What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-08-26 compared with 2020-08-27 · 11 added, 78 removed, 66 unchanged (57% of the section changed)

9 unchanged sentences

The election was made available to stockholders beginning with the dividend declared on May 8, 2019, and stockholders were able to make this election on a quarterly basis.

As of May 11, 2020, our Board of Directors (“Board”) has suspended the payment of cash dividends (on common and preferred stock), to strengthen our cash and liquidity and in keeping with our 2018 Coty Credit Agreement, as amended.

As we focus on preserving cash, we expect to suspend the payment of dividends through April 1, 2021 or until such later date that we reach a Net debt to Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) of 4x.

Any determination to pay dividends in the future will be at the discretion of our Board.

Dividends on the Convertible Series B Preferred Stock are payable in cash, by increasing the amount of accrued dividends with respect to a share of Convertible Series B Preferred Stock or any combination thereof, at the sole discretion of the Company.

Furthermore, we are required to comply with certain covenants contained within the agreements that govern our indebtedness, including our credit agreements and the indenture relating to our senior unsecured notes.

On April 29, 2020, our Board of Directors susp ended the payment of dividends on our common stock, in accordance with our 2018 Coty Credit Agreement, as amended.

As we focus on preserving cash, we have continued to suspend the payment of Common Stock dividends.

Any determination to pay dividends on our common stock in the future will be at the discretion of our Board of Directors and is subject to the restrictions under the terms of the Convertible Series B Preferred Stock described below.

Dividends on the Convertible Series B Preferred Stock are payable in cash, or by increasing the amount of accrued dividends on Convertible Series B Preferred Stock, or any combination thereof, at the sole discretion of the Company.

After the expiration of applicable restrictions under the 2018 Coty Credit Agreement, as amended, we began to pay dividends on the Convertible Series B Preferred Stock in cash for the period ending June 30, 2021, and we expect to continue to pay such dividends in cash on a quarterly basis, subject to the declaration thereof by our Board of Directors.

Dividends accrued on the Convertible Series B Preferred Stock before April 1, 2021 have not been paid in cash and any decision to do so will be at the discretion of our Board.

The terms of the Convertible Series B Preferred Stock restrict our ability to declare cash dividends on our common stock until all accrued dividends on the Convertible Series B Preferred Stock have been declared and paid in cash.

These agreements contain customary representations and warranties as well as customary affirmative and negative covenants, including but not limited to, restrictions on incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions.

7 unchanged sentences

The dollar amounts indicated in the graph above are as of the last trading day in the quarter.

The returns of each company in the Peer Group have been weighted according to their respective stock market capitalization at the beginning of each measurement period for purposes of arriving at a Peer Group average.

The returns of each company in the Peer Group have been weighted according to their respective stock market capitalization at the beginning of the measurement period for purposes of arriving at a Peer Group average.

Equity Compensation Plan Information

40 unchanged sentences

Each phantom unit has an economic value equivalent to one share of the Company’s Class A Common Stock.

The phantom units vest on the fifth anniversary of the grant date and, in the event of a change in control or Mr.

Becht’s death or disability, the phantom units shall vest immediately.

The phantom units vested on the fifth anniversary of the grant date.

Within 30 days of the grant date, Mr.

3 unchanged sentences

Issuer Purchases of Equity Securities

453,488 shares of Class A Common Stock were repurchased during the fiscal year ende d June 30, 2020.

Selected Financial Data.

(in millions, except per share data) Year Ended June 30,

2017 (e)(h)(i)

2016 (f)(h)(i)

Condensed Consolidated Statements of Operations Data:

Net revenues $ 4,717.8 $ 6,287.9 $ 6,841.8 $ 7,650.3 $ 4,349.1

Gross profit 2,726.6 3,789.4 4,123.6 4,622.0 2,603.1

Restructuring costs 130.2 34.2 134.9 374.8 86.9

Acquisition- and divestiture-related costs 157.3 — 64.2 355.4 174.0

Asset impairment charges 434.0 3,729.0 — — 5.5

Operating (loss) income (1,236.5) (3,688.4) (155.5) (420.9) 254.2

Interest expense, net 242.7 225.2 200.6 218.6 81.9

(Loss) income before income taxes from continuing operations (1,467.6) (3,945.4) (394.5) (658.0) 138.8

(Benefit) provision for income taxes (377.7) (54.8) (32.2) (259.5) (40.4)

Net (loss) income from continuing operations (1,089.9) (3,890.6) (362.3) (398.5) 179.2

Net income from discontinued operations 87.2 121.0 234.5 — —

Net (loss) income (1,002.7) (3,769.6) (127.8) (398.5) 179.2

Net (loss) income attributable to Coty Inc.

for common stockholders $ (1,006.7) $ (3,784.2) $ (168.8) $ (422.2) $ 156.9

Amounts attributable to Coty Inc.:

(Loss) income from continuing operations attributable to Coty Inc.

common stockholders (1,100.4) (3,905.2) (403.3) (398.5) 179.2

Net (loss) income attributable to Coty Inc.

common stockholders $ (1,013.2) $ (3,784.2) $ (168.8) $ (398.5) $ 179.2

Per Share Data:

Net (loss) income attributable to Coty Inc.

per common share:

Basic earnings (loss) from continuing operations $ (1.45) $ (5.20) $ (0.54)

Basic earnings (loss) for Coty Inc.

$ (1.33) $ (5.04) $ (0.23) $ (0.66) $ 0.45

Diluted earnings (loss) from continuing operations $ (1.45) $ (5.20) $ (0.54)

Diluted earnings (loss for Coty Inc.

$ (1.33) $ (5.04) $ (0.23) $ (0.66) $ 0.44

Weighted-average common shares

Basic 759.1 751.2 749.7 642.8 345.5

Diluted 759.1 751.2 749.7 642.8 354.2

Dividends declared per common share $ 0.38 $ 0.50 $ 0.50 $ 0.65 $ 0.25

(in millions) Year Ended June 30,

Consolidated Cash Flows Data:

Net cash (used in) provided by operating activities $ (50.9) $ 639.6 $ 413.7 $ 757.5 $ 501.4

Net cash (used in) investing activities (833.4) (454.0) (687.6) (1,163.6) (1,059.2)

Net cash (used in) provided by financing activities 877.3 (160.3) 69.3 595.2 592.6

(in millions) As of June 30,

Consolidated Balance Sheets Data:

Cash and cash equivalents $ 308.3 $ 340.4 $ 331.6 $ 535.4 $ 372.4

Total assets (g)(j)

16,728.8 17,710.0 22,630.2 22,548.2 7,035.6

Total debt, net of discount 8,147.3 7,735.0 7,610.5 7,205.0 4,162.8

Total Coty Inc.

stockholders’ equity 3,004.6 4,586.9 8,849.7 9,314.7 360.2

(a) Included in fiscal 2020 are the financial impacts of the divestiture of Younique LLC on September 16, 2019, and the King Kylie transaction on January 6, 2020.

(b) In fiscal 2020, we adopted ASU 2016-02 , Leases (Topic 842) which requires lease assets and liabilities to be recorded on the balance sheet.

(c) In fiscal 2019, we adopted, on a modified retrospective basis as of July 1, 2018, authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) for ASC 606, Revenue from Contracts with Customers and ASU No.

2016-16, Income Taxes (Topic 740):

Intra-Entity Transfers of Assets Other Than Inventory .

(d) Included in fiscal 2018 are the financial impacts of the acquisition of the Burberry Beauty Business as of October 2, 2017.

(e) Included in fiscal 2017 are the financial impacts of the acquisitions of the P&G Beauty Business as of October 1, 2016, ghd as of November 21, 2016 and Younique as of February 1, 2017.

(f) Included in fiscal 2016 are the financial impacts of the Hypermarcas Brands as of February 1, 2016.

(g) In fiscal 2017, we adopted authoritative guidance issued by the FASB requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts.

Prior to the adoption of this guidance, debt issuance costs were presented within total assets in the Consolidated Balance Sheets.

Total assets for all periods presented in the table above have been conformed to the current balance sheet presentation.

(h) In fiscal 2019, we adopted authoritative guidance issued by the FASB requiring employers to report the service cost component of net periodic benefit cost in the same line item or items as other compensation costs arising from services rendered by the underlying employees during the period.

The other components of net periodic benefit cost are required to be reported separately and outside of operating income.

In addition, only the service cost component would be eligible for capitalization in assets.

The impacts of the adoption of this standard were retrospectively applied to fiscal years 2018 and 2017 presented in the table above.

(i) For fiscal years 2017 and 2016, the results were not recast to show discontinued operations.

The P&G Beauty Business acquisition and the ghd acquisition were made during fiscal year 2017 and were mainly included in the Professional Beauty segment, which contributed net revenues of $1,395.5 and $250.0 for fiscal 2017 and 2016, respectively.

Due to the purchase accounting adjustments for the acquisition for the P&G business, the Company concluded through a cost/benefit analysis that it was impractical to recast the discontinued operations impact for these two fiscal years due to the complexities of the recast.

(j) Due to the acquisition and purchase accounting adjustments for the acquisition of the P&G business, the Company concluded through a cost/benefit analysis that it was impractical to recast the assets held for sale impact for the fiscal years 2018, 2017, and 2016, due to the complexities of the recast.

Zero and 453,488 shares of Class A Common Stock were repurchased during the fiscal years ende d June 30, 2021 and 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity