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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDEDSEPTEMBER 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                    TO          
COMMISSION FILE NUMBER 001-35964
COTY INC.
(Exact name of registrant as specified in its charter)
Delaware
13-3823358
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
350 Fifth Avenue,
 New York,NY10118
(Address of principal executive offices)(Zip Code)
(212) 389-7300
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes ý      No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes ý      No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer   Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No ý
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, $0.01 par valueCOTYNew York Stock Exchange
At November 1, 2021, 818,476,414 shares of the registrant’s Class A Common Stock, $0.01 par value, were outstanding.




COTY INC.
INDEX TO FORM 10-Q
Page



PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
 Three Months Ended
September 30,
 20212020
Net revenues$1,371.7 $1,124.1 
Cost of sales504.8 464.9 
Gross profit866.9 659.2 
Selling, general and administrative expenses776.3 583.4 
Amortization expense57.0 65.4 
Restructuring costs12.4 30.1 
Acquisition- and divestiture-related costs4.0 46.3 
Operating income (loss)17.2 (66.0)
Interest expense, net59.8 62.1 
Other income, net(386.1)(5.8)
Income (loss) from continuing operations before income taxes343.5 (122.3)
Provision (benefit) for income taxes on continuing operations114.6 (244.9)
Net income from continuing operations228.9 122.6 
Net income from discontinued operations 104.7 
Net income228.9 227.3 
Net (loss) income attributable to noncontrolling interests(0.5)0.4 
Net income attributable to redeemable noncontrolling interests3.4 5.5 
Net income attributable to Coty Inc.$226.0 $221.4 
Amounts attributable to Coty Inc.
Net income from continuing operations226.0 116.7 
Convertible Series B Preferred Stock dividends(123.0)(20.8)
Net income from continuing operations attributable to common stockholders103.0 95.9 
Net income from discontinued operations 104.7 
Net income attributable to common stockholders$103.0 $200.6 
Earnings per common share:
Earnings from continuing operations per common share - basic$0.13 $0.13 
Earnings from continuing operations per common share - diluted0.13 0.13 
Earnings from discontinued operations - basic 0.13 
Earnings from discontinued operations - diluted 0.11 
Earnings per common share - basic0.13 0.26 
Earnings per common share - diluted0.13 0.24 
Weighted-average common shares outstanding:  
Basic777.6 763.9 
Diluted787.7 916.7 

See notes to Condensed Consolidated Financial Statements.
1

COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
Three Months Ended
September 30,
 20212020
Net income$228.9 $227.3 
Other comprehensive income (loss):  
Foreign currency translation adjustment(143.1)(10.5)
Net unrealized derivative gain (loss) on cash flow hedges, net of taxes of $(1.6) and $(1.9) during the three months ended, respectively
4.4 5.7 
Pension and other post-employment benefits adjustment, net of tax of $0.0 and $0.0 during the three months ended, respectively
0.5 (1.2)
Total other comprehensive loss, net of tax(138.2)(6.0)
Comprehensive income90.7 221.3 
Comprehensive income attributable to noncontrolling interests:  
Net (loss) income(0.5)0.4 
Foreign currency translation adjustment(0.2)(0.1)
Total comprehensive (loss) income attributable to noncontrolling interests(0.7)0.3 
Comprehensive income attributable to redeemable noncontrolling interests:
Net income3.4 5.5 
Comprehensive income attributable to Coty Inc.$88.0 $215.5 

See notes to Condensed Consolidated Financial Statements.
2

COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
 September 30,
2021
June 30,
2021
ASSETS  
Current assets:  
Cash and cash equivalents$376.9 $253.5 
Restricted cash45.5 56.9 
Trade receivables—less allowances of $52.6 and $47.7, respectively
517.8 348.0 
Inventories660.7 650.8 
Prepaid expenses and other current assets459.3 473.9 
Total current assets2,060.2 1,783.1 
Property and equipment, net847.1 918.1 
Goodwill4,037.4 4,118.1 
Other intangible assets, net4,336.0 4,463.0 
Equity investments1,665.6 1,276.2 
Operating lease right-of-use assets302.6 318.5 
Deferred income taxes738.8 758.5 
Other noncurrent assets50.7 55.9 
TOTAL ASSETS$14,038.4 $13,691.4 
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY  
Current liabilities:
Accounts payable$1,232.5 $1,166.1 
Accrued expenses and other current liabilities1,298.4 1,096.0 
Mandatorily redeemable Convertible Series B Preferred Stock394.2  
Short-term debt and current portion of long-term debt24.0 24.2 
Current operating lease liabilities69.0 75.7 
Income and other taxes payable53.7 53.4 
Total current liabilities3,071.8 2,415.4 
Long-term debt, net5,250.0 5,401.0 
Long-term operating lease liabilities257.8 269.3 
Pension and other post-employment benefits410.8 420.6 
Deferred income taxes768.4 674.9 
Other noncurrent liabilities298.3 327.6 
Total liabilities10,057.1 9,508.8 
COMMITMENTS AND CONTINGENCIES (See Note 19)
CONVERTIBLE SERIES B PREFERRED STOCK, $0.01 par value; 1.0 shares authorized; 0.7 and 1.0 issued and 0.7 and 1.0 and outstanding, respectively, at September 30, 2021 and June 30, 2021
453.7 1,036.3 
REDEEMABLE NONCONTROLLING INTERESTS83.4 84.1 
EQUITY:  
Preferred Stock, $0.01 par value; 20.0 shares authorized, 1.5 issued and outstanding at September 30, 2021 and June 30, 2021
  
Class A Common Stock, $0.01 par value; 1,250.0 shares authorized, 883.3 and 832.3 issued and 817.0 and 766.0 outstanding, respectively, at September 30, 2021 and June 30, 2021
8.8 8.3 
Additional paid-in capital10,670.4 10,376.2 
Accumulated deficit(5,529.6)(5,755.6)
Accumulated other comprehensive income(459.9)(321.9)
Treasury stock—at cost, shares: 66.3 at September 30, 2021 and at June 30, 2021
(1,446.3)(1,446.3)
Total Coty Inc. stockholders’ equity3,243.4 2,860.7 
Noncontrolling interests200.8 201.5 
Total equity3,444.2 3,062.2 
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY$14,038.4 $13,691.4 
See notes to Condensed Consolidated Financial Statements.
3

COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended September 30, 2021
(In millions, except per share data)
(Unaudited)
 Preferred Stock
Class A
Common Stock
Additional
Paid-in Capital
(Accumulated Deficit)Accumulated Other Comprehensive (Loss) IncomeTreasury Stock
Total Coty Inc.
Stockholders’ Equity
Noncontrolling InterestsTotal Equity
Redeemable
Noncontrolling Interests
Convertible Series B Preferred Stock
 SharesAmountSharesAmountSharesAmount
BALANCE—July 1, 20211.5 $ 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 
Exercise of employee stock options and restricted stock units51.0 —    
Shares withheld for employee taxes(4.2)(4.2)(4.2)
Share-based compensation expense107.8 107.8 107.8 
Equity Investment contribution for share-based compensation1.6 1.6 1.6 
Changes in dividends accrued0.5 0.5 0.5 
Conversion of Convertible Series B Preferred Stock0.5 307.4 307.9 307.9 (307.9)
Reclassification to Mandatorily redeemable Convertible Series B Preferred Stock— — — (394.2)
Dividends Accrued - Convertible Series B Preferred Stock(22.7)(22.7)(22.7)22.7 
Deemed Dividends - Conversion of Convertible Series B Preferred Stock(6.7)(6.7)(6.7)6.7 
Deemed Dividends - Exchange Agreement(93.6)(93.6)(93.6)93.6 
Dividends Paid - Convertible Series B Preferred Stock— — (3.5)
Net income (loss)226.0 226.0 (0.5)225.5 3.4 
Other comprehensive loss(138.0)(138.0)(0.2)(138.2)
Adjustment of redeemable noncontrolling interests to redemption value4.1 4.1 4.1 (4.1)
BALANCE—September 30, 20211.5 $ 883.3 $8.8 $10,670.4 $(5,529.6)$(459.9)66.3 $(1,446.3)$3,243.4 $200.8 $3,444.2 $83.4 $453.7 

See notes to Condensed Consolidated Financial Statements.
4

COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended September 30, 2020
(In millions, except per share data)
(Unaudited)
 Preferred StockClass A
Common Stock
Additional
Paid-in Capital
(Accumulated Deficit)Accumulated Other Comprehensive (Loss) IncomeTreasury StockTotal Coty Inc.
Stockholders’ Equity
Noncontrolling InterestsTotal EquityRedeemable
Noncontrolling Interests
Convertible Series B Preferred Stock
 SharesAmountSharesAmountSharesAmount
BALANCE as previously reported—July 1, 20201.5 $ 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 ASU No. 2016-13(5.7)(5.7)(5.7)
BALANCE as adjusted—July 1, 20201.5 $ 830.6 $8.3 $10,447.4 $(5,554.3)$(456.2)65.5 $(1,446.3)$2,998.9 $224.2 $3,223.1 $79.1 $715.8 
Issuance of Preferred Stock— — 242.4 
Exercise of employee stock options and restricted stock units0.6 — — — 
Shares withheld for employee taxes(1.0)(1.0)(1.0)
Share-based compensation expense6.2 6.2 6.2 
Changes in dividends accrued— 0.8 0.8 0.8 
Dividends accrued- Convertible Series B Preferred Stock(20.8)(20.8)(20.8)20.8 
Net income221.4 221.4 0.4 221.8 5.5 
Other comprehensive loss(5.9)(5.9)(0.1)(6.0)
Distribution to noncontrolling interests, net— — — 
Adjustment of redeemable noncontrolling interests to redemption value1.5 1.5 1.5 (1.5)
BALANCE—September 30, 20201.5 $ 831.2 $8.3 $10,434.1 $(5,332.9)$(462.1)65.5 $(1,446.3)$3,201.1 $224.5 $3,425.6 $83.1 $979.0 

See notes to Condensed Consolidated Financial Statements.
5

COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
September 30,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$228.9 $227.3 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization137.8 146.2 
Non-cash lease expense18.2 18.0 
Deferred income taxes89.9 (216.0)
Provision (releases) for bad debts1.9 (3.4)
Provision for pension and other post-employment benefits4.1 2.1 
Share-based compensation108.2 7.0 
Unrealized gains from equity investments, net(389.4) 
Foreign exchange effects(3.9)16.9 
Other10.5 9.7 
Change in operating assets and liabilities  
Trade receivables(183.5)(149.7)
Inventories(24.4)(15.5)
Prepaid expenses and other current assets(2.6)9.2 
Accounts payable82.9 (103.9)
Accrued expenses and other current liabilities231.0 152.6 
Operating lease liabilities(20.4)(34.9)
Income and other taxes payable16.1 (3.4)
Other noncurrent assets3.3 9.7 
Other noncurrent liabilities(22.9)(29.3)
Net cash provided by operating activities285.7 42.6 
CASH FLOWS FROM INVESTING ACTIVITIES:  
Capital expenditures(45.0)(70.9)
Proceeds from sale of business, net of cash disposed 27.0 
Termination of currency swaps designated as net investment hedges (37.6)
Net cash used in investing activities(45.0)(81.5)
CASH FLOWS FROM FINANCING ACTIVITIES:  
Net proceeds from short-term debt, original maturity less than three months 1.6 
Proceeds from revolving loan facilities285.3 637.4 
Repayments of revolving loan facilities(365.5)(554.2)
Repayments of term loans and other long-term debt(6.0)(48.3)
Dividend payment on Class A Common Stock(0.8)(0.8)
Dividend payment on Convertible Series B Preferred Stock(3.5) 
Proceeds from issuance of Convertible Series B Preferred Stock 227.2 
6

Net (payments of) proceeds from foreign currency contracts(11.0)3.3 
Purchase of remaining mandatorily redeemable noncontrolling interest(7.1) 
Distributions to noncontrolling interests, redeemable noncontrolling interests and mandatorily redeemable financial instruments (0.5)
Payment of financing fees(10.4) 
All other(3.7)(1.5)
Net cash (used in) provided by financing activities(122.7)264.2 
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH(6.0)(2.0)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH112.0 223.3 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period310.4 352.0 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period$422.4 $575.3 
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:  
Cash paid during the period for interest$20.9 $44.3 
Net cash payments (refunds) for income taxes13.1 (16.1)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:  
Accrued capital expenditure additions$53.1 $46.0 
Non-cash Series B Preferred Stock dividends and deemed dividends (See Note 15)119.5 20.8 
See notes to Condensed Consolidated Financial Statements.
7

COTY INC. & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
($ in millions, except per share data)
(Unaudited)

1. DESCRIPTION OF BUSINESS
Coty Inc. 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.
The Company operates on a fiscal year basis with a year-end of June 30. 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 2022” refer to the fiscal year ending June 30, 2022. When used in this Quarterly Report on Form 10-Q, the term “includes” and “including” means, unless the context otherwise indicates, including without limitation.
The Company’s sales generally increase during the second fiscal quarter as a result of increased demand associated with the winter holiday season. Financial performance, working capital requirements, sales, cash flows and borrowings generally experience variability during the three to six months preceding the holiday season. Product innovations, new product launches and the size and timing of orders from the Company’s customers may also result in variability.
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 Kohlberg Kravis Roberts & Co. L.P. and its affiliates (“KKR”)), for the sale of a majority stake in Coty’s Professional and Retail Hair businesses, including the Wella, Clairol, OPI and ghd brands, (together, the “Wella Business”). As a result, Coty owned a 40% stake in Rainbow JVCO LTD and subsidiaries (together, "Wella") as of September 30, 2021. See Note 8—Equity Investments for additional information.
As previously disclosed, the Company's chief operating decision maker ("CODM") has been 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 to a principally product category-based structure, comprised of a Prestige business segment and a Consumer Beauty business segment. See Note 4—Segment Reporting for information on the Company's segments.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim Condensed Consolidated Financial Statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and include the Company’s consolidated domestic and international subsidiaries. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these unaudited interim Condensed Consolidated Financial Statements and accompanying footnotes should be read in conjunction with the Company’s Consolidated Financial Statements as of and for the year ended June 30, 2021. In the opinion of management, all adjustments, of a normal recurring nature, considered necessary for a fair presentation have been included in the Condensed Consolidated Financial Statements. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending June 30, 2022. All dollar amounts (other than per share amounts) in the following discussion are in millions of United States (“U.S.”) dollars, unless otherwise indicated.
Restricted Cash
Restricted cash represents funds that are not readily available for general purpose cash needs due to contractual limitations. 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 September 30, 2021 and June 30, 2021, the Company had restricted cash of $45.5 and $56.9, respectively, included in Restricted cash in the Condensed Consolidated Balance Sheets. The Restricted cash balance as of September 30, 2021 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 September 30, 2021. Restricted cash is included as a component of Cash, cash equivalents and restricted cash in the Condensed Consolidated Statement of Cash Flows.
8

Equity Investments
The Company elected the fair value option to account for its investment in Wella to align with the Company’s strategy for this investment. The fair value is updated on a quarterly basis. The investment is classified within Level 3 in the fair value hierarchy because the Company estimates the fair value of the investment using a combination of the income approach, the market approach and private transactions, when applicable. Changes in the fair value of equity investment under the fair value option are recorded in Other income, net within the Condensed Consolidated Statements of Operations (see Note 8—Equity Investments).
Use of Estimates
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 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. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions resulting from continuing changes in the economic environment will be reflected in the Condensed Consolidated Financial Statements in future periods.
Tax Information
The effective income tax rate for the three months ended September 30, 2021 and 2020 was 33.4% and 200.2%, respectively. The positive effective tax rate for the three months ended September 30, 2021 results from reporting income before taxes and a provision for income taxes. The positive effective tax rate for the three months ended September 30, 2020 results from reporting losses before income taxes and a benefit for income taxes. The change in the effective tax rate for the three months ended September 30, 2021, as compared with the three months ended September 30, 2020, is primarily due to the limitation on the deductibility of executive stock compensation in the current period as well as a benefit related to a change in the Company's main principal location of $220.5 recorded in the prior period. The benefit recorded in the prior period was the result of a tax rate differential on the deferred taxes recognized on the transfer of assets and liabilities, following the relocation of the Company's main principal location from Geneva to Amsterdam.
The effective income tax rates vary from the U.S. federal statutory rate of 21% due to the effect of (i) jurisdictions with different statutory rates, (ii) adjustments to the Company’s unrealized tax benefits (“UTBs”) and accrued interest, (iii) non-deductible expenses, (iv) audit settlements and (v) valuation allowance changes.
As of September 30, 2021 and June 30, 2021, the gross amount of UTBs was $278.5 and $279.9, respectively. As of September 30, 2021, the total amount of UTBs that, if recognized, would impact the effective income tax rate is $158.2. As of September 30, 2021 and June 30, 2021, the liability associated with UTBs, including accrued interest and penalties, was $180.6 and $181.2, respectively, which was recorded in Income and other taxes payable and Other noncurrent liabilities in the Condensed Consolidated Balance Sheets. The total interest and penalties recorded in the Condensed Consolidated Statements of Operations related to UTBs was $0.7 and $1.3 for the three months ended September 30, 2021 and 2020, respectively. The total gross accrued interest and penalties recorded in the Condensed Consolidated Balance Sheets as of September 30, 2021 and June 30, 2021 was $22.4 and $21.7, respectively. On the basis of the information available as of September 30, 2021, it is reasonably possible that a decrease of up to $20.0 in UTBs may occur within twelve months as a result of projected resolutions of global tax examinations and a potential lapse of the applicable statutes of limitations.
Recently Adopted Accounting Pronouncements
In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), which clarifies certain interactions between the accounting for equity securities, equity method investments, and certain derivative instruments. The Company adopted this guidance in the first quarter of fiscal 2022. The adoption of this standard did not have a material impact on the Company's financial position and its results of operations.
9

Recently Issued Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The new guidance under ASU No. 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is in the process of assessing the impact, if any, that ASU No. 2020-04 is expected to have on the Company’s financial position, its results of operations and related disclosures.
In August 2020, the FASB issued ASU No. 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), 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 financial position, its results of operations and related disclosures.
3. DISCONTINUED OPERATIONS
On June 1, 2020, the Company entered into a definitive agreement with KKR Bidco, regarding a strategic transaction for the sale of the Wella Business, valuing the business at $4,300.0 on a cash- and debt-free basis. The transaction was completed on November 30, 2020 and Coty retained ownership of 40% of 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 in the prior period leading up to the date of the sale, and, as such, have been excluded from both continuing operations and segment results for all periods presented. The Wella Business was comprised of the Professional Beauty and Retail Hair businesses.
10

The following table has selected financial information included in Net income from discontinued operations for the Wella Business.
Three Months Ended September 30, 2020
Net revenues$566.4 
Cost of sales181.0 
Gross profit385.4 
Selling, general and administrative expenses240.0 
Operating income145.4 
Interest expense, net (a)
11.8
Other expense (income), net0.1 
(Loss) income from discontinued operations before income taxes133.5 
(Benefit) provision for income taxes on discontinued operations28.8 
Net income from discontinued operations$104.7 
(a)Interest expense was allocated to the discontinued operations due to a requirement in the 2018 Coty Credit Agreement, as amended (defined in Note 11—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 $500.0 that will be used for reinvestment in the Company's business, pursuant to the 2018 Coty Credit Agreement, as amended. See Note 11—Debt for more information.
The following is selected financial information included in cash flows from discontinued operations for the Wella Business held for sale:
Three Months Ended September 30, 2020
NON-CASH OPERATING ITEMS
Depreciation and amortization$ 
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures$4.7 
4. 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. The Company has designated its Chief Executive Officer as the CODM.
As previously disclosed, the CODM has been 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 to a principally product category-based structure, comprised of a Prestige business segment and a Consumer Beauty business segment beginning in the first quarter of fiscal 2022. The Company has recast its results for fiscal 2021 to reflect the changes in its segments.
Certain income and shared costs and the results of corporate initiatives are managed by Corporate. Corporate primarily includes stock compensation expense, restructuring and realignment costs, costs related to acquisition and divestiture activities, and impairments of long lived assets, goodwill and intangibles that are not attributable to ongoing operating activities of the segments. Corporate costs are not used by the CODM to measure the underlying performance of the segments.
With the exception of goodwill, the Company does not identify or monitor assets by segment. The Company does not present assets by reportable segment since various assets are shared between reportable segments. The allocation of goodwill by segment is presented in Note 9—Goodwill and Other Intangible Assets, net.
11

Three Months Ended
September 30,
SEGMENT DATA20212020
Net revenues:
Prestige$870.7 $644.4 
Consumer Beauty501.0 479.7 
Total$1,371.7