XML 47 R36.htm IDEA: XBRL DOCUMENT
v3.22.0.1

EQUITY INVESTMENTS (Tables) | 6 Months Ended
--- | ---
Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Equity investments | The Company's equity investments, classified as Equity investments on the Condensed Consolidated Balance Sheets are represented by the following:
| December 31, 2021 |  | June 30, 2021
Equity method investments: |  |  |
KKW Holdings (a) | $ | 14.8 |  |  | $ | 16.2 |
Equity investments at fair value: |  |  |
Wella (b) | 1,175.0 |  |  | 1,260.0 |
Total equity investments | $ | 1,189.8 |  |  | $ | 1,276.2 |
(a)On January 4, 2021, the Company completed its purchase of 20% of the outstanding equity of KKW Holdings. The Company accounts for this minority investment under the equity method, given it has the ability to exercise significant influence over, but not control, the investee. The carrying value of the Company’s investment includes basis differences allocated to amortizable intangible assets. During the three and six months ended December 31, 2021, the Company recognized ($0.8) and $(1.4), respectively, representing its share of the investee’s net loss in Other (income) expense, net within the Condensed Consolidated Statements of Operations. (b)On November 30, 2020, the Company completed the previously announced strategic transaction with KKR for the sale of a 60% stake in Coty’s Wella Business. As of December 31, 2021 and June 30, 2021, the Company's stake in Wella was 25.9% and 40.0%, respectively. The following table presents summarized financial information of the Company’s equity method investees for the period ending December 31, 2021. Amounts presented represent combined totals at the investee level and not the Company’s proportionate share:
|  | Three Months Ended December 31, |  | Six Months Ended December 31,
|  | 2021 |  | 2020 (a) |  | 2021 |  | 2020 (a)
Summarized Statements of Operations information: |  |  |  |  |  |  |
Net revenues | $ | 744.3 |  |  | $ | 215.2 |  |  | $ | 1,363.5 |  |  | $ | 215.2 |
Gross profit | 508.4 |  |  | 147.0 |  |  | 938.1 |  |  | 147.0 |
Operating income | 76.2 |  |  | (5.1) |  |  | 101.8 |  |  | (5.1) |
Income before income taxes | 49.4 |  |  | (13.5) |  |  | 56.9 |  |  | (13.5) |
Net income | 36.5 |  |  | (12.7) |  |  | 42.0 |  |  | (12.7) |
(a)As the sale of the Wella Business occurred on November 30, 2020, Wella's prior year summarized financials only comprise of one month of activity. Additionally, as the investment in KKW did not occur until January 4, 2021, the prior year summarized financials do not include the financial activity of KKW.
Summary of movement in equity investments | The following table summarizes movements in equity investments with fair value option that are classified within Level 3 for the period ended December 31, 2021. There were no internal movements to or from Level 3 from Level 1 or Level 2 for the period ended December 31, 2021.
Equity investments at fair value: |
Balance as of June 30, 2021 | $ | 1,260.0 |
First Exchange | (390.6) |
Second Exchange | (212.7) |
Total gains/(losses) included in earnings | 518.3 |
Balance as of December 31, 2021 | $ | 1,175.0 |
Summary of significant unobservable inputs used in Level 3 valuation | The following table summarizes the significant unobservable inputs used in Level 3 valuation of the Company's investments carried at fair value as of December 31, 2021. Included in the table are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.
| Fair value |  | Valuation Technique |  | Unobservable input |  | Range
Equity investments at fair value | $ | 1,175.0 |  |  | Discounted cash flows |  | Discount rate |  | 11.25% (a)
|  | Growth rate |  | 1.5% - 4.2% (a)
| Market multiple |  | Revenue multiple |  | 2.0x (b)
|  | EBITDA multiple |  | 12.0x – 19.0x (b)
(a)The primary unobservable inputs used in the fair value measurement of the Company's equity investments with fair value option, when using a discounted cash flow method, are the discount rate and revenue growth rate. Significant increases (decreases) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement. The Company estimates the discount rate based on the investees' projected cost of equity and debt. The revenue growth rate is forecasted for future years by the investee based on their best estimates. Significant increases (decreases) in the revenue growth rate in isolation would result in a significantly higher (lower) fair value measurement. (b)The primary unobservable inputs used in the fair value measurement of the Company's equity investments with fair value option, when using a market multiple method, are the revenue multiple and EBITDA multiple. Significant increases (decreases) in the revenue multiple or EBITDA multiple in isolation would result in a significantly higher (lower) fair value measurement. The market multiples are derived from a group of guideline public companies.

X
- Definition Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsAndLiabilitiesMeasuredOnRecurringAndNonrecurringBasisValuationTechniquesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19279-110258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueAssetsMeasuredOnRecurringBasisUnobservableInputReconciliationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in net income (trading) and investment in equity security measured at fair value with change in fair value recognized in net income (FV-NI). + References No definition available. + Details
Name: | us-gaap_TradingSecuritiesAndCertainTradingAssetsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration