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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER
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Delaware
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13-3823358
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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350 Fifth Avenue, New York, NY
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10118
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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Three Months Ended
September 30, |
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2016
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2015
|
||||
Net revenues
|
$
|
1,080.2
|
|
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$
|
1,112.3
|
|
Cost of sales
|
444.8
|
|
|
443.7
|
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||
Gross profit
|
635.4
|
|
|
668.6
|
|
||
Selling, general and administrative expenses
|
478.9
|
|
|
484.3
|
|
||
Amortization expense
|
21.2
|
|
|
19.2
|
|
||
Restructuring costs
|
7.4
|
|
|
62.1
|
|
||
Acquisition-related costs
|
81.5
|
|
|
15.8
|
|
||
Asset impairment charges
|
—
|
|
|
5.5
|
|
||
Operating income
|
46.4
|
|
|
81.7
|
|
||
Interest expense, net
|
40.4
|
|
|
16.0
|
|
||
Other expense (income), net
|
1.3
|
|
|
(0.3
|
)
|
||
Income before income taxes
|
4.7
|
|
|
66.0
|
|
||
Benefit for income taxes
|
(5.1
|
)
|
|
(67.1
|
)
|
||
Net income
|
9.8
|
|
|
133.1
|
|
||
Net income attributable to noncontrolling interests
|
8.2
|
|
|
4.4
|
|
||
Net income attributable to redeemable noncontrolling interests
|
1.6
|
|
|
3.0
|
|
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Net income attributable to Coty Inc.
|
$
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—
|
|
|
$
|
125.7
|
|
Net income attributable to Coty Inc. per common share:
|
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|
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Basic
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$
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—
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$
|
0.35
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Diluted
|
—
|
|
|
0.34
|
|
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Weighted-average common shares outstanding:
|
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|
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Basic
|
336.3
|
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|
360.0
|
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Diluted
|
336.3
|
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369.9
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||
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Cash dividend declared per common share
|
$
|
0.275
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$
|
0.250
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Three Months Ended
September 30, |
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2016
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2015
|
||||
Net income
|
$
|
9.8
|
|
|
$
|
133.1
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||
Foreign currency translation adjustment
|
(5.9
|
)
|
|
(17.2
|
)
|
||
Net unrealized derivative gains on cash flow hedges, net of taxes of $0.1 and $(0.8) during the three months ended, respectively
|
8.5
|
|
|
4.5
|
|
||
Pension and other post-employment benefits adjustment, net of tax of $(0.8) and nil during the three months ended, respectively
|
5.2
|
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|
0.2
|
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Total other comprehensive income (loss), net of tax
|
7.8
|
|
|
(12.5
|
)
|
||
Comprehensive income
|
17.6
|
|
|
120.6
|
|
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Comprehensive income attributable to noncontrolling interests:
|
|
|
|
|
|
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Net income
|
8.2
|
|
|
4.4
|
|
||
Foreign currency translation adjustment
|
—
|
|
|
(0.5
|
)
|
||
Total comprehensive income attributable to noncontrolling interests
|
8.2
|
|
|
3.9
|
|
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Comprehensive income attributable to redeemable noncontrolling interests:
|
|
||||||
Net income
|
1.6
|
|
|
3.0
|
|
||
Foreign currency translation adjustment
|
—
|
|
|
0.1
|
|
||
Total comprehensive income attributable to redeemable noncontrolling interests
|
1.6
|
|
|
3.1
|
|
||
Comprehensive income attributable to Coty Inc.
|
$
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7.8
|
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|
$
|
113.6
|
|
|
September 30,
2016 |
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June 30,
2016 |
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ASSETS
|
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Current assets:
|
|
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Cash and cash equivalents
|
$
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378.0
|
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|
$
|
372.4
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Trade receivables—less allowances of $37.8 and $35.2, respectively
|
768.5
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|
682.9
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Inventories
|
616.7
|
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|
565.8
|
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Prepaid expenses and other current assets
|
234.5
|
|
|
206.8
|
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Deferred income taxes
|
110.0
|
|
|
110.5
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Total current assets
|
2,107.7
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1,938.4
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Property and equipment, net
|
665.7
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|
638.6
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Goodwill
|
2,192.3
|
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|
2,212.7
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Other intangible assets, net
|
2,038.0
|
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|
2,050.1
|
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Deferred income taxes
|
14.6
|
|
|
15.7
|
|
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Other noncurrent assets
|
175.1
|
|
|
180.1
|
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TOTAL ASSETS
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$
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7,193.4
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$
|
7,035.6
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LIABILITIES AND EQUITY
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Current liabilities:
|
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Accounts payable
|
$
|
964.6
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$
|
921.4
|
|
Accrued expenses and other current liabilities
|
753.0
|
|
|
748.4
|
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Short-term debt and current portion of long-term debt
|
156.6
|
|
|
161.8
|
|
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Income and other taxes payable
|
4.3
|
|
|
18.7
|
|
||
Deferred income taxes
|
4.4
|
|
|
4.9
|
|
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Total current liabilities
|
1,882.9
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|
1,855.2
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Long-term debt, net
|
4,210.4
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|
3,936.4
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Pension and other post-employment benefits
|
228.0
|
|
|
230.6
|
|
||
Deferred income taxes
|
298.8
|
|
|
339.2
|
|
||
Other noncurrent liabilities
|
236.9
|
|
|
233.8
|
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Total liabilities
|
6,857.0
|
|
|
6,595.2
|
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COMMITMENTS AND CONTINGENCIES (Note 17)
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REDEEMABLE NONCONTROLLING INTERESTS
|
70.3
|
|
|
73.3
|
|
||
EQUITY:
|
|
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Preferred Stock, $0.01 par value; 20.0 shares authorized, 1.7 issued and outstanding, respectively, at September 30, 2016 and June 30, 2016
|
—
|
|
|
—
|
|
||
Class A Common Stock, $0.01 par value; 1,000.0 and 800.0 shares authorized, 401.4 and 138.7 issued, respectively, and 336.4 and 75.1 outstanding, respectively, at September 30, 2016 and June 30, 2016
|
4.1
|
|
|
1.4
|
|
||
Class B Common Stock, $0.01 par value; 0.0 and 262.0 shares authorized, 0.0 and 262.0 issued and outstanding, respectively, at September 30, 2016 and June 30, 2016
|
—
|
|
|
2.6
|
|
||
Additional paid-in capital
|
1,957.6
|
|
|
2,038.4
|
|
||
Accumulated deficit
|
(37.0
|
)
|
|
(37.0
|
)
|
||
Accumulated other comprehensive loss
|
(231.9
|
)
|
|
(239.7
|
)
|
||
Treasury stock—at cost, shares: 65.0 and 63.6 at September 30, 2016 and June 30, 2016, respectively
|
(1,441.8
|
)
|
|
(1,405.5
|
)
|
||
Total Coty Inc. stockholders’ equity
|
251.0
|
|
|
360.2
|
|
||
Noncontrolling interests
|
15.1
|
|
|
6.9
|
|
||
Total equity
|
266.1
|
|
|
367.1
|
|
||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
$
|
7,193.4
|
|
|
$
|
7,035.6
|
|
|
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, 2016
|
1.7
|
|
|
$
|
—
|
|
|
138.7
|
|
|
$
|
1.4
|
|
|
262.0
|
|
|
$
|
2.6
|
|
|
$
|
2,038.4
|
|
|
$
|
(37.0
|
)
|
|
$
|
(239.7
|
)
|
|
63.6
|
|
|
$
|
(1,405.5
|
)
|
|
$
|
360.2
|
|
|
$
|
6.9
|
|
|
$
|
367.1
|
|
|
$
|
73.3
|
|
Conversion of Class B to Class A Common Stock
|
|
|
|
|
|
|
262.0
|
|
|
2.6
|
|
|
(262.0
|
)
|
|
(2.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|||||||||||||||||
Purchase of Class A Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.4
|
|
|
(36.3
|
)
|
|
(36.3
|
)
|
|
|
|
(36.3
|
)
|
|
|
||||||||||||||||||||||
Exercise of employee stock options and restricted stock units and related tax benefits
|
|
|
|
|
0.7
|
|
|
0.1
|
|
|
|
|
|
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
6.2
|
|
|
|
|
6.2
|
|
|
|
||||||||||||||||||||
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
2.9
|
|
|
|
|
2.9
|
|
|
|
|||||||||||||||||||||||
Dividends ($0.275 per common share)
|
|
|
|
|
|
|
|
|
|
|
|
|
(93.3
|
)
|
|
|
|
|
|
|
|
|
|
(93.3
|
)
|
|
|
|
(93.3
|
)
|
|
|
|||||||||||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
8.2
|
|
|
8.2
|
|
|
1.6
|
|
|||||||||||||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.8
|
|
|
|
|
|
|
7.8
|
|
|
|
|
|
7.8
|
|
|
|
|
|||||||||||||||||||||
Distribution to noncontrolling interests, net
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
(1.1
|
)
|
|||||||||||||||||||||
Adjustment of redeemable noncontrolling interests to redemption value
|
|
|
|
|
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
|
|
|
|
|
|
3.5
|
|
|
|
|
3.5
|
|
|
(3.5
|
)
|
||||||||||||||||||||||
BALANCE—September 30, 2016
|
1.7
|
|
|
$
|
—
|
|
|
401.4
|
|
|
$
|
4.1
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
1,957.6
|
|
|
$
|
(37.0
|
)
|
|
$
|
(231.9
|
)
|
|
65.0
|
|
|
$
|
(1,441.8
|
)
|
|
$
|
251.0
|
|
|
$
|
15.1
|
|
|
$
|
266.1
|
|
|
$
|
70.3
|
|
|
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 share units
|
|
|
|
|
1.1
|
|
|
0.1
|
|
|
|
|
|
|
|
|
9.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.9
|
|
|
|
|
|
9.9
|
|
|
|
|
||||||||||||
Share-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9.4
|
|
|
|
|
|
9.4
|
|
|
|
|
||||||||||||
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12.1
|
)
|
|
|
|
|
|
|
|
(12.1
|
)
|
|
(0.5
|
)
|
|
(12.6
|
)
|
|
0.1
|
|
||||||||||||
Distribution to noncontrolling interests, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
||||||||||||
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
|
|
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
9.8
|
|
|
$
|
133.1
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
59.9
|
|
|
57.5
|
|
||
Asset impairment charges
|
—
|
|
|
5.5
|
|
||
Deferred income taxes
|
(6.9
|
)
|
|
(97.4
|
)
|
||
Provision for bad debts
|
2.5
|
|
|
0.8
|
|
||
Provision for pension and other post-employment benefits
|
6.5
|
|
|
3.1
|
|
||
Share-based compensation
|
3.1
|
|
|
9.5
|
|
||
Other
|
6.2
|
|
|
7.4
|
|
||
Change in operating assets and liabilities, net of effects from purchase of acquired companies:
|
|
|
|
|
|
||
Trade receivables
|
(86.9
|
)
|
|
(104.7
|
)
|
||
Inventories
|
(48.7
|
)
|
|
(34.1
|
)
|
||
Prepaid expenses and other current assets
|
(6.1
|
)
|
|
11.9
|
|
||
Accounts payable
|
60.2
|
|
|
43.3
|
|
||
Accrued expenses and other current liabilities
|
4.6
|
|
|
44.5
|
|
||
Tax accruals
|
(18.7
|
)
|
|
(10.2
|
)
|
||
Other noncurrent assets
|
5.5
|
|
|
2.8
|
|
||
Other noncurrent liabilities
|
(6.0
|
)
|
|
43.7
|
|
||
Net cash (used in) provided by operating activities
|
(15.0
|
)
|
|
116.7
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Capital expenditures
|
(86.8
|
)
|
|
(42.6
|
)
|
||
Additions to restricted cash
|
(25.0
|
)
|
|
—
|
|
||
Proceeds from sale of asset
|
—
|
|
|
0.1
|
|
||
Net cash used in investing activities
|
(111.8
|
)
|
|
(42.5
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from short-term debt, original maturity more than three months
|
3.2
|
|
|
9.2
|
|
||
Repayments of short-term debt, original maturity more than three months
|
(3.2
|
)
|
|
(5.9
|
)
|
||
Net (repayments) proceeds from short-term debt, original maturity less than three months
|
(4.8
|
)
|
|
10.7
|
|
||
Proceeds from revolving loan facilities
|
355.0
|
|
|
195.0
|
|
||
Repayments of revolving loan facilities
|
(70.0
|
)
|
|
(50.0
|
)
|
||
Repayments of term loans
|
(27.9
|
)
|
|
—
|
|
||
Dividend payment
|
(92.4
|
)
|
|
—
|
|
||
Net proceeds from issuance of Class A Common Stock and related tax benefits
|
6.1
|
|
|
9.8
|
|
||
Payments for purchases of Class A Common Stock held as Treasury Stock
|
(36.3
|
)
|
|
(155.7
|
)
|
||
Net proceeds from foreign currency contracts
|
1.7
|
|
|
1.9
|
|
||
Distributions to redeemable noncontrolling interests
|
—
|
|
|
(2.9
|
)
|
||
Payment of deferred financing fees
|
—
|
|
|
(5.5
|
)
|
||
Net cash provided by financing activities
|
131.4
|
|
|
6.6
|
|
||
EFFECT OF EXCHANGE RATES ON CASH AND CASH EQUIVALENTS
|
1.0
|
|
|
(6.1
|
)
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
5.6
|
|
|
74.7
|
|
||
CASH AND CASH EQUIVALENTS—Beginning of period
|
372.4
|
|
|
341.3
|
|
||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
378.0
|
|
|
$
|
416.0
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
|
|
|
|
|
|
||
Cash paid during the period for interest
|
$
|
35.3
|
|
|
$
|
12.8
|
|
Cash paid during the period for income taxes, net of refunds received
|
15.2
|
|
|
36.8
|
|
||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Accrued capital expenditure additions
|
$
|
59.4
|
|
|
$
|
25.6
|
|
Non-cash capital contribution associated with special share purchase transaction
|
—
|
|
|
13.8
|
|
|
Three Months Ended
September 30, |
||||||
SEGMENT DATA
|
2016
|
|
2015
|
||||
Net revenues:
|
|
|
|
||||
Fragrances
|
$
|
492.6
|
|
|
$
|
548.1
|
|
Color Cosmetics
|
352.7
|
|
|
390.9
|
|
||
Skin & Body Care
|
161.9
|
|
|
173.3
|
|
||
Brazil Acquisition
|
73.0
|
|
|
—
|
|
||
Total
|
$
|
1,080.2
|
|
|
$
|
1,112.3
|
|
Operating income:
|
|
|
|
||||
Fragrances
|
$
|
94.2
|
|
|
$
|
108.9
|
|
Color Cosmetics
|
35.3
|
|
|
57.7
|
|
||
Skin & Body Care
|
11.5
|
|
|
6.8
|
|
||
Brazil Acquisition
|
4.2
|
|
|
—
|
|
||
Corporate
|
(98.8
|
)
|
|
(91.7
|
)
|
||
Total
|
$
|
46.4
|
|
|
$
|
81.7
|
|
Reconciliation:
|
|
|
|
||||
Operating income
|
$
|
46.4
|
|
|
$
|
81.7
|
|
Interest expense, net
|
40.4
|
|
|
16.0
|
|
||
Other expense (income), net
|
1.3
|
|
|
(0.3
|
)
|
||
Income before income taxes
|
$
|
4.7
|
|
|
$
|
66.0
|
|
|
|||||
PRODUCT CATEGORY
|
2016
|
|
2015
|
||
Fragrances:
|
|
|
|
||
Designer
|
35.8
|
%
|
|
38.0
|
%
|
Lifestyle
|
5.8
|
|
|
6.0
|
|
Celebrity
|
4.0
|
|
|
5.3
|
|
Total
|
45.6
|
%
|
|
49.3
|
%
|
Color Cosmetics:
|
|
|
|
||
Nail Care
|
13.9
|
%
|
|
15.1
|
%
|
Other Color Cosmetics
|
18.7
|
|
|
20.0
|
|
Total
|
32.6
|
%
|
|
35.1
|
%
|
Skin & Body Care:
|
|
|
|
||
Body Care
|
9.6
|
%
|
|
10.6
|
%
|
Skin Care
|
5.4
|
|
|
5.0
|
|
Total
|
15.0
|
%
|
|
15.6
|
%
|
Brazil Acquisition:
|
|
|
|
||
Total
|
6.8
|
%
|
|
—
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
Estimated
fair value as previously reported (a) |
|
Measurement period adjustments
(b)
|
|
Estimated
fair value as adjusted |
|
Estimated
useful life (in years) |
||||||
Cash and cash equivalents
|
$
|
11.1
|
|
|
$
|
—
|
|
|
$
|
11.1
|
|
|
|
Inventories
|
45.6
|
|
|
—
|
|
|
45.6
|
|
|
|
|||
Property, plant and equipment
|
95.4
|
|
|
—
|
|
|
95.4
|
|
|
2 - 40
|
|||
Goodwill
|
553.7
|
|
|
(16.6
|
)
|
|
537.1
|
|
|
Indefinite
|
|||
Trademarks - indefinite
|
147.1
|
|
|
—
|
|
|
147.1
|
|
|
Indefinite
|
|||
Trademarks - finite
|
10.3
|
|
|
—
|
|
|
10.3
|
|
|
5 - 15
|
|||
Customer relationships
|
44.6
|
|
|
—
|
|
|
44.6
|
|
|
13 - 28
|
|||
Product formulations
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
3
|
|||
Other net working capital
|
0.7
|
|
|
—
|
|
|
0.7
|
|
|
|
|||
Net other assets
|
2.1
|
|
|
(0.7
|
)
|
|
1.4
|
|
|
|
|||
Deferred tax liability, net
|
(21.5
|
)
|
|
17.3
|
|
|
(4.2
|
)
|
|
|
|||
Total purchase price
|
$
|
901.9
|
|
|
$
|
—
|
|
|
$
|
901.9
|
|
|
|
|
|
|
Three Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Acquisition Integration Program
|
$
|
3.2
|
|
|
$
|
46.5
|
|
Organizational Redesign
|
3.8
|
|
|
15.6
|
|
||
Productivity Program
|
0.4
|
|
|
—
|
|
||
Total
|
$
|
7.4
|
|
|
$
|
62.1
|
|
|
Severance and
Employee Benefits |
|
Third-Party
Contract Terminations |
|
Other
Exit Costs |
|
Total
Program Costs |
||||||||
Balance—July 1, 2016
|
$
|
35.7
|
|
|
$
|
7.6
|
|
|
$
|
0.1
|
|
|
$
|
43.4
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
5.2
|
|
|
5.2
|
|
||||
Payments
|
(2.8
|
)
|
|
(3.7
|
)
|
|
(0.4
|
)
|
|
(6.9
|
)
|
||||
Changes in estimates
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Effect of exchange rates
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Balance—September 30, 2016
|
$
|
33.2
|
|
|
$
|
3.7
|
|
|
$
|
4.9
|
|
|
$
|
41.8
|
|
|
Severance and
Employee Benefits |
|
Third-Party
Contract Terminations |
|
Other
Exit Costs |
|
Total
Program Costs |
||||||||
Balance—July 1, 2016
|
$
|
33.6
|
|
|
$
|
0.4
|
|
|
$
|
0.5
|
|
|
$
|
34.5
|
|
Restructuring charges
|
5.0
|
|
|
—
|
|
|
—
|
|
|
5.0
|
|
||||
Payments
|
(12.3
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(12.5
|
)
|
||||
Changes in estimates
|
(1.0
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(1.2
|
)
|
||||
Effect of exchange rates
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Balance—September 30, 2016
|
$
|
25.6
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
26.1
|
|
|
Severance and
Employee
Benefits
|
|
Total
Program
Costs
|
||||
Balance—July 1, 2016
|
$
|
6.2
|
|
|
$
|
6.2
|
|
Restructuring charges
|
0.4
|
|
|
0.4
|
|
||
Payments
|
(0.6
|
)
|
|
(0.6
|
)
|
||
Balance—September 30, 2016
|
$
|
6.0
|
|
|
$
|
6.0
|
|
|
September 30,
2016 |
|
June 30,
2016 |
||||
Raw materials
|
$
|
157.0
|
|
|
$
|
159.8
|
|
Work-in-process
|
6.3
|
|
|
9.5
|
|
||
Finished goods
|
453.4
|
|
|
396.5
|
|
||
Total inventories
|
$
|
616.7
|
|
|
$
|
565.8
|
|
|
Fragrances
|
|
Color Cosmetics
|
|
Skin & Body Care
|
|
Brazil Acquisition
|
|
Total
|
||||||||||
Gross balance at June 30, 2016
|
$
|
888.1
|
|
|
$
|
796.3
|
|
|
$
|
870.9
|
|
|
$
|
298.2
|
|
|
$
|
2,853.5
|
|
Accumulated impairments
|
—
|
|
|
—
|
|
|
(640.8
|
)
|
|
—
|
|
|
(640.8
|
)
|
|||||
Net balance at June 30, 2016
|
$
|
888.1
|
|
|
$
|
796.3
|
|
|
$
|
230.1
|
|
|
$
|
298.2
|
|
|
$
|
2,212.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Changes during the period ended September 30, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Measurement period adjustments
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.6
|
)
|
|
(16.6
|
)
|
|||||
Foreign currency translation
|
0.3
|
|
|
1.6
|
|
|
(0.4
|
)
|
|
(5.3
|
)
|
|
(3.8
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross balance at September 30, 2016
|
$
|
888.4
|
|
|
$
|
797.9
|
|
|
$
|
870.5
|
|
|
$
|
276.3
|
|
|
$
|
2,833.1
|
|
Accumulated impairments
|
—
|
|
|
—
|
|
|
(640.8
|
)
|
|
—
|
|
|
(640.8
|
)
|
|||||
Net balance at September 30, 2016
|
$
|
888.4
|
|
|
$
|
797.9
|
|
|
$
|
229.7
|
|
|
$
|
276.3
|
|
|
$
|
2,192.3
|
|
|
|
|
September 30, 2016
|
|
June 30, 2016
|
||||
Indefinite-lived other intangible assets
|
$
|
1,424.2
|
|
|
$
|
1,417.0
|
|
Finite-lived other intangible assets, net
|
613.8
|
|
|
633.1
|
|
||
Total Other intangible assets, net
|
$
|
2,038.0
|
|
|
$
|
2,050.1
|
|
|
Fragrances
|
|
Color
Cosmetics |
|
Skin & Body
Care |
|
Brazil Acquisition
|
|
Total
|
||||||||||
Gross balance at June 30, 2016
|
$
|
20.5
|
|
|
$
|
993.7
|
|
|
$
|
450.4
|
|
|
$
|
150.2
|
|
|
$
|
1,614.8
|
|
Accumulated impairments
|
—
|
|
|
(9.2
|
)
|
|
(188.6
|
)
|
|
—
|
|
|
(197.8
|
)
|
|||||
Net balance at June 30, 2016
|
20.5
|
|
|
984.5
|
|
|
261.8
|
|
|
150.2
|
|
|
1,417.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Changes during the period ended September 30, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation
|
0.3
|
|
|
3.3
|
|
|
2.8
|
|
|
0.8
|
|
|
7.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross balance at September 30, 2016
|
20.8
|
|
|
997.0
|
|
|
453.2
|
|
|
151.0
|
|
|
1,622.0
|
|
|||||
Accumulated impairments
|
—
|
|
|
(9.2
|
)
|
|
(188.6
|
)
|
|
—
|
|
|
(197.8
|
)
|
|||||
Net balance at September 30, 2016
|
$
|
20.8
|
|
|
$
|
987.8
|
|
|
$
|
264.6
|
|
|
$
|
151.0
|
|
|
$
|
1,424.2
|
|
|
Cost
|
|
Accumulated Amortization
|
|
Accumulated Impairment
|
|
Net
|
||||||||
June 30, 2016
|
|
|
|
|
|
|
|
||||||||
License agreements
|
$
|
798.3
|
|
|
$
|
(532.2
|
)
|
|
$
|
—
|
|
|
$
|
266.1
|
|
Customer relationships
|
611.7
|
|
|
(274.2
|
)
|
|
(5.5
|
)
|
|
332.0
|
|
||||
Trademarks
|
128.3
|
|
|
(108.6
|
)
|
|
—
|
|
|
19.7
|
|
||||
Product formulations
|
48.0
|
|
|
(32.7
|
)
|
|
—
|
|
|
15.3
|
|
||||
Total
|
$
|
1,586.3
|
|
|
$
|
(947.7
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
633.1
|
|
September 30, 2016
|
|
|
|
|
|
|
|
||||||||
License agreements
|
$
|
801.1
|
|
|
$
|
(542.1
|
)
|
|
$
|
—
|
|
|
$
|
259.0
|
|
Customer relationships
|
611.3
|
|
|
(284.6
|
)
|
|
(5.5
|
)
|
|
321.2
|
|
||||
Trademarks
|
128.7
|
|
|
(108.7
|
)
|
|
—
|
|
|
20.0
|
|
||||
Product formulations
|
47.9
|
|
|
(34.3
|
)
|
|
—
|
|
|
13.6
|
|
||||
Total
|
$
|
1,589.0
|
|
|
$
|
(969.7
|
)
|
|
$
|
(5.5
|
)
|
|
$
|
613.8
|
|
|
September 30, 2016
|
|
June 30, 2016
|
||||
Short-term debt
|
$
|
20.1
|
|
|
$
|
19.8
|
|
Coty Credit Agreement
|
|
|
|
||||
Revolving Credit Facility due October 2020
|
950.0
|
|
|
670.0
|
|
||
Term Loan A Facility due October 2020
|
1,861.4
|
|
|
1,883.6
|
|
||
Term Loan B Facility due October 2022
|
1,603.6
|
|
|
1,596.0
|
|
||
Other long-term debt and capital lease obligations
|
0.1
|
|
|
0.7
|
|
||
Total debt
|
4,435.2
|
|
|
4,170.1
|
|
||
Less: Short-term debt and current portion of long-term debt
|
(156.6
|
)
|
|
(161.8
|
)
|
||
Total Long-term debt
|
4,278.6
|
|
|
4,008.3
|
|
||
Less: Unamortized debt issuance costs
(a)
|
(61.1
|
)
|
|
(64.6
|
)
|
||
Less: Discount on Long-term debt
|
(7.1
|
)
|
|
(7.3
|
)
|
||
Total Long-term debt, net
|
$
|
4,210.4
|
|
|
$
|
3,936.4
|
|
|
|
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
Interest expense
|
$
|
39.7
|
|
|
$
|
15.0
|
|
Foreign exchange losses, net of derivative contracts
|
1.3
|
|
|
1.5
|
|
||
Interest income
|
(0.6
|
)
|
|
(0.5
|
)
|
||
Total interest expense, net
|
$
|
40.4
|
|
|
$
|
16.0
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||||||||||
|
Pension Plans
|
|
Other Post-
Employment
|
|
|
||||||||||||||||||||||||||
|
U.S.
