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EQUITY AND CONVERTIBLE PREFERRED STOCK | 3 Months Ended
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Sep. 30, 2024
Equity [Abstract] |
EQUITY AND CONVERTIBLE PREFERRED STOCK | EQUITY AND CONVERTIBLE PREFERRED STOCK Common Stock As of September 30, 2024, the Company’s common stock consisted of Class A Common Stock with a par value of $0.01 per share. The holders of Class A Common Stock are entitled to one vote per share. As of September 30, 2024, total authorized shares of Class A Common Stock was 1,250.0 million and total outstanding shares of Class A Common Stock was 867.8 million. On September 29, 2023 and October 2, 2023, the Company issued a total of 33.0 million shares of Class A common stock, par value $0.01 per share, at a public offering price of $10.80 (or €10.28) per share in a global offering (the “Offering”). The Company also announced the admission to listing and trading of its Common Stock on the professional segment of the Euronext Paris. The Company received $348.4 from the Offering, net of $10.0 of underwriting fees. Additionally, the Company incurred $6.0 in other professional fees. The underwriting fees and other professional fees incurred in connection with the Offering were incremental costs directly attributable to the issuance and thus were presented as a reduction of Equity in the Condensed Consolidated Balance Sheets. The Company's Majority Stockholder As of September 30, 2024, JAB Beauty B.V. ("JAB"), the Company’s largest stockholder, may be deemed to beneficially own approximately 55% of Coty’s Class A Common Stock. This is inclusive of all voting interests of Mr. Peter Harf, the Company's Chairman, and HFS Holdings S.à r.l, (“HFS”), which is beneficially owned by Mr. Harf, including its shares of Convertible Series B Preferred Stock (the "Series B Preferred Stock") on an if converted basis. The Company’s CEO, Sue Nabi, was granted a one-time sign-on award of restricted stock units on June 30, 2021. On October 29, 2021 and September 18, 2023, JAB completed the transfer of 10.0 million and 5.0 million shares of Common Stock, respectively, to Ms. Nabi pursuant to an equity transfer agreement. See Note 14—Share-Based Compensation Plans for additional information. Series A Preferred Stock As of September 30, 2024, total authorized shares of preferred stock are 20.0 million. There is one class of Preferred Stock, Series A Preferred Stock with a par value of $0.01 per share. As of September 30, 2024, there were 1.0 million shares of Series A authorized, issued, and outstanding. Series A Preferred Stock are not entitled to receive any dividends and have no voting rights except as required by law. On March 27, 2017, a Series A Preferred Stock subscription agreement was entered into with Lambertus J.H. Becht (“Mr. Becht”), the Company’s former Chairman of the Board. Under the terms provided in the subscription agreement, the Series A Preferred Stock immediately vested on the grant date and the holder was entitled to exchange the vested shares after the fifth anniversary of the date of issuance. This exchange right expired on March 27, 2024. The Company has the right to redeem the Series A Preferred Stock (1.0 million shares) at a redemption price of $0.01 per share. The Company plans to redeem these shares of Series A Preferred Stock in accordance with their terms. Convertible Series B Preferred Stock In 2020, the Company completed the issuance and sale to KKR Rainbow Aggregator L.P. (“KKR Aggregator”) of 1.0 million shares of Series B Preferred Stock, par value $0.01 per share, for an aggregate purchase price of $1,000 per share. On August 27, 2021, KKR Aggregator and its affiliated investment funds sold 146,057 shares of Series B Preferred Stock, to HFS, that is beneficially owned by Peter Harf, a director of the Company. As a result of various conversions and exchanges of KKR Aggregator's shares of the Series B Preferred Stock, as of December 31, 2021, Kohlberg Kravis Roberts & Co. L.P. and its affiliates ("KKR") has fully redeemed/exchanged all of their Series B Preferred Stock. Cumulative preferred dividends accrue daily on the Series B Preferred Stock at a rate of 9.0% per year. During the three months ended September 30, 2024 and 2023, the Board of Directors declared dividends on the Series B Preferred Stock of $3.3 and paid accrued dividends of $3.3. As of September 30, 2024 and June 30, 2024, the Series B Preferred Stock had outstanding accrued dividends of $3.3. Treasury Stock Share Repurchase Program Since February 2014, the Board has authorized the Company to repurchase its Class A Common Stock under approved repurchase programs. On February 3, 2016, the Board authorized the Company to repurchase up to $500.0 of its Class A Common Stock, and on November 13, 2023, the Board increased the Company's share repurchase authorization by an additional $600.0 (the “Share Repurchase Program”). Repurchases may 