MANDATORILY REDEEMABLE FINANCIAL INTEREST

12 Months Ended

Jun. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

MANDATORILY REDEEMABLE FINANCIAL INTEREST

MANDATORILY REDEEMABLE FINANCIAL INTEREST

On January 1, 2014, the Company, through a majority-owned subsidiary Coty Middle East and two third parties, entered into a shareholders agreement (the “U.A.E. Shareholders Agreement”) to create a new subsidiary (“U.A.E. JV”) in the United Arab Emirates (“U.A.E”). In connection with the capitalization of the U.A.E. JV, the Company contributed 18.0 million AED ($4.9) in cash and the third parties contributed 6.0 million AED ($1.6). The U.A.E. JV focuses on the sale, promotion and distribution of fragrances, skin and body care and color cosmetics products in the local markets of the U.A.E. The Company guaranteed up to 18.0 million AED ($4.9) in bank financing to support initial operation requirements if required and as a result of this additional financing requirement, the U.A.E. JV was determined to be a VIE. The Company was considered the primary beneficiary with 49% ownership since the Company has: (a) the power to direct, supervise, and manage the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Accordingly, the Company consolidates the assets and liabilities and results of operations of the U.A.E. JV in the Company’s Consolidated Financial Statements.

The Company is required under the U.A.E. Shareholders Agreement to purchase all of the shares held by one of the third parties equal to 25% of the outstanding shares of the U.A.E. JV at the termination of the agreement. The Company has determined such shares to be a mandatorily redeemable financial instrument that is recorded as a liability. The liability is calculated based upon a pre-determined formula in accordance with the U.A.E Shareholders Agreement. As of June 30, 2016 and 2015, the liability amounted to $5.6 and $6.1, of which $5.2 and $5.1, respectively, was recorded in Other noncurrent liabilities and $0.4 and $1.0, respectively, was recorded in Accrued expenses and other current liabilities.

The assets of the U.A.E. JV are restricted in that they are not available for general business use outside the context of the U.A.E. JV and creditors (or beneficial interest holders) do not have recourse to the Company or to its other assets. The U.A.E. JV has total assets and total liabilities of $18.2 and $10.3 as of June 30, 2016, and $20.1 and $10.4 as of June 30, 2015, respectively.