|
|
International
|
|
Benefits
|
|
Total
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
1.7
|
|
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
2.3
|
|
|
$
|
2.0
|
|
Interest cost
|
0.7
|
|
|
0.8
|
|
|
0.6
|
|
|
0.9
|
|
|
0.4
|
|
|
0.5
|
|
|
1.7
|
|
|
2.2
|
|
||||||||
Expected return on plan assets
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
(0.9
|
)
|
||||||||
Amortization of prior service (credit) cost
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|
(1.3
|
)
|
||||||||
Amortization of net loss
|
0.5
|
|
|
0.3
|
|
|
1.1
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.1
|
|
||||||||
Settlement loss recognized
|
3.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
—
|
|
||||||||
Net periodic benefit cost (credit)
|
$
|
3.8
|
|
|
$
|
0.5
|
|
|
$
|
3.5
|
|
|
$
|
3.2
|
|
|
$
|
(0.8
|
)
|
|
$
|
(0.6
|
)
|
|
$
|
6.5
|
|
|
$
|
3.1
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||||||||
|
September 30, 2016
|
|
June 30, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
|
September 30, 2016
|
|
June 30, 2016
|
||||||||||||
Financial assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forward contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.8
|
|
|
$
|
9.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
9.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange forward contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.3
|
|
|
$
|
7.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap contracts
|
—
|
|
|
—
|
|
|
21.3
|
|
|
30.0
|
|
|
—
|
|
|
—
|
|
||||||
Contingent consideration - business combination
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
||||||
Total Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25.6
|
|
|
$
|
37.3
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
Total net recurring fair value measurements
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(23.7
|
)
|
|
$
|
(28.1
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.7
|
)
|
|
September 30, 2016
|
|
June 30, 2016
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Coty Credit Agreement
|
$
|
4,415.0
|
|
|
$
|
4,409.2
|
|
|
$
|
4,149.6
|
|
|
$
|
4,106.9
|
|
Dividends payable
|
2.7
|
|
|
2.2
|
|
|
1.8
|
|
|
1.5
|
|
|
Asset
|
|
Liability
|
||||||||||||||||
|
Balance Sheet Classification
|
|
Fair Value
|
|
Balance Sheet Classification
|
|
Fair Value
|
||||||||||||
|
|
|
September 30, 2016
|
|
June 30, 2016
|
|
|
|
September 30, 2016
|
|
June 30, 2016
|
||||||||
Derivatives designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
Prepaid expenses and
other current assets
|
|
$
|
1.4
|
|
|
$
|
2.8
|
|
|
Accrued expenses and
other current liabilities
|
|
$
|
2.4
|
|
|
$
|
3.1
|
|
Interest rate swap contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
—
|
|
|
Accrued expenses and other current liabilities
|
|
10.5
|
|
|
13.6
|
|
||||
Interest rate swap contracts
|
Other noncurrent assets
|
|
0.1
|
|
|
—
|
|
|
Other noncurrent liabilities
|
|
10.8
|
|
|
16.4
|
|
||||
Total derivatives designated as hedges
|
|
|
$
|
1.5
|
|
|
$
|
2.8
|
|
|
|
|
$
|
23.7
|
|
|
$
|
33.1
|
|
Derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
Prepaid expenses and
other current assets
|
|
$
|
0.4
|
|
|
$
|
6.4
|
|
|
Accrued expenses and
other current liabilities
|
|
$
|
1.9
|
|
|
$
|
4.2
|
|
Total derivatives not designated as hedges
|
|
|
$
|
0.4
|
|
|
$
|
6.4
|
|
|
|
|
$
|
1.9
|
|
|
$
|
4.2
|
|
Total derivatives
|
|
|
$
|
1.9
|
|
|
$
|
9.2
|
|
|
|
|
$
|
25.6
|
|
|
$
|
37.3
|
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
|
|
|
||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amount Presented in the Condensed Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Foreign exchange forward contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prepaid expenses
and other current assets
|
$
|
1.9
|
|
|
(0.1
|
)
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
$
|
1.8
|
|
Accrued expenses and
other current liabilities
|
$
|
(4.5
|
)
|
|
0.2
|
|
|
(4.3
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(4.3
|
)
|
Interest rate swap contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other noncurrent assets
|
$
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
$
|
0.1
|
|
Accrued expenses and
other current liabilities
|
$
|
(10.5
|
)
|
|
—
|
|
|
(10.5
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(10.5
|
)
|
Other noncurrent liabilities
|
$
|
(10.8
|
)
|
|
—
|
|
|
(10.8
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(10.8
|
)
|
|
|
|
|
|
|
|
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets
|
|
|
||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Net Amount Presented in the Condensed Consolidated Balance Sheets
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
Foreign exchange forward contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prepaid expenses
and other current assets
|
$
|
10.1
|
|
|
(0.9
|
)
|
|
9.2
|
|
|
—
|
|
|
—
|
|
|
$
|
9.2
|
|
Accrued expenses and
other current liabilities
|
$
|
(8.9
|
)
|
|
1.6
|
|
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(7.3
|
)
|
Interest rate swap contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accrued expenses and other current liabilities
|
$
|
(13.6
|
)
|
|
—
|
|
|
(13.6
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(13.6
|
)
|
Other noncurrent liabilities
|
$
|
(16.4
|
)
|
|
—
|
|
|
(16.4
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(16.4
|
)
|
Gain (Loss) Recognized in OCI
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
Foreign exchange forward contracts
|
$
|
0.5
|
|
|
$
|
6.7
|
|
Interest rate swap contracts
|
5.1
|
|
|
—
|
|
||
Net investment hedge
|
(7.8
|
)
|
|
—
|
|
Condensed Consolidated Statements of Operations Classification of Gain (Loss) Reclassified from AOCI/(L)
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
Foreign exchange forward contracts:
|
|
|
|
||||
Net revenue
|
$
|
0.7
|
|
|
$
|
1.4
|
|
Interest rate swap contracts:
|
|
|
|
||||
Interest expense
|
$
|
(3.5
|
)
|
|
$
|
—
|
|
Condensed Consolidated Statements of Operations
Classification of Gain (Loss) Recognized in Operations |
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
Selling, general and administrative expenses
|
$
|
0.2
|
|
|
$
|
1.3
|
|
Interest expense, net
|
(2.1
|
)
|
|
(2.8
|
)
|
|
Losses on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Post-Employment Benefit Plans
|
|
Total
|
||||||||||||
|
|
Loss on Net Investment Hedge
|
|
Other Foreign Currency Translation Adjustments
|
|
|
|||||||||||||
Balance—July 1, 2016
|
$
|
(28.9
|
)
|
|
$
|
(2.5
|
)
|
|
$
|
(164.0
|
)
|
|
$
|
(44.3
|
)
|
|
$
|
(239.7
|
)
|
Other comprehensive (loss) income before reclassifications
|
5.7
|
|
|
(7.8
|
)
|
|
1.9
|
|
|
2.1
|
|
|
1.9
|
|
|||||
Net amounts reclassified from AOCI
|
2.8
|
|
|
—
|
|
|
—
|
|
|
3.1
|
|
|
5.9
|
|
|||||
Net current-period other comprehensive (loss)
income |
8.5
|
|
|
(7.8
|
)
|
|
1.9
|
|
|
5.2
|
|
|
7.8
|
|
|||||
Balance—September 30, 2016
|
$
|
(20.4
|
)
|
|
$
|
(10.3
|
)
|
|
$
|
(162.1
|
)
|
|
$
|
(39.1
|
)
|
|
$
|
(231.9
|
)
|
|
Losses on Cash Flow Hedges
|
|
Foreign Currency Translation Adjustments
|
|
Pension and Other Post-Employment Benefit Plans
|
|
Total
|
||||||||
Balance—July 1, 2015
|
$
|
(0.1
|
)
|
|
$
|
(249.3
|
)
|
|
$
|
(24.6
|
)
|
|
$
|
(274.0
|
)
|
Other comprehensive (loss) income before reclassifications
|
5.7
|
|
|
(16.8
|
)
|
|
0.2
|
|
|
(10.9
|
)
|
||||
Net amounts reclassified from AOCI
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
||||
Net current-period other comprehensive (loss)
income |
4.5
|
|
|
(16.8
|
)
|
|
0.2
|
|
|
(12.1
|
)
|
||||
Balance—September 30, 2015
|
$
|
4.4
|
|
|
$
|
(266.1
|
)
|
|
$
|
(24.4
|
)
|
|
$
|
(286.1
|
)
|
|
Three Months Ended
September 30, |
||||||
|
2016
|
|
2015
|
||||
|
(in millions, except per share data)
|
||||||
Net income attributable to Coty Inc.
|
$
|
—
|
|
|
$
|
125.7
|
|
Weighted-average common shares outstanding—Basic
|
336.3
|
|
|
360.0
|
|
||
Effect of dilutive stock options and Series A Preferred Stock
(a)
|
—
|
|
|
6.7
|
|
||
Effect of restricted stock and RSUs
(b)
|
—
|
|
|
3.2
|
|
||
Weighted-average common shares outstanding—Diluted
|
336.3
|
|
|
369.9
|
|
||
Net income attributable to Coty Inc. per common share:
|
|
|
|
||||
Basic
|
$
|
—
|
|
|
$
|
0.35
|
|
Diluted
|
—
|
|
|
0.34
|
|
|
|
(a)
|
Due to a net income of nil for the
three months ended September 30, 2016
, outstanding stock options and Series A Preferred Stock with purchase or conversion rights to common stock were excluded from the computation of diluted EPS as their inclusion would be anti-dilutive. For the
three months ended September 30, 2015
, outstanding stock options and Series A Preferred Stock with purchase or conversion rights to purchase
3.6 million
options were excluded in the computation of EPS as their inclusion would be anti-dilutive.
|
(b)
|
Due to a net income of nil for the for the
three months ended September 30, 2016
, outstanding RSUs were excluded from the computation of diluted EPS as their inclusion would be anti-dilutive. For the
three months ended September 30, 2015
,
no
RSU were included in the computation of diluted loss per share as their inclusion would be anti-dilutive.
|
|
Estimated
fair value |
|
Estimated
useful life (in years) |
||
Net working capital
|
$
|
1,118.8
|
|
|
|
Property, plant and equipment
|
838.8
|
|
|
3 - 45 years
|
|
Goodwill
|
4,798.3
|
|
|
Indefinite
|
|
Indefinite-lived intangible assets
|
2,180.0
|
|
|
Indefinite
|
|
Finite-lived intangible assets
|
4,468.2
|
|
|
2 - 30 years
|
|
Net other assets / (liabilities)
|
(347.4
|
)
|
|
|
|
Deferred tax liability, net
|
(1,486.3
|
)
|
|
|
|
Total purchase price
|
$
|
11,570.4
|
|
|
|
|
Three Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Pro forma Net revenues
|
$
|
2,111.2
|
|
|
$
|
2,185.3
|
|
Pro forma Net (loss) income
|
(185.9
|
)
|
|
66.2
|
|
||
Pro forma Net (loss) income attributable to Coty Inc.
|
(195.7
|
)
|
|
58.8
|
|
||
Pro forma Net (loss) income attributable to Coty Inc. per common share
|
|
|
|
||||
Basic
|
$
|
(0.26
|
)
|
|
$
|
0.08
|
|
Diluted
|
$
|
(0.26
|
)
|
|
$
|
0.08
|
|
•
|
an additional Term Loan A Facility in aggregate principal amount of
$975.0
in commitments (the “Incremental Term A Facility”);
|
•
|
an additional Term Loan B Facility in aggregate principal amount of
$100.0
in commitments (the “Incremental Term B Facility”);
|
•
|
refinancing of the previously existing term B facilities consisting of:
|
◦
|
a refinancing term B USD facility in an aggregate principal amount of in the aggregate principal amount of
$497.5
(the “Refinancing Term B USD Facility”);
|
◦
|
a refinancing term B-1 EUR facility in an aggregate principal amount of
€661.7 million
(the “Refinancing Term B-1 EUR Facility”);
|
◦
|
a refinancing term B-2 EUR facility in an aggregate principal amount of
€324.2 million
; (the Refinancing Term B-2 Facility” and together with the Refinancing Term B USD Facility and the Refinancing Term B-1 EUR Facility, the “Refinancing Facilities”).
|
•
|
strategic plans and annual budgets are prepared using the Adjusted Performance Measures;
|
•
|
senior management receives a monthly analysis comparing budget to actual operating results that is prepared using the Adjusted Performance Measures; and
|
•
|
senior management’s annual compensation is calculated, in part, by using the Adjusted Performance Measures.
|
•
|
Costs related to acquisition activities: We have excluded acquisition-related costs and acquisition accounting impacts such as those related to transaction costs and costs associated with the revaluation of acquired inventory in connection with business combinations because these costs are unique to each transaction. The nature and amount of such costs vary significantly based on the size and timing of the acquisitions and the maturities of the businesses being acquired. Also, the size, complexity and/or volume of past acquisitions, which often drives the magnitude of such expenses, may not be indicative of the size, complexity and/or volume of any future acquisitions.
|
•
|
Restructuring and other business realignment costs: We have excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance. In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs. By excluding the referenced expenses from our non-GAAP financial measures, our management is able to further evaluate our ability to utilize existing assets and estimate their long-term value. Furthermore, our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance.
|
•
|
Amortization expense: We have excluded the impact of amortization of finite-lived intangible assets, as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Although we exclude amortization of intangible assets from our non-GAAP expenses, our management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
|
•
|
Asset impairment charges: We have excluded the impact of asset impairments as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance.
|
•
|
Share-based compensation adjustment: We have excluded the impact of the fiscal 2013 accounting modification from liability plan to equity plan accounting for the share-based compensation plans as well as other share-based compensation transactions that are not reflective of the ongoing and planned pattern of recognition for such expense. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” contained in the respective forms filed with the SEC for a full discussion of the share-based compensation adjustment.
|
•
|
Interest and other (income) expense: We have excluded foreign currency impacts associated with acquisition-related and debt financing related forward contracts as the nature and amount of such charges are not consistent and are significantly impacted by the timing and size of such transactions.
|
•
|
Loss on early extinguishment of debt: We have excluded loss on extinguishment of debt as this represents a non-cash charge, and the amount and frequency of such charges is not consistent and is significantly impacted by the timing and size of debt financing transactions.
|
•
|
Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income. The tax impact of the non-GAAP adjustments are based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred.
|
•
|
the scale of the combined company by evaluating consolidated and segment financial metrics;
|
•
|
the expansion of product offerings by evaluating segment, brand, and geographic performance and the respective strength of the brands;
|
•
|
the evaluation of market share expansion in categories and geographies;
|
•
|
the earnings per share accretion and substantial incremental free cash flow generation providing financial flexibility for us; and
|
•
|
the comparison of actual and projected results, including achievement of projected synergies, post integration; provided that timing for any such comparison will depend on the size and complexity of the acquisition.
|
|
Three Months Ended
September 30, |
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
Change %
|
|||||
Reported operating income
|
$
|
46.4
|
|
|
$
|
81.7
|
|
|
(43
|
%)
|
% of Net revenues
|
4.3
|
%
|
|
7.3
|
%
|
|
|
|||
Costs related to acquisition activities
|
83.3
|
|
|
18.3
|
|
|
>100%
|
|
||
Amortization Expense
|
21.2
|
|
|
19.2
|
|
|
10
|
%
|
||
Restructuring and other business realignment costs
|
15.5
|
|
|
67.0
|
|
|
(77
|
%)
|
||
Asset impairment charges
(a)
|
—
|
|
|
5.5
|
|
|
(100
|
%)
|
||
Share-based compensation expense adjustment
|
—
|
|
|
0.9
|
|
|
(100
|
%)
|
||
Total adjustments to reported Operating income
|
120.0
|
|
|
110.9
|
|
|
8
|
%
|
||
Adjusted operating income
|
$
|
166.4
|
|
|
$
|
192.6
|
|
|
(14
|
%)
|
% of Net revenues
|
15.4
|
%
|
|
17.3
|
%
|
|
|
|
|
(a)
|
There were no asset impairment charges in the
three months ended September 30, 2016
. 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.
|
•
|
We incurred restructuring costs of
$7.4
primarily related to Organizational Redesign and Acquisition Integration Program costs, included in the Condensed Consolidated Statements of Operations.
|
•
|
We incurred business structure realignment costs of
$8.1
primarily related to our Organizational Redesign and certain other programs, included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.
|
•
|
We incurred restructuring costs of
$62.1
primarily related to Acquisition Integration Program and Organizational Redesign costs, included in the Condensed Consolidated Statements of Operations.
|
•
|
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.
|
|
Three Months Ended
September 30, 2016 |
|
Three Months Ended
September 30, 2015 |
||||||||||||||||||
(in millions)
|
Income Before Income Taxes
|
|
Provision for Income Taxes
|
|
Effective Tax Rate
|
|
Income Before Income Taxes
|
|
Provision for Income Taxes
|
|
Effective Tax Rate
|
||||||||||
Reported income before income taxes
|
$
|
4.7
|
|
|
$
|
(5.1
|
)
|
|
(108.5
|
%)
|
|
$
|
66.0
|
|
|
$
|
(67.1
|
)
|
|
(101.7
|
%)
|
Adjustments to reported Operating income
(a) (c)
|
120.0
|
|
|
42.6
|
|
|
|
|
110.9
|
|
|
(0.8
|
)
|
|
|
||||||
Adjustments to Interest expense
(b) (c)
|
1.4
|
|
|
0.5
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Adjusted income before income taxes
|
$
|
126.1
|
|
|
$
|
38.0
|
|
|
30.1
|
%
|
|
$
|
176.9
|
|
|
$
|
(67.9
|
)
|
|
(38.4
|
%)
|
|
|
(a)
|
See “Reconciliation of Reported operating income to Adjusted operating income.”
|
(b)
|
The amount represents a net loss of $1.4 incurred in connection with the Brazil Acquisition and subsequent intercompany loans, included in Interest expense, net in the Consolidated Statements of Operations.
|
(c)
|
The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability.
|
|
Three Months Ended
September 30, |
|
|
|||||||
(in millions)
|
2016
|
|
2015
|
|
Change %
|
|||||
Reported Net income attributable to Coty Inc.
|
$
|
—
|
|
|
$
|
125.7
|
|
|
(100
|
%)
|
% of Net revenues
|
—
|
%
|
|
11.3
|
%
|
|
|
|||
Adjustments to reported Operating income
(a)
|
120.0
|
|
|
110.9
|
|
|
8
|
%
|
||
Adjustments to Interest expense
(b)
|
1.4
|
|
|
—
|
|
|
N/A
|
|
||
Change in tax provision due to adjustments to reported Net income attributable to Coty Inc.
(c)
|
(43.1
|
)
|
|
0.8
|
|
|
<(100%)
|
|
||
Adjusted Net income attributable to Coty Inc.
|
$
|
78.3
|
|
|
$
|
237.4
|
|
|
(67
|
%)
|
% of Net revenues
|
7.2
|
%
|
|
21.3
|
%
|
|
|
|
||
Per Share Data
|
|
|
|
|
|
|||||
Adjusted weighted-average common shares
|
|
|
|
|
|
|||||
Basic
|
336.3
|
|
|
360.0
|
|
|
|
|||
Diluted
|
342.5
|
|
|
369.9
|
|
|
|
|||
Adjusted Net income attributable to Coty Inc. per common share
|
|
|
|
|
|
|||||
Basic
|
$
|
0.23
|
|
|
$
|
0.66
|
|
|
|
|
Diluted
|
0.23
|
|
|
0.64
|
|
|
|
|
|
(a)
|
See “Reconciliation of Reported operating income to Adjusted operating income.”
|
(b)
|
The amount represents a net loss of $1.4 incurred in connection with the Brazil Acquisition and subsequent intercompany loans, included in Interest expense, net in the Consolidated Statements of Operations.
|
(c)
|
The tax effects of each of the items included in adjusted net income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted net income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability.
|
|
September 30, 2016
|
|
June 30, 2016
|
||||
Short-term debt
|
$
|
20.1
|
|
|
$
|
19.8
|
|
Coty Credit Agreement
|
|
|
|
||||
Revolving Credit Facility due October 2020
|
950.0
|
|
|
670.0
|
|
||
Term Loan A Facility due October 2020
|
1,861.4
|
|
|
1,883.6
|
|
||
Term Loan B Facility due October 2022
|
1,603.6
|
|
|
1,596.0
|
|
||
Other long-term debt and capital lease obligations
|
0.1
|
|
|
0.7
|
|
||
Total debt
|
4,435.2
|
|
|
4,170.1
|
|
||
Less: Short-term debt and current portion of long-term debt
|
(156.6
|
)
|
|
(161.8
|
)
|
||
Total Long-term debt
|
4,278.6
|
|
|
4,008.3
|
|
||
Less: Unamortized deferred financing fees
(a)
|
(61.1
|
)
|
|
(64.6
|
)
|
||
Less: Discount on Long-term debt
|
(7.1
|
)
|
|
(7.3
|
)
|
||
Total Long-term debt, net
|
$
|
4,210.4
|
|
|
$
|
3,936.4
|
|
|
|
•
|
an additional Term Loan A Facility in aggregate principal amount of
$975.0
in commitments (the “Incremental Term A Facility”);
|
•
|
an additional Term Loan B Facility in aggregate principal amount of
$100.0
in commitments (the “Incremental Term B Facility”);
|
•
|
refinancing of the previously existing term B facilities consisting of:
|
◦
|
a refinancing term B USD facility in an aggregate principal amount of in the aggregate principal amount of
$497.5
(the “Refinancing Term B USD Facility”);
|
◦
|
a refinancing term B-1 EUR facility in an aggregate principal amount of
€661.7 million
(the “Refinancing Term B-1 EUR Facility”);
|
◦
|
a refinancing term B-2 EUR facility in an aggregate principal amount of
€324.2 million
; (the Refinancing Term B-2 Facility” and together with the Refinancing Term B USD Facility and the Refinancing Term B-1 EUR Facility, the “Refinancing Facilities”).
|
|
Three Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
Condensed Consolidated Statements of Cash Flows Data:
(in millions)
|
|
|
|
||||
Net cash (used in) provided by operating activities
|
$
|
(15.0
|
)
|
|
$
|
116.7
|
|
Net cash used in investing activities
|
(111.8
|
)
|
|
(42.5
|
)
|
||
Net cash provided by financing activities
|
131.4
|
|
|
6.6
|
|
•
|
Revenue Recognition
|
•
|
Goodwill, Other Intangible Assets and Long-Lived Assets
|
•
|
Business Combinations
|
•
|
Inventory
|
•
|
Pension and Other Post-Employment Benefit Costs
|
•
|
Share-Based Compensation
|
•
|
Income Taxes
|
•
|
our ability to achieve our global business strategy and compete effectively in the beauty industry, including successfully leveraging growth opportunities and addressing challenges inhibiting growth in our brand portfolio;
|
•
|
the integration of Galleria with our business, operations and culture and the ability to realize synergies and other potential benefits of the Transactions within the time frames currently contemplated, including planned organizational changes and their effects, diversion of management attention from existing core businesses, the impact of recent changes in management teams in our headquarters, regions and countries and addressing challenges in the Galleria business, particularly in mass retail;
|
•
|
our ability to successfully execute on our announced intent to divest or discontinue non-strategic brands which we expect to impact approximately 6 - 8% of our net revenues, including the Galleria brands, which we are targeting to complete in the next twelve months and the related risks, including an inability to identify suitable buyers, the effect of any post-closing claims for indemnification, the impact of any divestiture on our remaining business and potential diversion of significant financial, operational and managerial resources from existing operations;
|
•
|
our ability to successfully execute on our announced intent to rationalize wholesale distribution by reducing the amount of product diversion to the value and mass channels;
|
•
|
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 acquisitions of Bourjois, the digital marketing company, the Brazil Acquisition and Galleria and the pending acquisition of ghd;
|
•
|
risks associated with acquisitions or other strategic transactions, including acquired liabilities and restrictions, retaining customers from businesses acquired, achieving any expected results or synergies from acquired businesses, complying with new regulatory frameworks, difficulties in integrating acquired businesses or implementing strategic transactions generally and risks associated with international acquisition transactions, including in countries where we do not currently have a material presence;
|
•
|
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, including any potential impact of Brexit, 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 Acquisition Integration Program, the Organizational Redesign restructuring program and the Post-Merger Reorganization as planned and the success of the programs or any anticipated programs 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;
|
•
|
restrictions imposed on us through the Coty Credit Agreement and the Galleria Credit Agreement, including as to the incurrence of additional debt, the granting of further security interests and the maintenance of certain financial ratios;
|
•
|
changes in the manner in which we finance our debt and future capital needs, including potential acquisitions;
|
•
|
increasing dependency on information technology and our ability to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of implementation and effectiveness of any upgrades to our information technology systems and failure by us to comply with any privacy or data security laws or to protect against theft of customer, employee and corporate sensitive information;
|
•
|
changes in laws, regulations and policies that affect our business or products;
|
•
|
our ability to attract and retain key personnel;
|
•
|
use of estimates and assumptions in preparing the financial statements, including with regard to revenue recognition, the market value of inventory and the fair value of acquired assets and liabilities associated with acquisitions;
|
•
|
risks associated with our non-U.S. joint ventures relating to control and decision-making, compliance, accounting standards, transparency and customer relations, among others;
|
•
|
market acceptance of new product introductions;
|
•
|
the illegal distribution and sale by third parties of counterfeit versions of our products; and
|
•
|
other factors described elsewhere in this document and from time to time in documents that we file with the SEC.
