The table below presents the carrying amount of investments in and loans to affiliates as of June 30, 2012 and 2011:

	Provalliance			Empire Education Group, Inc.			MY Style			Hair Club for Men, Ltd.			Total

	(Dollars in thousands)
Balance at June 30, 2010	$	75,481		$	102,882		$	12,116		$	5,307		$	195,786
Acquisition of additional interest(1)		57,301			—			—			—			57,301
Payment of loans by affiliates		—			(15,000	)		—			—			(15,000	)
Loans to affiliates		—			15,000			—			—			15,000
Equity in income of affiliated companies, net of income taxes(2)		7,752			5,463			—			567			13,782
Other than temporary impairment(3)		—			—			(9,173	)		—			(9,173	)
Cash dividends received		(4,814	)		(4,129	)		—			(1,080	)		(10,023	)
Other, primarily translation adjustments		13,525			324			(733	)		351			13,467

Balance at June 30, 2011	$	149,245		$	104,540		$	2,210		$	5,145		$	261,140
Payment of loans by affiliates		—			(1,025	)		—			—			(1,025	)
Equity in income of affiliated companies, net of income taxes(7)		9,759			(4,031	)		—			816			6,544
Other than temporary impairment(4)(5)		(37,383	)		(19,426	)		—			—			(56,809	)
Cash dividends received		(2,769	)		—			—			(1,278	)		(4,047	)
Transfer to current notes receivable(6)		—			(20,375	)		(2,278	)		—			(22,653	)
Other, primarily translation adjustments		(17,548	)		—			68			506			(16,974	)

Balance at June 30, 2012	$	101,304		$	59,683		$	—		$	5,189		$	166,176

Percentage ownership at June 30, 2012		46.7	%		55.1	%		—			50.0	%

(1): In March of 2011, the Company elected to honor and settle a portion of the equity put option and acquired approximately 17 percent additional equity interest in Provalliance for $57.3 million (€ 40.4 million), bringing the Company's total equity interest to approximately 47 percent.
(2): Equity in income of affiliated companies, net of income taxes per the Consolidated Statement of Operations includes $7.8 million in equity income of Provalliance and a $2.4 million gain for the decrease in the Provalliance equity put valuation.
(3): Due to the natural disasters in Japan that occurred in March 2011, the Company was required to assess the preferred shares and premium for other than temporary impairment. As a result, the Company recorded an other than temporary impairment during the twelve months ended June 30, 2011 for the carrying value of the preferred shares and premium of $3.9 million (326,700,000 Yen) and $5.3 million (435,000,000 Yen), respectively. Of the total impairment, $9.0 million was recorded through the equity in income of affiliated companies and $0.2 million was recorded through the interest income and other, net, line items in the Consolidated Statement of Operations.
(4): On April 9, 2012, the Company entered into the Agreement to sell the Company's 46.7 percent equity interest in Provalliance to the Provost Family for a purchase price of €80 million. During the twelve months ended June 30, 2012, the Company recorded a $17.2 million net impairment charge associated with the Agreement recorded within equity in (loss) income of affiliated companies in the Consolidated Statement of Operations, which consisted of a $37.4 million impairment charge related to the difference between the purchase price and carrying value of the Company's investment in Provalliance, partially offset by a $20.2 million decrease in the fair value of the Equity Put.
(5): The Company recorded a $19.4 million other than temporary impairment charge in its fourth quarter ended June 30, 2012 on its investment in EEG.
(6): During the third quarter of fiscal year 2012, the Company had a $20.4 million outstanding loan receivable with EEG that was reclassified in the Consolidated Balance Sheet as other current assets as the loan is due in January 2013.
(7): Equity in loss of affiliated companies, net of income taxes per the Consolidated Statement of Operations includes the Provalliance $17.2 million net impairment charge discussed in (4) and the $19.4 million impairment charge associated with EEG discussed in (5).

The table below presents the summarized financial information of the equity method investees as of June 30, 2012 2011, and 2010. The financial information of the equity investees was based on results as of and for the twelve months ended June 30.

	Equity Method Investee Greater Than 50 Percent Owned							Equity Method Investees Less Than 50 Percent Owned

	2012			2011		2010		2012		2011		2010
	(Dollars in thousands)
Summarized Balance Sheet Information:
Current assets	$	56,516		$	34,715	$	35,070	$	84,914	$	93,280	$	74,040
Noncurrent assets		96,639			113,249		105,469		316,829		314,127		263,472
Current liabilities		61,074			29,340		27,458		107,636		109,416		91,077
Noncurrent liabilities		13,947			33,658		32,017		78,815		98,269		93,055
Summarized Statement of Operations Information:
Gross revenue	$	182,326		$	192,864	$	176,535	$	317,143	$	283,442	$	299,188
Gross profit		67,201			73,068		64,661		137,074		120,992		123,210
Operating (loss) income		(1,335	)		18,994		19,752		35,569		30,084		21,227
Net (loss) income		(7,211	)		11,023		11,082		24,067		21,154		14,763

On January 31, 2008, the Company merged its continental European franchise salon operations with the operations of the Franck Provost Salon Group in exchange for a 30.0 percent equity interest in the newly formed Provalliance entity (Provalliance). The merger with the operations of the Franck Provost Salon Group, which are also located in continental Europe, created Europe's largest salon operator with approximately 2,600 company-owned and franchise salons as of June 30, 2012.

The merger agreement contains a right (Equity Put) to require the Company to purchase an additional ownership interest in Provalliance between specified dates in 2010 to 2018. In December 2010, a portion of the Equity Put was exercised. In March of 2011, the Company elected to honor and settle a portion of the Equity Put and acquired approximately 17 percent additional equity interest in Provalliance for $57.3 million (approximately €40.4 million), bringing the Company's total equity interest to 46.7 percent.

On April 9, 2012, the Company entered into the Agreement to sell the Company's 46.7 percent equity interest in Provalliance to the Provost Family for a purchase price of €80 million. The transaction is expected to close no later than September 30, 2012 and is subject to the Provost Family securing financing for the purchase price. The purchase price was negotiated independently of the Equity Put and the Equity Put and Equity Call will automatically terminate upon closing. If the closing does not occur by September 30, 2012, the Provost Family will not be entitled to exercise their Equity Put rights until September 30, 2014.

During the twelve months ended June 30, 2012, the Company recorded a $37.4 million other than temporary impairment charge related to the difference between the €80 million purchase price and the carrying value of its investment in Provalliance. In addition, the fair value of the Equity Put decreased by $20.2 million to $0.6 million as of June 30, 2012. The remaining Equity Put liability as of June 30, 2012 is associated with the probability of the Agreement not closing and the Equity Put remaining effective. The $37.4 million other than temporary impairment charge, partially offset by the $20.2 million reduction in the fair value of the Equity Put, resulted in a net impairment charge of $17.2 million that is recorded within the equity in (loss) income of affiliated companies during the twelve months ended June 30, 2012. Regis did not receive a tax benefit on the net impairment charge.

In connection with the Agreement, the Company reassessed the consolidation of variable interest entities guidance to determine whether the Company will now be considered the primary beneficiary of the VIE. Consistent with the previous assessment, the Company has determined the Frank Provost Group continues to meet the power criterion and is considered the primary beneficiary of Provalliance as of June 30, 2012.

The tables below contain details related to the Company's investment in Provalliance for the twelve months ended June 30, 2012, 2011, and 2010:

On August 1, 2007, the Company contributed its 51 wholly-owned accredited cosmetology schools to Empire Education Group, Inc. (EEG) in exchange for a 49.0 percent equity interest in EEG. In January 2008, the Company's effective ownership interest increased to 55.1 percent related to the buyout of EEG's minority interest shareholder. EEG operates 105 accredited cosmetology schools, has revenues of approximately $180 million annually and is overseen by the Empire Beauty School management team.

At June 30, 2012 and 2011, the Company had an outstanding loan receivable with EEG totaling $11.4 and $21.4 million, respectively. During fiscal year 2012, the outstanding loan receivable was reclassified in the Consolidated Balance Sheet as other current assets as the loan is due in January 2013. The Company has also provided EEG with a $15.0 million revolving credit facility, against which there were $15.0 million and zero outstanding borrowings as of June 30, 2012 and 2011, respectively. The Company reviews the outstanding loan with EEG for changes in circumstances or the occurrence of events that suggest the Company's loan may not be recoverable. The outstanding loan and revolving credit facility with EEG as of June 30, 2012 is in good standing with no associated valuation allowance. During fiscal year 2012, 2011, and 2010, the Company recorded $0.5, $0.7, and $0.7 million, respectively, of interest income related to the loan and revolving credit facility. In addition, the Company received $10.0 million in principal payments on the loan during the twelve months ended June 30, 2012. The Company has also guaranteed a credit facility of EEG that expires on December 31, 2012 with a maximum exposure of $9 million. The Company has determined the exposure to the risk of loss on the guaranteed credit facility to be immaterial to the financial statements.

The proprietary school industry has seen broad changes the past few years in regulations resulting in challenges in the areas of student populations, revenue and profitability. Due to the regulatory changes, EEG experienced a decline in revenue and profitability in fiscal year 2012 and is projecting further declines in fiscal year 2013. As a result, during fiscal year 2012, the Company recorded a $19.4 million other than temporary impairment charge on its investment in EEG for the excess of the carrying value of its investment in EEG over the fair value. Regis did not receive a tax benefit on the impairment charge. The Company also recorded its $8.7 million share of an intangible asset impairment recorded directly by EEG. The exposure to loss related to the Company's involvement with EEG is the carrying value of the investment, the outstanding loan and the guarantee of the credit facility. Due to economic and other factors, the Company may be required to record additional impairment charges related to our investment in EEG and such impairments could be material to our consolidated balance sheet and results of operations. In addition, EEG may be required to record impairment charges related to long-lived assets and goodwill, and our share of such impairment charges could be material to our consolidated balance sheet and results of operations.

The Company utilized consolidation of variable interest entities guidance to determine whether or not its investment in EEG was a variable interest entity (VIE), and if so, whether the Company was the primary beneficiary of the VIE. The Company concluded that EEG was not a VIE based on the fact that EEG had sufficient equity at risk. As the substantive voting control relates to the voting rights of the Board of Directors, the Company granted the other shareholder a proxy to vote such number of the Company's shares such that the other shareholder would have voting control of 51.0 percent of the common stock of EEG. The Company accounts for EEG as an equity investment under the voting interest model. During fiscal years ended June 30, 2012, 2011, and 2010, the Company recorded $(4.0), $5.5, and $6.4 million of equity (loss) earnings related to its investment in EEG. During the twelve months ended June 30, 2011, EEG declared and distributed a dividend in which the Company received $4.1 million in cash and recorded tax expense of $0.3 million.

In April 2007, the Company purchased exchangeable notes issued by Yamano Holding Corporation (Exchangeable Note) and a loan obligation of a Yamano Holdings subsidiary, MY Style, formally known as Beauty Plaza Co. Ltd., (MY Style Note) for an aggregate amount of $11.3 million (1.3 billion Yen as of April 2007). The Exchangeable Note contains an option for the Company to exchange a portion of the Exchangeable Note for 27.1 percent of the 800 outstanding shares of common stock of MY Style. This exchange feature is akin to a deep-in-the-money option permitting the Company to purchase shares of common stock of MY Style. The option is embedded in the Exchangeable Note and does not meet the criteria for separate accounting under accounting for derivative instruments and hedging activities. In connection with the issuance of the Exchangeable Note, the Company paid a premium of approximately $5.5 million (573,000,000 Yen as of April 2007).

In March 2010 the Company amended the agreement with Yamano for which the Company purchased one share of Yamano Class A Preferred Stock with a subscription amount of $1.1 million (100,000,000 Yen) and one share of Yamano Class B Preferred Stock with a subscription amount of $2.3 million (211,131,284 Yen), collectively the "Preferred Shares". Portions of the Exchangeable Note that became due as a result of the March 2010 amendments were contributed in-kind as payment for the Preferred Shares. The Preferred Shares have the same terms and rights, yield a 5.0 percent dividend that accrues if not paid and have no voting rights. The preferred shares are accounted for as an available for sale debt security.

Due to the natural disasters in Japan that occurred in March 2011, the Company was required to assess the preferred shares and premium for other than temporary impairment. The fair value of the collateral which is the equity value of MY Style, declined due to changes in projected revenue growth rates after the natural disasters. As MY Style is highly leveraged, any change in growth rates has a significant impact on fair value. The estimated fair value was negligible. The Company recorded an other than temporary impairment during the third quarter of fiscal year 2011 for the carrying value of the preferred shares and premium of $3.9 million (326,700,000 Yen) and $5.3 million (435,000,000 Yen), respectively.

Exchangeable Note. As of June 30, 2012, the principal amount outstanding under the Exchangeable Note is $1.3 million (100,000,000 Yen) and is due September 30, 2012. The Company reviews the Exchangeable Note with Yamano for changes in circumstances or the occurrence of events that suggest the Company's note may not be recoverable. The $1.3 million outstanding Exchangeable Note with Yamano as of June 30, 2012 is in good standing with no associated valuation allowance. The Company has determined the future cash flows of Yamano support the ability to make payments on the Exchangeable Note. The Exchangeable Note accrues interest at 1.845 percent and interest is payable on September 30, 2012 with the final principal payment. The Company recorded approximately $0.1 million in interest income related to the Exchangeable Note during fiscal years 2012, 2011, and 2010.

MY Style Note. As of June 30, 2012, the principal amount outstanding under the MY Style Note is $0.7 million (52,164,000 Yen). Principal payments of 52,164,000 Yen along with accrued interest are due annually on May 31 through May 31, 2013. The Company reviews the outstanding note with MY Style for changes in circumstances or the occurrence of events that suggest the Company's note may not be recoverable. The $0.7 million outstanding note with MY Style as of June 30, 2012 is in good standing with no associated valuation allowance. The Company has determined the future cash flows of MY Style support the ability to make payments on the outstanding note. The MY Style Note accrues interest at 3.0 percent. The Company recorded less than $0.1 million in interest income related to the MY Style Note during fiscal years 2012, 2011, and 2010.

As of June 30, 2012, $2.3 million is recorded in the Consolidated Balance Sheet as current assets representing the Company's Exchangeable Note and outstanding note with MY Style. The exposure to loss related to the Company's involvement with MY Style is the carrying value of the outstanding notes.

All foreign currency transaction gains and losses on the Exchangeable Note and MY Style Note are recorded through other income within the Consolidated Statement of Operations. The foreign currency transaction gain (loss) was $0.5, $(1.1), and $3.1 million during fiscal years 2012, 2011, and 2010, respectively.

The Company acquired a 50.0 percent interest in Hair Club for Men, Ltd. through its acquisition of Hair Club in fiscal year 2005. The Company accounts for its investment in Hair Club for Men, Ltd. under the equity method of accounting. Hair Club for Men, Ltd. operates Hair Club centers in Illinois and Wisconsin. During fiscal years 2012, 2011, and 2010, the Company recorded income and received dividends of $0.8 and $1.3 million, $0.6 and $1.1 million, and $0.9 and $1.3 million, respectively. The exposure to loss related to the Company's involvement with Hair Club for Men, Ltd. is the carrying value of the investment. See Note 17 for discussion of the purchase agreement subsequent to June 30, 2012 that includes Hair Club for Men, Ltd.