What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-08-26 compared with 2020-08-27 · 842 added, 862 removed, 1869 unchanged (48% of the section changed)

4 unchanged sentences

Our management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021.

Based on the evaluation of our disclosure controls and procedures as of June 30, 2020, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Based on the evaluation of our

disclosure controls and procedures as of June 30, 2021, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

We have included our Management Report over Internal Control over Financial Reporting in “Item 15.

36 unchanged sentences

(4) List of Exhibits:

Number Document

Transaction Agreement dated as of July 8, 2015 among The Procter & Gamble Company, Coty Inc., Galleria Co.

28 unchanged sentences

Separation Agreement, dated June 1, 2020, by and among Coty Inc., Coty International Holding, B.V., Waves UK Divestco Limited and Rainbow UK Bidco Limited (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 2, 2020).

Amended and Restated Sale and Purchase Agreement, dated November 11, 2020, by and among Coty Inc., Coty International B.V.

and Rainbow UK Bidco Limited (incorporated by reference to Exhibit 2.2 of the Company ’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 12, 2020).

Amended and Restated Separation Agreement, dated November 11, 2020, by and among Coty Inc., Coty International B.V., Waves UK Divestco Limited and Rainbow UK Bidco Limited(incorporated by reference to Exhibit 2.1 of the C o mpany ’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 12, 2020).

Amended and Restated Certificate of Incorporation of Coty Inc.

18 unchanged sentences

London Branch, as London Paying Agent with respect to the Euro Notes (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2026 Dollar notes (included in Exhibit 4.4) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2023 Euro Notes (included in Exhibit 4.4) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2036 Euro Notes (included in Exhibit 4.4) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2026 Dollar notes (included in Exhibit 4.

5 ) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2023 Euro Notes (included in Exhibit 4.

5 ) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Form of 2036 Euro Notes (included in Exhibit 4.

5 ) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 10, 2018).

Stockholders Agreement, dated as of March 17, 2019, by and among JAB Holdings, Parent, Offeror and the Company (incorporated by reference to Exhibit (e)(17) to the Company’s Solicitation/Recommendation Statement on Schedule 14D-9/A filed on March 18, 2019).

Description of Securities.

Indenture, dated as of April 21, 2021, among Coty Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as Trustee and Collateral Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 22, 2021).

Form of 5.000% Senior Secured Notes due 2026 (included in Exhibit 4.11) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 22, 2021).

First Lien/First Lien Intercreditor Agreement, dated as of April 21, 2021, among JPMorgan Chase Bank, N.A., as the credit facility agent, Deutsche Bank Trust Company Americas, as the initial other authorized representative, and each additional authorized representative from time to time party thereto, as consented to by Coty Inc.

and the other grantors party to the Consent of Grantors attached thereto (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on April 22, 2021).

Pledge and Security Agreement, dated as of April 21, 2021, by and among Coty Inc., the other grantors from time to time party thereto and Deutsche Bank Trust Company Americas, as collateral agent (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on April 22, 2021).

Indenture, dated as of June 16, 2021, among Coty Inc., the guarantors named therein, and Deutsche Bank Trust Company Americas, as Trustee and Collateral Agent and Deutsche Bank AG, London Branch as paying agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K file on June 16, 2021).

Form of 3.875% Senior Secured Notes due 2026 (included in Exhibit 4.1 5 ) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K file on June 16, 2021).

Joinder Agreement No.

1, dated as of June 16, 2021 among and acknowledged by JPMorgan Chase Bank, N.A., as credit facility agent, Deutsche Bank Trust Company Americas as initial other authorized representative, and the Company to the First Lien/First Lien Intercreditor Agreement, dated as of April 21, 2021 among JPMorgan Chase Bank, N.A., as credit facility agent and Deutsche Bank Trust Company Americas as initial other authorized representative (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on June 16, 2021).

Pledge and Security Agreement, dated as of June 16, 2021, by and among Coty Inc., the other grantors from time to time party thereto and Deutsche Bank Trust Company Americas, as collateral agent (incorporated by reference to Exhibit 4.

4 to the Company’s Current Report on Form 8-K filed on June 16, 2021).

Credit Agreement, dated as of October 27, 2015, by and among Coty Inc., the other borrowers party thereto from time to time, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 30, 2015).

2 unchanged sentences

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).

Guaranty Agreement, dated as of October 27, 2015, by and among Coty Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporate by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 30, 2015).

Guaranty Agreement, dated as of October 27, 2015, by and among Coty Inc., its subsidiaries signatory thereto and any other subsidiary who may become a party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 30, 2015).

Incremental Assumption Agreement and Amendment No.

9 unchanged sentences

2, dated April 29, 2020, to the Amended and Restated Credit Agreement, dated April 5, 2018, by and among Coty Inc., Coty B.V., the other borrowers party thereto from time to time, the lenders and other parties from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K/A filed on April 30, 2020).

Transition Services Agreement, effective as of October 1, 2016, by and between The Procter & Gamble Company and Galleria Co.

(incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 3, 2016).

Amendment No.

3 to Credit Agreement (Incremental Assumption Agreement), dated as of June 4, 2021, by and among Coty Inc., Coty B.V., the other loan parties party thereto, the incremental revolving lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2021).

Investment Agreement, dated May 11, 2020, by and between Coty Inc.

7 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Company’s 8-K filed on May 26, 2020).

Employment Agreement, dated December 10, 2019, between Coty Management B.V.

and Pierre-Andre Terisse (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Shareholders’ Agreement, dated as of November 30, 2020, by and between Coty Inc., Coty International B.V., Rainbow Capital Group Limited, Rainbow JVCo Limited and Rainbow UK Bidco Limited (incorporated by reference to Exhibit 10.2 to the Company’s 8-K filed on December 1, 2020).

IP Cross-License Agreement, dated as of November 30, 2020, by and between Coty International B.V.

and Wella International Operations Switzerland S.á.r.l.

(incorporated by reference to Exhibit 10.1 to the Company’s 8-K filed on December 1, 2020).

Employment Agreement, dated January 27, 2020, between Coty Management B.V.

1 unchanged sentence

Employment Agreement, dated June 3, 2020, between Coty Management B.V.

and Gordon Von Bretten.†

Offer Letter, dated as of April 1, 2016, between Ayesha Zafar and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2016).†

Employment Agreement, dated October 12, 2015, between Coty Geneva SA Versoix and Sylvie Moreau (incorporated by reference to Exhibit 10.30 to the Company’s Quarterly Report on Form 10-Q filed on February 4, 2016).†

Employment Agreement, dated November 2, 2015, between Coty S.A.S.

and Edgar Huber (incorporated by reference to Exhibit 10.31 to the Company’s Quarterly Report on Form 10-Q filed on February 4, 2016).†

Offer Letter, dated June 20, 2019, between Coty Inc.

and Edgar Huber (incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Side Letter, dated March 17, 2020, between Coty Inc.

and Edgar Huber (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Employment Agreement, dated October 12, 2016 between HFC Prestige International Operations Switzerland sarl and Anne Jaeckin, and the addendum thereo dated May 18, 2020.†

and Gordon Von Bretten (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on August 27 , 2020).†

Employment Agreement, dated October 31, 2019, between Coty Management B.V.

and Richard Jones (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on February 5, 2020).†

Amended Employment Agreement, dated June 20, 2019, between Coty SAS and Simona Cattaneo (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Employment Agreement, dated February 27, 2020, between Coty Management B.V.

and Fiona Hughes (incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Employment Agreement, dated November 12, 2018, between Coty Services UK Limited and Pierre Laubies (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K on November 14, 2018).†

Employment Agreement Letter, dated January 9, 2020, between Coty Management B.V.

and Pierre Laubies (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Settlement Agreement, dated February 27, 2020, between Coty Management B.V.

and Pierre Laubies (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Side Letter to Settlement Agreement, dated May 5, 2020, between Coty Management B.V.

and Pierre Laubies (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020).†

Series A-1 Preferred Stock Repurchase Agreement, dated as of February 27, 2020, between Coty Inc., Pierre Laubies and Elmfort Invest B.V.

(incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on May 11, 2020)†

Amendment and Settlement Agreement, dated May 31, 2020, between Coty Management B.V.

and Pierre Denis.†

Settlement Agreement, dated May 30, 2020, between Coty Management B.V.

and Giovanni Pieraccione.†

Separation Agreement, dated May 29, 2020, between Coty Inc.

and Daniel Ramos Day.†

Separation Agreement, dated as of February 1, 2019, between Coty Inc.

and Laurent Kleitman (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on May 8, 2019).†

Separation Agreement, dated 5 November, 2019, between Coty Services UK Limited and Greerson McMullen (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2019).†

S eparation and Termination Agreement, dated as of September 9, 2019, by and between HFC Prestige International Operations Switzerland Sarl and Luc Volatier (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2019).

Offer Letter, dated as of April 1, 2016, between Ayesha Zafar and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 11, 2016).†

Employment Agreement, dated May 7, 2020, between Coty International B.V.

and Laurent Mercier (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on February 9, 2021).†

Offer Letter, dated October 21, 2019, between Coty International B.V.

and Laurent Mercier (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on February 9, 2021).†

Offer Letter, dated December 5, 2020, Coty International B.V.

and Laurent Mercier (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on February 9, 2021).†

Employment Agreement, dated December 21, 2020, between Coty Italia S.r.l.

and Anna von Bayern (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2021).†

Employment Agreement, dated January 1, 2021, between Coty Italia S.r.l.

and Anna von Bayern (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2021).†

Employment Agreement, dated October 12, 2016 between HFC Prestige International Operations Switzerland sarl and Anne Jaeckin, and the addendum thereto dated May 18, 2020 (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed on August 27 , 2020).†

Employment Agreement, dated October 13, 2020, between Coty Inc.

and Sue Nabi (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2021).†

Equity Transfer Agreement, dated July 2, 2020, among Cottage Holdco B.V., Coty Inc.

and Sue Nabi (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2021).†

Restricted Stock Unit Award between Coty Inc.

and Sue Nabi.

Settlement Agreement, dated December 8, 2020, between Coty Management B.V.

and Pierre-Andre Terisse (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on February 9, 2021).†

Separation Agreement, dated October 10, 2020 between Coty Inc.

and Edgar Huber (incorporated by reference to Exhibit 10.

5 to the Company’s Quarterly Report on Form 10-Q filed on February 9, 2021) .†

Settlement Agreement, dated July 31, 2020, between Coty Management B.V.

and Fiona Hughes (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2020).†

Settlement Agreement, dated September 25, 2020, between Coty Management B.V.

and Pascal Baltussen (incorporated by reference to Exhibit 10.

2 to the Company’s Quarterly Report on Form 10-Q filed on November 6, 2020) .†

Form of Indemnification Agreement between the registrant and its directors and officers (incorporated by reference to Exhibit 10.24 to Amendment No.

7 unchanged sentences

Amended and Restated Coty Inc.

Equity and Long-Term Incentive Plan, as amended and restated on February 1, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2017).†

Equity and Long-Term Incentive Plan, as amended and restated on November 3 , 20 20 (incorporated by reference to Exhibit 10.

1 to the Company’s Current Report on Form 8 -Q filed on November 6 , 20 2 0 ).†

Restricted Stock Unit Award Terms and Conditions Under Coty Inc.

7 unchanged sentences

Form of Subscription Agreement for Series A Preferred Stock (incorporated by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K filed on August 17, 2015).†

Subscription Agreement, dated as of February 16, 2017, between Coty Inc.

and Sébastien Froidefond (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2017).†

Subscription Agreement, dated as of March 27, 2017, between Coty Inc.

and Lambertus J.H.

Becht (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2017).†

Amended and Restated Coty Inc.

Stock Plan for Directors, as adopted November 3, 2020.†

Amended Form of Elite Subscription and Stock Option Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on May 10, 2017).†

6 unchanged sentences

Form of Restricted Stock Award Agreement under the Amended and Restated Coty Inc.

Equity and Long Term-Incentive Plan (incorporated by reference to Exhibit 10.

5 2 to the Company’s Annual Report on Form 10-K filed on August 27, 2020) †

Form of Restricted Stock Unit Terms and Conditions, as adopted on December 17, 2020, under the Amended and Restated Coty Inc.

Equity and Long-Term Incentive Plan .

17 unchanged sentences

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, New York on August 26, 2021.

/s/ Pierre-André Terisse

Pierre-André Terisse

Chief Operating Officer and Chief Financial Officer

/s/ Laurent Mercier

Laurent Mercier

Chief Financial Officer

POWER OF ATTORNEY

2 unchanged sentences

Signature Title Date

/s/Peter Harf Chief Executive Officer and Chairman of the Board of Directors

(Principal Executive Officer)

August 27, 2020

/s/Pierre-André Terisse Chief Operating Officer/Chief Financial Officer

/s/Sue Nabi Chief Executive Officer and Director

(Principal Executive Officer) August 26, 2021

/s/Laurent Mercier Chief Financial Officer

(Principal Financial Officer) August 26, 2021

(Pierre-André Terisse)

(Laurent Mercier)

/s/Ayesha Zafar Senior Vice President, Group Controller

1 unchanged sentence

(Ayesha Zafar)

/s/Maria Asuncion Aramburuzabala Director August 26, 2021

(Maria Asuncion Aramburuzabala)

/s/Beatrice Ballini Director August 26, 2021

(Beatrice Ballini)

/s/Sabine Chalmers Director August 27, 2020

(Sabine Chalmers)

/s/Joachim Creus Director August 26, 2021

3 unchanged sentences

(Olivier Goudet)

/s/Peter Harf Chairman of the Board of Directors August 26, 2021

/s/Johannes Huth Vice Chairman of the Board of Directors August 26, 2021

(Johannes Huth)

/s/Paul Michaels Director August 27, 2020

(Paul Michaels)

/s/Anna Makanju Director August 26, 2021

(Anna Makanju)

/s/Isabelle Parize Director August 26, 2021

(Isabelle Parize)

/s/Erhard Schoewel Director August 26, 2021

2 unchanged sentences

(Robert Singer)

/s/Isabelle Parize Director August 27, 2020

(Isabelle Parize)

/s/Justine Tan Director August 26, 2021

11 unchanged sentences

The Company's internal control over financial reporting as of June 30, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report which appears herein.

/s/ Peter Harf /s/ Pierre-André Terisse

Peter Harf Pierre-André Terisse

Chairman and Chief Executive Officer Chief Operating Officer/Chief Financial Officer

/s/Sue Nabi /s/Laurent Mercier

Sue Nabi Laurent Mercier

Chief Executive Officer Chief Financial Officer

August 26, 2021

46 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill and Other Indefinite-lived Intangible Assets – Goodwill for the Americas Reporting Unit and Impairment of Europe, Middle East and Africa “EMEA” Reporting Unit’s Goodwill and certain Trademarks – Refer to Notes 2 and 12 to the financial statement s

Goodwill and Other Intangible Assets, net – Max Factor Trademark Valuation – Refer to Notes 2 and 12 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its’ carrying value.

The Company determines the fair value of its reporting units using a combination of a discounted cash flow model and the market approach, when applicable.

The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to expected revenue growth rates, expected profit margins, and discount rates.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both.

Management assesses goodwill at least annually as of May 1 for impairment, or more frequently, if certain events or circumstances warrant.

The goodwill balance was $3,973.9 million as of June 30, 2020, of which $1,343.5 million and $1,781.6 million was allocated to the Americas and EMEA reporting units (the “reporting units”), respectively.

During fiscal 2020, the Company recognized goodwill impairment charges of $105.0 million related to the EMEA reporting unit, as the fair value of this reporting unit was lower than its’ carrying value.

In addition, the fair value of the Americas reporting unit exceeded its’ carrying value by approximately 2.4%.

The Company has trademarks that are indefinite-lived intangible assets.

1 unchanged sentence

Management estimates the fair value of these trademarks annually on its elected assessment date of May 1, or more frequently if certain events occur, based upon the income approach, using the relief from royalty methodology, which is a specific discounted cash flow method.

The determination of the fair value requires management to make significant estimates and assumptions related to the trademarks’ estimated cash flows, royalty rates and discount rates, especially those related to the CoverGirl, Max Factor and Sally Hansen trademarks (the “trademarks”).

Changes in these assumptions could have a significant impact on the fair value of the trademarks, the amount of any impairment charge, or both.

As of June 30, 2020, the carrying value of the trademarks was $995.5 million, of which $327.4 million, $169.7 million and $161.3 million related to the CoverGirl, Max Factor and Sally Hansen trademarks, respectively.

During fiscal 2020, the Company recognized trademark impairment charges of $329.0 million (mainly related to CoverGirl and Max Factor), as the fair values of the trademarks were lower than their carrying values.

In addition, the fair value of the Sally Hansen trademark exceeded its’ carrying value by approximately 0.6%.

Given the significant judgments made by management to estimate the fair values of the reporting units and the difference between the reporting units fair value and carrying value, performing auditing procedures to evaluate the reasonableness of management’s judgments regarding the business and valuation assumptions utilized in the valuation model, particularly the expected revenue growth rates and expected profit margins, and the selection of the discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

In addition, given the significant estimates and assumptions made by management to estimate the fair values of the trademarks, the impairment charges recorded during the year for the trademarks, and the difference between fair value and carrying value for the Sally Hansen trademark, performing audit procedures to evaluate the reasonableness of such estimates and assumptions, particularly the trademarks’ estimated cash flows, and the selection of the royalty and discount rates, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

The determination of the fair value requires management to make significant estimates and assumptions related to the trademarks’ estimated cash flows, royalty, and discount rates, especially those related to the Max Factor trademark.

Changes in these assumptions could have a significant impact on the fair value of the Max Factor trademark, the amount of any impairment charge, or both.

As of June 30, 2021, the carrying value of the indefinite-lived intangible assets was $1,018.7 million, of which $169.7 million related to the Max Factor trademark.

The fair value of the Max Factor trademark exceeded its’ carrying value by 3.3%.

Given the significant estimates and assumptions made by management to estimate the fair value and the difference between the fair value and carrying value for the Max Factor trademark, performing audit procedures to evaluate the reasonableness of such estimates and assumptions, particularly the estimated cash flows, and the selection of the royalty and discount rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the expected revenue growth rates and expected profit margins for the reporting units, estimated cash flows for the trademarks, the selection of the royalty rates for the trademarks, and the selection of the discount rates for the reporting units and the trademarks included the following, among others:

• We tested the effectiveness of controls over goodwill, and indefinite-lived intangible assets, including those over the expected revenue growth rates and expected profit margins for the reporting units, estimated cash flows for the trademarks and the selection of the respective discount and royalty rates.

• We evaluated management’s ability to accurately forecast by comparing actual results in previous years to management’s historical forecasts and by comparing the May and June 2020 forecasts with actual results for those months, for the reporting units and the trademarks, respectively.

• We evaluated the reasonableness of management’s expected revenues growth rates and profit margins for the reporting units and estimated cash flows for the trademarks, by comparing management’s forecasts with:

Our audit procedures related to the estimated cash flows, the selection of the royalty and discount rate for the Max Factor trademark included the following, among others:

• We tested the effectiveness of controls over indefinite-lived intangible assets, including those over the estimated cash flows for the Max Factor trademark and the selection of the respective royalty and discount rate.

• We evaluated the reasonableness of management’s estimated cash flows for the Max Factor trademark, by comparing management’s forecasts with:

◦ Historical cash flows and trends;

1 unchanged sentence

◦ Forecasted information included in Company press releases, as well as analyst and industry reports of the Company and selected companies in its peer group.

• We considered the impact of industry and market conditions on management’s forecasts for the reporting units and the trademarks, including consideration of the effects related to the COVID-19 Pandemic.

• We considered the impact of industry and market conditions on management’s forecasts for the Max Factor trademark, including consideration of the effects related to the COVID-19 Pandemic.

• We evaluated the impact of changes in management’s forecasts from the May 1, 2021 annual measurement date to June 30, 2021.

• With the assistance of our fair value specialists, we evaluated the valuation approaches and discount rates for the reporting units and the trademarks, and royalty rates for the trademarks, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the respective discount rates and royalty rates selected by management.

• With the assistance of our fair value specialists, we evaluated the valuation approach and royalty and discount rate for the Max Factor trademark, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the respective royalty and discount rate selected by management.

/s/ Deloitte & Touche LLP

24 unchanged sentences

Asset impairment charges — 434.0 3,729.0

(Gain) loss on divestitures and sale of brand assets ( 111.5 ) — 28.6

Gain on divestitures — ( 111.5 ) —

Operating loss ( 48.6 ) ( 1,236.5 ) ( 3,688.4 )

Interest expense, net 235.1 242.7 225.2

Loss on early extinguishment of debt — — 10.7

Other (income) expense, net ( 43.9 ) ( 11.6 ) 31.8

2 unchanged sentences

Net loss from continuing operations ( 67.8 ) ( 1,089.9 ) ( 3,890.6 )

Net income from discontinued operations 87.2 121.0 234.5

Net (loss) income from discontinued operations ( 137.3 ) 87.2 121.0

Net loss ( 205.1 ) ( 1,002.7 ) ( 3,769.6 )

Net income attributable to noncontrolling interests 4.7 2.5 2.0

Net (loss) income attributable to redeemable noncontrolling interests ( 0.7 ) 12.1 39.0

Net (loss) income attributable to noncontrolling interests ( 16.1 ) 4.7 2.5

Net income (loss) attributable to redeemable noncontrolling interests 12.3 ( 0.7 ) 12.1

Net loss attributable to Coty Inc.

3 unchanged sentences

Convertible Series B Preferred Stock dividends

( 102.3 ) ( 6.5 ) —

Net loss from continuing operations attributable to common stockholders ( 166.3 ) ( 1,100.4 ) ( 3,905.2 )

Net income from discontinued operations 87.2 121.0 234.5

Net (loss) income from discontinued operations ( 137.3 ) 87.2 121.0

Net loss attributable to common stockholders $ ( 303.6 ) $ ( 1,013.2 ) $ ( 3,784.2 )

(Loss) earnings per common share

(Loss) from continued operations per common share - basic $ ( 1.45 ) $ ( 5.20 ) $ ( 0.54 )

(Loss) from continued operations per common share - diluted $ ( 1.45 ) $ ( 5.20 ) $ ( 0.54 )

Earnings from discontinued operations - basic $ 0.12 $ 0.16 $ 0.31

Earnings from discontinued operations - diluted $ 0.12 $ 0.16 $ 0.31

Loss from continuing operations per common share - basic $ ( 0.22 ) $ ( 1.45 ) $ ( 5.20 )

Loss from continuing operations per common share - diluted $ ( 0.22 ) $ ( 1.45 ) $ ( 5.20 )

(Loss) earnings from discontinued operations - basic $ ( 0.18 ) $ 0.12 $ 0.16

(Loss) earnings from discontinued operations - diluted $ ( 0.18 ) $ 0.12 $ 0.16

Loss per common share - basic $ ( 0.40 ) $ ( 1.33 ) $ ( 5.04 )

15 unchanged sentences

( 23.6 ) 11.6 ( 59.3 )

Total other comprehensive (loss) income, net of tax ( 397.3 ) ( 217.5 ) 148.4

Comprehensive (loss) income ( 1,400.0 ) ( 3,987.1 ) 20.6

Total other comprehensive income (loss), net of tax 134.2 ( 397.3 ) ( 217.5 )

Comprehensive loss ( 70.9 ) ( 1,400.0 ) ( 3,987.1 )

Comprehensive income attributable to noncontrolling interests:

Net income 4.7 2.5 2.0

Net (loss) income ( 16.1 ) 4.7 2.5

Foreign currency translation adjustment ( 0.1 ) 0.1 0.1

Total comprehensive income attributable to noncontrolling interests 4.8 2.6 2.5

Total comprehensive (loss) income attributable to noncontrolling interests ( 16.2 ) 4.8 2.6

Comprehensive income attributable to redeemable noncontrolling interests:

Net (loss) income ( 0.7 ) 12.1 39.0

Net income (loss) 12.3 ( 0.7 ) 12.1

Comprehensive loss attributable to Coty Inc.

16 unchanged sentences

Other intangible assets, net 4,463.0 4,372.1

Operating lease right-of-use assets (See Note 16) 371.4 —

Equity investments 1,276.2 —

Operating lease right-of-use assets 318.5 371.4

Deferred income taxes 758.5 362.4

Other noncurrent assets 55.9 72.4

Noncurrent assets held for sale — 4,195.5

TOTAL ASSETS $ 13,691.4 $ 16,728.8

4 unchanged sentences

Short-term debt and current portion of long-term debt 24.2 188.3

Current operating lease liabilities (See Note 16) 105.0 —

Current operating lease liabilities 75.7 105.0

Income and other taxes payable 53.4 33.8

1 unchanged sentence

Total current liabilities 2,415.4 3,585.7

Long-term operating lease liabilities (See Note 16) 317.4 —

Long-term operating lease liabilities 269.3 317.4

Long-term debt, net 5,401.0 7,892.1

2 unchanged sentences

Other noncurrent liabilities 327.6 334.5

Noncurrent liabilities held for sale — 522.7

TOTAL LIABILITIES 9,508.8 12,705.1

2 unchanged sentences

1.0 shares authorized;

0.8 and 0.8 issued and outstanding, at June 30, 2020

1.0 and 0.8 issued and 1.0 and 0.8 outstanding, at June 30, 2021 and 2020, respectively

1,036.3 715.8

REDEEMABLE NONCONTROLLING INTERESTS 84.1 79.1

1 unchanged sentence

20.0 shares authorized;

1.5 and 9.4 issued and outstanding, at June 30, 2020 and 2019, respectively

1.5 issued and outstanding, at June 30, 2021 and 2020, respectively

Class A Common Stock, $ 0.01 par value;

1,250.0 and 1,000.0 shares authorized, 830.6 and 819.2 issued and 765.1 and 754.2 outstanding at June 30, 2020 and 2019, respectively

1,250.0 shares authorized, 832.3 and 830.6 issued and 766.0 and 765.1 outstanding at June 30, 2021 and 2020, respectively

Additional paid-in capital 10,376.2 10,447.4

Accumulated deficit ( 5,755.6 ) ( 5,548.6 )

Accumulated other comprehensive (loss) income ( 456.2 ) ( 58.8 )

Accumulated other comprehensive loss ( 321.9 ) ( 456.2 )

Treasury stock— at cost, shares:

18 unchanged sentences

BALANCE as previously reported—July 1, 2018 5.0 $ — 815.8 $ 8.1 $ 10,750.8 $ ( 626.2 ) $ 158.8 65.0 $ ( 1,441.8 ) $ 8,849.7 $ 5.5 $ 8,855.2 $ 661.3 $ —

Adjustment due to the adoption of ASU 2016-09

Revised Adjustment due to the adoption of ASU No.

( 112.6 ) ( 112.6 ) ( 112.6 )

Adjustment due to the adoption of ASC 606

( 18.2 ) ( 18.2 ) ( 18.2 )

Balance as adjusted —July 1, 2018 5.0 $ — 815.8 $ 8.1 $ 10,750.8 $ ( 757.0 ) $ 158.8 65.0 $ ( 1,441.8 ) $ 8,718.9 $ 5.5 $ 8,724.4 $ 661.3 $ —

1 unchanged sentence

Cancellation of Preferred Stock ( 3.5 ) — — —

Exercise of employee stock options and restricted stock units and related tax benefits 2.9 — 22.6 22.6 22.6

Exercise of employee stock options and restricted stock units 1.0 — 5.2 5.2 5.2

Shares withheld for employee taxes ( 1.4 ) ( 1.4 ) ( 1.4 )

Share-based compensation expense 16.9 16.9 16.9

Dividends ($ 0.500 per common share)

Dividends declared - Cash and Other ($ 0.500 per Common Share)

( 347.5 ) ( 347.5 ) ( 347.5 )

Dividends settled in Shares of Class A Common Stock 2.4 — 30.6 30.6 30.6

Dividends declared - Stock ($ 0.125 per Common Share)

( 30.6 ) ( 30.6 ) ( 30.6 )

Net income (loss) ( 3,784.2 ) ( 3,784.2 ) 2.5 ( 3,781.7 ) 12.1

Other comprehensive income ( 217.6 ) ( 217.6 ) 0.1 ( 217.5 )

Adjustment due to the adoption of ASU 2018-02

( 6.5 ) 6.5 — —

Distribution to noncontrolling interests, net — ( 1.6 ) ( 1.6 ) ( 26.8 )

Dilution of redeemable noncontrolling interest due to additional contribution 17.0 17.0 17.0 ( 17.0 )

Additional redeemable noncontrolling interests due to employee grants ( 7.4 ) ( 7.4 ) ( 7.4 ) 7.4

Proceeds from redeemable noncontrolling interests — — 0.2

Additional redeemable noncontrolling interests due to employee grants and other adjustments ( 0.6 ) ( 0.6 ) ( 0.6 ) 1.6

Adjustment of redeemable noncontrolling interests to redemption value 196.4 196.4 196.4 ( 196.4 )

12 unchanged sentences

BALANCE as previously reported—July 1, 2019 9.4 $ 0.1 819.2 $ 8.1 $ 10,620.5 $ ( 4,541.2 ) $ ( 58.8 ) 65.0 $ ( 1,441.8 ) $ 4,586.9 $ 6.5 $ 4,593.4 $ 451.8 $ —

Revised Adjustment due to the adoption of ASU No.

( 112.6 ) ( 112.6 ) ( 112.6 )

Adjustment due to the adoption of ASC 606

Adjustment due to the adoption of ASC 842 (See Note 2)

( 0.7 ) ( 0.7 ) ( 0.7 )

2 unchanged sentences

Cancellation of Preferred Stock ( 7.9 ) ( 0.1 ) ( 0.6 ) ( 0.7 ) ( 0.7 )

Purchase of Class A Common Stock 0.5 ( 4.5 ) ( 4.5 ) ( 4.5 )

Issuance of Restricted Stock 2.0 — — —

Exercise of employee stock options and restricted stock units 1.4 — 2.7 2.7 2.7

Shares withheld for employee taxes ( 1.4 ) ( 1.4 ) ( 1.4 )

Share-based compensation expense 31.8 31.8 31.8

1 unchanged sentence

( 196.3 ) ( 196.3 ) ( 196.3 )

Shares withheld for employee taxes ( 5.3 ) ( 5.3 ) ( 5.3 )

Dividends declared - Stock ( 88.9 ) ( 88.9 ) ( 88.9 )

Dividends settled in Shares of Class A Common Stock 8.0 0.2 88.9 89.1 89.1

Dividends declared - Stock ($ 0.125 per Common Share)

( 30.6 ) ( 30.6 ) ( 30.6 )

Dividends accrued - Convertible Series B Preferred Stock ( 6.5 ) ( 6.5 ) ( 6.5 ) 6.5

Net income (loss) ( 1,006.7 ) ( 1,006.7 ) 4.7 ( 1,002.0 ) ( 0.7 )

1 unchanged sentence

Distribution to noncontrolling interests, net — — ( 16.7 )

Additional redeemable noncontrolling interests due to employee grants and other adjustments ( 0.6 ) ( 0.6 ) ( 0.6 ) 1.6

Adjustments related to the sale of business 6.2 6.2 6.2 ( 360.4 )

Noncontrolling interest due to transaction (See Note 4) — 212.9 212.9

Adjustment of redeemable noncontrolling interests to redemption value ( 5.1 ) ( 5.1 ) ( 5.1 ) 5.1

12 unchanged sentences

BALANCE as previously reported—July 1, 2020 1.5 $ — 830.6 $ 8.3 $ 10,447.4 $ ( 5,548.6 ) $ ( 456.2 ) 65.5 $ ( 1,446.3 ) $ 3,004.6 $ 224.2 $ 3,228.8 $ 79.1 $ 715.8

Adjustment due to the adoption of ASC 842 (See Note 2)

Adjustment due to the adoption of ASU No.

2016-13 ( 5.7 ) ( 5.7 ) ( 5.7 )

1 unchanged sentence

Issuance of Preferred Stock — — 242.4

Cancellation of Preferred Stock ( 7.9 ) ( 0.1 ) ( 0.6 ) ( 0.7 ) ( 0.7 )

Purchase of Class A Common Stock 0.5 ( 4.5 ) ( 4.5 ) ( 4.5 )

Issuance of Restricted Stock 2.0 — — —

Reacquired Class A Common Stock for employee taxes 0.1 — — —

Cancellation of Restricted Stock 0.7 — —

Exercise of employee stock options and restricted stock units 1.7 — — — —

Share-based compensation expense 27.4 27.4 27.4

Dividends declared - Cash and Other ($ 0.375 ) per common share

( 196.3 ) ( 196.3 ) ( 196.3 )

Changes in dividends accrued 1.2 1.2 1.2

Shares withheld for employee taxes ( 5.0 ) ( 5.0 ) ( 5.0 )

Dividends declared - Stock ( 88.9 ) ( 88.9 ) ( 88.9 )

Dividends settled in Shares of Class A Common Stock 8.0 0.2 88.9 89.1 89.1

Deemed Dividends- Convertible Series B Preferred Stock ( 10.5 ) ( 10.5 ) ( 10.5 ) 10.5

Dividends Accrued - Convertible Series B Preferred Stock ( 67.6 ) ( 67.6 ) ( 67.6 ) 67.6

Dividends Paid- Convertible Series B Preferred Stock ( 24.2 ) ( 24.2 ) ( 24.2 )

Net income (loss) ( 201.3 ) ( 201.3 ) ( 16.1 ) ( 217.4 ) 12.3

1 unchanged sentence

Distribution to noncontrolling interests, net — ( 6.5 ) ( 6.5 ) ( 2.1 )

Adjustments related to the sale of business 6.2 6.2 6.2 ( 360.4 )

Noncontrolling interest due to transaction (See Note 4) — 212.9 212.9

Adjustment of redeemable noncontrolling interests to redemption value 5.2 5.2 5.2 ( 5.2 )

Equity Investment contribution for share-based compensation 2.3 2.3 2.3

BALANCE—June 30, 2021 1.5 $ — 832.3 $ 8.3 $ 10,376.2 $ ( 5,755.6 ) $ ( 321.9 ) 66.3 $ ( 1,446.3 ) $ 2,860.7 $ 201.5 $ 3,062.2 $ 84.1 $ 1,036.3

6 unchanged sentences

Net loss $ ( 205.1 ) $ ( 1,002.7 ) $ ( 3,769.6 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 585.3 716.5 736.0

2 unchanged sentences

Deferred income taxes ( 218.1 ) ( 342.7 ) ( 175.7 )

Provision for bad debts 55.4 11.6 24.0

(Release) provision for bad debts ( 13.2 ) 55.4 11.6

Provision for pension and other post-employment benefits 17.8 15.9 29.5

Share-based compensation 29.9 29.8 14.8

(Gain) loss on divestiture and sale of brand assets ( 111.5 ) — 28.6

Gain on divestiture — ( 111.5 ) —

Loss on sale of business in discontinued operations 246.4 — —

Loss on impairment of long-lived assets 7.2 24.6 27.8

Loss on early extinguishment of debt — — 10.7

Unrealized gains from equity investments, net ( 70.3 ) — —

Foreign exchange effects 26.7 30.5 ( 4.2 )

Deferred debt issuance cost and debt discount write-off 24.2 — 3.8

Other 38.6 39.6 43.5

9 unchanged sentences

Other noncurrent liabilities ( 26.4 ) ( 57.9 ) ( 49.8 )

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

Net cash provided by (used in) operating activities 318.7 ( 50.9 ) 639.6

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

Proceeds from sale of business, net of cash disposed 27.0 25.6 —

Proceeds from sale of discontinued business, net of cash disposed 2,374.1 — —

Return of capital from equity investments 448.0 — —

Payment for equity investment and related asset acquisition ( 200.0 ) — —

Proceeds from sale of long term assets, including assets under restructuring programs 4.3 0.6 13.4

Net cash used in investing activities ( 833.4 ) ( 454.0 ) ( 687.6 )

Termination of currency swaps designated as net investment hedges ( 37.6 ) — —

Net cash provided by (used in) investing activities 2,441.9 ( 833.4 ) ( 454.0 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (repayments of) proceeds from short-term debt, original maturity less than three months ( 4.3 ) ( 21.3 ) 21.0

Net repayments of short-term debt, original maturity less than three months — ( 4.3 ) ( 21.3 )

Proceeds from revolving loan facilities 2,759.8 4,681.3 2,183.3

Repayments of revolving loan facilities ( 3,593.3 ) ( 4,044.4 ) ( 1,729.1 )

Proceeds from term loans and other long term debt — — 7,467.2

Proceeds from issuance of other long term debt 1,748.8 — —

Repayments of term loans and other long term debt ( 3,894.5 ) ( 186.4 ) ( 189.8 )

Dividend payments ( 196.9 ) ( 346.2 ) ( 375.8 )

Dividend payment on Class A Common Stock ( 1.5 ) ( 196.9 ) ( 346.2 )

Dividend payment on Convertible Series B Preferred Stock ( 24.2 ) — —

Net proceeds from issuance of Class A Common Stock and Series A Preferred Stock — 2.7 5.9

1 unchanged sentence

Proceeds from issuance of Convertible Series B Preferred Stock

227.2 724.5 —

Net proceeds (payments) for foreign currency contracts 18.5 0.2 ( 0.4 )

3 unchanged sentences

All other ( 5.4 ) ( 11.2 ) ( 7.2 )

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

Net cash (used in) provided by financing activities ( 2,795.1 ) 877.3 ( 160.3 )

EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 7.1 ) ( 21.4 ) ( 7.1 )

8 unchanged sentences

Accrued capital expenditure additions $ 69.7 $ 76.7 $ 109.2

Non-cash contingent consideration for business combination — — 8.3

Non-cash Common Stock dividend — 88.9 30.6

6 unchanged sentences

DESCRIPTION OF BUSINESS

and its subsidiaries (collectively, the “Company” or “Coty”) manufacture, market, sell and distribute branded beauty products, including fragrances, color cosmetics, hair care products and skin & body related products throughout the world.

and its subsidiaries (collectively, the “Company” or “Coty”) manufacture, market, sell and distribute branded beauty products, including fragrances, color cosmetics and skin & body related products throughout the world.

Coty is a global beauty company with a rich entrepreneurial history and an iconic portfolio of brands.

1 unchanged sentence

Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended June 30 of that year.

For example, references to “fiscal 2020” refer to the fiscal year ending June 30, 2020.

For example, references to “fiscal 2021” refer to the fiscal year ended June 30, 2021.

When used in this Annual Report on Form 10-K, the term “includes” and “including” means, unless the context otherwise indicates, including without limitation.

2 unchanged sentences

Product innovations, new product launches and the size and timing of orders from the Company’s customers may also result in variability.

During the three months ended March 31, 2020, the Company’s chief operating decision maker (“CODM”) changed the reporting structure used to allocate resources amongst its regional commercial business units, and accordingly, the Company recast its segment results.

See Note 5—Segment Reporting for information on the Company’s segments.

On June 1, 2020, the Company entered into a definitive agreement with KKR, regarding a strategic transaction for the sale of Coty’s Professional and retail hair business, including the Wella, Clairol, OPI and ghd brands, together, the “Wella Business”, valuing the businesses at $ 4,300.0 on a cash- and debt-free basis.

KKR will own 60 % of this separately managed entity and Coty will own the remaining 40 %.

As a result of the above mentioned agreement, the Company’s financial statements present the Wella Business to be sold as discontinued operations and the related assets and liabilities as held for sale.

Additionally, the Company recast its segment results due to the discontinued operations presentation.

On November 30, 2020, the Company completed the previously announced strategic transaction with Rainbow UK Bidco Limited (“KKR Bidco”) (an affiliate of funds and/or separately managed accounts (“KKR Funds”) advised and/or managed by Kolberg Kravis Roberts & Co.

and its affiliates (“KKR”)), for the sale of a majority stake in Coty’s Professional and Retail Hair business, including the Wella, Clairol, OPI and ghd brands, (together, the “Wella Business”).

As a result Coty owns a 40 % stake in Rainbow JVCO LTD and subsidiaries (together, "Wella").

See Note 4—Business Combinations, Asset Acquisitions and Divestitures for information on the strategic transaction.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Prior year amounts have been reclassified to conform with current year presentation for amounts related to segment reporting (see Note 5);

assets and liabilities held for sale;

and discontinued operations (see Note 3).

The Company also consolidates majority-owned entities in the United States of America, United Arab Emirates, Kingdom of Saudi Arabia, and South Korea where the Company has the ability to exercise controlling influence.

2 unchanged sentences

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the period reported.

Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, the market value of inventory, the fair value of acquired assets and liabilities associated with acquisitions, the assessment of goodwill, other intangible assets and long-lived assets for impairment, and income taxes.

Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, the net realizable value of inventory, the fair value of acquired assets and liabilities associated with acquisitions, the fair value of equity investments, the assessment of goodwill, other intangible assets and long-lived assets for impairment, and income taxes.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate.

9 unchanged sentences

Restricted cash is classified as a current or long-term asset based on the timing and nature of when or how the cash is expected to be used or when the restrictions are expected to lapse.

As of June 30, 2020 and June 30, 2019, the Company had restricted cash of $ 43.7 and $ 40.0 , respectively, included in Restricted cash in the Consolidated Balance Sheets.

The restricted cash balance as of June 30, 2020 primarily provides collateral for certain bank guarantees on rent, customs and duty accounts and also consists of collections on factored receivables that remain unremitted to the factor as of June 30, 2020.

As of June 30, 2021 and 2020, the Company had restricted cash of $ 56.9 and $ 43.7 , respectively, included in Restricted cash in the Consolidated Balance Sheets.

The restricted cash balances as of June 30, 2021 and 2020 primarily provide collateral for certain bank guarantees on rent, customs and duty accounts and also consists of collections on factored receivables that remain unremitted to the factor as of June 30, 2021 and 2020.

Restricted cash is included as a component of Cash, cash equivalents, and restricted cash in the Consolidated Statement of Cash Flows.

9 unchanged sentences

In addition, and as necessary, the Company may establish specific reserves for future known or anticipated events.

Equity Investments

The Company elected the fair value option to account for its investment in the Wella Business to align with the Company’s strategy for this investment.

The fair value is updated on a quarterly basis.

The investments are classified within Level 3 in the fair value hierarchy because the Company estimates the fair value of the investments using a combination of the income and market approaches, when applicable.

Changes in the fair value of equity investments under the fair value option are recorded in Other (income) expense, net within the Consolidated Statements of Operations (see Note 13—Equity Investments).

Property and Equipment and Other Long-lived Assets

16 unchanged sentences

Product formulations and technology 2 - 28 years

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Long-lived assets, including tangible and intangible assets with finite lives, are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

2 unchanged sentences

The Company estimates fair value based on the best information available, including discounted cash flows and/or the use of third-party valuations.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Goodwill and Other Indefinite-lived Intangible Assets

17 unchanged sentences

An impairment loss is recognized when the estimated fair value of the intangible asset is less than its carrying value.

In February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842), which requires lease assets and liabilities to be recorded on the balance sheet.

The Company adopted this ASU and its related amendments as of July 1, 2019 using the modified retrospective method.

Under this approach, prior periods were not restated.

Rather, lease balances and other disclosures for prior periods were provided in the notes to the financial statements as previously reported, and the cumulative effect of initially applying the guidance was recognized in the Consolidated Balance Sheets.

The adoption resulted in a cumulative-effect adjustment to retained earnings of approximately $ 0.7 .

The new leasing standard includes several optional practical expedients available that entities may elect to apply upon transition.

These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset.

All of the Company’s material leases are operating leases.

These are primarily real estate properties, including corporate offices, retail stores and facilities to support the Company's manufacturing, research and development and distribution operations.

For any new or modified lease, the Company, at the inception of the contract, determines whether a contract is or contains a lease.

The Company records right-of-use ("ROU") assets and lease obligations for its operating leases, which are initially recognized based on the discounted future lease payments over the term of the lease.

Variable lease payments are not included in the measurement of ROU assets and lease liabilities.

As the rate implicit in the Company's leases is not easily determinable, the Company’s applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payments.

Lease term is defined as the non-cancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option.

The Company has elected not to recognize ROU asset and lease obligations for its short-term leases, which are defined as leases with an initial term of 12 months or less.

ASU 2016-02, Leases (Topic 842) , as amended, was adopted by the Company on July 1, 2019, utilizing a modified retrospective approach.

The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allows a lessee to carry forward its population of existing leases, the classification of each lease, as well as the treatment of initial direct costs as of the period of adoption.

In addition, the Company elected the practical expedient related to lease and non-lease components, as an accounting policy election for all asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component.

Lastly, the Company did not elect the practical expedient related to hindsight analysis which allows a lessee to use hindsight in determining the lease term and in assessing impairment of the entity’s right-of-use (“ROU”) assets.

The Company has made a policy election to not recognize ROU assets and lease liabilities that arise from leases with an initial term of twelve months or less on the Consolidated Balance Sheets.

However, the Company will recognize these lease payments in the Consolidated Statements of Operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation is incurred.

The Company has chosen to apply this accounting policy across all classes of underlying assets.

Additionally, upon adoption, the Company utilized a discount rate to determine the present value of the lease payments based on information available as of July 1, 2019.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

On July 1, 2019, the Company recognized a lease liability of $ 617.8 and a corresponding ROU asset of $ 551.3 , including the reclassification of approximately $ 66.4 of unamortized lease incentives and lease loss liabilities, upon the adoption of this standard, with minimal impact on the Consolidated Statements of Operations.

Lastly, the Company did not elect the practical expedient related to hindsight analysis which allows a lessee to use hindsight in determining the lease term and in assessing impairment.

Prior to July 1, 2019, leases were accounted for under ASC Topic 840, Leases .

Deferred Financing Fees

The Company capitalizes costs related to the issuanc e of debt instruments, as applicable.

The Company capitalizes costs related to the issuance of debt instruments, as applicable.

Such costs are amortized over the contractual term of the related debt instrument in Interest expense, net using the straight-line method, which approximates the effective interest method, in the Consolidated Statements of Operations.

5 unchanged sentences

Revenue Recognition

On July 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers and all related amendments (the “New Revenue Standard”) using the modified retrospective method applied to those contracts which were not completed as of July 1, 2018.

Results for reporting periods beginning after July 1, 2018 are presented under the New Revenue Standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605, Revenue Recognition.

For periods after July 1, 2018, revenue is recognized at a point in time and/or over time when control of the promised goods or services is transferred to the Company’s customers, which usually occurs upon delivery.

Revenue is recognized in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or services.

Revenue is recognized at a point in time and/or over time when control of the promised goods or services is transferred to the Company’s customers, which usually occurs upon delivery.

Revenue is recognized in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services.

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good or service (or bundle of goods or services) that is distinct.

9 unchanged sentences

In addition, as necessary, specific accruals may be established for significant future known or anticipated events.

The types of known or anticipated events that the Company has considered, and will continue to consider, include the financial condition of our customers, store closings by retailers, changes in the retail environment, and our decision to continue to support new and existing brands.

The types of known or anticipated events that the Company has considered, and will continue to consider, include the financial condition of the Company’s customers, store closings by retailers, changes in the retail environment, and the Company’s decision to continue to support new and existing brands.

Returns represented 2 %, 3 % and 2 % of gross revenue after customer discounts and allowances in fiscal 2021, 2020 and 2019, respectively.

Trade spending activities recorded as a reduction to gross revenue after customer discounts and allowances represented 10 %, 11 %, and 9 % in fiscal 2021, 2020 and 2019, respectively.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The Company accounts for certain customer store fixtures as other assets.

Such fixtures are amortized using the straight-line method over the period of 3 to 5 years as a reduction of revenue.

For the presentation of the Company’s revenues disaggregated by segment and product category see Note 5—Segment Reporting.

Cost of Sales

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Cost of sales includes all of the costs to manufacture the Company’s products.

14 unchanged sentences

The fair value of RSUs is determined on the date of grant based on the Company’s stock price.

Preferred Stock

The Company has issued Series A and Series A-1 Preferred Stock that can be converted into Class A Common Stock or settled in cash.

Series A and Series A-1 Preferred Stock are accounted for using liability plan accounting to the extent the award is expected to be settled in cash.

Accordingly, share-based compensation expense for the portion that is liability accounted is measured based on the fair value of the award on each reporting date and recognized as an expense to the extent earned.

Share-based compensation expense for the portion of the grants that the Company is not required to settle in cash is measured based on the estimated fair value of the award at the time it is known that they are going to be settled in shares and is recognized on a straight-line basis, net of estimated forfeitures, over the employee’s requisite service period.

The fair value of Series A and Series A-1 Preferred Stock is determined using the binomial valuation model and the weighted-average assumptions discussed in Note 24—Share-Based Compensation Plans.

Treasury Stock

4 unchanged sentences

If there are no treasury stock gains in Additional paid-in-capital, the losses upon re-issuance of treasury stock are recorded as a reduction of Retained earnings in the Company’s Consolidated Balance Sheets.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The Company is subject to income taxes in the U.S.

10 unchanged sentences

As the determination of liabilities related to UTBs and associated interest and penalties requires significant estimates to be made by the Company, there can be no assurance that the Company will accurately predict the outcomes of these audits, and thus the eventual outcomes could have a material impact on the Company’s operating results or financial condition and cash flows.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

As a result of the 2017 Tax Act changing the U.S.

to a modified territorial tax system, the Company no longer asserts that any of its undistributed foreign earnings are permanently reinvested.

We do not expect to incur significant withholding or state taxes on future distributions.

To the extent there remains a basis difference between the financial reporting and tax basis of an investment in a foreign subsidiary after the repatriation of the previously taxed income of $ 4,600.0 , the Company is permanently reinvested.

The Company does not expect to incur significant withholding or state taxes on future distributions.

A determination of the unrecognized deferred taxes related to these components is not practicable.

The Tax Act requires a U.S.

18 unchanged sentences

Other business realignment costs are generally recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Charges for accelerated depreciation are recognized on long-lived assets that will be taken out of service before the end of their normal service life, in which case depreciation estimates are revised to reflect the use of the asset over its shortened useful life.

7 unchanged sentences

If paid within three months of the acquisition date, these payments are reflected as investing activities in the Company’s Consolidated Statements of Cash Flows.

The Company generally uses the following methodologies for valuing our significant acquired intangibles assets:

The Company generally uses the following methodologies for valuing the Company’s significant acquired intangibles assets:

• Trademarks (indefinite or finite) - The Company uses a relief from royalty method to value trademarks.

The key assumptions for the model are forecasted net revenue, the royalty rate, the effective tax rate and the discount rate.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

• Customer relationships and license agreements - The Company uses an excess earnings method to value customer relationships and license agreements.

18 unchanged sentences

Net (losses)/gains of $( 6.8 ), $( 14.8 ) and $ 7.6 in fiscal 2021, 2020 and 2019, respectively, resulting from financing foreign exchange currency transactions are included in Interest expense, net in the Consolidated Statements of Operations.

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No.

2016-13 and ASU 2018-19, Financial Instruments-Credit Losses (Topic 326) :

M easurement of Credit Losses on Financial Instruments , which requires that a financial asset (or a group of financial assets) measured at an amortized cost basis be presented at the net amount expected to be collected.

This approach to estimating credit losses applies to most financial assets measured at amortized cost and certain other instruments, including but not limited to, trade and other receivables.

The Company adopted this guidance in the first quarter of fiscal 2021 and the cumulative effect adjustment from adoption was immaterial to the Company's Consolidated Financial Statements.

On initial recognition, the Company recorded an after-tax cumulative effect decrease to retained earnings of $ 5.7 ($ 6.6 pre-tax) as of the beginning of fiscal 2021.

On July 1, 2020, the Company adopted Accounting Standards Update No.

2018-13, Changes to Disclosure Requirements for Fair Value Measurements (Topic 820) , which improved the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements.

The standard removes, modifies, and adds certain disclosure requirements.

The adoption of this guidance impacted disclosures only and did not have an impact on the Company‘s financial position or results of operations.

On July 1, 2020, the Company adopted Accounting Standards Update No.

2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans (Subtopic 715-20) , which improved the effectiveness of disclosure requirements for defined benefit plans.

The standard removes, modifies, and clarifies certain disclosure requirements.

The adoption of this guidance impacted disclosures only and did not have an impact on the Company‘s financial position or results of operations.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”) as part of its simplification initiative to reduce the cost and complexity in accounting for income taxes.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

Recently Adopted Accounting Pronouncements

In August 2017, the FASB issued ASU No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities , which provided guidance for improvements to accounting for hedging activities under ASC 815.

The amendments better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results.

The Company adopted the standard in the first quarter of fiscal 2020 on a prospective basis.

The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

In October 2018, the FASB issued ASU No.

2018-16, Derivatives and Hedging (Topic 815):

Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes , which permitted the use of the OIS rate based on SOFR as a benchmark interest rate for hedge accounting purposes.

The Company adopted the standard concurrently with the adoption of ASU No.

2017-12 in the first quarter of fiscal 2020 on a prospective basis.

The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lease assets and liabilities to be recorded on the balance sheet.

On July 1, 2019, we adopted Topic 842 , as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding ROU assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.

We adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods.

The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged.

For information regarding the impact of Topic 842 adoption, see Significant Accounting Policies - Leases above and Note 16 - Leases.

See Note 16 for further information related to Leases.

ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP.

The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted.

The Company adopted ASU 2019-12 effective July 1, 2020, on a prospective basis.

The adoption of ASU 2019-12 did not have a material impact on the Company's Consolidated Financial Statements.

Recently Issued and Not Yet Adopted Accounting Pronouncements

Accounting Standard Update(s) Topic Effective Period Summary

2018-13 Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement Fiscal 2021 with early adoption permitted.

The FASB issued authoritative guidance that modifies the disclosure requirements by removing, modifying and adding disclosures related to fair value measurements.

Adoption of this guidance will impact disclosures only and will not have an impact on the Company’s financial position or results of operations.

2018-14 Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans Fiscal 2021 with early adoption permitted.

The FASB issued authoritative guidance that modifies the disclosure requirements by removing, modifying and clarifying disclosures related to defined benefit plans.

Adoption of this guidance will impact disclosures only and will not have an impact on the Company’s financial position or results of operations.

2018-19 Measurement of Credit Losses on Financial Instruments

Fiscal 2021 with early adoption permitted.

The FASB issued authoritative guidance, which requires that a financial asset (or a group of financial assets) measured at an amortized cost basis be presented at the net amount expected to be collected.

This approach to estimating credit losses applies to most financial assets measured at amortized cost and certain other instruments, including but not limited to, trade and other receivables.

The adoption of this standard will not have a material impact on the Company’s financial position or results of operations.

2019-12 Income Taxes Fiscal 2022 In December 2019, the FASB issued ASU No.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU No.

2019-12”), which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves the consistency in the application of GAAP for areas of Topic 740 by clarifying and amending existing guidance.

The amendment will be effective for the Company in fiscal 2022 with early adoption permitted.

2020-01 Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) Fiscal 2022 The FASB issued authoritative guidance that clarifies certain interactions between the accounting for equity securities, equity method investments, and certain derivative instruments.

The Company is evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements and related disclosures.

2021-01 Reference Rate Reform (Topic 848) Fiscal 2022 The FASB issued authoritative guidance that provides temporary optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease the financial reporting burdens related to transitioning from LIBOR and other reference rates expected to be discontinued by reference rate reform to alternative reference rates.

The Company is evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements and related disclosures.

2020-06 Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40) Fiscal 2023 The FASB issued authoritative guidance which removes certain separation models for convertible debt instruments and convertible preferred stock that require the separation of a convertible debt instrument into a debt component and an equity or derivative component.

The Company is evaluating the impact this guidance will have on the Company’s Consolidated Financial Statements and related disclosures.

DISCONTINUED OPERATIONS

On June 1, 2020, the Company entered into a definitive agreement with KKR Bidco, regarding a strategic transaction for the sale of Coty’s Professional and Retail Hair business, including the Wella, Clairol, OPI and ghd brands (together, the “Wella Business”), valuing the businesses at $ 4,300.0 on a cash- and debt-free basis.

KKR will own 60 % of this separately managed business and Coty will own the remaining 40 %.

The transaction is expected to close during the first half of fiscal 2021.

On June 1, 2020, the Company and KKR Bidco also entered into a Separation Agreement, which sets forth the terms and conditions on which the Wella Business will be separated from the Company.

In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Wella transaction are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Additionally, the Wella Business assets and liabilities which will be included in the sale are presented as assets and liabilities held for sale in the Consolidated Balance Sheets.

The Professional business historically comprised the Professional Beauty reportable segment and the Retail Hair business was historically included in the Americas, EMEA and Asia Pacific reportable segments.

As described in Note 1—Description of Business, on November 30, 2020, the Company completed the strategic transaction for the sale of a majority stake in the Wella Business.

In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Wella Business are presented as discontinued operations for the period up to and including the date of the sale, and, as such, have been excluded from both continuing operations and segment results for all periods presented.

Additionally, the Wella Business assets and liabilities included in the sale are presented as assets and liabilities held for sale in the Consolidated Balance Sheets for the comparative period provided.

The Wella Business was comprised of the Professional Beauty reportable segment and the Retail Hair business, which was included in the Americas, EMEA and Asia Pacific reportable segments.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The following table has selected financial information included in Net income from discontinued operations for the Wella Business.

Year Ended June 30,

2020 2019 2018

Net revenues $ 986.3 $ 2,020.1 $ 2,360.6

6 unchanged sentences

Operating income 220.8 218.2 216.9

Interest expense, net (a)

Interest expense, net (b)

21.3 49.7 50.6

Loss on sale of business 246.4 — —

Other (income) expense, net ( 1.0 ) ( 0.9 ) ( 1.0 )

Income from discontinued operations before income taxes 169.4 167.3 242.0

(Loss) income from discontinued operations before income taxes ( 45.9 ) 169.4 167.3

Income tax on discontinued operations 91.4 82.2 46.3

Net income from discontinued operations $ 87.2 $ 121.0 $ 234.5

(a) Interest expense was allocated to the discontinued operations due to a requirement in our Credit Agreement that cash generated from the divestiture of any businesses during the next nine months will be utilized to reduce our debt, other than a maximum of $ 500.0 that will be used to fund operations.

Net (loss) income from discontinued operations $ ( 137.3 ) $ 87.2 $ 121.0

(a) As the sale of the Wella Business occurred on November 30, 2020, discontinued operations activity, other than the Loss on sale of business, comprises five months for the fiscal year ended 2021.

(b) Interest expense was allocated to discontinued operations due to a requirement in the 2018 Coty Credit Agreement, as amended (as defined in the Note 15—Debt) that cash generated from the sale of the Wella Business is utilized to reduce the Company’s debt within the twelve months following the sale completion date, other than a maximum of $ 500.0 that will be used to fund operations.

The following is selected financial information included in cash flows from discontinued operations for the Wella Business held for sale:

6 unchanged sentences

Capital Expenditures $ 8.7 $ 24.7 $ 44.1

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The major components of assets and liabilities of the Wella Business held for sale are provided below.

The assets and liabilities held for sale will evolve up to the closing date for normal operational changes as well as contractual adjustments

including the finalization of local implementation agreements impacting the separation of the Wella Business in various countries.

Year Ended June 30,

Trade receivables $ 168.0

1 unchanged sentence

Prepaid expenses and other current assets 134.9

Property and equipment, net 241.3 268.0 (b)

Goodwill 874.8 907.1 (b)

Other intangible assets, net 2,770.4 2,891.0 (b)

Operating lease right of use asset 73.4 — (b)

Deferred income taxes 25.5 82.3 (b)

Other noncurrent assets 55.6 47.1 (b)

Total current assets held for sale 4,613.1 773.2

Total noncurrent assets held for sale — 4,195.5

Property and equipment, net 241.3

Goodwill 874.8

Other intangible assets, net 2,770.4

Operating lease right of use asset 73.4

Deferred income taxes 25.5

Other noncurrent assets 55.6

TOTAL ASSETS HELD FOR SALE $ 4,613.1

4 unchanged sentences

Long-term operating lease liabilities 65.9

Noncurrent deferred tax liabilities 324.8 347.6 (b)

Pension and other post-employment benefits 140.8 145.8 (b)

Other noncurrent liabilities 27.5 29.3 (b)

Total current liabilities held for sale 956.7 456.5

Total noncurrent liabilities held for sale — 522.7

Noncurrent deferred tax liabilities 324.8

Pension and other post-employment benefits 140.8

Other noncurrent liabilities 27.5

TOTAL LIABILITIES HELD FOR SALE $ 956.7

(a) The Company expects that the transaction will close in the first half of fiscal 2021.

As such, for the period ended June 30, 2020, all assets and liabilities held for sale are reported as current assets and liabilities held for sale on the Consolidated Balance Sheets.

(b) Amounts as of June 30, 2019, are reflected as part of the noncurrent assets and liabilities held for sale.

(a) The sale of Wella closed on November 30, 2020.

For the period ended June 30, 2020, all assets and liabilities held for sale are reported as current assets and liabilities held for sale on the Consolidated Balance Sheets.

The loss on sale of the Wella Business included in Net (loss) income from discontinued operations in the Consolidated Statements of Operations was $ 246.4 for the year ended June 30, 2021.

Initial cash proceeds received by the Company for the sale of its 60 % stake in Wella were $ 2,451.7 and the Company retained an equity interest of 40 %.

The loss on sale reflects the net assets sold, taxes and other costs to sell the Wella Business.

BUSINESS COMBINATIONS, ASSET ACQUISITIONS AND DIVESTITURES

Business Combinations and Asset Acquisitions

KKW Beauty Business Transaction

On January 4, 2021, the Company completed its purchase of 20 % of the outstanding equity of KKW Holdings, LLC (“KKW Holdings”), pursuant to a purchase agreement entered into between the Company, KKW Holdings and other parties listed as signatories (the “KKW Purchase Agreement”).

On the same date, as contemplated by the KKW Purchase Agreement, the Company entered into a collaboration agreement, pursuant to which, in exchange for a marketing fee and a license fee, it received the right and license to manufacture, advertise, promote, distribute and sell certain Kim Kardashian West products outside of the existing KKW Holdings scope of fragrances and cosmetics, and use certain intellectual property owned by or licensed to KKW Holdings in connection with the development, manufacture, labelling, packaging, advertising, display, distribution and sale of such products (the “KKW Collaboration Agreement”).

Under the KKW Collaboration Agreement, products will be sold by the Company’s consolidated subsidiaries.

Therefore, the related revenues generated and expenses incurred by such subsidiaries will be reported in the Company’s Consolidated Statements of Operations.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The KKW Purchase Agreement also gives the Company an option to acquire, and the sellers the option to compel the Company to acquire, an additional 31 % of the outstanding equity of KKW (the “KKW Call Option” and “KKW Put Option”, respectively).

The seller’s ability to exercise the KKW Put Option is contingent upon the achievement of certain contractually defined targets.

The KKW Call Option and KKW Put Option expire on the seventh anniversary of the KKW Collaboration Agreement.

Future exercise of the KKW Call Option or KKW Put Option has been deemed by the Company to be remote.

However, if exercise were to occur such exercise may result in a material cash outflow for the Company.

The purchase consideration paid for the equity interest, the KKW Call Option and rights under the KKW Collaboration Agreement was $ 200.0 and was allocated as follows using a relative fair value approach at the acquisition date:

Estimated fair value Estimated useful life (in years)

KKW Collaboration Agreement $ 180.6 20

20 % equity interest in KKW Holdings

Total purchase consideration $ 200.0

The initial fair value of the KKW Collaboration Agreement and the Company’s 20 % equity investment were estimated using an income approach.

The Company accounts for its 20 % investment in the equity of KKW Holdings under the equity method.

The initial fair value of the KKW Collaboration Agreement is recognized within Other intangible assets, net and the Company’s equity investment in KKW Holdings is recognized within Equity investments, each within the Consolidated Balance Sheets.

The fair value of the KKW Call Option was deemed to be de minimis.

King Kylie Transaction

2 unchanged sentences

In addition, as contemplated by the Purchase Agreement, the Company entered into a Collaboration Agreement, pursuant to which, in exchange for a marketing fee and a license fee, it received the right and license to manufacture, advertise, promote, distribute and sell certain products of King Kylie and use certain intellectual property owned by or licensed to King Kylie in connection with the development, manufacture, labelling, packaging, advertising, display, distribution and sale of such products.

The Company has finalized the valuation of assets acquired and liabilities assumed for the King Kylie transaction.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

The Company estimated the preliminary fair value of acquired assets, liabilities and noncontrolling interest as of the date of acquisition based on information currently available.

The preliminary fair values are substantially complete, with the exception of primarily accrued expenses and goodwill.

As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period.

The Company will reflect measurement period adjustments, if any, in the period in which the adjustments are recognized.

The following table summarizes the estimated allocation of the purchase price to the net assets as of the January 6, 2020 acquisition date:

15 unchanged sentences

Total purchase price $ 600.0 $ 600.0

(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

(b) The Company recorded measurement period adjustments in the fourth quarter of fiscal 2020 to certain working capital accounts as a result of obtaining new facts and circumstances that existed at the acquisition date.

(a) As previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

(b) The Company recorded no measurement period adjustments in fiscal 2021, other than allocating the goodwill as noted below.

Goodwill is not expected to be deductible for tax purposes.

The goodwill is attributable to expected synergies resulting from integrating King Kylie’s products into the Company’s existing manufacturing and sales channels.

Goodwill of $ 66.6 , $ 35.9 and $ 26.1 is allocated to the Americas, EMEA, and Asia Pacific segments, respectively.

The allocation of goodwill to segments was based on the relative fair values of expected future cash flows.

The fair value of the noncontrolling interest was estimated using the income approach applied to the projected cash flows of King Kylie.

As King Kylie is a private company, the fair value measurement was based on significant inputs that are not observable in the market and thus, represent a Level 3 measurement.

For the fiscal year ended June 30, 2020, net revenues and net loss of King Kylie included in the Company’s Consolidated Statements of Operations were $ 52.0 and $ 11.7 , respectively.

Net income for the fiscal year ended June 30, 2020 was impacted by the amortization of certain asset values based on the estimated fair values of the acquired assets as determined during the initial purchase accounting, such as the amortization of finite-lived intangibles.

This amortization impacted the net income for the fiscal year ended June 30, 2020 by $ 24.4 .

Burberry Beauty Business Acquisition

On October 2, 2017, the Company acquired the exclusive global license rights and other related assets for the Burberry Limited (“Burberry”) prestige fragrances, cosmetics and skincare business (the “Burberry Beauty Business”).

The Burberry Beauty Business acquisition further strengthens the Company’s position in the global prestige beauty industry.

Total purchase consideration, after post-closing adjustments, was £ 191.7 , the equivalent of $ 256.3 , at the time of closing.

Included in the purchase price was cash consideration of £ 183.3 , the equivalent of $ 245.1 , at the time of closing, in addition to £ 8.4 , the equivalent of $ 11.2 , of estimated contingent consideration, at the time of closing.

From the date of acquisition through the end of fiscal 2020, the Company made all contingent payments and has no further contractual obligation to make future payments.

Business Divestitures

Wella Business

On November 30, 2020, the Company completed the strategic transaction with KKR for the sale of a majority stake in the Wella Business (see Note 3—Discontinued Operations).

Following the sale, Coty deconsolidated the Wella Business as KKR owns approximately 60 % of the separately managed business, and the Company owns the remaining 40 %.

Initial cash proceeds received for the sale of the 60 % stake in Wella were $ 2,451.7 (less cash disposed of $ 65.5 , resulted in net cash proceeds of $ 2,386.2 ).

Coty utilized $ 2,015.5 of the net proceeds to pay down its 2018 Coty Term A and B Facilities (as defined in Note 15—Debt) on a pro rata basis and reserved $ 500.0 for reinvestment in the Company's business (see Note 15—Debt).

See Note 3—Discontinued Operations for information on the loss on sale of the Wella Business.

Additionally, as contemplated in the Sale and Purchase Agreement (as amended) relating to the sale of the Wella Business (the “Wella SPA”), the purchase consideration is subject to further adjustments for other working capital and contractually specified items.

As a result of the sale of the majority interest in Wella, the Company determined that it no longer had a controlling interest in the Wella Business.

The Company, therefore, deconsolidated its ownership of the Wella assets and liabilities and no longer reported the assets and liabilities of Wella in its Consolidated Balance Sheet as of December 1, 2020.

The operations of Wella were consolidated in the results of the Company through the date of sale.

The Company accounted for its 40 % stake in the Wella Business under the fair value option (see Note 13—Equity Investments).

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

The Company has finalized the valuation of assets acquired and liabilities assumed for the Burberry Beauty Business acquisition.

The Company recognized certain measurement period adjustments as disclosed below during the three months ended September 30, 2018.

The measurement period for the Burberry Beauty Business acquisition closed on October 1, 2018.

The following table summarizes the estimated allocation of the purchase price to the net assets of the Burberry Beauty Business as of the October 2, 2017 acquisition date:

fair value as

adjustments (b)

Estimated fair

adjusted Estimated

Inventories $ 47.9 $ — $ 47.9

Property, plant and equipment 5.8 — 5.8 1 - 3

License and distribution rights 177.8 6.7 184.5 3 - 15

Goodwill 34.9 ( 9.4 ) 25.5 Indefinite

Net other liabilities ( 10.1 ) 2.7 ( 7.4 )

Total purchase price $ 256.3 $ — $ 256.3

(a) As previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

(b) The Company recorded measurement period adjustments in the first quarter of fiscal 2019.

The measurement period adjustments related to an increase in the value of the License and distribution rights due to changes in assumptions that were used at the date of acquisition for valuation purposes.

The measurement period adjustment related to the decrease in net other liabilities acquired was a result of obtaining new facts and circumstances about acquired accrued expenses that existed as of the acquisition date.

All measurement period adjustments were offset against Goodwill.

Goodwill is expected to be deductible for tax purposes.

The goodwill is attributable to expected synergies resulting from integrating the Burberry Beauty Business products into the Company’s existing sales channels.

Goodwill of $ 6.2 , $ 9.2 , and $ 3.9 is allocated to the Americas, EMEA, and Asia Pacific segments, respectively.

Goodwill includes amounts related to discontinued operations of $ 6.2 .

The allocation of goodwill to the segments were due to the reduction in corporate and regional overhead allocated to these segments due to the addition of the Burberry Beauty Business acquisition.

The business combinations mentioned above were not significant to our operating results individually or in aggregate, and thus pro forma results are not presented.

Business Divestitures

On August 27, 2019, the Company entered into a Contribution and Redemption Agreement to transfer all of its membership interest in Foundation, which held the net assets of Younique, to an existing noncontrolling interest holder.

On September 16, 2019 (the “Closing Date”), the Company completed the sale of all of its membership interest in Foundation.

Consideration received at the Closing Date consisted of $ 50.0 cash and a secured promissory note with a face value of $ 27.9 .

During the fiscal year June 30, 2020, the Company recorded a final pre-tax gain of $ 111.5 resulting from the sale.

The final pre-tax gain is included in (Gain) loss on divestitures and sale of brand assets in the Consolidated Statements of Operations for the fiscal year ended June 30, 2020.

On August 27, 2019, the Company entered into a contribution and redemption agreement to transfer all of its membership interest in Foundation, LLC (“Foundation”), which held the net assets of Younique, to an existing noncontrolling interest holder.

On September 16, 2019, the Company completed the sale of all of its membership interest in Foundation.

Total consideration received was $ 77.9 .

The final pre-tax gain is included in Gain on divestitures in the Consolidated Statements of Operations for the fiscal year ended June 30, 2020.

Younique’s operations are included within Other and its results of operations through the Closing Date are included in the Consolidated Statements of Operations for the fiscal year ended June 30, 2020.

SEGMENT REPORTING

Operating and reportable segments (referred to as “segments”) reflect the way the Company is managed and for which separate financial information is available and evaluated regularly by the Company’s CODM in deciding how to allocate resources and assess performance.

Operating and reportable segments (referred to as “segments”) reflect the way the Company is managed and for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

The Company has designated its Chief Executive Officer as the CODM.

During the three months ended March 31, 2020, the Company's CODM changed the reporting structure used to allocate resources from the previous category focused organizational structure that included three operating and reportable segments:

Luxury, Consumer Beauty and Professional Beauty, to a structure based on regional commercial business units.

Due to discontinued operations presentation, the Company’s three remaining segments for its continuing operations are:

Americas, EMEA, and Asia Pacific, excluding the discontinued retail hair operations in each segment.

The change in

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

profitability of each of the remaining segments is due to the reallocation of certain shared costs, which were previously allocated to the Professional Beauty division and the discontinued retail hair operations, to the remaining segments comprising continuing operations.

The Company’s three segments for its continuing operations are:

Americas, EMEA, and Asia Pacific.

Americas, EMEA, and Asia Pacific include the businesses focused on prestige fragrances, prestige skin care, prestige cosmetics, mass color cosmetics, mass fragrance, mass skin care and body care, and are supported by central marketing teams.

As previously disclosed, the Company’s CODM is in the process of finalizing her organization structure and how she will assess performance, and the Company has concurrently evaluated the potential impact to its segment reporting.

Based on this evaluation, the Company has determined that it is appropriate to realign its reportable segments from the current regional structure to a principally product category-based structure, comprised of a prestige business segment and a consumer beauty business segment.

The Company is in the process of making corresponding changes, as needed, to its management structure and operating responsibilities as well as to its information systems to enable appropriate internal and external financial reporting reflecting such newly identified segments by the first quarter of its fiscal year 2022.

Certain income and shared costs and the results of corporate initiatives are managed by Corporate.

5 unchanged sentences

The allocation of goodwill by segment is presented in Note 12—Goodwill and Other Intangible Assets, net.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Year Ended June 30,

12 unchanged sentences

Total $ 585.3 $ 584.7 $ 578.5

Operating (loss) income from continuing operations

Operating income (loss) from continuing operations

Americas $ 36.5 $ ( 164.8 ) $ ( 1,474.5 )

5 unchanged sentences

Reconciliation:

Operating (loss) income from continuing operations $ ( 1,236.5 ) $ ( 3,688.4 ) $ ( 155.5 )

Operating loss from continuing operations $ ( 48.6 ) $ ( 1,236.5 ) $ ( 3,688.4 )

Interest expense, net 235.1 242.7 225.2

Loss on early extinguishment of debt — — 10.7

Other (income) expense, net ( 43.9 ) ( 11.6 ) 31.8

Loss from continuing operations before income taxes $ ( 239.8 ) $ ( 1,467.6 ) $ ( 3,945.4 )

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

As of June 30,

1 unchanged sentence

$ 3,919.0 $ 3,340.5

Switzerland 3,690.9 4,379.4

Netherlands 3,880.8 69.7

Brazil 494.8 494.0

Switzerland 142.3 3,690.9

All other 1,062.3 1,832.5

3 unchanged sentences

The United States had net revenues of $ 1,288.9 , $ 1,159.3 and $ 1,470.5 in fiscal 2021, 2020 and 2019, respectively.

No customer or group of affiliated customers accounted for more than 10% of the Company’s Net revenues in fiscal 2021, 2020 and 2019 or are otherwise deemed significant.

For Long-lived assets, a major country is defined as a group of subsidiaries within a country with combined long-lived assets greater than 10% of consolidated long-lived assets or as otherwise deemed significant.

Long-lived assets include property and equipment, goodwill and other intangible assets.

No customer or group of affiliated customers accounted for more than 10% of the Company’s Net revenues in fiscal 2020, 2019 and 2018 or are otherwise deemed significant.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Presented below are the net revenues associated with Company’s product categories as a percentage of total net revenues for continuing operations:

3 unchanged sentences

Color Cosmetics 29.3 % 31.1 % 32.2 %

Skin & Body Care 13.0 % 13.0 % 13.8 %

Hair Care 0.4 % 0.4 % 0.3 %

Body Care & Other 13.3 % 13.4 % 13.4 %

Total 100.0 % 100.0 % 100.0 %

1 unchanged sentence

Acquisition-related costs, which are expensed as incurred, represent non-restructuring costs directly related to acquiring and integrating an entity, for both completed and contemplated acquisitions and can include finder’s fees, legal, accounting, valuation, other professional or consulting fees, and other internal costs which can include compensation related expenses for dedicated internal resources.

The Company recognized acquisition-related costs of $ 19.7 , nil and $ 64.2 for the fiscal years ended 2020, 2019 and 2018, respectively, which have been recorded in Acquisition- and divestiture-related costs in the Consolidated Statements of Operations.

Acquisition-related costs incurred during the fiscal year ended 2020 were primarily related to the King Kylie Transaction and the pending transaction with Kim Kardashian West.

Acquisition- related costs incurred during the fiscal year ended 2018 were primarily related to the P&G Beauty Business acquisition.

The Company recognized acquisition-related costs of $ 3.0 , $ 19.7 and nil for the fiscal years ended 2021, 2020 and 2019, respectively.

Acquisition-related costs incurred during fiscal year 2020 were primarily related to the KKW Beauty Business Transaction and King Kylie Transaction.

Divestiture-related costs, which are expensed as incurred, represent non-restructuring costs directly related to divesting and selling an entity, for both completed and contemplated divestitures.

1 unchanged sentence

Internal costs can include compensation related expenses for dedicated internal resources.

Additionally, for divestitures, we include write-offs of assets that are no longer recoverable and contract related costs due to the divestiture.

The Company recognized divestiture-related costs of $ 137.6 , nil and nil for the fiscal 2020, 2019 and 2018, respectively.

Divestiture-related costs incurred during the fiscal 2020 were primarily related to the definitive agreement with KKR regarding the strategic transaction for the sale of the Wella Business.

See Note 1—Description of Business for information on the strategic transaction.

Additionally, for divestitures, the Company includes write-offs of assets that are no longer recoverable and contract related costs due to the divestiture.

The Company recognized divestiture-related costs of $ 135.8 , $ 137.6 and nil for the fiscal 2021, 2020 and 2019, respectively.

Divestiture-related costs incurred during the fiscal years 2021 and 2020 were primarily related to the strategic transaction with KKR for the sale of a majority stake in the Wella Business.

See Note 4—Business Combinations, Asset Acquisitions and Divestitures for information on the strategic transaction.

These costs have been recorded in Acquisition- and divestiture- related costs in the Consolidated Statements of Operations .

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

RESTRUCTURING COSTS

2 unchanged sentences

2021 2020 2019

Turnaround Plan $ 165.2 $ — $ —

Global Integration Activities

( 23.9 ) 28.5 106.5

2018 Restructuring Actions

( 3.0 ) 16.8 68.4

Transformation Plan $ 73.2 $ 156.6 $ —

Other Restructuring ( 9.6 ) ( 26.4 ) 34.2

Total $ 63.6 $ 130.2 $ 34.2

Expense reclassified to discontinued operations ( 7.5 ) ( 10.0 ) ( 38.3 )

Total Restructuring Expense $ 130.2 $ 34.2 $ 134.9

Turnaround/Transformation Plan

Transformation Plan

In connection with the four-year plan announced on July 1, 2019 to drive substantial improvement in and optimization in the Company's businesses (the “Turnaround Plan”), the Company has and expects to continue to incur restructuring and related costs.

On May 11, 2020, the Company announced an expansion of the Turnaround Plan to further reduce fixed costs, (the “Transformation Plan”).

Over the next 3 fiscal years, the Company expects to incur approximately $ 170.0 of additional restructuring charges pertaining to the approved actions, primarily related to employee termination benefits, contract terminations and other exit-related costs.

Of the expected costs, the Company has incurred cumulative restructuring charges of $ 229.8 related to approved initiatives through June 30, 2021, which have been recorded in Corporate.

The following table presents aggregate restructuring charges for the program:

Severance and Employee Benefits Fixed Asset Write-offs Other Exit Costs Total

Fiscal 2020 $ 159.8 $ ( 1.1 ) $ 6.5 $ 165.2

The related liability balance and activity of restructuring costs for the Turnaround Plan are presented below:

Severance and

Benefits Fixed Asset Write-offs Other

Balance—July 1, 2019 $ — $ — $ — $ —

Restructuring charges 181.4 ( 1.1 ) 6.5 186.8

Payments ( 28.4 ) — ( 4.3 ) ( 32.7 )

Changes in estimates ( 21.6 ) — — ( 21.6 )

Non-cash utilization — 1.1 — 1.1

ASC 842 adoption adjustment — — ( 1.5 ) ( 1.5 )

Effect of exchange rates 1.7 — — 1.7

Balance—June 30, 2020 133.1 — 0.7 133.8

Liability reclassified to held for sale ( 1.2 ) — — ( 1.2 )

Balance—June 30, 2020 $ 131.9 $ — $ 0.7 $ 132.6

The Company currently estimates that the total remaining accrual of $ 132.6 will result in cash expenditures of approximately $ 110.1 , $ 22.1 and $ 0.4 in fiscal 2021, 2022 and thereafter, respectively.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Global Integration Activities

In connection with the acquisition of the P&G Beauty Business, the Company has, and anticipates, that it will continue to incur restructuring and related costs aimed at integrating and optimizing the combined organization (“Global Integration Activities”).

Of the expected costs, the Company has incurred cumulative restructuring charges of $ 476.1 related to approved initiatives through the fiscal year ended June 30, 2020, which have been recorded in Corporate.

Over the next two fiscal years, the Company expects to incur approximately $ 80.0 of additional restructuring charges pertaining to the approved actions, primarily related to employee termination benefits, contract terminations and other exit-related costs.

The following table presents aggregate restructuring charges for the program:

Severance and Employee Benefits Third-Party

Terminations Fixed Asset Write-offs Other Exit Costs Total (a)

Fiscal 2017 $ 333.9 $ 22.4 $ 4.6 $ 4.1 $ 365.0

Fiscal 2018 67.5 19.3 14.3 5.4 106.5

Fiscal 2019 ( 6.0 ) 4.5 27.8 2.2 28.5

Fiscal 2020 ( 18.3 ) ( 5.5 ) — ( 0.1 ) ( 23.9 )

Cumulative through June 30, 2020 $ 377.1 $ 40.7 $ 46.7 $ 11.6 $ 476.1

The related liability balance and activity for the Global Integration Activities restructuring costs are presented below:

Severance and

Benefits Third-Party

Terminations Other

Balance—July 1, 2019 $ 53.7 $ 11.7 $ 1.6 $ 67.0

ASC 842 adoption adjustment — — ( 1.5 ) ( 1.5 )

Payments ( 25.2 ) ( 3.4 ) — ( 28.6 )

Change in estimates ( 18.3 ) ( 5.5 ) ( 0.1 ) ( 23.9 )

Effect of exchange rates ( 0.3 ) — — ( 0.3 )

Balance—June 30, 2020 9.9 2.8 — 12.7

Liability reclassified as held for sale ( 0.8 ) ( 1.5 ) — ( 2.3 )

Balance—June 30, 2020 $ 9.1 $ 1.3 $ — $ 10.4

The Company currently estimates that the total remaining accrual of $ 10.4 will result in cash expenditures of approximately $ 7.7 , $ 0.5 and $ 2.2 in fiscal 2021, 2022 and thereafter, respectively.

2018 Restructuring Actions

During fiscal 2018, the Company began evaluating initiatives to reduce fixed costs and enable further investment in the business (“the 2018 Restructuring Actions”).

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

Of the expected costs, the Company incurred cumulative restructuring charges of $ 82.2 related to approved initiatives through the fiscal year ended June 30, 2020, primarily related to role eliminations in Europe and North America, which have been recorded in Corporate.

The following table presents aggregate restructuring charges for the program:

Severance and Employee Benefits Third-Party

Fixed Asset Write-offs Other Exit Costs Total

Fiscal 2018 $ 63.5 $ 0.2 $ 1.3 $ 3.4 $ 68.4

Severance and Employee Benefits Fixed Asset Write-offs Other Exit Costs Total

Fiscal 2020 $ 151.2 $ ( 1.1 ) $ 6.5 $ 156.6

1 unchanged sentence

Cumulative through June 30, 2021 $ 224.6 $ ( 1.6 ) $ 6.8 $ 229.8

The related liability balance and activity of restructuring costs for the 2018 Restructuring Actions are presented below:

The related liability balance and activity of restructuring costs for the Transformation Plan restructuring costs are presented below:

Severance and

Benefits Third-Party

Terminations Other

Benefits Fixed Asset Write-offs Other

Balance—July 1, 2020 $ 131.9 $ — $ 0.7 $ 132.6

ASC 842 adoption adjustment — ( 1.2 ) ( 1.2 )

Restructuring charges 106.5 ( 0.5 ) 0.4 106.4

Payments ( 88.0 ) — ( 0.8 ) ( 88.8 )

Changes in estimates ( 33.1 ) — ( 0.1 ) ( 33.2 )

Non-cash utilization — 0.5 — 0.5

Adjustment for sale of Wella Business ( 0.6 ) — — ( 0.6 )

Effect of exchange rates 5.8 — 0.1 5.9

Balance—June 30, 2021 $ 122.5 $ — $ 0.3 $ 122.8

Liability reclassified as held for sale ( 1.4 ) — — ( 1.4 )

Balance—June 30, 2020 $ 1.2 $ — $ 0.2 $ 1.4

The Company currently estimates that the total remaining accrual of $ 1.4 will result in cash expenditures of approximately $ 0.6 and $ 0.8 in fiscal 2021 and 2022, respectively.

There are no more anticipated expenditures for these activities.

The Company currently estimates that the total remaining accrual of $ 122.8 will result in cash expenditures of approximately $ 80.8 , $ 42.0 in fiscal 2022 and thereafter, respectively.

Other Restructuring

5 unchanged sentences

The Company maximizes its use of the factoring facility, by factoring additional invoices to replace invoices paid early.

The Company accounts for trade receivable transfers under the Receivables Purchase Agreement and European Receivables Purchase Agreement, as defined below, as sales and derecognizes the sold receivables from the Consolidated Balance Sheets.

The net amount utilized under the factoring facilities was $ 133.6 and $ 123.1 as of June 30, 2021 and 2020, respectively.

7 unchanged sentences

Pursuant to Receivables Purchase Agreement, the Company acts as collections agent for the financial institution and is responsible for the collection, and remittance to the financial institution, of all customer payments related to trade receivables factored under this arrangement.

For certain customer receivables factored, the Company will retain a recourse obligation of up to 10 percent of the respective invoice’s net invoice value, payable to the financial institution if the customer’s payment is not received by the contractual due

The fair value of sold receivables approximated their book value due to their short-term nature.

The Company estimated that the fair value of its servicing responsibilities was not material.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

The Company accounts for trade receivable transfers under the Receivables Purchase Agreement as sales and derecognizes the sold receivables from the Consolidated Balance Sheets.

The fair value of sold receivables approximated their book value due to their short-term nature.

The Company estimated that the fair value of its servicing responsibilities was not material.

Cash received from the selling of receivables under the Receivables Purchase Agreement are presented as a change in trade receivables within the operating activities section of the Consolidated Statements of Cash Flows.

European Receivables Purchase Agreement

In September, 2019, the Company entered into a factoring agreement with a financial institution, which allows for the transfer of receivables from certain of our European subsidiaries, in exchange for cash (the “European Receivables Purchase Agreement”).

The total outstanding amount permitted among such subsidiaries is € 93.0 .

In September 2019, the Company entered into a factoring agreement with a financial institution, which allows for the transfer of receivables from certain of the Company’s European subsidiaries, in exchange for cash (the “European Receivables Purchase Agreement”).

The total outstanding amount permitted among such subsidiaries is € 93.0 million.

Factoring of such receivables under the European Receivables Purchase Agreement is executed on a non-recourse basis.

8 unchanged sentences

2021 June 30,

Due from related party $ 153.4 $ —

Value added tax, sales and other non-income tax assets 84.4 83.1

Expected income tax refunds, credits and prepaid income taxes 79.4 134.4

Prepaid marketing, copyright and agency fees 78.8 91.1

Value added tax, sales and other non-income tax assets 83.1 114.8

Non-trade receivables 25.3 53.4

2 unchanged sentences

Total prepaid expenses and other current assets $ 473.9 $ 411.6

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

PROPERTY AND EQUIPMENT, NET

11 unchanged sentences

Depreciation expense is recorded in Cost of sales and Selling, general and administrative expenses in the Consolidated Statements of Operations.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

During fiscal 2021, 2020 and 2019 the Company recorded asset impairment charges of $ 5.2 , $ 16.8 and $ 27.8 respectively.

The fiscal 2020 impairment charge is recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations and primarily relate to the abandonment of a retail store and software no longer in use.

The fiscal 2019 and 2018 impairment charges are included in Restructuring costs in the Consolidated Statements of Operations and primarily relate to the disposal of certain manufacturing facilities, and the write-off of machinery and equipment in excess of the Company’s needs.

The fiscal 2021 and 2020 impairment charges are recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.

The fiscal 2021 impairment charge primarily relates to abandonment of machinery and equipment, while the fiscal 2020 impairment primarily relates to the abandonment of a retail store and software no longer in use.

The fiscal 2019 impairment charge is included in Restructuring costs in the Consolidated Statements of Operations and primarily relates to the disposal of certain manufacturing facilities, and the write-off of machinery and equipment in excess of the Company’s needs.

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

1 unchanged sentence

The Company tests goodwill and indefinite-lived other intangible assets for impairment at least annually as of May 1, or more frequently, if certain events or circumstances warrant.

There were no impairments of goodwill at the Company’s reporting units or of indefinite-lived other intangible assets in fiscal 2018.

During fiscal 2019, the Company recorded total goodwill impairments of $ 3,307.5 and total impairments on indefinite-lived other intangible assets of $ 389.8 .

During fiscal 2021, there were no impairments of goodwill at the Company’s reporting units and there were no impairments of indefinite-lived other intangible assets.

During fiscal years 2020 and 2019, the Company recorded total goodwill impairments of $ 105.0 and $ 3,307.5 , respectively, and total impairments on indefinite-lived other intangible assets of $ 329.0 and $ 389.8 , respectively.

Additionally, the Company recorded impairments of $ 19.7 on finite-lived other intangible assets during fiscal 2019 .

During fiscal 2020, the Company recorded total goodwill impairments of $ 105.0 and total impairments on indefinite-lived other intangible assets of $ 329.0 .

The asset impairment charges were a result of the following impairment tests:

During the third quarter of fiscal 2020, the Company was adversely impacted by the COVID-19 global pandemic.

This drove a decrease in net revenue, impacting all product categories across the Company, due to the closure of retail malls, professional salons, travel retail channels and certain mass channels.

Management concluded that this adverse factor represented an indicator of impairment that warranted an interim impairment test for goodwill and certain other intangible assets.

As a result, in the three and nine months ended March 31, 2020, the Company recognized asset impairment charges of $ 40.4 , relating to indefinite-lived other intangible assets (related to the CoverGirl, Max Factor and Bourjois trademarks).

In the fourth quarter of fiscal 2020, a s a result of the May 1, 2020 annual impairment test, the Company recorded asset impairment charges of $ 288.6 related to indefinite-lived other intangible assets (mainly CoverGirl, Max Factor, Philosophy and Bourjois trademarks) that are all considered corporate assets.

There were no goodwill impairment charges recorded as a result of the annual impairment test performed on May 1, 2020.

On June 1, 2020, the Company entered into a definitive agreement with KKR, regarding a strategic transaction for the sale of Coty’s Wella Business.

A goodwill impairment test should be performed immediately before and after a Company reorganizes its reporting structure if the reorganization would affect the composition of one or more of its reporting units.

As a result, the Company determined that goodwill should be tested for potential impairment after considering the sale of the Wella Business.

As a result of the June 1, 2020 impairment test, the Company recorded impairment charges of $ 105.0 related to goodwill of the EMEA reporting unit.

The Company considered several factors that developed during the fourth quarter of fiscal 2020 that led to the conclusion that the fair values of the EMEA reporting unit and certain indefinite-lived other intangible assets were below their carrying amounts.

The continuing impacts of the COVID-19 pandemic was the principle driver of additional impairments.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

decrease in net revenue, impacting all product categories across the Company, due to the slow economic recovery that arose as a result of the pandemic.

The fair value of the EMEA reporting unit was also adversely impacted due to a loss of synergies from the sale of the Wella Business.

Additionally the fair values of the trademarks were adversely affected by a 165 and 190 basis point increase in the discount rate compared to the May 1, 2019 and March 31, 2020 test, respectively.

The Company estimated the fair values of its reporting units based on discounted cash flow methodology reflecting the latest projections which included, among other things, the impact of COVID-19 pandemic for the Company’s impairment testing performed during the fourth quarter of our 2020 fiscal year.

These projections assumed a gradual recovery from the COVID-19 pandemic beginning in early fiscal 2021 through the third quarter of fiscal 2021.

These projections also considered the targeted reduction in the Company’s fixed cost structure in line with the announced Transformation Plan.

These cost reductions will be achieved through a combination of further consolidating its supply network, headcount restructuring, and substantial reduction in its non-people costs.

Goodwill as of June 30, 2021, 2020 and 2019 is presented below:

4 unchanged sentences

Changes during the year ended June 30, 2020

Impairment charges ( 1,562.6 ) ( 1,455.3 ) ( 289.6 ) ( 3,307.5 )

Measurement period adjustments (a)

Acquisitions (a)

128.6 — — 128.6

Dispositions ( 10.8 ) ( 10.1 ) ( 2.0 ) ( 22.9 )

Impairment charges (b)

— ( 105.0 ) — ( 105.0 )

Foreign currency translation ( 75.0 ) ( 88.9 ) ( 29.7 ) ( 193.6 )

3 unchanged sentences

Changes during the year ended June 30, 2021

Acquisitions (b)

Measurement period adjustments (c)

( 62.0 ) 35.9 26.1 —

Dispositions ( 10.8 ) ( 10.1 ) ( 2.0 ) ( 22.9 )

Foreign currency translation 46.6 68.2 29.4 144.2

Impairment charges — ( 105.0 ) — ( 105.0 )

Gross balance at June 30, 2021 $ 3,096.8 $ 3,743.0 $ 1,318.4 $ 8,158.2

1 unchanged sentence

Net balance at June 30, 2021 $ 1,328.1 $ 1,885.7 $ 904.3 $ 4,118.1

(a) Includes measurement period adjustments during the year ended June 30, 2019 in connection with the Burberry Beauty Business acquisition (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

(b) Includes goodwill resulting from the King Kylie Transaction on January 6, 2020 (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

As described in Note 5 — Segment Reporting, the Company changed its segments during the third quarter ended March 31, 2020.

As a result, the Company allocated goodwill to the new segments using a relative fair value approach.

In addition, the Company completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed.

Further, the Company recast the goodwill and indefinite-lived intangible asset tables for the new segments.

(a) Includes goodwill resulting from the King Kylie Transaction on January 6, 2020 (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

(b) As a result of the June 1, 2020 impairment test, the EMEA reporting unit was impaired due to the COVID-19 pandemic, a loss of synergies from the sale of the Wella Business and an increase in the discount rate.

(c) Includes measurement period adjustments in connection with the King Kylie acquisition (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

As a result of the definitive agreement signed with KKR for the Wella Business (see Note 3 — Discontinued Operations), the results of the Wella Business are presented as discontinued operations.

The Professional Beauty business has historically been reported as the Company’s Professional Beauty reportable segment, and the Retail Hair business has been included within EMEA, Americas and Asia Pacific reportable segments.

The goodwill attributable to the Wella Business as of June 30, 2020, 2019 and 2018 is excluded from the preceding table and is reported as held for sale in the Consolidated Balance Sheets.

Other Intangible Assets, net

10 unchanged sentences

Changes during the year ended June 30, 2020

Impairment charges ( 389.8 ) ( 389.8 )

Impairment charges (a)

( 329.0 ) ( 329.0 )

Foreign currency translation ( 5.0 ) ( 5.0 )

3 unchanged sentences

Changes during the year ended June 30, 2021

Impairment charges ( 329.0 ) ( 329.0 )

Foreign currency translation 23.2 23.2

2 unchanged sentences

Net balance at June 30, 2021 1,018.7 1,018.7

(a) During fiscal 2020, the Company recognized asset impairment charges of $ 329.0 relating to indefinite-lived other intangible assets, mainly the CoverGirl, Max Factor, Philosophy and Bourjois trademarks.

& SUBSIDIARIES

4 unchanged sentences

June 30, 2020

License and collaboration agreements $ 3,240.2 $ ( 873.1 ) $ ( 19.6 ) $ 2,347.5

Customer relationships 978.6 ( 450.2 ) ( 5.5 ) 522.9

License and collaboration agreements (a)

$ 3,861.2 $ ( 1,021.1 ) $ ( 19.6 ) $ 2,820.5

Customer relationships (a)

786.1 ( 427.3 ) ( 5.5 ) 353.3

Trademarks 325.7 ( 154.0 ) ( 0.5 ) 171.2

2 unchanged sentences

June 30, 2021

License and collaboration agreements (a)

$ 3,861.2 $ ( 1,021.1 ) $ ( 19.6 ) $ 2,820.5

Customer relationships (a)

License and collaboration agreements (b)

$ 4,192.9 $ ( 1,229.1 ) $ ( 19.6 ) $ 2,944.2

Customer relationships 803.1 ( 486.3 ) ( 5.5 ) 311.3

330.2 ( 168.7 ) ( 0.5 ) 161.0

2 unchanged sentences

(a) Includes License agreements and Customer relationships of $ 649.0 and $ 27.0 , respectively resulting from the King Kylie acquisition on January 6, 2020 (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

Due to the divestiture of the Wella Business, intangible assets specific to this business as of June 30, 2020 are excluded from the preceding tables and reported as Held for sale assets.

In September 2019, the Company divested all of its membership interest in Foundation, which held the net assets of Younique (including goodwill of $ 22.9 and other intangible assets of $ 228.6 ).

(Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

In July 2018, the Company acquired a trademark associated with a preexisting license.

As a result of the acquisition, the preexisting license was effectively terminated, and accordingly the Company recorded $ 12.6 of Asset impairment charges in the Consolidated Statement of Operations related to the license agreement.

(b) Includes the KKW Collaboration Agreement of $ 180.6 resulting from the KKW Holdings transaction on January 4, 2021 (Refer to Note 4—Business Combinations, Asset Acquisitions and Divestitures).

Amortization expense totaled $ 251.2 , $ 233.1 and $ 246.7 for the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

8 unchanged sentences

The Company records assets for license agreements (“licenses”) acquired in transactions accounted for as business combinations.

These licenses provide the Company with the exclusive right to manufacture and market on a worldwide and/or

These licenses provide the Company with the exclusive right to manufacture and market on a worldwide and/or regional basis, certain of the Company’s products which comprise a significant portion of the Company’s revenues.

These licenses have initial terms covering various periods.

Certain brand licenses provide for automatic extensions ranging from 2 to 10 year terms, at the Company’s discretion.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

regional basis, certain of the Company’s products which comprise a significant portion of the Company’s revenues.

These licenses have initial terms covering various periods.

Certain brand licenses provide for automatic extensions ranging from 2 to 10 year terms, at the Company’s discretion.

EQUITY INVESTMENTS

The Company's equity investments, classified as Equity investments on the Consolidated Balance Sheets, as of June 30, 2021 are represented by the following:

Equity method investments:

KKW Holdings (a)

Equity investments at fair value:

Wella Business (b)

Total equity investments $ 1,276.2

(a) On January 4, 2021, the Company completed its purchase of 20 % of the outstanding equity of KKW Holdings.

(See Note 4—Business Combinations, Asset Acquisitions and Divestitures).

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 year ended June 30, 2021, the Company recognized $ 3.2 representing its share of the investee’s net loss and the amortization of basis differences in Other (income) expense, net within the Consolidated Statements of Operations.

(b) On November 30, 2020, the Company completed the previously announced strategic transaction with KKR for the sale of a majority stake in Coty’s Wella Business.

As part of the transaction, Coty received initial cash proceeds of $ 2,451.7 , and retained a 40 % stake in Wella.

The Company initially computed the fair value of its retained noncontrolling interest investment based on the fair value of the Wella Business exchanged with KKR.

This resulted in an initial fair value of $ 1,634.5 for the retained noncontrolling interest investment in Wella.

Immediately after closing, Wella drew down on their third party debt for $ 1,282.4 and used $ 448.0 of such funds to make a distribution to the Company, which the Company has accounted for as a return of capital.

As of June 30, 2021, the fair value of the Company's investment in Wella was estimated to be $ 1,260.0 .

The following table presents summarized financial information of the Company’s equity method investees for the year ended June 30, 2021 (for the period of the Company’s investment).

Amounts presented represent combined totals at the investee level and not the Company’s proportionate share:

June 30, 2021

Summarized Statements of Operations information:

Net revenues $ 1,317.4

Gross profit 846.3

Operating loss ( 107.3 )

Loss before income taxes ( 157.7 )

Net loss ( 174.3 )

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Summarized Balance Sheets information:

Current assets $ 1,112.5

Noncurrent assets 4,249.4

Total assets 5,361.9

Current liabilities 888.5

Noncurrent liabilities 1,624.5

Total liabilities 2,513.0

As of June 30, 2021, the Wella Business issued 31.8 million shares of common stock and 2,588.0 million shares of redeemable preferred stock, of which Coty holds 40 % of each class of shares.

The Wella Business has total equity inclusive of redeemable preferred stock of $ 2,859.1 as of June 30, 2021.

The following table summarizes movements in equity investments with fair value option that are classified within Level 3 for the period ended June 30, 2021.

There were no internal movements to or from Level 3 from Level 1 or Level 2 for the period ended June 30, 2021.

Equity investments at fair value:

Balance as of June 30, 2020 $ —

Initial investment 1,186.5

Total gains/(losses) included in earnings - unrealized 73.5

Balance as of June 30, 2021 $ 1,260.0

Level 3 significant unobservable inputs sensitivity

The following table summarizes the significant unobservable inputs used in Level 3 valuation of the Company’s investments carried at fair value as of June 30, 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 $ 1,260.0 Discounted cash flows Discount rate 11.00 % (a)

Growth rate 1.5 % - 4.2 % (a)

Market multiple Revenue multiple 2.0 x (b)

EBITDA multiple 12.5 x – 15.5 x (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.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

2 unchanged sentences

Advertising, marketing and licensing $ 295.7 $ 268.3

Compensation and other compensation related benefits 183.0 256.7

Customer returns, discounts, allowances and bonuses 232.3 166.1

Restructuring costs 120.5 55.2

Compensation and other compensation related benefits 118.6 183.0

Value added, sales and other non-income taxes 94.0 97.0

Restructuring costs 80.8 120.5

Auditing, consulting, legal and litigation accruals 51.1 61.9

Interest rate swap liability 44.6 17.9

Due to related party 37.9 —

Interest 33.5 22.8

Factoring - due to counterparty 25.8 13.2

Cross currency swap liability 12.5 —

Unfavorable contract liability 11.5 10.9

Deferred income 10.1 10.0

Mandatorily redeemable financial interest liability (See Note 21) 1.9 51.8

Other 98.9 86.2

Total accrued expenses and other current liabilities $ 1,111.6 $ 1,188.5

OTHER NONCURRENT LIABILITIES

Other noncurrent liabilities as of June 30, 2020 and 2019 are presented below:

2020 June 30,

Noncurrent income tax liabilities $ 170.7 $ 170.6

Unfavorable contract liabilities 78.7 90.5

Restructuring costs 26.6 24.9

Interest rate swap liability 9.8 44.6

Mandatorily redeemable financial interest liability (See Note 21) 7.1 1.9

Deferred income 6.7 10.5

Deferred rent — 45.6

Cross currency swap liability — 12.5

Other 87.8 98.9

Total other noncurrent liabilities $ 334.5 $ 398.0

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Total accrued expenses and other current liabilities $ 1,096.0 $ 1,111.6

2021 June 30,

Short-term debt $ — $ —

Senior Secured Notes

2026 Dollar Senior Secured Notes due April 2026 900.0 —

2026 Euro Senior Secured Notes due April 2026 833.3 —

2018 Coty Credit Agreement

13 unchanged sentences

Total Long-term debt, net $ 5,401.0 $ 7,892.1

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Short-Term Debt

The Company maintains short-term lines of credit with financial institutions around the world.

Total available lines of credit were $ 87.8 and $ 113.5 , of which nil and $ 2.3 were outstanding at June 30, 2020 and 2019, respectively.

Total available lines of credit were $ 88.5 and $ 87.8 , of which nil and nil were outstanding at June 30, 2021 and 2020, respectively.

Interest rates on these short-term lines of credit vary depending on market rates for borrowings within the respective geographic locations plus applicable spreads.

2 unchanged sentences

In addition, the Company had undrawn letters of credit of $ 15.0 and $ 6.0 and bank guarantees of $ 31.2 and $ 45.7 as of June 30, 2021 and 2020, respectively.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Long-Term Debt

The Company’s long-term debt facilities consisted of the following as of June 30, 2021 and 2020:

Facility Maturity Date Borrowing Capacity (in millions) Interest Rate Terms Applicable Interest Rate Spread as of

June 30, 2020 Debt Discount Repayment Schedule

Facility Maturity Date Borrowing Capacity (in millions) as of June 30, 2021

Interest Rate Terms Applicable Interest Rate Spread as of

June 30, 2021

Debt Discount Repayment Schedule

2026 Dollar Senior Secured Notes April 2026 $ 900.0 5.0 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021

5.000 % N/A (b)

Payable in full at maturity date

2026 Euro Senior Secured Notes April 2026 € 700.0 3.875 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2021

3.875 % N/A (b)

Fiscal 2021 and Fiscal 2020

2018 Coty Revolving Credit Facility April 2023 $ 2,750.0 LIBOR (a) plus a margin ranging from 1.00 % to 2.00 % per annum or a base rate plus a margin ranging from 0.00 % to 1.00 % per annum, based on the Company’s total net leverage ratio (c) (d) (e)

1 unchanged sentence

Payable in full at maturity date

2018 Coty Term A Facility - USD Portion April 2023 $ 1,000.0 1.75 % N/A (b)

2018 Coty Term A Facility - USD Portion April 2023 $ — (f)

1.75 % N/A (b)

Quarterly repayments beginning September 30, 2018 at 1.25 % of original principal amount

2018 Coty Term A Facility - EUR Portion April 2023 € 2,035.0 1.75 % N/A (b)

2018 Coty Term B Facility - USD Portion April 2025 $ 1,400.0 LIBOR (a) plus a margin of 2.25 % per annum or a base rate plus a margin of 1.25 % per annum (d)

2018 Coty Term A Facility - EUR Portion April 2023 € 95.7 (f)

1.75 % N/A (b)

2018 Coty Term B Facility - USD Portion April 2025 $ 849.0 (f)

LIBOR (a) plus a margin of 2.25 % per annum or a base rate plus a margin of 1.25 % per annum (d)

2.25 % 0.25 % Quarterly repayments beginning September 30, 2018 at 0.25 % of original principal amount

2018 Coty Term B Facility - EUR Portion April 2025 € 850.0 LIBOR (a) plus a margin of 2.50 % per annum (d)

2018 Coty Term B Facility - EUR Portion April 2025 € 514.8 (f)

LIBOR (a) plus a margin of 2.50 % per annum (d)

2.50 % 0.25 %

5 unchanged sentences

(b) N/A - Not Applicable.

(d) The selection of the applicable one, two, three, six or twelve month interest rate for the period is at the discretion of the Company.

1 unchanged sentence

As of June 30, 2021 and 2020, the applicable rate on the unused commitment fee was 0.30 % and 0.30 %, respectively.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

(f) As a result of the debt prepayments in fiscal 2021 (as described below), the capacities of the 2018 Coty Term A Facility - USD portion and - EUR portion, and the 2018 Coty Term B Facility - USD portion and - EUR portion permanently decreased from $ 1,000.0 , € 2,035.0 , $ 1,400.0 and € 850.0 , respectively.

Offering of Senior Secured Notes

On June 16, 2021, the Company issued an aggregate principal amount of € 700.0 million of 3.875 % senior secured notes due 2026 (the “2026 Euro Senior Secured Notes”) in a private offering.

Coty received gross proceeds of € 700.0 million in connection with the offering of the 2026 Euro Senior Secured Notes.

On April 21, 2021, the Company issued an aggregate principal amount of $ 900.0 of 5.00 % senior secured notes due 2026 (the “2026 Dollar Senior Secured Notes” and, together with the 2026 Euro Senior Secured Notes, the “Senior Secured Notes”).

Coty received gross proceeds of $ 900.0 in connection with the offering of the 2026 Dollar Senior Secured Notes.

Coty used the gross proceeds of the offerings of the Senior Secured Notes to repay a portion of the term loans outstanding under the existing credit facilities and to pay related fees and expenses thereto.

The Senior Secured Notes are senior secured obligations of Coty and are guaranteed on a senior secured basis by each of Coty’s wholly-owned domestic subsidiaries that guarantees Coty’s obligations under its existing senior secured credit facilities and are secured by first priority liens on the same collateral that secures Coty’s obligations under its existing senior secured credit facilities, as described below.

The Senior Secured Notes and the guarantees are equal in right of payment with all of Coty’s and the guarantors’ respective existing and future senior indebtedness and are pari passu with all of Coty’s and the guarantors’ respective existing and future indebtedness that is secured by a first priority lien on the collateral, including the existing senior secured credit facilities, to the extent of the value of such collateral.

Optional Redemption

Applicable Premium

The indentures governing the Senior Secured Notes specify the Applicable Premium (as defined in the respective indentures) to be paid upon early redemption of some or all of the 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes.

The Applicable Premium related to the 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes on any redemption date and as calculated by the Company is the greater of:

(1) 1.0 % of the then outstanding principal amount of the respective 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes;

(2) the excess, if any, of (a) the present value at such redemption date of (i) the redemption price of such 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes that would apply if such 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes were redeemed on April 15, 2023 (such redemption price is expressed as a percentage of the principal amount being set forth in the table appearing in the Redemption Pricing section below), plus (ii) all remaining scheduled payments of interest due on the 2026 Euro Senior Secured Notes or 2026 Dollar Senior Secured Notes to and including April 15, 2023 (excluding accrued but unpaid interest, if any, to, but excluding, the redemption date), with respect to each of subclause (i) and (ii), computed using a discount rate equal to the Treasury Rate in the case of the 2026 Dollar Senior Secured Notes or Bund Rate in the case of the 2026 Euro Senior Secured Notes (both Treasury Rate and Bund Rate as defined in the respective indentures) as of such redemption date plus 50 basis points;

over (b) the principal amount of the respective 2026 Dollar Notes, 2023 Euro Notes or 2026 Euro Notes.

Redemption Pricing

At any time and from time to time prior to April 15, 2023, the Company may redeem some or all of the 2026 Dollar Senior Secured Notes and 2026 Euro Senior Secured Notes at redemption prices equal to 100 % of the respective principal amounts being redeemed plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates.

At any time on or after April 15, 2023, the Company may redeem some or all of the 2026 Dollar Senior Secured Notes and 2026 Euro Senior Secured Notes at the redemption prices (expressed in percentage of principal amount) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Year 2026 Dollar Senior Secured Notes 2026 Euro Senior Secured Notes

2023 102.5000 % 101.9380 %

2024 101.2500 % 100.9690 %

2025 and thereafter 100.0000 % 100.0000 %

2018 Coty Credit Agreement

On April 5, 2018, the Company entered into a new credit agreement (the “2018 Coty Credit Agreement”), which amended and restated the previously existing 2015 Coty Credit Agreement.

the incurrence by the Company of (1) a senior secured term A facility in an aggregate principal amount of (i) $ 1,000.0 denominated in U.S.

dollars and (ii) € 2,035.0 million denominated in euros (the “2018 Coty Term A Facility”) and (2) a senior secured term B facility in an aggregate principal amount of (i) $ 1,400.0 denominated in U.S.

dollars and (ii) € 850.0 million denominated in euros (the “2018 Coty Term B Facility”) and (b) the incurrence by the Company and Coty B.V., a Dutch subsidiary of the Company (the “Dutch Borrower” and, together with the Company, the “Borrowers”), of a senior secured revolving facility in an aggregate principal amount of $ 3,250.0 denominated in U.S.

dollars, specified alternative currencies or other currencies freely convertible into U.S.

dollars and readily available in the London interbank market (the “2018 Coty Revolving Credit Facility”) (the 2018 Coty Term A Facility, together with the 2018 Coty Term B Facility and the 2018 Coty Revolving Credit Facility, the “2018 Coty Credit Facilities”).

Initial borrowings under the 2018 Coty Term B Facility were issued at a 0.250 % discount.

The 2018 Coty Credit Agreement provides that with respect to the 2018 Coty Revolving Credit Facility, up to $ 150.0 is available for letters of credit and up to $ 150.0 is available for swing line loans.

The 2018 Coty Credit Agreement also permits, subject to certain terms and conditions, the incurrence of incremental facilities thereunder in an aggregate amount of (i) $ 1,700.0 plus (ii) an unlimited amount if the First Lien Net Leverage Ratio (as defined in the 2018 Coty Credit Agreement), at the time of incurrence of such incremental facilities and after giving effect thereto on a pro forma basis, is less than or equal to 3.00 to 1.00.

The obligations of the Company under the 2018 Coty Credit Agreement are guaranteed by the material wholly-owned subsidiaries of the Company organized in the U.S., subject to certain exceptions (the “Guarantors”) and the obligations of the Company and the Guarantors under the 2018 Coty Credit Agreement are secured by a perfected first priority lien (subject to permitted liens) on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.

The Dutch Borrower does not guarantee the obligations of the Company under the 2018 Coty Credit Agreement or grant any liens on its assets to secure any obligations under the 2018 Coty Credit Agreement.

On June 27, 2019, the Company entered into an amendment (“2019 Amendment”) to the 2018 Coty Credit Agreement.

The 2019 Amendment modified the 2018 Coty Credit Agreement by amending the financial covenants to (i) delay until March 31, 2022 the total net leverage ratio step down from 5.25 to 5.0 (as further described in the Covenants section below), (ii) extend the applicable window for certain cost savings add-backs in the calculation of Adjusted EBITDA for purpose of determining the total net leverage ratio, and (iii) amend the determination of the exchange rate to be used for purposes of calculating “Total Indebtedness” (as defined in the 2018 Coty Credit Agreement) for purposes of the total net leverage ratio, and decreasing the total commitments under the revolving credit facility by $ 500.0 to $ 2,750.0 .

On April 29, 2020, the Company amended its existing credit agreement.

The amendment (i) provided a net debt to EBITDA financial covenant "holiday" through March 31, 2021;

(ii) established a minimum liquidity covenant through March 31, 2021 of $ 350.0 , which increased to $ 500.0 for the prepayment event noted below;

and (iii) effectively placed certain limitations on the ability to make certain investments and restricted payments (including limiting the Company’s ability to pay dividends in cash through March 31, 2021) and on incurring additional secured indebtedness.

On November 30, 2020, the Company completed the strategic transaction with KKR for the sale of a majority stake in the Wella Business.

As part of the transaction, Coty received initial cash proceeds of $ 2,451.7 for the sale of its 60 % stake in Wella and its pro rata share of Wella's return of capital distribution of $ 448.0 , and retained a 40 % stake in Wella (see Note 4—Business Combinations, Asset Acquisitions and Divestitures).

In accordance with the 2018 Coty Credit Agreement, as amended, the Company utilized $ 2,015.5 of the net proceeds to pay down its 2018 Coty Term A and B Facilities on a pro rata basis and reserved $ 500.0 for reinvestment in the business, as defined in the 2018 Coty Credit Agreement, as amended, ("the Reinvestment Balance").

If the Reinvestment Balance is not reinvested within twelve months, the Company is required to use the remainder to pay down its 2018 Coty Term A and B Facilities on a pro rata basis.

Additionally, in accordance with the 2018

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Coty Credit Agreement, as amended, as a result of these prepayments, the minimum liquidity covenant increased from $ 350.0 to $ 500.0 .

Offering of Senior Unsecured Notes

On April 5, 2018 the Company issued, at par, $ 550.0 of 6.50 % senior unsecured notes due 2026 (the “2026 Dollar Notes”), € 550.0 of 4.00 % senior unsecured notes due 2023 (the “2023 Euro Notes”) and € 250.0 of 4.75 % senior unsecured notes due 2026 (the “2026 Euro Notes” and, together with the 2023 Euro Notes, the “Euro Notes,” and the Euro Notes together with the 2026 Dollar Notes, the “Senior Unsecured Notes”) in a private offering.

On April 5, 2018 the Company issued, at par, $ 550.0 of 6.50 % senior unsecured notes due 2026 (the “2026 Dollar Notes”), € 550.0 million of 4.00 % senior unsecured notes due 2023 (the “2023 Euro Notes”) and € 250.0 million of 4.75 % senior unsecured notes due 2026 (the “2026 Euro Notes” and, together with the 2023 Euro Notes, the “Euro Notes,” and the Euro Notes together with the 2026 Dollar Notes, the “Senior Unsecured Notes”) in a private offering.

The Senior Unsecured Notes are senior unsecured debt obligations of the Company and will be pari passu in right of payment with all of the Company’s existing and future senior indebtedness (including the 2018 Coty Credit Facilities described below).

5 unchanged sentences

Interest on the 2026 Dollar Notes is payable semi-annually in arrears on April 15 and October 15 of each year.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The 2023 Euro Notes will mature on April 15, 2023 and the 2026 Euro Notes will mature on April 15, 2026.

5 unchanged sentences

Optional Redemption

Applicable Premium

The indenture governing the Senior Unsecured Notes (the “Indenture”) specifies the Applicable Premium (as defined in the Indenture) to be paid upon early redemption of some or all of the 2026 Dollar Notes or 2026 Euro Notes.

The Applicable Premium related to the 2026 Dollar Notes and 2026 Euro Notes on any redemption date and as calculated by the Company is the greater of:

(1) 1.0 % of the then outstanding principal amount of the respective 2026 Dollar Notes and 2026 Euro Notes;

(2) the excess, if any, of (a) the present value at such redemption date of (i) the redemption price of such 2026 Dollar Notes or 2026 Euro Notes that would apply if such 2026 Dollar Notes or 2026 Euro Notes were redeemed on April 15, 2021 or April 15, 2021, respectively (such redemption price is expressed as a percentage of the principal amount being set forth in the table appearing in the Redemption Pricing section below), plus (ii) all remaining scheduled payments of interest due on the 2026 Dollar Notes or 2026 Euro Notes to and including April 15, 2021 and April 15, 2021, respectively (excluding accrued but unpaid interest, if any, to, but excluding, the redemption date), with respect to each of subclause (i) and (ii), computed using a discount rate equal to the Treasury Rate in the case of the 2026 Dollar Notes or Bund Rate in the case of the 2026 Euro Notes (both Treasury Rate and Bund Rate as defined in the Indenture) as of such redemption date plus 50 basis points;

over (b) the principal amount of the respective 2026 Dollar Notes or 2026 Euro Notes.

Redemption Pricing

At any time and from time to time prior to April 15, 2021 and April 15, 2021, the Company may redeem some or all of the 2026 Dollar Notes, and 2026 Euro Notes, respectively, at redemption prices equal to 100 % of the respective principal amounts being redeemed plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates.

At any time on or after April 15, 2021, April 15, 2020 and April 15, 2021, the Company may redeem some or all of the 2026 Dollar Notes, 2023 Euro Notes and 2026 Euro Notes, respectively, at the redemption prices (expressed in percentage of principal amount) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

As of June 30, 2021, the Company may at any time redeem some or all of the 2026 Dollar Notes, 2023 Euro Notes and 2026 Euro Notes, respectively, at the redemption prices (expressed in percentage of principal amount) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates, if redeemed during the twelve-month period beginning on April 15 of each of the years indicated below:

Year 2026 Dollar Notes 2023 Euro Notes 2026 Euro Notes

3 unchanged sentences

2024 and thereafter 100.0000 % N/A 100.0000 %

In addition, at any time prior to April 15, 2021 and April 15, 2021, the Company may redeem up to 35 % of the aggregate principal amounts of the outstanding 2026 Dollar Notes and 2026 Euro Notes, respectively, using the net cash proceeds from certain equity offerings at redemption prices (expressed as a percentage of the principal amount) of 106.50 % and 104.75 %, respectively, plus accrued and unpaid interest, if any, to, but excluding, the redemption dates;

provided that (i) at least 65 % of the aggregate principal amount of 2026 Dollar Notes and 2026 Euro Notes, respectively, originally issued on the date of the Indenture remain outstanding after each such redemption, and (ii) notice of any such redemption is delivered to the Trustee within 90 days of the closing of each such equity offering.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

2018 Coty Credit Agreement

On April 5, 2018, the Company entered into a new credit agreement (the “2018 Coty Credit Agreement”), which amended and restated the previously existing 2015 Coty Credit Agreement.

the incurrence by the Company of (1) a senior secured term A facility in an aggregate principal amount of (i) $ 1,000.0 denominated in U.S.

dollars and (ii) € 2,035.0 denominated in euros (the “2018 Coty Term A Facility”) and (2) a senior secured term B facility in an aggregate principal amount of (i) $ 1,400.0 denominated in U.S.

dollars and (ii) € 850.0 denominated in euros (the “2018 Coty Term B Facility”) and (b) the incurrence by the Company and Coty B.V., a Dutch subsidiary of the Company (the “Dutch Borrower” and, together with the Company, the “Borrowers”), of a senior secured revolving facility in an aggregate principal amount of $ 3,250.0 denominated in U.S.

dollars, specified alternative currencies or other currencies freely convertible into U.S.

Initial borrowings under the 2018 Coty Term Loan B Facility were issued at a 0.250 % discount.

On June 27, 2019, the Company entered into an amendment (“2019 Amendment”) to the 2018 Coty Credit Agreement.

In connection with the 2019 Amendment, the Company wrote off $ 3.8 of unamortized deferred financing fees, which were recorded as Other expense, net in the Consolidated Statement of Operations.

On April 29, 2020, the Company amended its existing credit agreement.

The amendment (i) provides a net debt to EBITDA financial covenant "holiday" through March 31, 2021;

(ii) establishes a minimum liquidity covenant through March 31, 2021 of $ 350.0 ;

and (iii) effectively places certain limitations on the ability to make certain investments and restricted payments (including limiting our ability to pay dividends in cash through March 31, 2021) and on incurring additional secured indebtedness.

The amendment does not modify the applicable funding costs during the period through March 31, 2021.

Deferred Issuance Costs

For the fiscal years ended June 30, 2021, 2020 and 2019, the Company capitalized deferred financing fees of $ 25.4 , $ 13.4 , and $ 5.9 , respectively.

The Company incurred $ 0.8 and $ 0.8 in third-party debt issuance costs during the fiscal years ended June 30, 2020 and 2019, respectively, which were recorded as Other expense, net in the Consolidated Statement of Operations.

Loss on Early Extinguishment of Debt

During the fiscal years ended June 30, 2020, 2019 and 2018, the Company wrote off $ 0.0 , $ 0.0 and $ 8.7 of unamortized deferred financing fees related to extinguishments of substantially different debt.

Also during the fiscal years ended June 30, 2020, 2019 and 2018, the Company wrote-off $ 0.0 , $ 0.0 and $ 2.0 of unamortized original issue debt discounts.

The write-offs of these unamortized deferred financing fees and unamortized original issue debt discounts are included in Loss on early extinguishment of debt in the Consolidated Statements of Operations.

The Company did no t incur any third-party debt issuance costs during the fiscal year ended June 30, 2021.

The Company incurred $ 0.8 and $ 0.8 in third-party debt issuance costs during the fiscal years ended June 30, 2020 and 2019, respectively, which were recorded as Other (income) expense, net in the Consolidated Statement of Operations.

In fiscal 2021, the Company wrote off $ 21.1 of unamortized deferred financing fees and $ 3.1 of unamortized debt discounts as the prepayments of the 2018 Coty Term A and B Facilities were considered partial extinguishments of debt.

There were no write offs in fiscal 2020.

In fiscal 2019, the Company wrote off $ 3.8 of unamortized deferred financing fees in connection with the 2019 Amendment.

The write-offs of the unamortized deferred financing fees and unamortized debt discounts are included in Other (income) expense, net in the Consolidated Statements of Operations.

The 2018 Coty Credit Agreement facilities will bear interest at rates equal to, at the Company’s option, either:

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

• LIBOR of the applicable qualified currency, of which the Company can elect the applicable one, two, three, six or twelve month rate, plus the applicable margin;

24 unchanged sentences

In no event will LIBOR be deemed to be less than 0.00 % per annum.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Fair Value of Debt

1 unchanged sentence

Value Carrying

Senior Secured Notes $ 1,733.3 $ 1,749.1 $ — $ —

2018 Coty Credit Agreement

1 unchanged sentence

Senior Unsecured Notes 1,502.3 1,500.5 1,449.4 1,270.3

The Company uses the market approach to value the 2018 Coty Credit Agreement and the Senior Unsecured Notes.

The Company uses the market approach to value the Senior Secured Notes, the 2018 Coty Credit Agreement and the Senior Unsecured Notes.

The Company obtains fair values from independent pricing services to determine the fair value of these debt instruments.

Based on the assumptions used to value these liabilities at fair value, these debt instruments are categorized a Level 2 in the fair value hierarchy.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Debt Maturities Schedule

Aggregate maturities of all long-term debt, including current portion of long-term debt and excluding capital lease obligations as of June 30, 2020, are presented below:

Aggregate maturities of all long-term debt, including the current portion of long-term debt and excluding capital lease obligations as of June 30, 2021, are presented below:

Fiscal Year Ending June 30,

Thereafter 831.1

Total $ 5,481.3

3 unchanged sentences

Quarterly Test Period Ending Total Net Leverage Ratio (as amended April 29, 2020) (a)

June 30, 2020 through March 31, 2021 N/A (not tested)

June 30, 2021 through December 31, 2021 5.25 to 1.00

3/31/2022 5.00 to 1.00

6/30/2022 4.75 to 1.00

9/30/2022 4.50 to 1.00

12/31/2022 4.25 to 1.00

March 31, 2022 5.00 to 1.00

June 30, 2022 4.75 to 1.00

September 30, 2022 4.50 to 1.00

December 31, 2022 4.25 to 1.00

March 31, 2023 through June 30, 2023 4.00 to 1.00

2 unchanged sentences

Adjusted EBITDA, as defined in the 2018 Coty Credit Agreement, as amended, includes certain add backs related to cost savings, operating expense reductions and future unrealized synergies subject to certain limits and conditions as specified in the 2018 Coty Credit Agreement, as amended.

The 2018 Coty Credit Agreement, as amended, establishes a quarterly minimum liquidity covenant for this period of $ 350.0 .

As of June 30, 2020, the current immediate liquidity was $ 1,618.1 .

In the four fiscal quarters following the closing of any Material Acquisition (as defined in the 2018 Coty Credit Agreement, as amended), including the fiscal quarter in which such Material Acquisition occurs, the maximum Total Net Leverage Ratio shall be the lesser of (i) 5.95 to 1.00 and (ii) 1.00 higher than the otherwise applicable maximum Total Net Leverage Ratio for such quarter (as set forth in the table above).

Immediately after any such four fiscal quarter period, there shall be at least two consecutive fiscal quarters during which our Total Net Leverage Ratio is no greater than the maximum Total Net Leverage Ratio that would otherwise have been required in the absence of such Material Acquisition, regardless of whether any additional Material Acquisitions are consummated during such period.

On January 6, 2020, the Company entered into a purchase agreement for the King Kylie Transaction, which constituted a Material Acquisition.

As of June 30, 2020, the Company was in compliance with all covenants contained within the 2018 Coty Credit Agreement, as amended.

Immediately after any such four fiscal quarter period, there shall be at least two consecutive fiscal quarters during which the Company’s Total Net Leverage Ratio is no greater than the maximum Total Net

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

The Company determines if an arrangement is a lease at lease inception.

For operating leases entered into prior to July 1, 2019, the ROU assets and operating lease liabilities are recognized in the balance sheet based on the present value of the remaining future minimum payments over the lease term from the implementation date of the standard, July 1, 2019.

For leases entered into subsequent to July 1, 2019, the operating lease ROU assets and operating lease liabilities are based on the present value of minimum payments over the lease term at the commencement date of the lease.

The Company uses discount rates to determine the present value of future lease payments.

The Company uses its secured incremental borrowing rate, based on the information available for leases, including the lease term and interest rate environment in the country in which the lease exists.

The lease terms used to calculate the ROU assets and lease liabilities may include options to extend or terminate when it is reasonably certain that the Company will exercise that option.

Leverage Ratio that would otherwise have been required in the absence of such Material Acquisition, regardless of whether any additional Material Acquisitions are consummated during such period.

As of June 30, 2021, the Company was in compliance with all covenants contained within the 2018 Coty Credit Agreement, as amended.

The Company leases office facilities under non-cancelable operating leases with terms generally ranging between 10 and 25 years.

3 unchanged sentences

None of the Company’s leases restricts the payment of dividends or the incurrence of debt or additional lease obligations, or contain significant purchase options.

A portion of our real estate lease portfolio contains base rents subject to annual changes in the Consumer Price Index (“CPI”) as well as charges for operating expenses which are reimbursable to the landlord based on actual usage.

Changes to the CPI and payments for such reimbursable operating expenses that are not defined with a minimum rate increase are considered variable and are recognized as variable lease costs in the period in which the obligation for those payments was incurred.

As a practical expedient, the Company has elected an accounting policy not to separate non-lease components from lease components and instead, account for these components as a single lease component.

The Company has made an accounting policy election not to recognize ROU assets and lease liabilities for leases that, at the commencement date, are for 12 months or less.

All of the Company’s material leases are operating leases.

These are primarily real estate properties, including corporate offices, retail stores and facilities to support the Company's manufacturing, research and development and distribution operations.

Due to the divestiture of the Wella Business, lease assets, liabilities and expenses specific to this business for the fiscal year ended June 30, 2020 are excluded from the subsequent tables and reported as held for sale.

The following chart provides additional information about the Company’s operating leases for the fiscal year ended June 30, 2020.

Due to the divestiture of the Wella Business, lease assets, liabilities and expenses specific to this business for the fiscal years ended June 30, 2021 and 2020 are excluded from the subsequent tables.

The following table provides additional information about the Company’s operating leases for the fiscal years ended June 30, 2021 and 2020.

June 30, 2021 Year Ended

June 30, 2020

7 unchanged sentences

Right-of-use assets obtained in exchange for lease obligations 27.8 6.3

Weighted-average remaining lease term - real estate 6.9 years

Weighted-average remaining lease term - real estate 6.4 years 6.9 years

Weighted-average discount rate - real estate leases 3.57 % 3.09 %

The Company incurred net rent expense of $ 197.7 and $ 208.2 relating to operating leases under ASC 840 in fiscal years 2019 and 2018, respectively.

The Company collected payments from sub-lessors relating to facilities no longer in use by the Company of $ 9.4 and $ 6.2 for fiscal years 2019 and 2018, respectively.

The fiscal years ended 2019 and 2018 rent expense and sub-lessor payments include amounts related to discontinued operations.

The Company incurred net rent expense of $ 197.7 relating to operating leases under ASC 840 in fiscal year 2019.

The Company collected payments from sub-lessors relating to facilities no longer in use by the Company of $ 9.4 for fiscal year 2019.

The fiscal year ended 2019 rent expense and sub-lessor payments include amounts related to discontinued operations.

During fiscal 2021, 2020 and 2019, the Company recorded asset impairment charges of $ 0.6 , $ 7.8 and $ 0.0 .

The fiscal 2020 impairment charges are recorded in selling, general and administrative expenses in the Consolidated Statements of Operations and primarily relate to abandonment of a retail store no longer in use.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

During fiscal 2020, 2019 and 2018, we recorded asset impairment charges of $ 7.8 , $ 0.0 and $ 0.0 .

Future minimum lease payments for the Company’s operating leases as of June 30, 2021 are as follows:

June 30, 2020

Fiscal Year Ending June 30,

Thereafter 102.5

5 unchanged sentences

Total operating lease liabilities $ 345.0

Table excludes obligations for leases with original terms of 12 months or less which have not been recognized as ROU assets or liabilities in the Consolidated Balance Sheets.

At June 30, 2019, the aggregate future minimum rental commitments under all non-cancelable operating lease agreements are disclosed below.

The table below includes amounts related to discontinued operations.

Fiscal Year Ending June 30, Leases

Thereafter 252.3

sublease income ( 20.1 )

Total payments $ 701.4

Table excludes obligations for leases with original terms of twelve months or less which have not been recognized as ROU assets or liabilities in the Consolidated Balance Sheets.

(Loss) income before income taxes from continuing operations in fiscal 2021, 2020 and 2019 is presented below:

4 unchanged sentences

Total $ ( 239.8 ) $ ( 1,467.6 ) $ ( 3,945.4 )

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The components of the Company’s total (benefit) provision for income taxes from continuing operations during fiscal 2021, 2020 and 2019 are presented below:

11 unchanged sentences

Benefit for income taxes from continued operations $ ( 172.0 ) $ ( 377.7 ) $ ( 54.8 )

During fiscal 2021, the Company recorded a benefit of $ 234.4 as a result of a tax rate differential on the deferred taxes recognized on the transfer of assets and liabilities, following the Company’s relocation of the main principal location from Geneva to Amsterdam.

The overall value of the assets and liabilities transferred was negotiated with both the Swiss and Dutch tax authorities and per terms of the agreements, will be reevaluated after three years.

The Company also recorded an expense of

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

$ 130.0 related to an internal restructuring following the Wella divestiture, primarily intended to create a more efficient structure to hold its remaining 40 % equity investment in Wella.

During fiscal 2020, the Company recorded a benefit of $ 105.7 for the capital loss generated as a result of the disposition of its investment in Younique.

During fiscal 2019, the Company recorded goodwill impairment that is not tax-deductible.

During fiscal 2018, the Company incurred an expense of $ 123.0 as a result of the Tax Act.

The reconciliation of the U.S.

8 unchanged sentences

Change in unrecognized tax benefit ( 18.0 ) 21.3 43.3

Tax Act — — 123.0

Permanent differences—net ( 13.1 ) 14.3 5.0

Amortization on intercompany sale — — 1.9

Goodwill impairment — 26.1 675.6

Principal relocation ( 234.4 )

Post-divestiture restructuring 130.0

Gain on sale of business adjustment — ( 132.1 ) —

17 unchanged sentences

Lease liability 24.3 22.6

Principal relocation lease liability 487.8 —

Property, plant and equipment 7.7 —

Other 36.8 54.3

4 unchanged sentences

Property, plant and equipment — 6.4

Unrealized gain — 0.5

Licensing rights 23.3 20.9

2 unchanged sentences

Deferred income tax liabilities 971.5 709.7

Net deferred income tax asset (liability) $ 187.3 $ ( 240.9 )

Net deferred income tax asset $ 83.6 $ 187.3

The expirations of tax loss carry forwards, amounting to $ 1,343.8 as of June 30, 2021, in each of the fiscal years ending June 30, are presented below:

7 unchanged sentences

The total valuation allowances recorded are $ 33.4 and $ 40.0 as of June 30, 2021 and 2020, respectively.

In fiscal 2020, the change in the valuation allowance was due primarily to valuation allowances released as a result of the underlying net operating losses either expiring or being written off due to the entity being liquidated.

In fiscal 2021, the change in the valuation allowance was due primarily to valuation allowances released as a result of the underlying net operating losses expiring.

& SUBSIDIARIES

15 unchanged sentences

During fiscal 2021, the Company accrued interest of $ 0.8 , while in fiscal 2020 and 2019 the Company accrued interest of $ 3.2 and $ 4.3 , respectively.

During fiscal 2020, the Company accrued penalties of $ 0.0 , while in fiscal 2019 and 2018 the Company accrued penalties of $ 0.0 and $ 0.4 , respectively.

During fiscal 2021, the Company released penalties of $ 0.5 , while in fiscal 2020 and 2019 the Company accrued penalties of $ 0.0 and $ 0.0 , respectively.

The total gross accrued interest and penalties recorded in the Other noncurrent liabilities in the Consolidated Balance Sheets related to UTBs as of June 30, 2021 and 2020 is $ 21.7 and $ 19.3 , respectively.

10 unchanged sentences

However, the Company believes it has adequately provided for its UTBs for all open tax years in each tax jurisdiction.

On December 22, 2017, “H.R.1”, formerly known as the “Tax Cuts and Jobs Act” (“Tax Act”) was enacted.

The Tax Act significantly revises the U.S.

corporate income tax system by, amongst other things, reducing the federal tax rate on U.S.

earnings to 21%, implementing a modified territorial tax system and imposing a one-time deemed repatriation tax on historical earnings generated by foreign subsidiaries that have not been repatriated to the U.S.

As a result of the 2017 Tax Act changing the U.S.

to a modified territorial tax system, the Company no longer asserts that any of its undistributed foreign earnings are permanently reinvested.

We do not expect to incur significant withholding or state taxes on future distributions.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No.

118 (“SAB 118”) which provides guidance on accounting for the tax effects of the Tax Act.

SAB 118 provides a measurement period that should not extend beyond one year from the enactment date of the Tax Act for companies to complete the accounting under ASC 740.

The Company recorded its initial estimate of the impact of the Tax Act in fiscal 2018.

This estimate was a charge of approximately $ 123.0 as a result of utilizing tax attributes (e.g., net operating losses and foreign tax credits) to fully offset the cash impact of the one-time deemed repatriation tax.

During fiscal 2019, the Company finalized its estimate of the impact of the Tax Act and no additional adjustments were required.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

INTEREST EXPENSE, NET

3 unchanged sentences

Interest expense $ 231.8 $ 233.3 $ 252.0

Foreign exchange (gain) losses, net of derivative contracts (a)

14.8 ( 7.6 ) ( 8.5 )

Foreign exchange losses (gain), net of derivative contracts 6.8 14.8 ( 7.6 )

Interest income ( 3.5 ) ( 5.4 ) ( 19.2 )

Total interest expense, net $ 235.1 $ 242.7 $ 225.2

(a) In the year ended June 30, 2018, the Company recorded gains of $ 1.4 related to short-term forward contracts to exchange euros for U.S.

dollars to facilitate the repayment of U.S.

dollar denominated debt.

Fluctuations in exchange rates between the dates the short-term forward contracts were entered into and the settlement date resulted in a gain upon settlement of $ 1.4 included within total Interest expense, net for the fiscal year ended June 30, 2018 in the Company’s Consolidated Statements of Operations.

EMPLOYEE BENEFIT PLANS

2 unchanged sentences

and international savings plans for employees in certain other countries.

In the U.S., hourly and salary based employees are eligible to participate in the plan after 90 days of service and the Company matches 100 % of employee contributions up to 6.0 % of employee compensation.

In the U.S., hourly

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

and salary based employees are eligible to participate in the plan after 90 days of service and the Company matches 100 % of employee contributions up to 6.0 % of employee compensation.

In addition, the Company makes contributions to the plan on behalf of employees determined by their age and compensation.

9 unchanged sentences

Settlements and Curtailments for Pension Plans

As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of our non-U.S.

As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of the Company’s non-U.S.

pension plans.

As a result, the Company recognized curtailment gains of $ 14.1 during the year ended June 30, 2020.

As a result, the Company recognized curtailment gains of $ 6.9 and $ 14.1 during the years ended June 30, 2021 and 2020, respectively.

Additionally, the Company recognized a settlement loss of $ 3.8 , of which $ 2.3 was related to restructuring actions during the year ended June 30, 2021.

The impact of settlement and curtailment activity on the current and prior comparative periods is included in Other expense, net in the Consolidated Statements of Operations.

During fiscal 2019, as part of Global Integration Activities, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of our non-U.S.

pension plans.

6 unchanged sentences

Settlements and Curtailments for OPEB Plans

As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of our US OPEB Plans.

As a result, the Company recognized curtailment gains of

As part of the Turnaround Plan, the Company concluded that restructuring actions resulted in a significant reduction of future services of active employees in certain of the Company’s U.S.

As a result, the Company recognized curtailment gains of $ 0.8 during the year ended June 30, 2020.

The impact of settlement and curtailment activity on the current and prior comparative periods is included in Other (income) expense, net in the Consolidated Statements of Operations.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

$ 0.8 during the year ended June 30, 2020.

The impact of settlement and curtailment activity on the current and prior comparative periods is included in Other expense, net in the Consolidated Statements of Operations.

The Company amended a non-U.S.

postretirement healthcare plan during fiscal 2018, which significantly reduced the expected years of future service for employees participating in the plan.

The amendment triggered a curtailment gain of $ 10.4 , which is included in Other expense, net in the Consolidated Statement of Operations for the year ended June 30, 2018.

All of the disclosures below include amounts related to discontinued operations, except when otherwise noted.

All of the disclosures below include amounts related to discontinued operations through November 30, 2020, except when otherwise noted.

The aggregate reconciliation of the projected benefit obligations, plan assets, funded status and amounts recognized in the Company’s Consolidated Financial Statements related to the Company’s pension plans and other post-employment benefit plans is presented below:

7 unchanged sentences

Plan participants’ contributions — — 4.3 6.1 0.2 0.3 4.5 6.4

Plan amendments — — — ( 10.3 ) — — — ( 10.3 )

Benefits paid ( 0.6 ) ( 1.4 ) ( 16.2 ) ( 16.8 ) ( 2.3 ) ( 2.1 ) ( 19.1 ) ( 20.3 )

2 unchanged sentences

Pension curtailment — — ( 6.6 ) ( 11.2 ) — ( 0.8 ) ( 6.6 ) ( 12.0 )

Acquisitions/Divestitures — — ( 303.4 ) — ( 0.6 ) — ( 304.0 ) —

Pension settlement — — ( 47.0 ) ( 39.0 ) — — ( 47.0 ) ( 39.0 )

1 unchanged sentence

Effect of exchange rates — — 41.0 ( 4.0 ) ( 0.3 ) ( 0.1 ) 40.7 ( 4.1 )

Other — — — 1.6 — ( 1.1 ) — 0.5

Benefit obligation—June 30 $ 18.9 $ 18.5 $ 515.9 $ 753.2 $ 50.2 $ 53.7 $ 585.0 $ 825.4

8 unchanged sentences

Plan settlements — — ( 46.5 ) ( 39.0 ) — — ( 46.5 ) ( 39.0 )

Acquisitions/Divestitures — — ( 148.6 ) — ( 0.4 ) — ( 149.0 ) —

Effect of exchange rates — — 13.1 1.9 — — 13.1 1.9

Other — — — 0.5 — — — 0.5

Fair value of plan assets—June 30 — — 159.1 274.1 — 0.5 159.1 274.6

14 unchanged sentences

Net amount recognized $ ( 18.6 ) $ ( 19.2 ) $ ( 388.0 ) $ ( 337.2 ) $ ( 42.5 ) $ ( 44.9 ) $ ( 449.1 ) $ ( 401.3 )

The projected benefit obligation actuarial loss of $ 35.9 is primarily driven by a decrease in discount rates since June 30, 2020.

The actuarial loss is the cumulative impact of the decrease in discount rates at (i) the remeasurement as of November 30, 2020 due to the Wella divestiture and (ii) the measurement as of fiscal year ending June 30, 2021.

The actuarial loss in the projected benefit obligation was partially offset by the asset gain of $ 18.3 as a result of better than expected asset performance, particularly in Germany.

During fiscal 2021 the retiree medical and life insurance plan experienced a gain on the liability of $ 2.8 primarily due to retirees waiving medical coverage this year that had coverage last year, and updated claims, mortality and discount rate assumptions.

The gain was slightly offset due to updated medical trend assumptions .

The accumulated benefit obligation for the U.S.

11 unchanged sentences

The components of net periodic benefit cost for pension plans and other post-employment benefit plans recognized in the Consolidated Statements of Operations are presented below:

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Year Ended June 30,

11 unchanged sentences

Net periodic benefit cost $ 2.0 $ 1.3 $ — $ 16.9 $ 18.6 $ 32.2 $ ( 1.1 ) $ ( 4.0 ) $ ( 2.7 ) $ 17.8 $ 15.9 $ 29.5

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Net periodic benefit costs include amounts related to discontinued operations of $ 6.2 , $ 14.4 , and $ 12.2 for the years ended June 30, 2021, 2020 and 2019, respectively.

11 unchanged sentences

Net actuarial (loss) gain $ ( 0.5 ) $ ( 1.6 ) $ ( 17.1 ) $ 25.6 $ 2.8 $ 5.2 $ ( 14.8 ) $ 29.2

Amortization of prior service (credit) cost — — ( 0.8 ) 0.2 ( 5.9 ) ( 5.9 ) ( 6.7 ) ( 5.7 )

Curtailment recognition of prior service credit (cost) — — ( 2.9 ) — ( 0.4 ) — ( 3.3 ) —

Amortization or curtailment recognition of prior service (credit) cost — — ( 0.7 ) ( 3.7 ) ( 3.3 ) ( 6.3 ) ( 4.0 ) ( 10.0 )

Recognized net actuarial (gain)

3 unchanged sentences

Total recognized in OCI/(L) $ 1.0 $ ( 0.9 ) $ ( 14.1 ) $ 21.5 $ ( 0.3 ) $ ( 1.7 ) $ ( 13.4 ) $ 18.9

Amounts in AOCI/(L) expected to be amortized as components of net periodic benefit cost during fiscal 2021 are presented below:

Pension Plans Other Post-Employment Benefits Total

International

Prior service credit (cost) $ — $ 0.6 $ 3.3 $ 3.9

Net gain (loss) ( 1.5 ) 0.1 0.1 ( 1.3 )

Total $ ( 1.5 ) $ 0.7 $ 3.4 $ 2.6

Changes in plan assets and benefit obligations recognized in OCI/(L) excludes $( 19.2 ) of discontinued operations for the year ended June 30, 2021.

Pension and Other Post-Employment Benefit Assumptions

The weighted-average assumptions used to determine the Company’s projected benefit obligation above are presented below:

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Pension Plans Other Post-Employment Benefits

3 unchanged sentences

Future compensation growth rates N/A N/A 1.0 %- 2.5 %

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The weighted-average assumptions used to determine the Company’s net periodic benefit cost in fiscal 2021, 2020 and 2019 are presented below:

13 unchanged sentences

Year that the rate reaches the ultimate trend rate 2027 2026 2026

A one-percentage point change in assumed health care cost trend rates would have the following effects:

One Percentage Point Increase One Percentage Point Decrease

Effect on total service cost and interest cost $ 6.1 $ ( 5.3 )

Effect on post-employment benefit obligation 0.3 ( 0.3 )

Pension Plan Investment Policy

82 unchanged sentences

The Company expects that through hedging, any gain or loss on the derivative instruments would generally offset the expected increase or decrease in the value of the underlying forecasted transactions.

The Company entered into foreign exchange forward contracts for which hedge accounting treatment has been applied, which the Company anticipates realizing in the Consolidated Statements of Operations through fiscal 2021.

In addition, in September 2019, the Company entered into cross-currency swap contracts in the notional amount of $ 550.0 and designated these cross-currency swaps as hedges of its net investment in certain foreign subsidiaries.

These cross-currency swaps allow for the exchange of fixed interest payments on the agreed upon notional amounts, between the Company and the related counterparties, effectively converting the Company’s fixed rate U.S.

dollar denominated debt to euro denominated debt with more favorable fixed rate interest payments over the contracts’ term.

Cross-currency swaps designated as net investment hedges are marked-to-market using the current spot exchange rate as of the end of each reporting period, with gains and losses included in the foreign currency translation component of accumulated other comprehensive income (loss) (“AOCI/(L)”) until the sale or substantial liquidation of the underlying net investments.

The Company enters into foreign exchange forward contracts to hedge anticipated transactions for periods consistent with the Company’s identified exposures to minimize the effect of foreign exchange rate movements on revenues, costs and on the cash flows that the Company receives from foreign subsidiaries and third parties where there is a high probability that anticipated exposures will materialize.

The foreign exchange forward contracts used to hedge anticipated transactions have been designated as foreign exchange cash-flow hedges.

Hedge effectiveness of foreign exchange forward contracts is based on the forward-to-forward hypothetical derivative methodology and includes all changes in value.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The Company also continued to use certain derivatives as economic hedges of foreign currency exposure on firm commitments and forecasted transactions, which do not qualify for hedge accounting.

The Company is exposed to foreign currency exchange rate fluctuations in the normal course of business, including through exposure to inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the transaction currency.

To manage this exposure, in June 2021, the Company entered into non-deliverable forward foreign-exchange contracts (the “NDF contracts”) that are intended to offset changes in cash flow attributable to currency exchange movements.

The NDF contracts have been designated as foreign exchange cash flow hedges.

Hedge effectiveness of the NDF contracts is based on the hypothetical derivative methodology for prospective assessment and on the cumulative dollar offset methodology for retrospective assessment.

The Company entered into these contracts with counterparties that are banks or other financial institutions, and the Company considers the risk of non-performance by such counterparties not to be material.

The Company also continued to use certain derivatives as economic hedges of foreign currency exposure on firm commitments, which do not qualify for hedge accounting.

Although these derivatives were not designated for hedge accounting, the overall objective of mitigating foreign currency exposure is the same for all derivative instruments.

1 unchanged sentence

For derivatives not designated as hedging instruments, changes in fair value are recorded in the line item in the Consolidated Statements of Operations to which the derivative relates.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

In September 2020, the Company terminated its existing net investment cross currency swap derivatives with notional amount of $ 550.0 in exchange for cash payment of $ 37.6 .

The related loss from this termination is included in AOCI/(L) until the sale or substantial liquidation of the underlying investments.

On December 1, 2020, the Company entered into a novation agreement with Wella to assign all then existing foreign exchange forward contracts and related obligation executed by the Company in connection with the Wella Business.

In July 2021, the Company entered into foreign exchange forward contracts to hedge up to 80 % of the Company’s euro denominated external debt as part of management’s strategy to minimize the impact of currency movements on those debt instruments.

Interest Rate Risk

4 unchanged sentences

Hedge effectiveness of interest rate swap contracts is based on a long-haul hypothetical derivative methodology and includes all changes in value.

During August 2018, the Company extended the maturity of the interest rate swap portfolio through fiscal 2021 by replacing its original swap contracts with swap contracts having longer maturities to manage the medium term exposure to interest rate increases.

The Company received $ 43.2 for settlement of the original swap contracts.

As the forecasted interest expense under the original swap agreements is still probable, the related AOCI/(L) will be amortized in line with the timing of the forecasted transactions.

During September 2019, the Company entered into incremental interest rate swap contracts in the notional amount of $ 1,000.0 , which extended the maturity of the interest rate swap portfolio from 2021 through 2023.

These interest rate swaps are designated and qualify as cash flow hedges.

In fiscal 2021, the Company terminated certain existing interest rate swaps with notional amount of $ 700.0 in exchange for cash payment of $ 4.9 .

The related losses from these terminations is included in Interest expense.

As of June 30, 2021 and 2020, the Company had interest rate swap contracts designated as effective hedges in the notional amount of $ 1,900.0 and $ 3,000.0 , respectively.

14 unchanged sentences

Exposure to credit risk in the event of nonperformance by any of the counterparties with respect to the Company’s foreign exchange forward contracts is limited to the fair value of contracts in net asset positions under master netting arrangements.

Exposure to credit risk in the event of nonperformance by any of the counterparties with respect to the Company’s interest rate swap contracts is limited to the fair value of contracts in net asset positions.

Accordingly, management of the Company believes risk of material loss under these hedging contracts is remote.

Exposure to credit risk in the event of nonperformance by any of the counterparties with respect to the Company’s interest rate swap contracts is limited to the fair

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

value of contracts in net asset positions.

Accordingly, management of the Company believes risk of material loss under these hedging contracts is remote.

Net Investment Hedge

Foreign currency gains and losses on borrowings designated as a net investment hedge, except ineffective portions, are reported in the cumulative translation adjustment (“CTA”) component of AOCI/(L), along with the foreign currency translation adjustments on those investments.

Foreign currency denominated borrowings designated as net investment hedges had nominal exposures of € 3,591.0 and € 3,699.3 as of June 30, 2020 and 2019, respectively.

As a result of the prepayments of the 2018 Coty Term A and B Facilities, as described in Note 15—Debt, foreign currency denominated borrowings designated as net investment hedges decreased from nominal exposures of € 3,591.0 million as of June 30, 2020 to € 1,809.5 million as of June 30, 2021.

Net investment hedge effectiveness is assessed based on the change in the spot rate of the foreign currency denominated loans payable.

21 unchanged sentences

2021 2020 2019

Net Revenues Interest expense, net Cost of sales Interest expense, net Net Revenues Cost of sales Interest expense, net

Net Revenues Interest expense, net Net Revenues Interest expense, net Cost of sales Interest expense, net

Foreign exchange forward contracts:

13 unchanged sentences

The Company is required under a shareholders agreement to purchase all of the shares held by the noncontrolling interest holder equal to 25 % of the outstanding shares of a certain subsidiary in the United Arab Emirates (the “U.A.E.

subsidiary”) at the termination of the agreement.

The Company has determined such shares to be a mandatorily redeemable financial interest (“MRFI”) that is recorded as a liability.

The liability is calculated based upon a pre-determined formula in accordance with the related U.A.E.

Shareholders Agreement.

As of June 30, 2020 and 2019, the liability amounted to $ 8.8 and $ 7.5 , respectively, of which $ 6.9 and $ 6.1 , respectively, was recorded in Other noncurrent liabilities and $ 1.9 and $ 1.4 , respectively, was recorded in Accrued expenses and other current liabilities.

The assets of the U.A.E.

subsidiary are restricted in that they are not available for general business use outside the context of the U.A.E.

subsidiary and creditors (or beneficial interest holders) do not have recourse to the Company or to its other assets.

subsidiary has total assets and total liabilities of $ 25.8 and $ 15.1 as of June 30, 2020, and $ 37.2 and $ 26.7 as of June 30, 2019, respectively.

subsidiary”) at the termination of the agreement on December 31, 2020.

The final purchase price of $ 7.1 was paid in July 2021.

Prior to the cash purchase of the remaining noncontrolling interest, the noncontrolling interest balance was recorded as a mandatorily redeemable financial instrument (“MRFI”) liability.

As of June 30, 2021 and 2020, the liability amounted to $ 7.1 and $ 8.8 , respectively.

Southeast Asian subsidiary

2 unchanged sentences

The termination was effective on June 30, 2019 and immediately prior to the cash purchase of the remaining noncontrolling interest, the noncontrolling interest balance was recorded as a MRFI liability.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

REDEEMABLE NONCONTROLLING INTERESTS

4 unchanged sentences

As a result of the Company’s sale of its membership interest in Foundation, RNCI of $ 360.4 was derecognized as of the date of sale.

The Company accounted for the 40.7 % noncontrolling interest portion of Foundation as RNCI due to the noncontrolling interest holder’s right to put their shares to the Company in certain circumstances.

Foundation was a majority-owned consolidated subsidiary through September 16, 2019 and the Company recorded income tax expense based on the Company’s 59.3 % membership interest in Foundation due to its treatment as a partnership for U.S.

income tax purposes.

Accordingly, Foundation’s net income attributable to RNCI is equal to the 40.7 % noncontrolling interest of Foundation’s net income excluding a provision for income taxes.

The Company recognized $ 365.3 as the RNCI balance as of June 30, 2019.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Subsidiary in the Middle East

6 unchanged sentences

The Company recognized $ 84.1 and $ 79.1 as the redeemable noncontrolling interest balances as of June 30, 2021 and 2020, respectively.

Percentage of redeemable noncontrolling interest (a)

Earliest exercise date(s) (b)

December 2028

Formula of redemption value (c)

Percentage of redeemable noncontrolling interest 25 %

Earliest exercise date(s) December 2028

Formula of redemption value (a)

3 -year average of EBIT * 6

(a) The parties are entitled to call or put the remaining interest in July 2028.

The Put right and Call right will be exercised in respect of the noncontrolling interest holder’s percentage of shares of the Middle East subsidiary at the time of the exercise.

(b) The parties are entitled to call or put the noncontrolling interest holder’s percentage of shares of the subsidiary in December 2028.

(c) EBIT is defined in the amended shareholders’ agreement as the consolidated net earnings before interest and income tax.

(a) EBIT is defined in the amended shareholders’ agreement as the consolidated net earnings before interest and income tax.

EQUITY AND CONVERTIBLE PREFERRED STOCK

1 unchanged sentence

The holders of Class A Common Stock are entitled to one vote per share.

As of June 30, 2020, total authorized shares of Class A Common Stock was 1,250.0 million and total outstanding shares of Class A Common Stock was 765.1 .

As of June 30, 2021, total authorized shares of Class A Common Stock was 1,250.0 million and total outstanding shares of Class A Common Stock was 766.0 million.

In the fiscal years ended June 30, 2021, 2020, and 2019, the Company issued 1.7 , 1.4 , and 1.0 million shares of its Class A Common Stock, respectively, and received $ 0.0 , $ 2.7 , and $ 5.2 , in cash, respectively, in connection with the exercise of employee stock options and settlement of RSUs and special incentive awards.

During the fiscal year ended June 30, 2020, the Company granted 2.3 million restricted stock awards to employees.

Of the 2.3 million, 0.3 million were withheld for employee taxes and 2.0 million shares of Class A Common Stock were issued.

Of the 2.0 million shares, 0.6 million shares vested immediately but are restricted from trading for one year and 1.4 million shares will vest in equal installments over the next three fiscal years .

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

During the fiscal year ended June 30, 2021, the Company reacquired 0.8 million of the 1.4 million shares of Class A Common Stock issued for the restricted stock awards granted during the year ended June 30, 2020.

Of the 0.8 million shares of Class A Common Stock reacquired, 0.1 million were withheld for employee taxes due on vested restricted stock awards and 0.7 million were for restricted stock awards forfeited during the year ended, June 30, 2021.

During the fiscal years ended June 30, 2021, 2020 and 2019, Cottage Holdco B.V.

10 unchanged sentences

As of June 30, 2021, total authorized shares of preferred stock are 20.0 million.

On May 18, 2018, the Company reduced the total authorized number of shares of Series A Preferred Stock from 6.5 million to 6.3 million.

On January 15, 2019, the Company cancelled 3.0 million shares of its Series A Preferred Stock that were forfeited during the six months ended December 31, 2018, reducing the total authorized number of shares of Series A Preferred Stock from 6.3 million to 3.3 million.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

On February 4, 2019, the Company authorized, designated and issued 6.9 million shares of Series A-1 Preferred Stock.

16 unchanged sentences

Series A 1.0 0.2 $ 19.85

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

(a) If the h older does not exchange the vested Series A Preferred Stock by a specified expiration date, the Company must automatically exchange the Series A Preferred Stock into cash or shares, at election of the Company.

(a) If the holder does not exchange the vested Series A Preferred Stock by a specified expiration date, the Company must automatically exchange the Series A Preferred Stock into cash or shares, at election of the Company.

(b) This grant was sold to Lambertus J.H.

3 unchanged sentences

Therefore, the award is classified as a liability as of June 30, 2021.

Income of $ 1.9 and $ 0.1 and $ 1.7 was recorded during fiscal 2020, 2019 and 2018, respectively, and has been included in Selling, general and administrative expense on the Consolidated Statements of Operations.

An expense (income) of $ 0.8 , $( 1.9 ) and $( 0.1 ) was recorded during fiscal 2021, 2020 and 2019, respectively, and has been included in Selling, general and administrative expenses on the Consolidated Statements of Operations.

As of June 30, 2021, total issued and outstanding shares of Series A and Series A-1 Preferred Stock are 1.5 million and nil , respectively.

Of the 1.5 million outstanding shares of Series A Preferred Stock, 1.0 million shares vested on March 27, 2017, 0.3 million shares vest on February 16, 2022 and 0.2 million shares vest on November 16, 2022.

Of the 1.5 million outstanding shares of Series A Preferred Stock, 1.0 million shares vested on March 27, 2017 and 0.5 million shares were forfeited but remain outstanding pending final settlement.

As of June 30, 2021, the Company classified nil Series A and Series A-1 Preferred Stock as equity and $ 0.9 as a liability, inclusive of the related cash bonuses, recorded in Other noncurrent liabilities in the Consolidated Balance Sheet.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

Convertible Series B Preferred Stock

On May 11, 2020, the Company entered into an Investment Agreement with KKR Aggregator (the “Investor”), relating to the issuance and sale by the Company to the Investor of up to 1,000,000 shares of the Company’s new Convertible Series B Preferred Stock, par value $ 0.01 per share (the “Series B Preferred Stock”), for an aggregate purchase price of up to $ 1,000.0 , or $ 1,000 per share (the “Issuance”).

On May 11, 2020, the Company entered into an investment agreement (the “Investment Agreement”) with KKR Aggregator (the “Investor”), relating to the issuance and sale by the Company to the Investor of up to 1,000,000 shares of the Company’s new Convertible Series B Preferred Stock, par value $ 0.01 per share (the “Series B Preferred Stock”), for an aggregate purchase price of up to $ 1,000.0 , or $ 1,000 per share (the “Issuance”).

The Issuance was proposed to be issued in two tranches:

3 unchanged sentences

Cumulative preferred dividends accrue daily on the Series B Preferred Stock at a rate of 9.0 % per year.

The Series B Preferred Stock had accrued unpaid dividends of $ 6.5 as of June 30, 2020.

There were no dividends paid in relation to the Series B Preferred Stock in the year ended June 30, 2020.

On July 31, 2020, the Company completed the previously announced issuance and sale of 250,000 shares of the Company’s Series B Preferred Stock to the Investor for an aggregate purchase price of $ 250.0 .

On June 3, 2021, the Board of Directors declared and paid a dividend on Series B Preferred Stock, totaling $ 24.2 , for the quarter ended June 30, 2021.

The Series B Preferred Stock had accrued unpaid dividends of $ 74.1 and $ 6.5 for the year-ended June 30, 2021 and 2020, respectively.

Dividend Rights and Liquidation Preferences.

The Series B Preferred Stock rank senior to our common stock with respect to dividend rights and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company.

The Series B Preferred Stock rank senior to the Company’s Common Stock with respect to dividend rights and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company.

The Series B Preferred Stock has a liquidation preference of $ 1,000 per share, representing an aggregate liquidation preference of $ 1,000.0 upon issuance.

2 unchanged sentences

If the Company does not declare and pay a dividend on the Series B Preferred Stock on any dividend payment date, the dividend rate will increase by 1 % per annum until all accrued but unpaid dividends have been paid in full.

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

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

Accrued and unpaid dividends are not payable in shares unless the Series B Preferred Stock is converted to Common Stock.

2 unchanged sentences

At any time after the third anniversary of the closing date, if the volume weighted average price of the Common Stock exceeds $ 12.48 per share for at least 20 trading dates in any period of 30 consecutive trading days, at the election of the Company, all or any portion of the Series B Preferred Stock will be convertible into the relevant number of shares of Common Stock.

As of June 30, 2020, Series B Preferred Stock and Accrued Dividends were convertible into 121,233,944 shares of Common Stock.

As of June 30, 2021, Series B Preferred Stock and Accrued Dividends were convertible into 172,123,533 shares of Common Stock of which no shares have been converted.

Redemption Features.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

any time after the sixth anniversary of the Closing Date and prior to the seventh anniversary of the Closing Date, and (C) 100 % if the redemption occurs at any time after the seventh anniversary of the Closing Date.

At any time following the fifth anniversary of the Closing Date, the Company may redeem some or all of the Series B Preferred Stock for a per share amount in cash equal to (i) the sum of (x) 100 % of the liquidation preference plus (y) all accrued and unpaid dividends, multiplied by (ii) (A) 107 % if the redemption occurs at any time after the fifth anniversary of the Closing Date and prior to the sixth anniversary of the Closing Date, (B) 105 % if the redemption occurs at any time after the sixth anniversary of the Closing Date and prior to the seventh anniversary of the Closing Date, and (C) 100 % if the redemption occurs at any time after the seventh anniversary of the Closing Date.

Voting rights.

2 unchanged sentences

Change of Control Put.

Upon certain change of control events involving the Company holders of Series B Preferred Stock may, at the holder’s election (i) convert their shares of Series B Preferred Stock into Common Stock at the then-current conversion price or (ii) cause the Company to redeem their shares of Series B Preferred Stock in an amount in cash equal to (x) if the change of control occurs on or before the fifth anniversary of the Closing Date, 110 % of the sum of the liquidation preference thereof plus any accrued and unpaid dividends and (y) if the change of control occurs on or after the fifth anniversary of the Closing Date, 100 % of the Redemption Price, provided that in the case of either clause (i) or (ii) above, if such change of control occurs on or before the fifth anniversary of the Closing Date, the Company will also be required to pay the holders of the Series B Preferred Stock a “make-whole” premium.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

conversion price or (ii) cause the Company to redeem their shares of Series B Preferred Stock in an amount in cash equal to (x) if the change of control occurs on or before the fifth anniversary of the Closing Date, 110 % of the sum of the liquidation preference thereof plus any accrued and unpaid dividends and (y) if the change of control occurs on or after the fifth anniversary of the Closing Date, 100 % of the Redemption Price, provided that in the case of either clause (i) or (ii) above, if such change of control occurs on or before the fifth anniversary of the Closing Date, the Company will also be required to pay the holders of the Series B Preferred Stock a “make-whole” premium.

Participation and Other Pertinent Rights.

Pursuant to the Investment Agreement, the Company increased the size of its board of directors (the “Board”) in order to elect two individuals designated by the Investor (the “Designees”) to the Board.

On April 29, 2020, the Board of Directors suspended the payment of dividends, in keeping with the 2018 Coty Credit Agreement, as amended, which is expected to last through April 21, 2021 or until such later date that a Net debt to Adjusted EBITDA of 4x is reached.

Dividends - Common Stock

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 year ended June 30, 2021.

During fiscal 2020, prior to the Board’s decision to suspend the payment of dividends, the Company maintained a Stock Dividend Reinvestment Program and had registered a total of 19.3 million shares of Class A Common Stock for purchase under the program.

1 unchanged sentence

if a holder elected to participate in the program, fifty percent ( 50 %) of their cash dividends were reinvested in additional shares of Class A Common Stock.

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The following dividends were declared during fiscal years 2020 and 2019:

15 unchanged sentences

Fiscal 2019 $ 0.500 $ 379.9 $ 345.0 $ 30.6 $ 4.3

2017 Quarterly $ 0.125 September 1, 2017 $ 94.4 September 14, 2017 $ 93.6 N/A $ 0.8

November 9, 2017 Quarterly 0.125 November 30, 2017 94.6 December 14, 2017 93.7 N/A 0.9

February 8, 2018 Quarterly 0.125 February 28, 2018 94.6 March 15,

2018 93.8 N/A 0.8

May 9, 2018 Quarterly 0.125 May 31, 2018 94.6 June 14,

2018 93.8 N/A 0.8

Fiscal 2018 $ 0.500 $ 378.2 $ 374.9 N/A $ 3.3

(a) The June 28, 2019, September 30, 2019 , December 27, 2019 and March 27, 2020 stock dividend payments of $ 30.6 , $ 30.9 , $ 29.3 and $ 28.7 resulted in the issuances of 2.4 million, 3.2 million , 2.4 million and 2.4 million shares of Class A Common Stock, respectively.

1 unchanged sentence

Dividends payable are recorded as Accrued expense and other current liabilities and Other noncurrent liabilities in the Consolidated Balance Sheet.

Total dividends in cash and other recorded to additional paid-in capital (“APIC”) in the Consolidated Balance Sheet as of June 30, 2020 was $ 196.3 , consisting of $ 195.2 dividends settled in cash, $ 3.6 dividends payable, offset by $ 2.5 of dividends no longer expected to vest as a result of forfeitures of outstanding RSUs.

Total dividends in cash and other recorded to additional paid-in capital (“APIC”) in the Consolidated Balance Sheet as of June 30, 2021 was $( 1.2 ) which represents dividends no longer expected to vest as a result of forfeitures of outstanding RSUs.

In addition to the activity noted above, the Company made a payment of $ 1.5 for the previously accrued dividends on RSUs that vested during the twelve months ended June 30, 2021.

Thus, total dividends settled in cash during the twelve months ended June 30, 2021 was $ 1.5 .

Total accrued dividends on unvested RSUs and phantom units of $ 2.0 and $ 4.7 , $ 2.2 and $ 5.2 and $ 0.8 and $ 5.2 are included in Accrued expense and other current liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheet as of June 30, 2020, 2019 and 2018, respectively.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

Accumulated Other Comprehensive Income (Loss)

Total accrued dividends on unvested RSUs and phantom units of $ 2.4 and $ 1.7 , and $ 2.0 and $ 4.7 are included in Accrued expenses and other current liabilities and Other noncurrent liabilities, respectively, in the Consolidated Balance Sheets as of June 30, 2021 and 2020, respectively.

Accumulated Other Comprehensive (Loss) Income

Foreign Currency Translation Adjustments

11 unchanged sentences

Ending balance at June 30, 2021 $ ( 15.5 ) $ ( 32.2 ) $ ( 259.3 ) $ ( 14.9 ) $ ( 321.9 )

(a) Amortization of actuarial gains (losses) of $ 10.5 and $ 7.0 , net of taxes of $ 3.2 and $ 1.5 , were reclassified out of AOCI/(L) and included in the computation of net period pension costs for the fiscal years ended June 30, 2020 and 2019, respectively (see Note 19—Employee Benefit Plans).

(a) Amortization of actuarial gains of $ 0.9 and $ 10.5 , net of taxes of $ 0.3 and $ 3.2 , were reclassified out of AOCI/(L) and included in the computation of net period pension costs for the fiscal years ended June 30, 2021 and 2020, respectively (see Note 19—Employee Benefit Plans).

Treasury Stock - Share Repurchase Program

1 unchanged sentence

On February 3, 2016, the Board authorized the Company to repurchase up to $ 500.0 of its Class A Common Stock (the “Incremental Repurchase Program”).

Subject to certain restrictions on repurchases of shares through September 30, 2018 imposed by the tax matters agreement, dated October 1, 2016, between the Company and P&G entered into in connection with the P&G Beauty Business acquisition, 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.

Such 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 June 30, 2021, the Company has $ 396.8 remaining under the Incremental Repurchase Program.

19 unchanged sentences

Total share-based compensation expense $ 28.4 $ 42.2 $ 11.7

(a) Equity Plan shared-based compensation expense of $ 31.8 was recorded to additional paid in capital and presented in the Consolidated Statement of Equity for the period ended June 30, 2020.

Of the $ 31.8 , $ 7.0 was reclassified to discontinued operations.

The share-based compensation expense for fiscal 2020, 2019 and 2018 of $ 42.2 , $ 11.7 and $ 30.4 , respectively, includes $ 48.9 , $ 30.0 , and $ 30.4 expense for the respective period offset by $( 6.7 ), $( 18.3 ) and nil income for the respective periods primarily due to significant executive forfeitures of share-based compensation instruments and the impact of actual forfeitures on the change in estimated forfeiture rates during the period.

(a) Equity plan shared-based compensation expense of $ 27.4 and $ 31.8 was recorded to additional paid in capital and presented in the Consolidated Statement of Equity for the fiscal years ended June 30, 2021 and 2020, respectively.

Of the $ 27.4 and $ 31.8 for the fiscal years ended June 30, 2021 and 2020, respectively, $ 2.0 and $ 7.0 was reclassified to discontinued operations.

The share-based compensation expense for fiscal 2021, 2020 and 2019 of $ 28.4 , $ 42.2 and $ 11.7 , respectively, includes $ 34.7 , $ 48.9 , and $ 30.0 expense for the respective period offset by $( 6.3 ), $( 6.7 ) and $( 18.3 ) of income for the respective periods primarily due to significant executive forfeitures of share-based compensation instruments.

During fiscal 2020, $ 18.3 of share-based compensation expense related to the repurchase of Series A-1 Preferred Stock shares from the Company’s former CEO.

As of June 30, 2020, the total unrecognized share-based compensation expense related to unvested stock options, Series A and Series A-1 Preferred Stock, restricted stock, restricted stock units and other share awards is $ 24.3 , nil , $ 6.3 and $ 69.7 , respectively.

The unrecognized share-based compensation expense related to unvested stock options, Series A and A-1 Preferred Stock, restricted stock, restricted stock units and other share awards is expected to be recognized over a weighted-average period of 3.45 , nil, 1.93 and 2.23 years, respectively.

Nonqualified Stock Options

During fiscal 2020, 2019 and 2018, the Company granted 2.2 million, 19.4 million and 5.9 million nonqualified stock option awards, respectively.

As of June 30, 2021, the total unrecognized share-based compensation expense related to unvested stock options, Series A and Series A-1 Preferred Stock, restricted stock, and restricted stock units and other share awards is $ 5.9 , $ 0.0 , $ 2.1 and $ 319.8 , respectively.

The unrecognized share-based compensation expense related to unvested stock options, Series A and A-1 Preferred Stock, restricted stock, and restricted stock units and other share awards is expected to be recognized over a weighted-average period of 2.48 , 0.00 , 1.93 and 2.21 years, respectively.

Non-Qualified Stock Options

During fiscal 2021, 2020 and 2019, the Company granted 0.0 million , 2.2 million and 19.4 million non-qualified stock option awards, respectively.

These options are accounted for using equity accounting whereby the share-based compensation expense is estimated and fixed at the grant date based on the estimated value of the options using the Black-Scholes valuation model.

During fiscal 2020, 2019 and 2018, the share-based compensation expense recognized on nonqualified stock options is based upon the fair value on the grant date estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

2020 2019 2018

Expected life 7.4 years 6.5 years 7.5 years

During fiscal 2020 and 2019, the share-based compensation expense recognized on non-qualified stock options is based upon the fair value on the grant date estimated using the Black-Scholes valuation model with the following weighted-average assumptions:

Expected life 7.4 years 6.5 years

Risk-free interest rate 1.63 % 2.56 %

1 unchanged sentence

Expected dividend yield 4.10 % 4.64 %

Expected life —The expected life represents the period of time (years) that options granted are expected to be outstanding, which the Company calculates using a formula based on the vesting term and the contractual life of the respective option.

Risk-free interest rate —The Company bases the risk-free interest rate on the implied yield available on a U.S.

Expected life —The expected life represented the period of time (years) that options granted were expected to be outstanding, which the Company calculated using a formula based on the vesting term and the contractual life of the respective option.

Risk-free interest rate —The Company based the risk-free interest rate on the implied yield available on a U.S.

Treasury note with a term equal to the expected term of the underlying options.

Expected volatility —The Company calculates expected volatility based on median volatility for peer companies using expected life daily stock price history equal to the expected life.

Expected volatility —The expected volatility is derived using historical stock price information for the Company’s common stock and that of certain peer group companies, and the volatility implied by the trading of options to purchase the Company’s stock on open-market exchanges.

Expected dividend yield —The weighted-average expected dividend yield is based upon the Company’s expectation to pay dividends over the contractual term of the options.

Nonqualified stock options generally become exercisable 5 years from the date of the grant or on a graded vesting schedule where 60 % of each award granted vests after three years , 20 % of each award granted vests after four years and 20 % of each award granted vests after five years .

All grants expire 10 years from the date of the grant.

& SUBSIDIARIES

1 unchanged sentence

($ in millions, except per share data)

The Company’s outstanding nonqualified stock options as of June 30, 2020 and activity during the fiscal year then ended are presented below:

Non-qualified stock options generally become exercisable five years from the date of the grant or on a graded vesting schedule where 60 % of each award granted vests after three years , 20 % of each award granted vests after four years and 20 % of each award granted vests after five years .

All grants expire ten years from the date of the grant.

The Company’s outstanding non-qualified stock options as of June 30, 2021 and activity during the fiscal year then ended are presented below:

(in millions) Weighted

3 unchanged sentences

Outstanding at July 1, 2020 18.0 $ 12.93

Granted 2.2 12.21

Exercised ( 0.3 ) 9.56

Forfeited ( 4.6 ) 12.70

2 unchanged sentences

Exercisable at June 30, 2021 0.6 $ 10.50 $ — 0.17

Of the 18.0 million stock options outstanding, 9.8 million vest on the fifth anniversary of the grant date and 8.2 million vest on a graded vesting schedule where 60 % of each award granted vests after three years , 20 % of each award granted vests after four years and 20 % of each award granted vests after five years .

The grant prices of the outstanding options as of June 30, 2020 ranged from $ 8.25 to $ 20.42 .

The grant prices for exercisable options ranged from $ 9.20 to $ 10.50 .

Of the 13.4 million stock options outstanding at June 30, 2021, 6.4 million vest on the fifth anniversary of the grant date and 7.0 million vest on the graded vesting schedule.

As of June 30, 2021, the grant prices of the outstanding options ranged from $ 8.25 to $ 20.42 , and the grant prices for exercisable options ranged from $ 9.20 to $ 10.50 .

A summary of the aggregated weighted-average grant date fair value of stock options granted and total intrinsic value of stock options exercised for fiscal 2020 and 2019 is presented below:

2020 2019 2018

Weighted-average grant date fair value of stock options $ 3.41 $ 2.87

Intrinsic value of options exercised 6.1 11.5

The Company’s non-vested nonqualified stock options as of June 30, 2020 and activity during the fiscal year then ended are presented below:

The Company’s non-vested non-qualified stock options as of June 30, 2021 and activity during the fiscal year then ended are presented below:

(in millions) Weighted

Non-vested at July 1, 2020 17.2 $ 3.73

Granted 2.2 3.41

Forfeited ( 4.4 ) 3.63

Non-vested at June 30, 2021 12.8 $ 2.84

The share-based compensation expense recognized on the nonqualified stock options is $ 3.6 , $ 4.3 and $ 10.7 during fiscal 2020, 2019 and 2018, respectively.

The share-based compensation expense recognized on the non-qualified stock options was $ 0.5 , $ 3.6 and $ 4.3 during fiscal 2021, 2020 and 2019, respectively.

Executive Ownership Programs

1 unchanged sentence

These programs govern shares of Class A Common Stock purchased by employees (“Purchased Shares”).

Employees purchased 0.8 million, 1.4 million and 2.0 million shares in fiscal 2020, 2019 and 2018, respectively, and received matching nonqualified stock options or RSUs in accordance with the terms of the Compensation Plans under the Omnibus LTIP.

Employees purchased 0.1 million, 0.8 million and 1.4 million shares in fiscal 2021, 2020 and 2019, respectively, and received matching non-qualified stock options or RSUs in accordance with the terms of the Compensation Plans under the Omnibus Long-Term Incentive Plan (“Omnibus LTIP”).

There was no share-based compensation expense recorded in connection with Purchased Shares for fiscal 2021, 2020 and 2019.

6 unchanged sentences

($ in millions, except per share data)

On February 27, 2020, the Company agreed to repurchase 6.9 million shares of Series A-1 Preferred Stock from the former CEO for $ 18.3 , which settled in cash during the fiscal 2020.

On February 27, 2020, the Company agreed to repurchase 6.9 million shares of Series A-1 Preferred Stock from the former CEO for $ 18.3 , which settled in cash during fiscal 2020.

The repurchase was treated as a modification of stock compensation awards’ vesting and settlement terms.

The Company recorded an incremental expense of $ 18.3 related to the modification during the fiscal 2020.

In fiscal 2017, the Company granted Series A Preferred Stock that included cash bonus payments tied to the exercisability of the awards.

Due to the addition of cash bonus payments in connection with the grant of Series A Preferred Stock to certain executives in fiscal 2017, the Company began estimating the fair value of the Series A Preferred Stock using a binomial lattice model to value the equity and cash bonus components of the combined instrument.

The lattice structure the Company uses to value the awards consists of (i) a common stock lattice that models the possible stock price movements from the valuation date to the maturity date consistent with the stock price and estimated volatility on the valuation date;

(ii) a share exchange lattice that calculates the value of the common stock received on conversion;

(iii) a cash exchange lattice that calculates the value of the cash bonus;

and (iv) a continuation value lattice that tracks the holding value of the combined instrument.

In Fiscal 2019, the Company granted Series A-1 Preferred Stock with similar terms as previously granted Series A Preferred Stock and used the binomial lattice model to value the equity and cash bonus components of the combined instrument.

The fair value of the Company’s outstanding Series A and Series A-1 Preferred Stock that are liability accounted were estimated with the following weighted-average assumptions.

The Company recorded an incremental expense of $ 18.3 related to the modification during fiscal 2020.

The Company uses the binomial lattice or the Black-Scholes model to value the equity and cash bonus components of the granted Series A/A-1 Preferred Stocks.

The fair value of the Company’s outstanding Series A and Series A-1 Preferred Stock were estimated with the following weighted-average assumptions.

2021 2020 2019

4 unchanged sentences

Expected life, in years - The expected life represents the period of time (years) that Series A or Series A-1 Preferred Stock granted are expected to be outstanding, which the Company calculates using a formula based on the vesting term and the contractual life of the respective Series A or Series A-1 Preferred Stock.

Expected volatility - The Company calculates expected volatility based on the average of historical and implied volatilities.

Risk-free rate of return - The Company bases the risk-free rate of return on the US Constant Maturity Treasury Rate.

Expected volatility - The expected volatility is derived using historical stock price information for the Company’s common stock and that of certain peer group companies, and the volatility implied by the trading of options to purchase the Company’s stock on open-market exchanges.

Risk-free rate of return - The Company bases the risk-free rate of return on the U.S.

Constant Maturity Treasury Rate.

Dividend yield on Class A Common Stock - The Company calculated the weighted-average dividend yield on shares using the annualized dividend rate calculated on the per share dividend paid quarterly and the stock price as of the valuation date.

4 unchanged sentences

Outstanding at July 1, 2020 1.5 $ 22.10

Forfeited ( 7.9 ) 9.46

Outstanding at June 30, 2021 1.5 22.10

Vested and expected to vest at June 30, 2021 1.0 $ 22.39 $ — 2.74

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

The Company’s non-vested shares of Series A and Series A-1 Preferred Stock as of June 30, 2021 and activity during the fiscal year then ended are presented below:

1 unchanged sentence

Non-vested at July 1, 2020 0.5 $ 3.55

Forfeited ( 7.9 ) 3.72

Non-vested at June 30, 2021 0.5 $ 3.55

3 unchanged sentences

During the fiscal year ended June 30, 2019, the incremental stock based compensation expense resulting from the modification was offset by income from actual and expected forfeitures in the modified awards.

On October 14, 2020, the Company’s Board of Directors approved a new vesting schedule applicable to RSUs granted during fiscal 2021, to three-year graded vesting where one-third of each award granted vests after the first anniversary of grant,

& SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in millions, except per share data)

one-third of each award granted vests after the second anniversary of grant and one-third of each awarded granted vests after the third anniversary of grant.

During fiscal 2021, 2020 and 2019, 38.1 million, 6.2 million and 6.9 million RSUs were granted under the Omnibus LTIP and 0.3 million, 0.1 million and 0.1 million RSUs were granted under the 2007 Stock Plan for Directors, respectively.

The Company’s CEO, Sue Nabi, was granted a one-time sign-on award of restricted stock units (the “Award”) on June 30, 2021.

The Award will vest and settle in 10,000,000 shares of the Company’s Class A Common Stock, par value $ 0.01 per share, on each of August 31, 2021, August 31, 2022 and August 31, 2023, subject to her continued employment through each such date.

The Company will recognize approximately $ 273.2 of share-based compensation expense, on a straight-line basis over the vesting period, based on the fair value on the grant date.

The amount of compensation cost recognized at each vesting date must at least equal the portion of the award legally vested.

As such, $ 168.3 , $ 89.9 and $ 15.0 will be recognized in the fiscal years ending 2022, 2023 and 2024, respectively.

In connection with this Award, Cottage Holdco B.V., the Company’s largest stockholder and a wholly-owned subsidiary of JAB Holding Company S.à r.l., has agreed, pursuant to an equity transfer agreement, to transfer to Ms.

Nabi (either directly or through contributing to the Company) 10,000,000 shares of Common Stock no later than sixty days following the first vesting date.

If, however, Ms.

Nabi is terminated without cause or due to death or disability on or following the first vesting date but prior to the second vesting date, the Company has agreed to issue to Cottage Holdco B.V.

the number of shares of Common Stock determined on pro-rata basis in accordance with the equity transfer agreement.

In the event Ms.

Nabi remains employed through the third vesting date, Cottage Holdco B.V.

has agreed to transfer an additional 5,000,000 shares of Common Stock to Ms.

The Company’s outstanding RSUs as of June 30, 2021 and activity during the fiscal year then ended are presented below:

16 unchanged sentences

Restricted Stock

During fiscal 2020, 2.3 million restricted stock awards were granted under the Omnibus LTIP.

During fiscal 2021 and 2020, 0.0 million and 2.3 million restricted stock awards were granted under the Omnibus LTIP.

& SUBSIDIARIES

6 unchanged sentences

Settled ( 0.2 )

Cancelled ( 0.7 )

Outstanding at June 30, 2021 0.5

Vested and expected to vest at June 30, 2021 0.4 $ 1.7 1.41

The share-based compensation expense recorded in connection with the restricted stock was $ 4.6 during fiscal 2020.

The share-based compensation expense recorded in connection with the restricted stock was $ 1.0 and $ 4.6 during fiscal 2021 and 2020, respectively.

The Company’s outstanding and non-vested restricted stock as of June 30, 2021 and activity during the fiscal year then ended are presented below:

1 unchanged sentence

Outstanding and nonvested at July 1, 2020 1.4 $ 5.08

Granted 2.3 5.08

Vested ( 0.2 ) 1.06

Cancelled ( 0.7 ) 5.08

Outstanding and nonvested at June 30, 2021 0.5 $ 5.08

The total intrinsic value of Restricted Stock vested and settled during fiscal 2020 was $ 4.5 .

The total intrinsic value of restricted stock vested and settled during fiscal 2021 and 2020 was $ 1.2 and $ 4.5 , respectively.

Phantom Units

8 unchanged sentences

Becht elected to receive payment of the phantom units in the form of shares of Class A Common Stock and the phantom units were valued at $ 8.0 .

The phantom units 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 and remain outstanding as of June 30, 2021.

The Company recognized $ 8.0 of share-based compensation expense during the fiscal year ended June 30, 2016 as there are no service or performance conditions with respect to the phantom units.

3 unchanged sentences

common stockholders per common share (“basic EPS”) is computed by dividing net loss attributable to Coty Inc.

less any dividends on Convertible Series B Preferred Stock by the weighted-average number of common shares outstanding during the period.

less any dividends on Series B Preferred Stock by the weighted-average number of common shares outstanding during the period.

Net loss attributable to Coty Inc.

common stockholders per common share assuming dilution (“diluted EPS”) is computed by adjusting the numerator used in basic EPS to add back the dividends applicable to the Convertible Series B Preferred Stock and using the basic EPS weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period as the denominator.

Potentially dilutive securities consist of non-qualified stock options, Series A and Series A-1 Preferred Stock, RSUs, unvested restricted stock awards and potential shares resulting from the conversion of the Convertible Series B Preferred Stock as of June 30, 2020, 2019 and 2018.

The dilutive effect of the outstanding instruments, excluding the Convertible Series B Preferred Stock is reflected in diluted EPS by application of the treasury stock method.

The dilutive effect of the Convertible Series B Preferred Stock is reflected in diluted EPS by application of the if-converted method.

common stockholders per common share assuming dilution (“diluted EPS”) is computed by adjusting the numerator used in basic EPS to add back the dividends applicable to the Series B Preferred Stock and using the basic EPS weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period as the denominator.

Potentially dilutive securities consist of non-qualified stock options, Series A Preferred Stock, RSUs, unvested restricted stock awards and potential shares resulting from the conversion of the Series B Preferred Stock as of June 30, 2021, 2020 and 2019.

Net loss attributable to Coty Inc.

11 unchanged sentences

Convertible Series B Preferred Stock dividends

( 102.3 ) ( 6.5 ) —

Net loss from continuing operations attributable to common stockholders ( 166.3 ) ( 1,100.4 ) ( 3,905.2 )

3 unchanged sentences

Weighted-average common shares outstanding—Basic 764.8 759.1 751.2

Effect of dilutive stock options and Series A/A-1 Preferred Stock (a)

Effect of restricted stock and RSUs (b)

Effect of Convertible Series B Preferred Stock (c)

Weighted-average common shares outstanding—Diluted 759.1 751.2 749.7

Weighted-average common shares and common share equivalents outstanding—Diluted (a)

764.8 759.1 751.2