|
•
|
develop our power brand portfolio through branding, innovation and execution;
|
•
|
engage in strategic transactions to augment our brand portfolio;
|
•
|
execute any acquisitions efficiently and integrate businesses successfully, in particular in connection with realizing anticipated synergies from the Transactions;
|
•
|
identify and incubate new and existing brands with the potential to develop into global power brands;
|
•
|
innovate and develop new products that are appealing to the consumer;
|
•
|
extend our brands into the other segments of the beauty industry in which we compete and develop new brands;
|
•
|
acquire or enter into new licenses;
|
•
|
expand our geographic presence to take advantage of opportunities in developed and emerging markets;
|
•
|
continue to expand our distribution channels to increase market presence, brand recognition and sales;
|
•
|
expand margins through sales growth, the development of higher margin products and supply chain integration and efficiency initiatives;
|
•
|
optimize the efficiency of our marketing spend and in-store execution;
|
•
|
manage capital investments and working capital effectively to improve the generation of cash flow;
|
•
|
execute any divestitures or discontinuations of non-strategic brands efficiently, including our announced intent to divest or discontinue non-strategic brands which will impact approximately six to eight percent of our combined company net revenues; and
|
•
|
rationalize wholesale distribution by reducing the amount of product diversion to the value and mass channels.
|
•
|
increasing our vulnerability to adverse economic, industry or competitive developments;
|
•
|
exposing us to the risk of increased interest rates to the extent that our indebtedness bears interest at variable rates;
|
•
|
making it more difficult to satisfy obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing the indebtedness;
|
•
|
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
|
limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions and general corporate or other purposes; and
|
•
|
placing us at a competitive disadvantage compared to competitors who are less highly leveraged and who therefore, may be able to take advantage of opportunities that our leverage prevents us from pursuing.
|
•
|
fluctuations in foreign currency exchange rates, which have affected and may in the future affect our results of operations, reported earnings, the value of our foreign assets, the relative prices at which we and foreign competitors sell products in the same markets and the cost of certain inventory and non-inventory items required by our operations;
|
•
|
changes in foreign laws, regulations and policies, including restrictions on foreign investment, trade, import and export license requirements, quotas, trade barriers and other protection measures imposed by foreign countries, and tariffs and taxes, as well as changes in U.S. laws and regulations relating to foreign trade and investment;
|
•
|
difficulties and costs associated with complying with, and enforcing remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including the FCPA, and different regulatory structures and unexpected changes in regulatory environments;
|
•
|
lack of well-established or reliable legal and administrative systems;
|
•
|
failure to effectively and immediately implement processes and policies across our diverse operations and employee base; and
|
•
|
adverse weather conditions, social and economic conditions, terrorist attacks, war or other military action or violent revolution, such as recent events in Greece, Ukraine, Russia and the Middle East, and other geopolitical conditions.
|
•
|
our advertising, promotional and marketing strategies for our new products may be less effective than planned and may fail to effectively reach the targeted consumer base or engender the desired consumption;
|
•
|
product purchases by our consumers may not be as high as we anticipate;
|
•
|
we may experience out-of-stocks and/or product returns exceeding our expectations as a result of our new product launches or retailer space reconfigurations or our net revenues may be impacted by retailer inventory management or changes in retailer pricing or promotional strategies;
|
•
|
we may incur costs exceeding our expectations as a result of the continued development and launch of new products, including, for example, advertising, promotional and marketing expenses, sales return expenses or other costs related to launching new products;
|
•
|
we may experience a decrease in sales of certain of our existing products as a result of newly-launched products; and
|
•
|
our product pricing strategies for new product launches may not be accepted by our retail customers or their consumers, which may result in our sales being less than anticipated.
|
•
|
subject to specified exceptions, issuing stock (or stock equivalents) or recapitalizing, repurchasing, redeeming or otherwise participating in acquisitions of its stock;
|
•
|
amending its certificate of incorporation or other organizational documents to affect the voting rights of its stock;
|
•
|
merging or consolidating with another entity, or liquidating or partially liquidating, except for any merger, consolidation, liquidation or partial liquidation that is disregarded for U.S. federal income tax purposes;
|
•
|
discontinuing, selling, transferring or ceasing to maintain the Galleria Company active business under section 355(b) of the Code;
|
•
|
taking any action that permits a proposed acquisition of our stock or Galleria Company stock to occur by means of an agreement to which none of us, Galleria Company or their affiliates is a party (including by soliciting a tender offer for Galleria Company stock or our stock, participating in or otherwise supporting any unsolicited tender offer for such stock or redeeming rights under a shareholder rights plan with respect to such stock); and
|
•
|
engaging in other actions or transactions that could jeopardize the tax-free status of the Distribution, Merger and/or certain related transactions.
|
•
|
paying annual royalties on net sales of the licensed products;
|
•
|
maintaining the quality of the licensed products and the image of applicable trademarks;
|
•
|
permitting the licensor’s involvement in and, in some cases, approval of advertising, packaging and marketing plans relating to the licensed products;
|
•
|
maintaining minimum royalty payments and/or minimum sales levels for the licensed products;
|
•
|
actively promoting the sales of the licensed products;
|
•
|
spending a certain amount of net sales on marketing and advertising for the licensed products;
|
•
|
maintaining the integrity of the specified distribution channel for the licensed products;
|
•
|
expanding the sales of the licensed products and/or the markets in which they are sold;
|
•
|
agreeing not to enter into licensing arrangements with competitors of certain of our licensors;
|
•
|
indemnifying the licensor in the event of product liability or other claims related to our products;
|
•
|
limiting assignment and sub-licensing to third parties without the licensor’s consent; and
|
•
|
in some cases, requiring notice to, or approval by, the licensor of certain changes in control as a condition to continuation of the license.
|
|
|
Exhibit No.
|
|
Description
|
||
10.1
|
|
|
Side Letter, dated September 13, 2016, between Coty Inc. and The Procter & Gamble Company
|
|
10.2
|
|
|
Credit Agreement, dated January 26, 2016, among Galleria Co., as initial borrower, the other borrowers from time to time party thereto, J.P. Morgan Chase Bank, N.A., as administrative agent and collateral agent, and the other agents and lenders party thereto (incorporated by reference to Exhibit 10.4 of Galleria Co.’s Registration Statement on Form S-4 filed on April 22, 2016)
|
|
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
|
|
|
COTY INC.
|
|
|
|
|
|
Date: November 9, 2016
|
|
By:
|
/s/Camillo Pane
|
|
|
|
Name: Camillo Pane
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/Patrice de Talhouët
|
|
|
|
Name: Patrice de Talhouët
|
|
|
|
Title: Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
Exhibit 21.1
|
COTY INC.
|
|
Subsidiary List
|
|
October 1, 2016
|
|
Subsidiary Name
|
Jurisdiction of Organization
|
Coty Argentina S.A.