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 Class A Common Stock, and general market conditions. As of September 30, 2024, the Company has $796.8 remaining under the Share Repurchase Program. In June 2022, December 2022 and November 2023, the Company entered into forward repurchase contracts (the “Forward” and together the “Forwards”) with three large financial institutions (“Counterparties”) to start hedging for potential $200.0, $196.0 and $294.0 share buyback programs in 2024, 2025 and 2026, respectively. In February 2024, the Company elected to physically settle the June 2022 Forward for a cash payment of $200.0 in exchange for 27.0 million shares of its Class A Common Stock. The fair value of the shares repurchased was approximately $350.6, which was recorded as an increase to Treasury stock in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity. As part of the Forward agreements, the Company will pay interest on the outstanding underlying notional amount of the Forwards held by the Counterparties during the contract periods. The interest rates are variable, based on the United States secured overnight funding rate (“SOFR”) plus a spread. The weighted average interest rate plus applicable spread for the December 2022 and November 2023 Forward transactions were 9.8% and 8.2%, respectively, as of September 30, 2024. In addition, the Forwards include a provision for a potential true-up in cash upon specified changes in the price of the Company’s Class A Common Stock relative to the Initial Price (“Hedge Valuation Adjustment”). Such Hedge Valuation adjustment shall not result in a termination date or any adjustment of the number of Coty’s Class A Common Stock shares purchased by the Counterparties at inception. Since the Forwards permit a net cash settlement alternative in addition to the physical settlement, the Company accounted for the Forwards initially and subsequently at their fair value, with changes in the fair value recorded in Other expense, net in the Condensed Consolidated Statement of Operations. See Note 12—Derivative Instruments and Footnote 19— Subsequent Events for additional information. Dividends On April 29, 2020, the Board of Directors suspended the payment of dividends on Common Stock. No dividends on Common Stock were declared for the period ended September 30, 2024. The change in dividends accrued recorded to APIC in the Condensed Consolidated Balance Sheet as of September 30, 2024 and 2023 was nil, which represent dividends no longer expected to vest as a result of forfeitures of outstanding restricted stock units (“RSUs”). In addition, the Company made payments of nil for the previously accrued dividends on RSUs that vested during the three months ended September 30, 2023 and none for the three months ended September 30, 2024. Total accrued dividends on unvested RSUs and phantom units included in Accrued expenses and other current liabilities are $0.8 as of September 30, 2024 and June 30, 2024. Accumulated Other Comprehensive Income (Loss)
|  |  | Foreign Currency Translation Adjustments |  |  |  |
| Gain (loss) on Cash Flow Hedges |  | Loss on Net Investment Hedge |  | Other Foreign Currency Translation Adjustments |  | Pension and Other Post-Employment Benefit Plans (a) |  | Total
Balance—July 1, 2024 | $ | 2.1 |  |  | $ | (23.0) |  |  | $ | (823.0) |  |  | $ | 48.8 |  |  | $ | (795.1) |
Other comprehensive (loss) income before reclassifications | (0.4) |  |  | (60.2) |  |  | 180.7 |  |  | 2.3 |  |  | 122.4 |
Net amounts reclassified from AOCI/(L) | (0.4) |  |  | — |  |  | — |  |  | (1.4) |  |  | (1.8) |
Net current-period other comprehensive (loss) income | (0.8) |  |  | (60.2) |  |  | 180.7 |  |  | 0.9 |  |  | 120.6 |
Balance—September 30, 2024 | $ | 1.3 |  |  | $ | (83.2) |  |  | $ | (642.3) |  |  | $ | 49.7 |  |  | $ | (674.5) |
(a) For the three months ended September 30, 2024, other comprehensive income before reclassifications of $2.3 and net amounts reclassified from AOCI/(L) related to pensions and other post-employment benefit plans included amortization of prior service credits and actuarial losses of $1.0, net of tax of $0.4.
|  |  | Foreign Currency Translation Adjustments |  |  |  |
| Loss on Cash Flow Hedges |  | (Loss) gain on Net Investment Hedge |  | Other Foreign Currency Translation Adjustments |  | Pension and Other Post-Employment Benefit Plans |  | Total
Balance—July 1, 2023 | $ | 0.7 |  |  | $ | (49.8) |  |  | $ | (667.9) |  |  | $ | 54.6 |  |  | $ | (662.4) |
Other comprehensive income (loss) before reclassifications | 1.5 |  |  | 17.7 |  |  | (132.1) |  |  | (1.5) |  |  | (114.4) |
Net amounts reclassified from AOCI/(L) | — |  |  | — |  |  | — |  |  | (0.6) |  |  | (0.6) |
Net current-period other comprehensive income (loss) | 1.5 |  |  | 17.7 |  |  | (132.1) |  |  | (2.1) |  |  | (115.0) |
Balance—September 30, 2023 | $ | 2.2 |  |  | $ | (32.1) |  |  | $ | (800.0) |  |  | $ | 52.5 |  |  | $ | (777.4) |

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