other markets as “emerging markets”. We define North America as the United States of America and Canada. Except as specifically indicated, all references to rankings are based on retail value market share.

Our fiscal year ends on June 30. Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “fiscal 2016” refer to the fiscal year ended June 30, 2016. Any reference to a year not preceded by “fiscal” refers to a calendar year.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Fiscal 2015 Form 10-K.

Item 4. Controls and Procedures.

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Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our interim Chief Executive Officer (the “ interim CEO”) and our Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2015 . Based on the evaluation of our disclosure controls and procedures as of September 30, 2015 , our interim CEO and CFO concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) of the Exchange Act during the first fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our interim CEO and CFO, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving our objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings .

We have disclosed information about certain legal proceedings in the section entitled “Legal Proceedings” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 (the “Fiscal 2015 Form 10-K”). Other than as disclosed below, there have been no subsequent material developments to these matters.

We are involved, from time to time, in litigation, other regulatory actions and other legal proceedings incidental to our business. Other than as previously disclosed above and in the Fiscal 2015 Form 10-K, management believes that current litigation, regulatory actions and legal proceedings will not have a material effect upon our business, results of operations, financial condition or cash flows. However, management’s assessment of our current litigation, regulatory actions and other legal proceedings could change in light of the discovery of facts with respect to litigation, regulatory actions or other proceedings pending against us not presently known to us or determinations by judges, juries or other finders of fact which are not in accord with management’s evaluation of the possible liability or outcome of such litigation, regulatory actions and legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

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The table below provides information with respect to repurchases of shares of our Class A Common Stock that settled during the fiscal quarter ended September 30, 2015. No shares of Class B Common Stock were repurchased during this period.



Period	Total Number of Shares Purchased	Average Price Paid per Share ^(a)	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs ^(a)
July 1, 2015 - July 31, 2015	1,431,571 ^(b)	31.9000	-	-
August 1, 2015 - August 31, 2015	2,134,200	28.4751	2,134,200	669,615,293.11
September 1, 2015 - September 30, 2015	8,332,800	28.5620	8,332,800	544,290,221.81
Total	11,898,571	28.9480	10,467,000 ^(c)(d)	544,290,221.81 ^(c)(d)

^(a) Includes fees and commissions.

^(b) These shares of Class A Common Stock were purchased by JABC from an affiliate of an individual originally intended to become an executive of the Company.

^(c) 5,467,000 shares of Class A Common Stock were purchased for approximately $155.7 million under our $700.0 million share repurchase program (the “Repurchase Program”) publicly announced on August 13, 2015. All repurchases were made using cash resources. No time has been set for the completion of the Repurchase Program, and the Repurchase Program may be suspended or discontinued at any time. The timing and exact amount of any repurchases will depend on various factors, including ongoing assessments of the capital needs of our business, the market price of our Class A Common Stock, and general market conditions. The Repurchase Program may be executed through open market purchases or privately negotiated transactions, including through Rule 10b5-1 trading plans. As of September 30, 2015, approximately $544.3 million of authorized purchases remained under the Repurchase Program.

^(d) 5,000,000 shares of Class A Common Stock were purchased by JABC for approximately $143.1 million pursuant to JABC’s plan to purchase approximately 6 million shares of the Company’s Class A Common Stock, announced on August 13, 2015.

Item 6. Exhibits, Financial Statement Schedules.

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q:



Exhibit
Number		Document
10.53			Coty Inc. Equity and Long-Term Incentive Plan, as amended on October 28, 2015
10.57			Separation Agreement Amendment, dated September 17, 2015, between the registrant and Ralph Macchio
10.58			Open-Ended Employment Agreement, dated August 24, 2015, between Coty SAS and Sébastien Froidefond
21.1			List of significant subsidiaries
31.1			Certification of Chief Executive Officer, pursuant to Rule 13a-14(a)
31.2			Certification of Chief Financial Officer, pursuant to Rule 13a-14(a)
32.1			Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350
32.2			Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350
101.INS	*		XBRL Instance Document.
101.SCH	*		XBRL Taxonomy Extension Schema Document
101.CAL	*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	*		XBRL Taxonomy Extension Presentation Linkbase Document

* Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission

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requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	COTY INC.

Date: November 5, 2015	By:	/s/Lambertus J.H. Becht
		Name: Lambertus J.H. Becht
		Title: Interim Chief Executive Officer and Chairman of the Board of Directors
		(Principal Executive Officer)

		/s/Patrice de Talhouët
		Name: Patrice de Talhouët
		Title: Chief Financial Officer
		(Principal Financial Officer)

Exhibit 10.53

COTY INC.

EQUITY AND LONG-TERM INCENTIVE PLAN

(as amended on October 28, 2015)

SECTION 1

PURPOSE AND DURATION

1.1

Purpose . The purpose of this Coty Inc. Equity and Long-Term Incentive Plan is to promote the interests of Coty Inc. and its shareholders by (i) attracting and retaining exceptional executive personnel and other key employees of the Company and its Affiliates; (ii) motivating such employees by means of performance‑related incentives to achieve long‑range performance goals; and (iii) enabling such employees to participate in the long‑term growth and financial success of the Company.


1.2	Effective Date and Term of the Plan .


(a)	The original effective date of the Plan is November 8, 2012. The effective date of this amended and restated plan document is the Effective Date.

(b)

The Plan will terminate upon the earlier of (i) the date on which all Shares available for issuance under the Plan have been issued pursuant to the exercise of Stock Options or the Award of Shares under the Plan, or (ii) the date specified by action of the Board. Upon such Plan termination, all Awards outstanding under the Plan will continue to have full force and effect in accordance with the terms of the Terms and Conditions evidencing each Award.

SECTION 2

DEFINITIONS

Whenever used in the Plan, the following terms have the meanings set forth below:


2.1	“Affiliate” means any entity (i) that, directly or indirectly, is controlled by the Company, or in which the Company has a significant equity interest, and (ii) as to which the Company is an “eligible issuer of service recipient stock” within the meaning of Treas. Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee.


2.2	“Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from the Grant Date of an Award to the date of the Participant’s termination of Service and the denominator of which is the number of days between the Grant Date and the date the Award was scheduled to become exercisable or otherwise vest.


2.3	“Award” means a grant under the Plan to a Participant of a Stock Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit, Performance Award, or Other Stock-Based Award.

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2.4	“Board” means the Board of Directors of the Company.


2.5	“Business Day” means any day other than a Saturday, Sunday, or legal holiday, or a day on which the national securities exchange that constitutes the principal market for the Shares is closed.

2.6

“Cause” has the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Cause,” then “Cause” shall mean the occurrence of any of the following, as determined by the Committee in its sole discretion:

(a)

a Participant’s willful and continued failure substantially to perform his or her duties (other than as a result of total or partial incapacity due to physical or mental illness or as a result of termination by such Participant for Good Reason), which failure continues for more than 30 days after receipt by the Participant of written notice setting forth the facts and circumstances identified by the Company as constituting adequate grounds for termination under this clause (a);


(b)	any willful act or omission by a Participant constituting dishonesty, fraud or other malfeasance, and any act or omission by a Participant constituting immoral conduct, which in any such case is injurious to the financial condition or business reputation of the Company or any of its Affiliates;


(c)	a Participant’s indictment for a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or


(d)	a Participant’s breach of any nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound.

For purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by a Participant not in good faith and without a reasonable belief that such action or failure to act was in or not opposed to the Company’s best interests.


2.7	“Change in Control” means the occurrence of any of the following:

(a)

Any Person or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that is not the Majority Shareholder is or becomes the "beneficial owner" (as defined below), directly or indirectly, of securities representing either (i) more than 50% of the combined voting power of the Company’s then outstanding securities, or (ii) 20% or more of the combined voting power of the Company's then outstanding securities at a time when the Majority Shareholder hold less than 30% of such combined voting power. For purposes of this clause (a), “beneficial owner” has the meaning given that term in Rule 13d‑3 under the Exchange Act, except that a Person shall be deemed to be the "beneficial owner" of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such Rule;

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(b)

Individuals who constitute the Board on the Effective Date (the “ Incumbent Board ”) cease for any reason to constitute at least a majority thereof, provided, that any Person becoming a director subsequent to such date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors then comprising the Incumbent Board shall be, for purposes of this clause (b), considered as though such Person were a member of the Incumbent Board; and provided , further , that this clause (b) shall not apply as long as the Majority Shareholder is the beneficial owner of a majority of voting power the Company’s outstanding securities;


(c)	The Majority Shareholder enters into any joint venture, joint operating arrangement, partnership, standstill agreement or other arrangement similar to any of the foregoing with any other Person or group, pursuant to which such Person or group assumes significant operational or managerial control of the Company; or

(d)

The shareholders of the Company approve a plan or agreement providing (i) for a merger or consolidation of the Company other than with a wholly owned subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) for a sale, exchange or other disposition of all or substantially all of the business or assets of the Company. If any of the events enumerated in this clause (d) occurs, the Board shall determine the effective date of the Change in Control resulting therefrom for purposes of this Plan.


2.8	“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

2.9

“Committee” means the Remuneration and Nominating Committee of the Board or any successor committee with responsibility for compensation, or any subcommittee, as long as the number of Committee members and their qualifications shall at all times be sufficient to meet the independence requirements of the New York Stock Exchange, Inc. or any other applicable exchange on which the Company’s common equity is at the time listed and, as applicable, the requirements for “outside directors” under Section 162(m) and the regulations thereunder, as in effect from time to time.


2.10	“Company” means Coty Inc., a Delaware corporation, and any successor thereto as provided in Section 16.1.

2.11

“Designated Beneficiary” means the Person or Persons the Participant designates from time to time on a signed form prescribed by the Committee, properly filed with the Committee during the Participant’s lifetime, as the beneficiary of any amounts or benefits the Participant owns or is to receive under the Plan, in accordance with Section 12.1. A properly filed beneficiary designation will revoke all prior designations by the same Participant. If no such form has been filed with the Committee, the Designated Beneficiary shall be the beneficiary named by the Participant in the Company’s qualified 401(k) savings plan or, if none, the Beneficiary’s estate.


2.12	“Director” means a member of the board of directors of the Company or an Affiliate.

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2.13

“Disability” means either (i) disability as defined for purposes of the Company’s disability benefit plan, or (ii) a Participant’s inability, as a result of physical or mental incapacity, to perform the duties of his or her position(s) for a period of six consecutive months or for an aggregate of six months in any consecutive 12-month period. Any question as to the existence of the Disability of a Participant as to which the Participant and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to the Participant and the Company. If the Participant and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Company and the Participant shall be final and conclusive for all purposes of the Plan. Following a Change in Control, the Company shall pay all expenses incurred in the determination of whether a Participant is disabled.


2.14	“Effective Date” means the date on which the Amended and Restated Certificate of Incorporation of the Company that is contemplated to be adopted by the Company in connection with the first underwritten public offering of the Company’s common stock is filed with the Secretary of State of the State of Delaware.


2.15	“Employee” means an employee of the Company or an Affiliate (that is not a Joint Venture).


2.16	“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.


2.17	“Executive Officer” means any Company employee who is an “executive officer” as defined in Rule 3b-7 promulgated under the Exchange Act.


2.18	“ Exercise Date ” shall mean any Business Day.


2.19	“Exercise Price” means the price at which a Participant may purchase a Share pursuant to a Stock Option or Stock Appreciation Right.

2.20

“Fair Market Value” as it relates to a Share means, unless otherwise determined by the Committee, the most recent closing price of a Share on the principal national securities exchange on which the Shares are then listed, or if there were no sales on such date, on the next preceding day on which there were sales, or if such Shares are not listed on a national securities exchange, the last reported bid price in the over-the-counter market.


2.21	“Good Reason” shall have the meaning set forth in any employment, severance or other agreement between the Company or an Affiliate and the Participant. If there is no employment, severance or other agreement between the Company or an Affiliate and the Participant, or if such agreement does not define “Good Reason,” then “Good Reason” shall mean the occurrence of any of the following:


(a)	Before a Change in Control:


(i)	A Participant’s removal from, or the Company’s failure to reelect or reappoint the Participant to, his or her positions at the Company (other than as a result of a promotion). For purposes of this clause (i), a mere change of title shall not constitute removal from, or non-reelection to, such position, provided that a

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Participant’s new title is substantially equivalent to the Participant’s title as of the Grant Date and his or her position is otherwise not adversely affected; or


(ii)	The relocation of a Participant’s principal workplace without his or her consent to a location more than 25 miles distant from its current location.


(b)	Following a Change in Control:


(i)	Any of the events described in clause (a) above;


(ii)	A material diminution in a Participant’s title, position, duties or responsibilities, or the assignment to a Participant of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with his or her position as of the Grant Date; or


(iii)	The failure of the Company to continue a Participant’s participation in the Company’s Annual Performance Plan and in this Plan on a basis that is commensurate with his or her position.


2.22	“Grant Date” means the date on which an Award is granted.


2.23	“Joint Venture” has the meaning given that term in Section 6.9.


2.24	“Majority Shareholder” means (i) the Company’s majority shareholder as of the Effective Date or (ii) a Benckiser Permitted Holder as defined in the Company’s Certificate of Incorporation effective on the Effective Date or any other similarly situated Person as determined by the Committee.


2.25	“Original Effective Date” means November 8, 2012.


2.26	“Other Stock-Based Awards” has the meaning given that term in Section 10.


2.27	“Owned Shares” means Shares that a Participant has acquired through the exercise of a Stock Option or a Stock Appreciation Right, the vesting of Restricted Stock, the settlement of a Restricted Stock Unit or a distribution of Shares in connection with an Other Stock-Based Award.


2.28	“Participant” means an Employee selected by the Committee to receive an Award under the Plan pursuant to Section 5.2, or who has an outstanding Award granted under the Plan.


2.29	“Performance Award” means a right to receive cash or Shares (as determined by the Committee) upon the achievement, in whole or in part, of the applicable Performance Criteria pursuant to Section 9. A grant of Restricted Stock, Restricted Stock Units, or Other Stock Awards may be designed to qualify as Performance Awards.


2.30	“Performance-Based Exception” means the performance-based exception from the tax deductibility limitations of Code Section 162(m) and any regulations promulgated thereunder.


2.31	“Performance Criteria” means the objectives established by the Committee for a Performance Period for the purpose of determining the extent to which an Award of Performance Awards has

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been earned. “Performance Criteria” may be based on the relative or comparative attainment of one or more of the following criteria during a Performance Period, whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies: total stockholder return (inclusive or exclusive of dividends paid); stock price; gross, operating or net earnings or margins; approved rate increases; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA excluding traditional working media; earnings per share; economic value added; ratio of operating earnings to capital spending; net sales; sales growth; return on assets, capital or equity; income; market share; level of expenses; revenue; revenue growth; cash flow; increases in customer base; capital expenditures; cost reductions and expense control objectives; compliance with environmental or regulatory goals or requirements; conservation; budget objectives; working capital; mergers, acquisitions and divestitures; attainment of objectives measured in terms of quality or safety; customer complaints or customer satisfaction; and improvements in financial controls; and, in the case of persons who are not Executive Officers, such other criteria as may be determined by the Committee. Performance Criteria may be established on a Company-wide basis or with respect to one or more business units, divisions, subsidiaries, or geographic locations, or on an individual basis.

At the time the Committee establishes Performance Criteria for a Performance Period, the Committee may exclude any or all “extraordinary items” as determined under U.S. generally accepted accounting principles including, without limitation, the charges or costs associated with restructurings of the Company or any subsidiary, discontinued operations, other unusual or non-recurring items, the cumulative effects of accounting changes or such other objective factors as the Committee deems appropriate. Unless otherwise explicitly stated by the Committee at the time Performance Criteria are established, each applicable performance goal shall be appropriately adjusted for one or more of the following items: (i) asset impairments or write downs; (ii) litigation judgments or claim settlements; (iii) the effect of changes in tax law, accounting principles or such laws or provisions affecting reported results; (iv) accruals for reorganization and restructuring programs; (v) any extraordinary nonrecurring items as described in Accounting Standards Codification (ASC) 225-20 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) the operations of any business acquired by the Company or any affiliate or of any joint venture in which the Company or affiliate participates; (vii) the divestiture of one or more business operations or the assets thereof; or (viii) the costs incurred in connection with such acquisitions or divestitures; and (ix) charges for stock based compensation.

Except in the case of Awards to Executive Officers intended to qualify for the Performance-Based Exception, the Committee may at any time adjust the Performance Criteria for any Performance Period as it deems equitable. The Committee shall have no obligation to treat Participants uniformly.


2.32	“Performance Period” means the 12-month time period during which Performance Criteria must be met in order for a Participant to earn Performance Awards granted under Section 9.


2.33	“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization and any other entity, whether foreign or domestic, including any governmental entity or any department, agency or political subdivision thereof.

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2.34	“Plan” means this Coty Inc. Equity and Long-Term Incentive Plan, as amended from time to time.


2.35	“Prior Plans” means the Coty Inc. Long-Term Incentive Plan and the Coty Inc. Executive Ownership Plan, each as in effect immediately prior to the Original Effective Date and as may be amended from time to time.


2.36	“Restricted Stock” means a contingent grant of Shares awarded to a Participant pursuant to Section 8.


2.37	“Restricted Stock Unit” means a Restricted Stock Unit granted to a Participant, as described in Section 8.

2.38

“Restriction Period” means the period during which the transfer of Restricted Stock is limited in some way (based on the passage of time, the achievement of performance objectives, or the occurrence of other events as the Committee determines, in its sole discretion) and, except as provided in the Terms and Conditions, during which the Restricted Stock and any Restricted Stock Unit is not vested.


2.39	“Retirement” means a termination of Service (other than a termination of Service for Cause):


(a)	after attaining age 60, but only if the Company or the employing Affiliate consents to the treatment of such termination as a “Retirement” for purposes of this Plan; or


(b)	qualifying as a retirement at normal retirement age under the laws and/or arrangements applicable to the Participant, as reasonably determined by the Committee.


2.40	“Section 162(m)” means Section 162(m) of the Code and the applicable regulations and other legal authority promulgated thereunder.


2.41	“Section 409A” means Section 409A of the Code and the applicable regulations and other legal authority promulgated thereunder.

2.42

“Service” means the provision of services in the capacity of an Employee or Continuing Director of the Company or an Affiliate. A transfer of Service from the Company to an Affiliate or from an Affiliate to the Company or another Affiliate shall not constitute a termination of Service under the Plan or any Terms and Conditions. All determinations regarding Service, including whether any leave of absence is a termination of Service, shall be made by the Committee in its sole discretion. For purposes of this paragraph, a “Continuing Director” shall mean any individual who, upon his or her termination of employment with the Company or an Affiliate, continues to serve as a member of the Board or the board of directors of an Affiliate. The Service of a Continuing Director shall terminate when he or she ceases to serve as a member of the Board or on the board of directors of an Affiliate.


2.43	“Share” means a share of the Class A Common Stock, par value $.01 per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time.

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2.44	“Stock Appreciation Right” or “SAR” means an Award consisting of a right to receive any excess in value of shares of common stock over the exercise price and designated as an SAR pursuant to the terms of Section 7.


2.45	“Stock Appreciation Right Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Appreciation Right is exercised exceeds the aggregate Exercise Price with respect to such Stock Appreciation Right.


2.46	“Stock Option” means a nonqualified stock option, as described in Section 6, that is not intended to meet the requirements of Code Section 422.


2.47	“Stock Option Spread” means the amount by which the Fair Market Value, as of the Exercise Date, of the Shares as to which a Stock Option is exercised exceeds the aggregate Exercise Price with respect to such Shares.

2.48

“Successor” means the Participant’s spouse, the Participant’s lineal descendants, any trust the beneficiaries of which consist only of the Participant, the Participant’s spouse and/or the Participant’s lineal descendants, or to a corporation in which the Participant, the Participant’s spouse and/or the Participant’s lineal descendants own 100% of the economic interest and has the unfettered right to prevent further transfer or disposition of the Restricted Stock, Stock Option, Stock Appreciation Right, Restricted Stock Unit or Owned Shares, applicable. The Committee may, in its discretion, deem other parties to qualify as a Successor for purposes of this Plan.


2.49	“Terms and Conditions” means any electronic or written agreement or other instrument or document evidencing an Award.


2.50	“Valuation Date” means any Business Day. A Valuation Date shall also occur upon the consummation of a transaction constituting a Change in Control.


2.51	“Withholding Tax” means the aggregate federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising under the Plan.

SECTION 3

Administration


3.1	Plan Administration . The Plan shall be administered by the Committee.

3.2

Authority of the Committee . Except as limited by law or the by-laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to: (a) select eligible Employees to participate in the Plan; (b) determine the size and type of Awards; (c) determine the terms and conditions of Awards in a manner consistent with the Plan; (d) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in Shares, and the method or methods by which Awards may be settled or exercised; (e) determine the Fair Market Value of a Share; (f) construe and interpret the Plan and any agreement or instrument entered into under the Plan; (g) establish, amend or waive rules and regulations for the Plan’s administration; (h) specify the Exercise Price; and (i) subject to the provisions of Section 15.1, amend the terms and conditions of any outstanding Award to the extent the amended terms are within the Committee’s authority under the Plan. Further, the

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Committee shall make all other determinations that may be necessary or advisable to administer the Plan. The Committee may delegate some or all of its authority under the Plan to officers or employees of the Company or other Persons, except with respect to Awards to Executive Officers.


3.3	Decisions Binding . All determinations and decisions made by the Committee or by a Person or Persons delegated authority by the Committee pursuant to the provisions of the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its shareholders, all Affiliates, Employees, Participants and their estates and beneficiaries.

SECTION 4

Shares Subject to the Plan

4.1

Number of Shares Available for Grants . Subject to adjustment as provided in Sections 4.2 and 4.3, the number of Shares that may be issued or transferred to Participants under the Plan is 18,000,000. No additional awards shall be made under the Prior Plans on or after the Original Effective Date. Subject to adjustment as provided in Section 4.3, to the extent necessary to comply with Section 162(m), the maximum number of Shares or Share equivalent units that may be granted during any fiscal year to any one Participant under Options, SARs, Restricted Stock, Restricted Stock Units, Performance Awards or other Stock-Based Awards is $25,000,000, which limit will apply regardless of whether the compensation is paid in Shares or in cash. To the extent necessary to comply with Code Section 162(m) the maximum aggregate dollar amount that may be paid to any one Participant during any fiscal year under Performance Awards or any cash-based Award under Section 9 is $25,000,000.

4.2

Lapsed Awards . If any Award granted under this Plan or a Prior Plan is canceled, terminates, expires or lapses for any reason, any Shares subject to such award will again be available for the grant of an Award under the Plan. Common Stock issued through the assumption or substitution of outstanding grants from an acquired company shall not reduce the shares available for Awards under the Plan. In addition, if a Share subject to an Award is not delivered because the award is settled in cash, then that Share will thereafter be deemed to be available for grant. If a Share subject to an Award is not delivered because it is used to satisfy a tax withholding obligation or used to pay the Exercise Price of an Option, then that share will not thereafter be deemed to be available for grant.

4.3

Adjustments in Authorized Shares . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share that may become subject to an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be.


4.4	Sources of Shares Deliverable under Awards . Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of treasury Shares.

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SECTION 5

Eligibility and Participation


5.1	Eligibility . Any Employee, including any officer or employee‑director of the Company or an Affiliate, shall be eligible to be designated a Participant. To be eligible, a Participant shall have signed and delivered to the Company the Confidentiality and Non-Competition Agreement delivered by the Company to the Participant.


5.2	Actual Participation . The Committee shall determine the eligible Employees to whom it will grant Awards.

SECTION 6

Stock Options


6.1	Grant of Stock Options .


(a)	Subject to the terms and provisions of the Plan, the Committee may grant Stock Options to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions.

(b)

Each Stock Option grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Option, the number of Shares to which the Stock Option pertains, the manner, time, and rate of exercise and vesting of the Stock Option, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service.


6.2	Exercise Price . The Terms and Conditions shall specify the Stock Option’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date.


6.3	Duration of Stock Options . Each Stock Option will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions.


6.4	Exercise of Stock Options .


(a)	Stock Options shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Option need not be the same for each Award or for each Participant.

(b)

The holder of a Stock Option may exercise the Stock Option only by delivering a written notice of exercise to the Company setting forth the number of Shares as to which the Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay or provide for the Exercise Price and applicable Withholding Tax in full, pursuant to such procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules


(c)	Any exercisable Stock Option that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date

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immediately prior to its expiration if, on such Exercise Date, there is a Stock Option Spread with respect to such Stock Option.


6.5	Termination of Service . Except as otherwise provided in the Terms and Conditions:


(a)	In the event a Participant’s Service terminates by reason of death, Disability, or Retirement:


(i)	The Applicable Fraction of the portion of any Stock Option held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable.


(ii)	All Stock Options held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire.


(iii)	Any unvested portion of the Participant’s Stock Options as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination.


(b)	Except as provided in Section 6.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement:


(i)	Any unvested portion of the Participant’s Stock Options as of the date of termination shall be forfeited and canceled on the date of termination, and

(ii)

The vested portion, if any, of the Participant’s Stock Options shall remain exercisable through (i) the ninetieth (90th) day after the Participant’s termination of Service, if the ninety (90) day period commences in an open trading window, or (ii) if the ninety (90) day period commences in a closed trading window, the ninetieth (90th) day commencing from the first day of the next open trading window. Any vested Stock Option remaining outstanding after such date shall thereafter expire.


(c)	Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Option at any time as permitted by Section 409A.


(d)	In no event shall a Stock Option be exercisable following its expiration date.


6.6	Nontransferability of Stock Options .

(a)

Except as otherwise provided in Section 6.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Options shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian

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or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

(b)

Subject to applicable law, vested Stock Options may be transferred to a Successor. Such transferred Stock Options may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 6.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.

6.7

Dividend Equivalents and Other Distributions . The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Options that are equivalent to dividends or other distributions declared and paid on the Shares underlying the Stock Options prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A.

6.8

Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Option shall vest and become exercisable.

6.9

Employment in a Joint Venture . If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “ Joint Venture ”), during the Restriction Period, vesting of the Participant’s Stock Options shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Options shall be extended by the number of days the Participant was an employee of the Joint Venture.

SECTION 7

Stock Appreciation Rights


7.1	Grant of Stock Appreciation Rights .


(a)	Subject to the terms and provisions of the Plan, the Committee may grant Stock Appreciation Rights to any Participant in the number, and upon the terms, and at such time or times, as the Committee determines and sets forth in the Terms and Conditions.

(b)

Each Stock Appreciation Right grant shall be evidenced by the Terms and Conditions that specifies the duration of the Stock Appreciation Right, the number of Shares to which the Stock Appreciation Right pertains, the manner, time, and rate of exercise and vesting of the Stock Appreciation Right, and such other provisions as the Committee determines. Vesting conditions may include, but not be limited to, the achievement of specific

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performance objectives (Company-wide, business unit, and/or individual) or continued Service.


7.2	Exercise Price . The Terms and Conditions shall specify the Stock Appreciation Right’s Exercise Price, which shall be not less than the Fair Market Value of a Share on the Grant Date.


7.3	Duration of Stock Appreciation Rights . Each Stock Appreciation Right will expire at the time determined by the Committee at the time of grant and set forth in the Terms and Conditions.


7.4	Exercise of Stock Appreciation Rights .


(a)	Stock Appreciation Rights shall become exercisable at such times and be subject to such vesting and other restrictions and conditions as the Committee in each instance approves and sets forth in each Terms and Conditions. Restrictions and conditions on the exercise of a Stock Appreciation Right need not be the same for each Award or for each Participant.

(b)

The holder of a Stock Appreciation Right may exercise the Stock Appreciation Right only by delivering a written notice of exercise to the Company setting forth the number of Stock Appreciation Rights to be exercised. The Stock Appreciation Right Spread may be settled, as set forth in the Terms and Conditions, by delivery by the Company of the number of Shares equal to the Stock Appreciation Right Spread, in which case the Participant shall on or before the Exercise Date pay or provide for the applicable Withholding Tax in full, pursuant to such exercise procedures established by the Committee from time to time after giving consideration to applicable tax, securities and accounting rules. Any exercisable Stock Appreciation Right that has not been exercised by its holder shall be automatically exercised in accordance with subsection (b) hereof on the Exercise Date immediately prior to its expiration if, on such Exercise Date, there is a Stock Appreciation Right Spread with respect to such Stock Appreciation Right.


7.5	Termination of Service . Except as otherwise provided in the Terms and Conditions:


(a)	In the event a Participant’s Service terminates by reason of death, Disability, or Retirement:


(i)	The Applicable Fraction of the portion of any Stock Appreciation Right held by such Participant which has not theretofore become exercisable shall immediately become vested and exercisable.


(ii)	All Stock Appreciation Rights held by the Participant, to the extent exercisable (including by application of clause (i) above) as of the Participant’s termination of Service shall remain exercisable through the second anniversary of the date of termination of Service and shall thereafter expire.


(iii)	Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination (other than any portion thereof that becomes vested pursuant to clause (i) above) shall be forfeited and canceled, without consideration, on the date of termination.

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(b)	Except as provided in Section 7.8, in the event a Participant’s Service terminates other than by reason of death, Disability, or Retirement:


(i)	Any unvested portion of the Participant’s Stock Appreciation Rights as of the date of termination shall be forfeited and canceled on the date of termination, and


(ii)	The vested portion, if any, of the Participant’s Stock Appreciation Rights shall remain exercisable through the ninetieth (90th) day after the Participant’s termination of Service. Any vested Stock Appreciation Right remaining outstanding after such date shall thereafter expire.


(c)	Notwithstanding the foregoing, the Committee may, in its sole discretion, accelerate the vesting and exercisability, and/or extend the period of exercisability, of all or a portion of a Stock Appreciation Right at any time as permitted by Section 409A.


(d)	In no event shall a Stock Appreciation Right be exercisable following its expiration date.


7.6	Nontransferability of Stock Appreciation Rights .

(a)

Except as otherwise provided in Section 7.6(b), a Participant’s Terms and Conditions, or the Plan, during the Restriction Period, (i) no Stock Appreciation Right granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, and (ii) all Stock Appreciation Rights shall be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

(b)

Subject to applicable law, vested Stock Appreciation Rights may be transferred to a Successor. Such transferred Stock Appreciation Rights may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 7.6, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.

7.7

Dividend Equivalents and Other Distributions . The Committee may, in its sole discretion, provide under an agreement for payments in connection with Stock Appreciation Rights that are equivalent to dividends and other distributions declared and paid on the Shares underlying the Stock Appreciation Rights prior to the date of exercise. Such dividend equivalent agreement, if any, shall be separate and apart from the Terms and Conditions and shall be designed to comply separately with Section 409A.


7.8	Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a

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Joint Venture) for Good Reason, the unvested portion of any then outstanding Stock Appreciation Right shall vest and become exercisable.

7.9

Employment in a Joint Venture . If a Participant becomes an employee of certain joint ventures of the Company, as determined by the Board from time to time (a “ Joint Venture ”), during the Restriction Period, vesting of the Participant’s Stock Appreciation Rights shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture until the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Stock Appreciation Rights shall be extended by the number of days the Participant was an employee of the Joint Venture.

SECTION 8

Restricted Stock and Restricted Stock Units


8.1	Grant of Restricted Stock and Restricted Stock Units . Subject to the terms and provisions of the Plan, the Committee may, at any time and from time to time, grant Restricted Stock or Restricted Stock Units to any Participant in such amounts as it determines and sets forth in the Terms and Conditions.


8.2	Terms and Conditions . Each grant of Restricted Stock or Restricted Stock Units shall be evidenced by the Terms and Conditions that specifies the Restriction Period, the number of Shares or Restricted Stock Units granted, the purchase price, if any, and such other provisions as the Committee determines.


8.3	Nontransferability .

(a)

Except as provided in Section 8.3(b), during the Restricted Period, (i) no Restricted Stock or Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution and (ii) all rights with respect to Restricted Stock or Restricted Stock Units shall be available during the Participant’s lifetime only to the Participant or the Participant’s guardian or legal representative. The Committee may, in its sole discretion, require a Participant’s guardian or legal representative to supply it with evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant.

(b)

Subject to applicable law, Restricted Stock may be transferred to a Successor. Such transferred Restricted Stock may only be further sold, transferred, pledged, assigned or otherwise alienated by the Successor in accordance with this Section 8.3, and shall be subject in all respects to the terms of the Terms and Conditions and the Plan. For a transfer to be effective, the Successor shall promptly furnish the Company with written notice thereof and a copy of such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance of the Successor of the terms and conditions of the Plan.


8.4	Termination of Service . Except as provided in Section 8.5, if a Participant’s Service terminates, then except as otherwise provided in the Terms and Conditions all unvested Restricted Stock and Restricted Stock Units held by such Participant will be forfeited and any vested Restricted

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Stock and Restricted Stock Units shall continue to be subject to the terms of the Plan and any applicable Award.

8.5

Change in Control . If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Restricted Stock and Restricted Stock Units shall vest and become nonforfeitable.

8.6

Other Conditions . The Committee may impose such other conditions and restrictions on any Restricted Stock and Restricted Stock Units as it deems advisable and sets forth in the Terms and Conditions, including, without limitation, vesting restrictions based upon the achievement of specific performance objectives (Company-wide, business unit, and/or individual) or continued Service, and/or restrictions under applicable federal or state securities laws. The Committee may provide that restrictions established under this Section 8.6 as to any given Award will lapse all at once or in installments.


8.7	Voting Rights . Except as otherwise provided in the Terms and Conditions, and subject to Section 13.1(c), a Participant holding Shares of Restricted Stock may exercise any voting rights that apply to those Shares during the Restriction Period.

8.8

Dividends and Other Distributions . During the Restriction Period, a Participant holding Shares of Restricted Stock or Restricted Stock Units shall be credited with regular dividends or dividend equivalents and other distributions paid on those Shares. Such dividends or dividend equivalents and other distributions shall be subject to the same vesting conditions as the underlying Shares or Restricted Stock Units, and shall be paid within 30 days following the end of the Restriction Period.


8.9	Section 83(b) Elections on Restricted Stock . The Participant, if subject to taxation in the United States with respect to any compensation derived under the Plan, shall indicate to the Company whether the Participant intends to make an election under Code Section 83(b) with respect to the Restricted Stock.

8.10

Employment in a Joint Venture . If a Participant becomes an employee of a Joint Venture during the Restriction Period, vesting of the Participant’s Restricted Stock and Restricted Stock Units shall be tolled beginning on the date such Participant becomes an employee of the Joint Venture and shall recommence on the date such Participant again becomes an Employee. Accordingly, the Restriction Period for such Participant’s Restricted Stock and Restricted Stock Units shall be extended by the number of days the Participant was an employee of the Joint Venture.


8.11	Payment of Restricted Stock Units . Each Restricted Stock Unit shall be payable to the Participant in such form provided in the Terms and Conditions following the last day of the Restriction Period, or on such later date provided in the Terms and Conditions or pursuant to a deferral agreement between the Participant and the Company.

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SECTION 9

Performance Awards

9.1

Grant of Performance Awards. The Committee shall have the authority to determine (i) the Participants who shall receive Performance Awards, (ii) the size, number, amount or value, as applicable, of Performance Awards, and (iii) the Performance Criteria applicable in respect of such Performance Awards for each Performance Period. The Committee shall determine the duration of each Performance Period (which may differ from each other), and there may be more than one Performance Period in existence at any one time as to any Participant or all or any class of Participants. Each grant of Performance Awards shall be evidenced by the Terms and Conditions that shall specify the Performance Criteria applicable thereto and such other terms and conditions not inconsistent with the Plan as the Committee shall determine.

9.2

Earning of Performance Awards. The grant and/or vesting of Performance Awards shall be contingent, in whole or in part, upon the attainment of specified Performance Criteria or the occurrence of any event or events involving a Change in Control, death or Disability, as the Committee shall determine. In addition to the achievement of the specified Performance Criteria, the Committee may, at the grant date, condition earning of Performance Awards on the Participant completing a minimum period of service following the Grant Date or on such other conditions as the Committee shall specify.


9.3	Performance Awards and Code Section 162(m) . The provisions of this Section 9.3 shall apply with respect to any Performance Award that is intended to meet the Performance-Based Exception.

(a)

Establishment of Performance Criteria . The Committee shall establish the Performance Criteria for the applicable Performance Period no later than the 90 ^th day after the Performance Period begins (or by such other date as may be required under Section 162(m)) but in any event at a time when achievement of the Performance Criteria is substantially uncertain. The Committee may not in any event increase the amount of compensation payable to an Executive Officer upon attainment of the Performance Criteria above the maximum amount approved by the Committee at the time the Performance Criteria is established.


(b)	Certification of Attainment of Performance Criteria . As soon as practicable after the end of a Performance Period and prior to any payment in respect of such Performance Period, the Committee shall certify in writing the amount, number or value, as applicable, of the Performance Awards that have been earned on the basis of performance in relation to the established Performance Criteria.

(c)

Payment of Awards . Earned Performance Awards shall be distributed to the Participant or, if the Participant has died, to the Participant’s Designated Beneficiary as soon as practicable after the expiration of the Performance Period and the Committee’s certification under Section 9.3(b) above, provided that , unless the payment of a Performance Award has been deferred in accordance with Section 409A of the Code, distributions of a Performance Award shall be made no later than March 15 of the year following the year in which the amount is earned.

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SECTION 10
Other Stock-Based Awards

10.1

The Committee shall have authority to grant to eligible Participants an “ Other Stock‑Based Award ,” which shall consist of any right which (i) is not a Stock Option, Stock Appreciation Right, Restricted Stock Unit or Restricted Stock and (ii) is an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Terms and Conditions, the Committee shall determine the terms and conditions of any such Other Stock‑Based Award.

SECTION 11

Share Restrictions and Purchase and Sale Rights


11.1	Restrictions. The Committee may impose such restrictions on any Shares as it deems necessary or advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed and/or traded, and under any blue sky or state securities laws.


11.2	Additional Conditions of Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or transferred, or (ii) to treat as owner of such Shares, to accord the right to vote as such owner, or to pay dividends to any transferee to whom such Shares have been transferred in violation of the Plan or any Terms and Conditions.

SECTION 12

Beneficiary Designation

12.1

Each Participant may, from time to time, name any Designated Beneficiary (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in case the Participant should die before receiving any or all of his or her benefits under the Plan. Each beneficiary designation shall revoke all prior designations by the same Participant, must be in a form prescribed by the Committee and must be made during the Participant’s lifetime.

SECTION 13

Breach of Restrictive Covenants


13.1	The Terms and Conditions may provide that if the Participant breaches, whether during or after termination of Service, a nonsolicitation, noncompetition, confidentiality, or other restrictive covenant by which he or she is bound, then in addition to any other penalties or restrictions that may apply under any such agreement, state law, or otherwise, the Participant shall forfeit:


(a)	Any Awards granted to him or her under the Plan, including Awards that have become exercisable;


(b)	The profit the Participant realized from the exercise of any Stock Options or Stock Appreciation Rights that the Participant exercised after terminating Service and within the six-month period immediately preceding the Participant’s termination of Service, which is the Stock Option Spread or Stock Appreciation Right Spread associated with

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any Shares acquired by the Participant upon his or her exercise of such Stock Options or such Stock Appreciation Rights; and


(c)	The Fair Market Value, as determined on the vesting date, of any Restricted Stock that vested or Restricted Stock Unit that was settled within the six-month period immediately preceding the Participant’s termination of Service.

SECTION 14

Rights of Participants

14.1

Service . Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, or confer upon any Participant any right to continue in the Service of the Company or any Affiliate. The grant of any Award under the Plan shall not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure, or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets.


14.2	Participation . No Employee shall have the right to receive an Award under the Plan, or, having received any Award, to receive a future Award.

SECTION 15

Amendment, Modification, Termination and Change in Control

15.1

Amendment, Modification and Termination . The Board may at any time and from time to time alter, amend, modify or terminate the Plan in whole or in part, without the approval of the Company’s shareholders, except to the extent such approval is required by law. Subject to the terms and conditions of the Plan, the Committee may modify, extend or renew outstanding Awards under the Plan, or accept the surrender of outstanding Awards (to the extent not already exercised) and grant new Awards in substitution of them (to the extent not already exercised), in order to comply with the requirements of applicable law or otherwise. Notwithstanding the foregoing, no modification of an Award shall, without the prior written consent of the Participant, materially alter or impair any rights or obligations under any Award already granted under the Plan, except such an amendment made to comply with the requirements of applicable law.


15.2	Adjustment of Awards upon the Occurrence of Certain Events .

(a)

In General . If the Shares, as currently constituted, are changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation (whether because of a merger, consolidation, recapitalization, reclassification, split, reverse split, combination of shares, or otherwise, but not including a capital infusion from any source) or if the number of Shares is increased through the payment of a stock dividend, then the Committee shall substitute for or add to each Share underlying an Award the number and kind of shares of stock or other securities into which each outstanding Share was changed, for which each such Share was exchanged, or to which each such Share is entitled, as the case may be, which shares or other securities shall be subject to the same terms and conditions as the underlying Award. Any such adjustment in an outstanding Stock Option or Stock Appreciation Right shall be made with a corresponding adjustment in the Exercise Price for each Share or other unit of any

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security covered by such Stock Option or Stock Appreciation Right but without change in the aggregate purchase price applicable to the unexercised portion of such Stock Option.


(b)	Reciprocal Transactions . The Committee may, but shall not be obligated to, make an appropriate and proportionate adjustment to an Award or to the Exercise Price of any outstanding Award, and/or grant an additional Award to the holder of any outstanding Award, to compensate for the diminution in the intrinsic value of the Shares resulting from any reciprocal transaction.

(c)

Certain Unusual or Nonrecurring Events . In recognition of unusual or nonrecurring events affecting the Company or its financial statements, or in recognition of changes in applicable laws, regulations, or accounting principles, and, whenever the Committee determines that adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee may, using reasonable care, make adjustments in the terms and conditions of, and the criteria included in, Awards. In no event will the Committee, unless otherwise approved by shareholders, be permitted (i) to reduce the Exercise Price of any outstanding Stock Option or Stock Appreciation Right, (ii) cancel a Stock Option or Stock Appreciation Right in exchange for cash or other Awards (except as provided in Section 15.4), (iii) exchange or replace an outstanding Stock Option or Stock Appreciation Right with a new Stock Option or Stock Appreciation Right with a lower Exercise Price, or (iv) take any other action that would be a "repricing" of Stock Options or Stock Appreciation Rights.


(d)	Notice . The Committee shall give notice of any adjustment to each Participant who holds an Award that has been adjusted and the adjustment (whether or not such notice is given) shall be effective and binding for all Plan purposes.


(e)	Section 409A . Notwithstanding any provision herein to the contrary, no adjustment shall be made under this Section 15.2 to the extent it would give rise to adverse tax consequences under Section 409A.


15.3	Fractional Shares . Fractional Shares, whether resulting from any adjustment in Awards pursuant to Section 15.2 or otherwise, may be settled in cash or otherwise as the Committee determines.


15.4	Change in Control .


(a)	If, within twelve months following a Change in Control, (i) a Participant is terminated by the Company or an employing Affiliate (that is not a Joint Venture) without Cause or (ii) such Participant resigns from the Company or an employing Affiliate (that is not a Joint Venture) for Good Reason, all then outstanding Awards shall become fully vested.

(b)

Any Award that has not been fully exercised before the date of a Change in Control may be settled or otherwise terminated on such date in the discretion of the Committee, unless a provision has been made in writing in connection with such transaction for the assumption of all Awards theretofore granted, or the substitution for such Awards of awards to acquire the stock of the surviving, resulting or acquiring corporation, with any adjustments as the Committee determines appropriate, in which event the Awards

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theretofore granted shall continue in the manner and under the terms so provided. Notwithstanding anything in the Plan to the contrary, any underwater Award that has not been fully exercised, and any Award that the Committee determines cannot become vested, before the date of consummation of the Change in Control may be canceled without consideration in the discretion of the Committee.


15.5	Tax Withholding . The Company shall have the right to deduct or withhold, or require a Participant to remit to the Company, an amount (either in cash or Shares) sufficient to satisfy any Withholding Tax.

SECTION 16

Miscellaneous Provisions


16.1	Successors . All obligations of the Company under the Plan or any Terms and Conditions shall be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the Company’s stock, or a merger or consolidation, or otherwise.


16.2	Legal Construction .


(a)	Number . Except where otherwise indicated by the context, any plural term used in the Plan includes the singular and any singular term includes the plural.


(b)	Severability . If any provision of the Plan is held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.


16.3	Business Day . In the event the day prescribed for the performance of any act under the Plan, or deadline by which such act must be performed, shall fall on a day other than a Business Day, such day or deadline shall be extended until the close of business on the next succeeding Business Day.


16.4	Requirements of Law . The granting of Awards, the issuance of Shares and the payment of cash under the Plan shall be subject to all applicable laws, rules and regulations, and to any approvals by governmental agencies or national securities exchanges as may be required.


16.5	Rights of a Shareholder . A Participant shall not be, nor shall a Participant have any of the rights and privileges of, a shareholder until certificates for the underlying Shares have been issued or the underlying Shares have been registered as a book-entry in the name of the Participant.


16.6	Securities Law Compliance .

(a)

As to any individual who is, on the relevant date, an officer, director or greater than 10% percent beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or any successor rule. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee.

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(b)

To the extent the Committee deems it necessary, appropriate or desirable to comply with state securities laws or practice and to further the purposes of the Plan, the Committee may, without amending the Plan, (i) establish rules applicable to Awards granted to Participants, including rules that differ from those set forth in the Plan, and (ii) grant Awards to such Participants in accordance with those rules that would require the application of the securities laws of any state.

16.7

Unfunded Status of the Plan . The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments or deliveries of Shares not yet made to a Participant by the Company, the Participant’s rights are no greater than those of a general creditor of the Company. The Committee may authorize the establishment of trusts or other arrangements to meet the obligations created under the Plan, so long as the arrangement does not cause the Plan to lose its legal status as an unfunded plan.

16.8

Non-U.S. Based Participant . Notwithstanding any other provision of the Plan to the contrary, the Committee may make Awards to Participants who are not citizens or residents of the United States, or to Participants outside the United States, on terms and conditions that are different from those specified in the Plan as may, in the Committee’s judgment, be necessary or desirable to foster and promote achievement of the Plan’s purposes. In furtherance of such purposes, the Committee may, without amending the Plan, establish or modify rules, procedures and subplans as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company operates or has employees.


16.9	Governing Law . To the extent not preempted by Federal law, the Plan and all agreements hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to its conflicts of law principles that would require the application of the law of any other jurisdiction.

16.10

Section 162(m). The Plan is intended to be administered, interpreted and construed so that Awards remain tax deductible to the Company and unlimited by Section 162(m), which restricts under certain circumstances the Federal income tax deduction for compensation paid by a public company to Executive Officers in excess of $1 million per year. As of the Plan’s effective date, the exemption is based on Treasury Regulation Section 1.162-27(f), which generally exempts from the application of Section 162(m) compensation paid pursuant to a plan that existed before a company becomes publicly held. Under such Treasury Regulation, this exemption is available to the Plan with respect to certain Awards for the duration of the period that lasts until the earlier of the expiration or material modification of the Plan or the first meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Company first becomes subject to the reporting obligations of Section 12 of the Exchange Act. To the extent that the Committee determines that the exemption described in this Section 16.10 is no longer available with respect to an Award that would otherwise be intended to satisfy the Performance-Based Exception, such Award shall be contingent upon shareholder approval of the Plan and related Award in accordance with Section 162(m).


16.11	Recoupment . Notwithstanding any provision in the Plan to the contrary, Awards granted or paid under the Plan will be subject to recoupment by the Company pursuant to any “clawback” or similar compensation recoupment policy that may be established by the Company.

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Exhibit 10.57

September 17, 2015

Ralph Macchio

24 Cherokee Court

Sparta, NJ 07871

Dear Ralph:

This letter (the “ Amendment ”) amends the agreement dated July 21, 2014, as amended by letter dated January 21, 2015, (the “ Agreement ”) between you and Coty Inc. (the “ Company ” and, collectively with its affiliates, “ Coty ”). The parties agree as follows:


1.	Effective Date . This Amendment will be effective beginning on the date you have executed the Amendment and delivered it to the Company and it has become irrevocable pursuant to paragraph 10.


2.	Scheduled Separation Date . Paragraph 2 of the Agreement is amended by replacing December 31, 2015 with December 31, 2016.


3.	FY15 APP Bonus . Paragraph 5(b) of the Agreement is replaced in its entirety by the following:

(b)

FY 15 APP Bonus . You will be eligible to earn for each of the fiscal year ending June 30, 2015 (“ FY15 ”) a bonus (“ FY15 Bonus ”) under the Coty Inc. Annual Performance Plan (“ APP Plan ”) based on the Company’s financial performance and your personal performance objectives for FY15, as previously set by the Company. The evaluation of your personal performance objectives is at the sole discretion of the Company, in accordance with prior evaluation criteria. The FY15 Bonus will be paid at the same time and be subject to the same plan guidelines as for active employees.


4.	Retirement Treatment . Paragraph 6(a) of the Agreement is amended by substituting “December 31, 2016” for “December 31, 2015”.


5.	FY 16 Bonus . Paragraph 6(e) of the Agreement is replaced in its entirety by the following:

(e)

FY16 Bonus . Provided you remain employed through June 30, 2016, you will be eligible to earn for the fiscal year ending June 30, 2016 (“ FY16 ”) a bonus under the APP Plan (“ FY16 Bonus ”). If your employment terminates on or after December 31, 2015 but prior to June 30, 2016, you will eligible to earn a prorated FY16 Bonus for the time you were employed. The FY16 Bonus will be calculated in the same manner as the FY15 APP Bonus.


6.	FY 17 Bonus . The following new paragraph 6(f) is added to the Agreement:


(f)	FY17 Bonus . Provided you remain reemployed through December 31, 2016, you will be eligible to earn for the fiscal year ending June 30, 2017 (“ FY17 ”) a bonus under the APP Plan (“ FY17 Bonus ”). The FY17 Bonus shall be prorated to December 31, 2016 and will be calculated at a factor of one (1). The FY17 Bonus will be paid no later than December 31, 2016.


7.	No Reliance . You acknowledge that the Company has made no promises, commitments or representations to you other than those contained in this Amendment and that you have not relied upon any statement or representation made by the Company with respect to the basis or effect of this Amendment.


8.	Consultation with Counsel . You are hereby advised to consult and have had the opportunity to consult with an attorney before signing this Amendment.


9.	Opportunity to Consider . You acknowledge that you were given 21 days in which to review and consider this Amendment, and that if you executed it before the end of the 21-day period such early execution was completely voluntary.


10.	Opportunity to Revoke . You acknowledge that for a period of seven days after you sign this Amendment you have the right to revoke it by providing notice in writing to the Company’s General Counsel, by hand delivery, certified mail or overnight courier. This Amendment will not become effective and enforceable until after the expiration of the seven-day revocation period.

11.

Confirmation of Agreement . Except as expressly modified by this Amendment, the Agreement is confirmed and shall continue to be and remain in full force and effect in accordance with its terms. Any existing or future reference to the Agreement and any document or instrument delivered in connection with the Agreement shall be deemed to be a reference to the Agreement as modified by this Amendment. To the extent that anything in this Amendment is inconsistent with anything in the Agreement, this Amendment shall control.


12.	Counterparts . This Amendment may be executed in counterparts, each of which will be an original, and all of which will constitute one and the same instrument.


13.	Governing Law . This Amendment is governed by the laws of the State of New York, without regard to its conflict of law provisions.

If this Amendment is acceptable to you, please indicate your agreement by signing and dating below.

Sincerely,

COTY INC.



/s/Jules Kaufman
By:	Jules Kaufman
Senior Vice President and General Counsel

I acknowledge that I have read this Amendment, and that I understand and voluntarily accept its terms.

THIS IS A LEGALLY ENFORCEABLE DOCUMENT.



/s/Ralph Macchio			10/1/2015
Ralph Macchio			Date

Exhibit 10.58

OPEN-ENDED EMPLOYMENT AGREEMENT

BETWEEN THE UNDERSIGNED:

Coty SAS , simplified joint stock company with capital of 22,905,465 euros, registered with the Commerce and Companies Register of Paris under number 394 710 552, whose registered office is at 14, rue du 4 septembre - 75002 Paris, represented by Mr. Géraud-Marie Lacassagne acting as President (hereinafter referred to as the “ Company ”)

Party of the first part,

And

Mr. Sébastien Froidefond, of French nationality, born April 12, 1968, residing [Paris, 282 bd raspail, 75014] and whose social security number is XXXXXXXXXXX (hereinafter referred to as the " Employee ")

Party of the second part,

The company Coty SAS and Mr. Froidefond are hereinafter collectively referred to as the " Parties ."

IT HAS BEEN AGREED AS FOLLOWS

The declaration prior to the hiring was made with the URSSAF of Paris.

The Employee may contact this organization to exercise his right of access and opposition provided under Act No. 78-17 of January 6, 1978.

ARTICLE 1- CONDITIONS OF ENGAGEMENT

The Company wishes to engage the services of the Employee, who accepts the position offered to him by the means provided as a part of this open-ended agreement (hereinafter the “ Agreement ”).

The provisions of the Agreement constitute the entire agreement between the Company and the Employee regarding the subject of the Agreement.

Accordingly, the provisions of the Agreement supersede and automatically cancel those contained in any document, correspondence or written or oral communication exchanged between the Parties or between Mr. Froidefond and any other company from Coty Group (hereinafter the " Group ") before signing the Agreement and relating to the subject of the latter.



[initials]	[initials]

For the purposes of this Agreement, the term “Group” means any company and its subsidiaries and affiliated companies controlling, directly or indirectly, Coty SAS, and any company and its subsidiaries and affiliated companies controlled, directly or indirectly, by Coty SAS.

The Company engages the Employee no later than September 1, 2015, subject to the results of the recruitment medical examinations.

The Employee who accepts this engagement declares that he does not have ties to any other company except the company n-Spire SAS in which he holds office as President without executive power and he declares that he has left his previous employment free of any commitment, in particular, commitment to non-competition.

The Agreement is governed by the legislative and regulatory provisions in force and by those resulting from the collective agreement applicable to the Company, currently the Convention Collective de la Chimie [Chemical Industry Collective Agreement] (hereinafter the "Collective Agreement"), and by the particular conditions indicated herein. It is specified that the reference to the applicable collective agreement applicable to this Agreement is indicative and shall not cause the benefits provided by it to be included in this Agreement.

ARTICLE 2 - FUNCTION AND CLASSIFICATION

The Employee is hired as Director of Human Resources for the Group.

Given the classification of the Collective Agreement, the functions of the Employee correspond to the status of senior manager, group V coefficient 880.

As part of his duties, the Employee will be placed under the authority and will act under the instructions of the President of the Company or any delegate. The Employee will sit on the Company's Management Committee (“CODIR”).

The duties of the Employee are by nature always evolving and can be adapted according to the operating needs of the Company. If necessary, the Employee undertakes to perform any training that the company would request.

ARTICLE 3: TRIAL PERIOD

This Agreement is concluded for an indefinite period without a trial period.

ARTICLE 4: DURATION OF WORK

The Employee expressly acknowledges that, given his level of responsibility within the Company, his high level of compensation and management duties involving total independence with regard to the organization of his work and broad autonomy in judgment,



[initials]	[initials]

initiative and decision making, the Employee is considered a senior officer within the meaning of French law and the provisions of the Collective Agreement.

Because of this status and the provisions of the law, the Employee expressly acknowledges not being subject to any statutory provision or collective agreement provision related to work hours.

ARTICLE 5: WORK LOCATION

For information purposes, the Employee shall perform his functions primarily at the Company's registered office, currently located at 14 rue du 4 septembre 75002 Paris.

Additionally, the nature of his duties will require the Employee to make frequent business trips in France and abroad. Travel costs that are necessary for the proper completion of the Employee's mission shall be reimbursed in accordance with the provisions of Article 8 below.

The Employee's work location may be moved to London before September 1, 2016, to which the Employee expressly agrees. In this event, an employment agreement under English law would be concluded with the host entity, to which the Employee expressly agrees.

If the Employee's work location must be moved to London, the Employee would receive a benefit to cover the costs of (i) education, (ii) health insurance and (iii) relocation under the Company's internal regulations.

ARTICLE 6: COMPENSATION

6.1 Gross fixed annual flat-rate compensation

In compensation of his duties, the Employee shall receive a gross annual flat-rate salary of 300,000 (three hundred thousand) euros payable in 12 equal monthly payments.

If the Employee is to be based in London before September 1, 2016, the Employee would receive, as of the date of his transfer to London, a gross annual flat-rate salary of 270,000 (two hundred seventy thousand) Pounds payable in 12 equal monthly payments, to which the Employee expressly agrees.

6.2 Gross annual variable compensation

In addition to the fixed compensation indicated above, the Employee will be entitled to payment of variable target-based compensation of 60% of his gross fixed annual flat-rate compensation paid under the terms of Article 6.1 above. The payment of this variable compensation is conditional on the presence of the Employee on the date of payment.

The objectives, qualitative and/or quantitative, as well as the calculation methods serving as the basis for determining the variable compensation will be decided unilaterally by the Company.



[initials]	[initials]

ARTICLE 7 - ELIGIBILITY FOR BONUS SHARE PLAN

Note, for information purposes, that the Employee will be eligible for bonus share plans currently in force within the Company and may, under pre-conditions of those plans, be awarded bonus shares for an annual value of 600,000 dollars after decision of the Board of Directors of the Company and its Compensation Committee.

ARTICLE 8 – COMPANY CAR

For use in fulfilling his duties, the Company will provide the Employee with a company car under the terms of the policy in force within the Company.

In this respect, the Employee confirms the possession of a valid driver's license and agrees to immediately inform the Company of any changes regarding his license.

The Employee will be authorized to use the company car for personal use. Any violation or fine the Employee must pay due to violation of the traffic laws as part of his personal or business use of the vehicle will not be paid by the Company.

The use of a company car for personal needs is a benefit in kind which will have to be accounted for with regard to taxes for calculating social contributions. The Company agrees to apply the formula for assessing the most favorable in kind benefit to the Employee, in compliance with regulations in force.

In the event of an accident, the Employee must within 48 hours inform the Company and the insurance company, stating the circumstances of the accident.

The car made available to the Employee must be returned to the Company in the event of breach of the Agreement for any reason whatsoever, upon the effective termination of the Agreement, or before, with the consent of the Employee.

The Company reserves the right to later modify the terms of use of the company car.

ARTICLE 9: BUSINESS EXPENSES

The Employee agrees to obtain, in their name, an American Express credit card which will be used for the payment of expenses incurred during the performance of his duties. The Employee will be responsible for monthly payments resulting from the use of this card, and will receive, subject to producing documentation of expenses, reimbursement of business expenses



[initials]	[initials]

incurred, in accordance with the travel and reimbursement policy in effect within the Company.

ARTICLE 10 – PAID LEAVE

The Employee shall receive a number of days of paid vacation determined under the legal and contractual provisions in effect within the Group, the length of the leave period being determined by agreement between the Employee and the supervisor taking into account the needs of the business.

No leave will be authorized to carry over to the next year without written consent of the Company.

ARTICLE 11 - ILLNESS - INCAPACITY - ACCIDENTS

In case of illness, accident or physical incapacity, the Employee must notify the Company on the same day, unless there is a major obstacle, and shall document it by producing a medical certificate within 48 hours.

If an extended amount of time will be taken off from work, the Employee shall at that time submit a medical certificate justifying the extension.

ARTICLE 12 - PERSONAL DATA

The Employee accepts that the Company collects, stores and processes personal data that the Employee may provide the Company and associate it with his duties under this Agreement including, but not limited to, administering and updating personal records, payment and revaluation of salaries and other compensation or benefits, for evaluation and performance interviews, or to keep record of any absences.

The Employee acknowledges and accepts that the Company may, within the framework of its responsibilities and obligations as an employer, be required to disclose personal information about the Employee after the end of this Agreement. The Employee acknowledges that this does not affect his rights under Act No. 78-17 of January 6, 1978.

ARTICLE 13 - OBLIGATIONS

The Employee agrees to comply with Management's instructions regarding conditions of performance of work and to comply with the rules governing its internal operation, particularly the Company's Internal Regulations.

The Employee also agrees to promptly notify the Company of any changes in the information reported during engagement (address, family status, etc.).



[initials]	[initials]

ARTICLE 14 - CONFIDENTIALITY

The Employee shall have, independent of his general obligation of discretion and professional confidentiality, a duty of absolute discretion with regard to all Confidential Information (as defined below) with which he is likely to come in contact in the course of his duties or association with the Company.

Accordingly, as of the effective date of this Agreement and after the end of the Agreement, the Employee agrees not to use or disclose to third parties any Confidential Information except (i) in the performance of his duties under this Agreement, (ii) if it is otherwise required by law, regulation or legal process, or (iii) if requested by an authority, agency or government institution.

For the purposes of this Agreement, the term “Confidential Information” means any proprietary or confidential information relating to the Company and the Group, customers of the Company or the Group, or any other party with whom the Company or the Group has business relationships or could provide the Company and/or the Group with a competitive advantage, and includes, but is not limited to, trade secrets; inventions (patentable or not); technological or business processes; plans related to the business, products, strategy, marketing; negotiation strategies; sales or other forecasts; financial information; customer lists or other material protected as intellectual property; information on compensation and benefits; public data compilations that become confidential and proprietary because of their compilation by the Company or one of the companies of the Group for use as part of its business; and records (including electronic records, video or audio) and oral communications that include Confidential Information. The Employee must also comply with any duty of confidentiality to which the Company may be bound with regard to third parties that the Employee knows or should know, whatever the source. The information cannot be considered Confidential Information if it is or becomes generally available to the public by means other than unauthorized disclosure, an action or decision on the part of the Employee or disclosure by any other person who directly or indirectly receives such information through the Employee. Considering the value attached to the Confidential Information, the Company takes steps to ensure its privacy and conserve its secrecy. Confidential Information may be copied, disclosed or used by the Employee in connection with the performance of his duties within the limits of what is necessary for the business of the Company and, where applicable, in compliance with agreements associating the Company with third parties. If the communication of information covered by this duty of confidentiality is required from the Employee, whether or not the disclosure is part of a judicial procedure, the Employee must inform the Company and obtain its written consent prior to any disclosure.



[initials]	[initials]

ARTICLE 15 - EXCLUSIVITY

During the execution of this Agreement, the Employee:


-	must devote, throughout his work, all his activity and all his care to the Company, and is therefore prohibited, except by prior written agreement between the parties, from conducting another professional activity, either on his own behalf or that of third parties;


-	is prohibited, except by prior written agreement between the parties, from pursuing an interest directly or indirectly, in any manner and for any reason whatsoever (as employee, self-employed, sole proprietorship, partner, corporate officer, or sponsor, etc.) in any business created or being created that could compete with the Company.

ARTICLE 16 - NON SOLICITATION

In the event of termination of this Agreement for any reason whatsoever, for a period of 24 months from the date of his departure from the Company, the Employee is prohibited, either on its own behalf or on behalf of third parties, be it a natural person or a legal person, from directly or indirectly:


-	soliciting or attempting to divert, from the Company or the Group, customers or any natural or legal person in business with the Company (provider or other) or the Group, with which the Employee was in contact during the 12 months preceding the date the Agreement was terminated;

offering a job to anyone who was, on the date on which this Agreement was terminated or during the preceding 12 months, an intern, an employee, a consultant or a corporate officer of the Company or of any company that is or will be affiliated or associated with it, or attempting by any means whatsoever, directly or indirectly, to persuade or induce a person to accept another job or leave the Company or the Group.

ARTICLE 17 -NON COMPETITION

Given the nature and importance of the duties performed by the Employee within the Company, the information and knowledge that he may acquire now or in the future at the Company, through training and experience, but also the particularly competitive nature of the market in which the Company is evolving, the Employee is prohibited, except with prior written consent of the Company, in the event of termination of this employment agreement by either party for any reason whatsoever:


-	From acquiring, directly or indirectly, a stake in a company conducting a business that competes with the Company or one of the companies in the Group;



[initials]	[initials]


-	From entering into the service, including as an employee, corporate officer or consultant, of a company competing directly or indirectly with the business, services or products of the Company or one of the companies of the Group;


-	From creating or undertaking, directly or indirectly, through an intermediary, a business of the same or similar nature or collaborate directly or indirectly, including as an employee, corporate officer or consultant in such business, and more generally, any activity relating to the business sector of the Company.


-	From soliciting or approaching, directly or indirectly, business partners of the Company or the companies in the Group for purposes other than the development of the Company, including for the purpose of encouraging them to end their business relationship with the Company or one of the companies of the Group.

For the purposes of this clause, a competing business activity is defined as any activity in the perfume, makeup, cosmetics or hair products industries.

This competition ban shall apply for a period of 24 months from the date of effective departure of the Employee and is limited to the following geographical areas: Europe and the United States.

In consideration of this non-compete obligation, the employee will receive a monthly compensation of an amount equal to 2/3 of his gross monthly salary, calculated on the basis of his compensation, as defined in Article 6.1 of this Agreement, received during the 12 months preceding the notification of termination.

In case of violation of this clause, the Employee shall pay the Company a sum fixed by mutual agreement at one year's gross salary calculated on the basis of his compensation (defined in Articles 6.1 and 6.2 of this agreement) received during the 12 months preceding the notification of termination. The Company will be released from its commitment to pay financial compensation.

The payment of this indemnity by the Employee shall not deprive the company of its right to sue for compensation for loss actually suffered and to order under penalty the cessation of competitive activity and the repayment of amounts paid by the Company to the Employee under this non-compete clause.

In accordance with the provisions of the Collective Agreement, the Company may unilaterally remove the non-compete clause during the performance of the employment agreement, it being specified that, under the terms of the Collective Agreement, the deletion will take effect only if the Employee is not laid off within one year after the notification of the deletion.

In compliance with the provisions of the Collective Agreement, if the Company breaks this Agreement for any reason whatsoever, it may, with the agreement of the person concerned, release him in writing from his non-compete obligation at the time of the break. In this case, the previously agreed



[initials]	[initials]

monthly compensation will be paid to the Employee for a period of 3 months from the effective termination of his duties within the Company.

In accordance with the provisions of the Collective Agreement, if the Employee breaks this Agreement, he must remind his employer explicitly in writing of this non-compete clause. The Company will then have a period of three weeks to release itself from paying the non-compete compensation provided for previously by releasing the Employee in writing of his non-compete obligation. In this case, the monthly compensation previously provided for will be paid to the Employee for a period of three months from the effective termination of his duties within the Company.

ARTICLE 18 – RETURN OF EQUIPMENT

During the execution or at the end of this Agreement, for any reason whatsoever, the Employee shall return, upon request of the Company, in particular, all documents, drawings, notes, memoranda, floppy disks, manuals, reports, specifications, tools, formulas and all other property given to him as part of the performance of his duties and any media on which the Employee stored or recorded data and information about the Company or one of the companies of the Group.

The Employee acknowledges that the documents, information and assets mentioned above are the exclusive property of the Company, and that he is not granted any right of retention.

ARTICLE 19 - SOCIAL BENEFITS

The Employee will be affiliated with the Company's customary pension fund.

He will receive benefits from the mandatory collective scheme for welfare and healthcare costs. The share of contributions from the Employee will be deducted from his pay.

He will receive the benefits granted to senior officers at the same level as the Group.

***

Executed in Paris on August 24, 2015

In two copies, one for each party



/s/ Géraud-Marie Lacassagne		/s/Sébastien Froidefond
For the company Coty SAS		Mr. Sébastien Froidefond
Géraud-Marie Lacassagne, President

Exhibit 21.1

Coty Inc. Subsidiaries

As of September 30, 2015



Subsidiary Name	Jurisdiction of Organization
Coty Argentina S.A	Argentina
Coty Australia Pty. Ltd.	Australia
Coty Austria GmbH, wien	Austria
Bourjois S.A.	Belgium
Coty Benelux S.A.	Belgium
Coty Brasil Industria e Comercio de Cosmeticos Ltda.	Brazil
Coty Brazil Retail Cosmeticos S.A.	Brazil
Lancaster do Brasil Cosmeticos Ltda.	Brazil
StarAsia Distribution (Cambodia) Ltd.	Cambodia
Coty Canada Inc.	Canada
TJoy Holdings Co. Ltd.	Cayman
Coty Cosmeticos Chile Limitada	Chile
Coty China Holding Limited	China
Coty International Trade (Shanghai) Co. Ltd.	China
Coty Prestige Shanghai Ltd.	China
Coty R&D (Suzhou) Co. Ltd.	China
Nanjing TJoy Biochemical Co. Ltd.	China
Nanjing Yanting Trade Co. Ltd.	China
StarAsia Distributions Hong Kong Limited	China
Suzhou Ganon Trading Co., Ltd.	China
Suzhou Jiahua Biochemistry Co.	China
Coty Colombia Ltda.	Colombia
Coty Ceska Republika, k.s.	Czech Republic
Bourjois S.A.S.	France
Coty France S.A.S.	France
Coty S.A.S.	France
Else France S.A.S.	France
Fragrance Production S.A.S.	France
Coty Germany GmbH	Germany
Coty Services and Logistics GmbH	Germany
Coty Hellas S.A.	Greece
Bourjois Limited (HK)	Hong Kong
Chi Chun Industrial Co. Ltd.	Hong Kong
Coty Hong Kong. Ltd.	Hong Kong
Coty Prestige Hong Kong Ltd.	Hong Kong
Coty Prestige Shanghai (HK) Ltd.	Hong Kong
Coty Prestige Southeast Asia (HK) Limited	Hong Kong



Ming-De Investment Co. Ltd.	Hong Kong
Super Globe Holdings Ltd.	Hong Kong
Coty Hungary Kft.	Hungary
Coty India Beauty and Fragrance Products Private Ltd.	India
PT Coty Prestige Southeast Asia Indonesia	Indonesia
PT StarAsia Distributions	Indonesia
Coty Ireland Ltd.	Ireland
Coty Italia S.p.A.	Italy
Coty Prestige Japan KK	Japan
OPI Japan KK	Japan
Coty Prestige Southeast Asia (M) SDN. BHD.	Malaysia
StarAsia (Malaysia) Sdn Bhd.	Malaysia
Coty Mexico S.A. de C.V.	Mexico
Coty Lancaster S.A.M.	Monaco
Bourjois B.V.	Netherlands
Coty B.V.	Netherlands
Coty Benelux B.V.	Netherlands
Coty Investment B.V.	Netherlands
Lancaster B.V.	Netherlands
Coty Prestige Southeast Asia Philippines	Philippines
Coty Polska Sp z.o.o.	Poland
Coty Puerto Rico Inc.	Puerto Rico
Coty Cosmetics Romania S.r.l.	Romania
Bourjois Paris LLC	Russia
Coty Russia ZAO	Russia
Coty Beauty LLC	Russia
Coty Arabia Trading Company	Saudi Arabia
Coty Asia Pte. Ltd.	Singapore
Coty Prestige Southeast Asia Pte. Ltd.	Singapore
StarAsia Group Pte. Ltd.	Singapore
StarAsia Manufacturing Pte. Ltd.	Singapore
StarAsia Singapore Pte. Ltd.	Singapore
Coty Slovenska Republika s.r.o.	Slovak Republic
Coty Beauty South Africa (Pty) Ltd.	South Africa
Coty South Africa (PTY) Ltd.	South Africa
Coty Korea Ltd.	South Korea
Bourjois Espana S.A.	Spain
Coty Spain S.L.	Spain
Bourjois S.a.r.l.	Switzerland
Coty (Schweiz) AG	Switzerland
Coty Geneva S.A. Versoix	Switzerland
Coty Prestige (Taiwan) Ltd.	Taiwan
StarAsia Taiwan Co., Ltd.	Taiwan



Coty Prestige Southeast Asia (Thailand) Co. Ltd.	Thailand
Coty Distribution Emirates L.L.C.	United Arab Emirates
Coty Middle East FZCO	United Arab Emirates
Beauty International Ltd.	United Kingdom
Bourjois Limited	United Kingdom
Coty Brands Group Limited	United Kingdom
Coty Export U.K. Ltd.	United Kingdom
Coty Manufacturing UK Ltd.	United Kingdom
Coty Services U.K. Ltd.	United Kingdom
Coty UK Ltd.	United Kingdom
Del Laboratories (U.K.) Limited	United Kingdom
India Projects Ltd.	United Kingdom
Lady Manhattan Ltd.	United Kingdom
Lancaster Group, Ltd.	United Kingdom
Lena White Limited	United Kingdom
Rimmel International Ltd.	United Kingdom
Philosophy Cosmetics, Inc.	United States – AZ
Philosophy, Inc.	United States – AZ
Biotech Research Labs, Inc.	United States – DE
Calvin Klein Cosmetic Corporation	United States – DE
Coty Prestige Travel Retail and Export LLC	United States – DE
Coty US LLC	United States – DE
DLI International Holding II Corp.	United States – DE
Green Acquisition Sub Inc.	United States – DE
Philosophy Beauty Consulting LLC	United States – DE
Rimmel Inc.	United States – DE
DLI International Holding I LLC	United States – DE
O P I Products Inc.	United States – DE
Philosophy Acquisition Company, Inc.	United States – DE
Philosophy Mezzanine Corp.	United States – DE
Coty Beauty Vietnam Company Limited	Vietnam

Exhibit 31.1

Certification

I, Lambertus J.H. Becht, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Coty Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	November 5, 2015	/s/Lambertus J.H. Becht
		Lambertus J.H. Becht
		Interim Chief Executive Officer

Exhibit 31.2

Certification

I, Patrice de Talhouët, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Coty Inc.;

d) Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	November 5, 2015	/s/ Patrice de Talhouët
		Patrice de Talhouët
		Chief Financial Officer

Exhibit 32.1

Certification

Pursuant to Rule 13a-14(b) or

Rule 15d-14(b) and 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002)

Pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002), the undersigned officer of Coty Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (the “Report”) of the Company fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m or 78o(d)), and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:	November 5, 2015	/s/Lambertus J.H. Becht
		Lambertus J.H. Becht
		Interim Chief Executive Officer

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and for no other purpose.

Exhibit 32.2

Certification

Pursuant to Rule 13a-14(b) or

Rule 15d-14(b) and 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002)



Dated:	November 5, 2015	/s/ Patrice de Talhouët
		Patrice de Talhouët
		Chief Financial Officer