|
Argentina
|
Coty Australia Pty. Ltd.
|
Australia
|
HFC Prestige International Australia PTY Ltd.
|
Australia
|
Cosmetics Suppliers Pty. Ltd.
|
Australia
|
Gresham Cosmetics Pty. Ltd.
|
Australia
|
Coty Austria GmbH, wien
|
Austria
|
HFC Prestige International Austria GmbH
|
Austria
|
Bourjois S.A.
|
Belgium
|
Coty Benelux S.A.
|
Belgium
|
HFC Prestige Products N.V.
|
Belgium
|
Lancaster do Brasil Cosmeticos Ltda
|
Brazil
|
Novita Distribuicao, Armazenamento e Transportes S.A.
|
Brazil
|
Savoy Industira de Cosmeticos S.A.
|
Brazil
|
HFC Brasil Comercio De Cosmetics
|
Brazil
|
Coty Canada Inc.
|
Canada
|
HFC Prestige International Canada, Inc.
|
Canada
|
TJoy Holdings Co. Ltd.
|
Cayman
|
Coty Cosmeticos Chile Limitada
|
Chile
|
Coty China Holding Limited
|
China
|
China International Trade (Shanghai) Co. Ltd.
|
China
|
Coty Prestige Shanghai Ltd.
|
China
|
Coty R&D (Suzhou) Co. Ltd.
|
China
|
Nanjing Yanting Trade Co. Ltd.
|
China
|
Coty Hong Kong Distribution Ltd.
|
China
|
Suzhou Ganon Trading Co., Ltd.
|
China
|
Suzhou Jiahua Biochemistry Co.
|
China
|
HFC (Shanghai) Cosmetics Co. Ltd.
|
China
|
HFC Prestige Service Costa Rica
|
Costa Rica
|
Coty Ceska Republika, k.s.
|
Czech Republic
|
HFC Prestige International Denmark ApS
|
Denmark
|
HFC Prestige International Finland Oy
|
Finland
|
Coty France S.A.S.
|
France
|
Coty S.A.S.
|
France
|
Else France S.A.S.
|
France
|
Fragrance Production S.A.S.
|
France
|
Wella France SAS
|
France
|
HFC Prestige Holding France SAS
|
France
|
Coty Germany GmbH
|
Germany
|
Coty Services and Logistics GmbH
|
Germany
|
Coty Brands Management GmbH
|
Germany
|
HFC Prestige International Germany GmbH
|
Germany
|
HFC Prestige Manufacturing Germany GmbH
|
Germany
|
HFC Prestige Service Germany GmbH
|
Germany
|
HFC Prestige Manufacturing Cologne GmbH
|
Germany
|
Wella Grundstucks- und & Vermogensverwaltungs GmbH AG & Co KG
|
Germany
|
Sebastian Europe GmbH
|
Germany
|
HFC P&G Prestige Products GmbH
|
Germany
|
Coty Hellas S.A.
|
Greece
|
Wella Hellas MEPE
|
Greece
|
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
|
HFC Prestige International Hong Kong Ltd.
|
Hong Kong
|
Coty Hungary Kft.
|
Hungary
|
Coty India Beauty and Fragrance Products Private Ltd.
|
India
|
Wella India Private Limited
|
India
|
PT Coty Prestige Southeast Asia Indonesia
|
Indonesia
|
PT StarAsia Distributions
|
Indonesia
|
Coty Ireland Ltd.
|
Ireland
|
Wella Ireland
|
Ireland
|
HFC Prestige Manufacturing Ireland ltd.
|
Ireland
|
Coty Italia S.R.L.
|
Italy
|
Labocos SrL
|
Italy
|
Coty Prestige Japan KK
|
Japan
|
OPI Japan KK
|
Japan
|
HFC Prestige Japan Godo Kaisha
|
Japan
|
HFC Prestige International Holding Luxembourg SARL
|
Luxembourg
|
HFC Prestige International Luxembourg SARL
|
Luxembourg
|
Coty Prestige Southeast Asia (M) SDN. BHD.
|
Malaysia
|
Coty Malaysia Sdn. Bhd.
|
Malaysia
|
HFC Prestige International Malaysia Sdn. Bhd.
|
Malaysia
|
Coty Mexico S.A. de C.V.
|
Mexico
|
HFC Prestige International S. de R.L.
|
Mexico
|
HFC Cosmetics S. de R.L. de C.V.
|
Mexico
|
Galería Productora de Cosméticos, S. de R.L. de C.V.
|
Mexico
|
Coty Lancaster S.A.M.
|
Monaco
|
Coty B.V.
|
Netherlands
|
Coty Benelux B.V.
|
Netherlands
|
Coty Investments B.V.
|
Netherlands
|
Lancaster B.V.
|
Netherlands
|
Coty Global 1 B.V.
|
Netherlands
|
Coty Global 2 B.V.
|
Netherlands
|
Coty Global 3 B.V.
|
Netherlands
|
Coty Global 4 B.V.
|
Netherlands
|
HFC Prestige International Netherlands BV
|
Netherlands
|
HFC Prestige International Netherlands Holding BV
|
Netherlands
|
HFC Prestige International New Zealand Limited
|
New Zealand
|
HFC Prestige International Norway AS
|
Norway
|
Coty Prestige Southeast Asia Philippines, Inc.
|
Philippines
|
Coty Polska Sp z.o.o.
|
Poland
|
HFC Prestige Service Poland Sp. Zo.o
|
Poland
|
HFC Prestige International Poland Sp. Zo.o
|
Poland
|
P&G Prestige Products SA/ HFC Prestige Products Portugal SA
|
Portugal
|
Coty Puerto Rico Inc.
|
Puerto Rico
|
HFC Prestige International Puerto Rico LLC
|
Puerto Rico
|
Coty Cosmetics Romania S.r.l.
|
Romania
|
Bourjois Paris LLC
|
Russia
|
Coty Russia ZAO
|
Russia
|
Coty Beauty LLC
|
Russia
|
Russwell Ltd.
|
Russia
|
LLC Capella
|
Russia
|
Coty Arabia Trading Company
|
Saudi Arabia
|
Coty Asia Pte. Ltd.
|
Singapore
|
Coty Prestige Southeast Asia Pte. Ltd.
|
Singapore
|
Coty Southeast Asia Pte. Ltd.
|
Singapore
|
Coty Singapore Pte. Ltd.
|
Singapore
|
HFC Prestige International Singapore Pte. Ltd.
|
Singapore
|
HFC Prestige International Operations Switzerland SARL
|
Singapore
|
Coty Slovenska Republika s.r.o.
|
Slovak Republic
|
Coty Beauty South Africa (Pty) Ltd.
|
South Africa
|
Coty Korea Ltd.
|
South Korea
|
Coty Spain S.L., Sociedad Unipersonal
|
Spain
|
Productos Cosmeticos, SLU
|
Spain
|
HFC Prestige Products SAU
|
Spain
|
Professional Care Logistics SL
|
Spain
|
HFC Prestige International Sweden AB
|
Sweden
|
Coty (Schweiz) AG
|
Switzerland
|
Coty Geneva SA Versoix
|
Switzerland
|
Coty International Sarl
|
Switzerland
|
HFC Prestige International Switzerland Sarl
|
Switzerland
|
HFC Prestige International Holding Switzerland SARL
|
Switzerland
|
HFC Prestige International Operations Switzerland SARL
|
Switzerland
|
Coty Prestige (Taiwan) Ltd.
|
Taiwan
|
StarAsia Taiwan Co., Ltd.
|
Taiwan
|
Coty Prestige Southeast Asia (Thailand) Co. Ltd.
|
Thailand
|
HFC Prestige Manufacturing Thailand Ltd.
|
Thailand
|
HFC Prestij Satis ve Dagitim Ltd. Sti.
|
Turkey
|
Coty Distribution Emirates L.L.C.
|
United Arab Emirates
|
Coty Middle East FZCO
|
United Arab Emirates
|
Coty Regional Trading FZE
|
United Arab Emirates
|
Date:
|
November 9, 2016
|
/s/ Camillo Pane
|
|
|
Camillo Pane
|
|
|
Chief Executive Officer
|
Date:
|
November 9, 2016
|
/s/ Patrice de Talhouët
|
|
|
Patrice de Talhouët
|
|
|
Chief Financial Officer
|
Dated:
|
November 9, 2016
|
/s/ Camillo Pane
|
|
|
Camillo Pane
|
|
|
Chief Executive Officer
|
Dated:
|
November 9, 2016
|
/s/ Patrice de Talhouët
|
|
|
Patrice de Talhouët
|
|
|
Chief Financial Officer
|