8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 12, 2017 (February 1, 2017)

Coty Inc.

(Exact Name of Registrant as Specified in its Charter)

DE	001-35964	13-3823358
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

350 Fifth Avenue New York, NY	10118
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 389-7300

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

As previously disclosed, on February 1, 2017, Coty Inc. (the “Company”) completed the transactions contemplated by the Contribution Agreement, dated as of January 10, 2017 (as amended, modified and supplemented from time to time, the “Contribution Agreement”), by and among the Company, Coty US Holdings Inc., a Delaware corporation (“Coty US”), Foundation, LLC, a Delaware limited liability company and wholly-owned subsidiary of Coty US, Younique, LLC, a Utah limited liability company (“Younique”), UEV Holdings, LLC, a Delaware limited liability company, Aspen Cove Holdings, Inc., a Utah corporation and the majority unit holder of Younique, each of the other unit holders of Younique, and Derek Maxfield, in his individual capacity and as the “Unit Holder Representative” thereunder. This amendment to the Company’s Current Report on Form 8-K dated February 1, 2017 (the “Initial 8-K”) is being filed to provide the financial statements described in Item 9.01(a) and 9.01(b) below.

Forward-Looking Statements

Certain statements in this Form 8-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current views with respect to, among other things, the Company’s future operations and financial performance. These forward-looking statements are generally identified by words or phrases, such as “anticipate”, “are going to”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”, “continue”, “target”, “aim”, “potential” and similar words or phrases. These statements are based on certain assumptions and estimates that the Company considers reasonable and are subject to a number of risks and uncertainties, many of which are beyond the control of the Company, which could cause actual events or results to differ materially from such statements, including:

· the Company’s ability to achieve its global business strategy, compete effectively in the beauty industry and achieve the benefits contemplated by its recent strategic transactions within the expected time frame, including the Company’s joint ventures and recent acquisitions;

· use of estimates and assumptions in preparing the Company’s financial statements, including with regard to revenue recognition, stock compensation expense, the market value of inventory and the fair value of acquired assets and liabilities associated with acquisitions;

· managerial, integration, operational, regulatory, legal and financial risks, including management of cash flows and expenses associated with the Company’s strategic transactions and internal reorganizations;

· the integration of The Procter & Gamble Company’s global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands with the Company’s business, operations, systems, financial data and culture and the ability to realize synergies and other potential benefits within the time frames currently contemplated;

· changes in law, regulations and policies that affect the Company’s business or products;

· the Company’s and its brand partners' and licensors' ability to obtain, maintain and protect the intellectual property rights, including trademarks, brand names and other intellectual property used in their respective businesses, products and software, and their abilities to protect their respective reputations and defend claims by third parties for infringement of intellectual property rights;

· the Company’s ability to implement its restructuring programs and the success of the programs or any anticipated programs in delivering anticipated improvements and efficiencies;

· the Company’s ability to successfully execute its announced intent to divest or discontinue non-core brands and to rationalize wholesale distribution by reducing the amount of product diversion to the value and mass channels;

· the Company’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including any relaunched or rebranded products;

· risks related to the Company’s international operations and joint ventures, including reputational, compliance, regulatory, economic and foreign political risks;

· the Company’s dependence on certain licenses, entities performing outsourced functions and third-party suppliers, including third party software providers;

· administrative, development and other difficulties in meeting the expected timing of market expansions, product launches and marketing efforts;

· global political and/or economic uncertainties or disruptions;

· the Company’s ability to manage seasonal variability;

· increased competition, consolidation among retailers, shifts in consumers’ preferred distribution channels and other changes in the retail, e-commerce and wholesale environment in which the Company does business and sell their products;

· disruptions in operations, including due to disruptions or consolidation in supply chain, manufacturing rights or information systems, labor disputes and natural disasters;

· restrictions imposed on the Company through its license agreements and credit facilities and changes in the manner in which the Company finances its debt and future capital needs, including potential acquisitions;

· increasing dependency on information technology and the Company's ability to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of implementation and effectiveness of any upgrades to their respective information technology systems and failure by the Company to comply with any privacy or data security laws or to protect against theft of customer, employee and corporate sensitive information;

· the Company’s ability to attract and retain key personnel;

· the distribution and sale by third parties of counterfeit and/or gray market versions of the Company’s products; and

· other factors described elsewhere in this document and from time to time in documents that the Company files with the Securities and Exchange Commission.

More information about potential risks and uncertainties that could affect the Company’s business and financial results is included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2016 and other periodic reports the Company has filed and may file with the Securities and Exchange Commission from time to time.

All forward-looking statements made in this document are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this document, and the Company does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired

The audited consolidated balance sheet of Younique as of December 31, 2016, the audited consolidated statement of income and comprehensive income of Younique for the year ended December 31, 2016, the audited consolidated statement of members’ equity and the audited consolidated statement of cash flows of Younique for the year ended December 31, 2016 are filed herewith as Exhibit 99.1 and incorporated herein by reference.

(b) Pro forma financial information

The unaudited condensed combined pro forma balance sheet information of the Company and its subsidiaries as of December 31, 2016 and the unaudited condensed combined pro forma statement of operations of the Company and its subsidiaries for the year ended June 30, 2016 and for the six months ended December 31, 2016 are filed herewith as Exhibit 99.2 and incorporated herein by reference.

(d) Exhibits

Exhibit No.	Description
23.1	Consent of Squire & Company, PC
99.1	Audited consolidated financial statements of Younique as of December 31, 2016 and for the year ended December 31, 2016
99.2	Unaudited condensed combined pro forma financial statements of Coty Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		COTY INC.
		(REGISTRANT)
Date: April 12, 2017	By:	/s/ Patrice de Talhouët
	Name:	Patrice de Talhouët
	Title:	Chief Financial Officer

COTY INC.

EXHIBIT INDEX

Exhibit No.	Description
23.1	Consent of Squire & Company, PC
99.1	Audited consolidated financial statements of Younique as of December 31, 2016 and for the year ended December 31, 2016
99.2	Unaudited condensed combined pro forma financial statements of Coty Inc.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-189276 and 333-214532 on Form S-8 of Coty Inc., of our report dated March 20, 2017, relating to the consolidated financial statements of Younique, LLC and subsidiaries as of December 31, 2016 and for the year ended December 31, 2016, which appears in this Current Report on Form 8-K/A of Coty Inc. dated April 12, 2017.

/s/ Squire & Company, PC

Orem, Utah

April 12, 2017

1

EX-99.1

Exhibit 99.1

YOUNIQUE, LLC AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2016

TABLE OF CONTENTS

	Page
INDEPENDENT AUDITOR’S REPORT	1
FINANCIAL STATEMENTS:
Consolidated Balance Sheet	2
Consolidated Statement of Income and Comprehensive Income	3
Consolidated Statement of Members’ Equity	4
Consolidated Statement of Cash Flows	5
Notes to Consolidated Financial Statements	6

INDEPENDENT AUDITOR’S REPORT

To the members of

Younique, LLC

We have audited the accompanying consolidated financial statements of Younique, LLC and Subsidiaries, which comprise the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income and comprehensive income, members’ equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Younique, LLC and Subsidiaries as of December 31, 2016, and the consolidated results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Squire & Company, PC

Orem, Utah

March 20, 2017

YOUNIQUE, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

December 31, 2016

ASSETS
Current Assets:
Cash and cash equivalents	$	41,575,602
Inventories, net		58,026,272
Prepaids and other current assets		7,550,261
Total current assets		107,152,135
Property and Equipment, net		8,832,369
Intangible Assets, net		756,231
Deposits		621,273
Total assets	$	117,362,008
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities:
Accounts payable	$	7,643,397
Deferred revenue		8,915,390
Accrued expenses		26,032,713
Income taxes payable		242,334
Current portion of capital lease obligation		551,453
Total current liabilities		43,385,287
Capital Lease Obligation, net of current portion		650,199
Total liabilities		44,035,486
Commitments and Contingencies (see Note 12)
Members’ Equity		73,326,522
Total liabilities and members’ equity	$	117,362,008

The accompanying notes are an integral part of these consolidated financial statements.

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YOUNIQUE, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

Year Ended December 31, 2016

Revenue, net	$	395,881,049
Cost of Sales		130,045,665
Gross Profit		265,835,384
Operating Expenses:
Presenter incentives		87,349,881
Selling, general and administrative		65,472,896
Total operating expenses		152,822,777
Operating Income		113,012,607
Other Income (Expenses):
Foreign currency transaction losses		(6,981,295	)
Gain on disposal of property and equipment		89,453
Interest expense		(273,547	)
Total other expenses		(7,165,389	)
Income before Income Taxes		105,847,218
Income Tax Expense		701,802
Net Income		105,145,416
Other Comprehensive Income:
Foreign currency translation adjustment		718,929
Comprehensive Income	$	105,864,345

The accompanying notes are an integral part of these consolidated financial statements.

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YOUNIQUE, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF MEMBERS’ EQUITY

Year Ended December 31, 2016

	Undistributed Earnings
	Accumulated Earnings		Member Distributions			Undistributed Earnings			Member Contributions		Cumulative Translation Adjustment		Total Members’ Equity
Balance, January 1, 2016	$	167,691,888	$	(123,143,030	)	$	44,548,858		$	1,638,582	$	6,365	$	46,193,805
Net income		105,145,416		-			105,145,416			-		-		105,145,416
Currency translation adjustment		-		-			-			-		718,929		718,929
Member units for services		-		-			-			49,613		-		49,613
Member distributions		-		(78,781,241	)		(78,781,241	)		-		-		(78,781,241	)
Balance, December 31, 2016	$	272,837,304	$	(201,924,271	)	$	70,913,033		$	1,688,195	$	725,294	$	73,326,522

The accompanying notes are an integral part of these consolidated financial statements.

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YOUNIQUE, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

Year Ended December 31, 2016

Cash Flows from Operating Activities:
Net income	$	105,145,416
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization		2,039,553
Gain on disposal of property and equipment		(89,453	)
Member units for services		49,613
Changes in operating assets and liabilities:
Inventories, net		(26,797,913	)
Prepaids and other current assets		3,487,363
Other assets		48,428
Accounts payable		2,858,077
Accrued expenses		10,402,648
Income taxes payable		113,221
Deferred revenue		(1,335,889	)
Total adjustments		(9,224,352	)
Net cash provided by operating activities		95,921,064
Cash Flows from Investing Activities:
Purchase of intangible assets		(600,000	)
Purchase of property and equipment		(6,532,237	)
Net cash used by investing activities		(7,132,237	)
Cash Flows from Financing Activities:
Payments on capital lease obligations		(522,406	)
Member distributions		(78,781,241	)
Net cash used by financing activities		(79,303,647	)
Effect of Exchange Rates on Cash		720,654
Net Increase in Cash and Cash Equivalents		10,205,834
Cash and Cash Equivalents at Beginning of Year		31,369,768
Cash and Cash Equivalents at End of Year	$	41,575,602
Supplemental Disclosure of Cash Flows Information:
Cash paid during the year for interest	$	82,268
Cash paid during the year for income taxes	$	232,199

The accompanying notes are an integral part of these consolidated financial statements.

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. The Company

These consolidated financial statements include the accounts of Younique, LLC (Younique USA) and the operating results of its wholly-owned subsidiaries: Younique International Holdings, LLC (which includes its wholly-owned subsidiaries as disclosed below), Younique DISC Corporation (DISC) and Younique Corporation (Belize). Younique USA and subsidiaries are collectively referred to as “the Company” in these consolidated financial statements.

Yonique USA markets skin and cosmetic products through a network of independent presenters. Younique USA also distributes product to its wholly-owned subsidiaries. Younique USA was organized as a Utah Limited Liability Company on July 13, 2012, with a 30 year duration, and has issued 9,000 class A and 81,000 class B units along with 22,500 profits interest units. Only class A units have voting rights.

Younique International Holdings, LLC is a holding company without operations of its own. The subsidiaries of Younique Holdings International, LLC include: YQ Products MEX, S. de R.L. de C.V. (Younique Mexico), Younique Products Coöperatief U.A. and Younique Products B.V. (collectively, Younique Europe), Younique Spain, S.L. (Younique Spain), and Younique Hong Kong Limited (Younique Hong Kong). These subsidiaries were created to facilitate sales of the Company’s products to independent presenters in their respective countries or regions of the world

DISC is a U.S. IC-DISC corporation created to promote U.S. exports.

Belize was created to facilitate presenter commission payments.

Note 2. Summary of Significant Accounting Policies

This summary of significant accounting policies of the Company is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the consolidated financial statements.

Cash and Cash Equivalents – The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents also include amounts due from third-party financial institutions for credit and debit card transactions. Typically these amounts are settled within a few days and totaled $949,231 at December 31, 2016.

Inventories – Inventories consist primarily of merchandise purchased held for resale, and are stated at the lower of cost or market, using the first-in, first-out method. Obsolete or defective inventories are written off in a timely manner. Inventories determined to be excess or slow-moving are written down to lower of cost or market.

Prepaids and Other Current Assets – The Company has made payments for taxes, inventories, events, incentives, and other services that will be received, consumed or used in a future period.

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (continued)

Use of Estimates – The preparation of financial statements in conformity with generally accepted accounting principles 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These differences may be material. Some of the most significant estimates relate to depreciation and amortization of assets, inventory reserves, and deferred revenue.

Fair Value – The Company has concluded that the carrying amounts of cash and cash equivalents, accounts payable, and certain accrued expenses approximate their fair values due to their short-term nature. The recorded value of capital lease obligations approximate fair value as the interest rate approximates market interest rates.

Property and Equipment – Property and equipment are recorded at cost and depreciated using the straight line method over the following estimated useful lives:

Furniture and office equipment	3-7 years
Computer equipment and software	3-5 years
Automotive equipment	3 years
Machinery and equipment	5 years
Leasehold improvements	Life of the lease (1-5 years)

Expenditures for maintenance and repairs are expensed as incurred. Depreciation and amortization of property and equipment totaled $1,845,784 for the year ended December 31, 2016. Maintenance and repair costs are expensed as incurred.

Intangible Assets – Intangible assets consists of original program code used to develop and build the presenter sales and commission engine and formulas used in the Company’s products. Intangible assets are amortized over the expected useful life of the assets; between 5 and 10 years.

Impairment of Long-Lived Assets – Management reviews the carrying amount of long-lived assets for possible impairment by comparing the carrying value to the undiscounted estimated future cash flows of the related assets. If the sum of the undiscounted future cash flows is less than the carrying amount, the Company uses valuation methodologies to determine the fair value of the assets. Any necessary adjustment would reduce the assets to their fair value. The resulting loss is reported as a component of operating activities.

Deposits – Deposits have been made for various office and warehouse space, including the building lease.

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (continued)

Foreign Currency Translation – A portion of the Company’s sales and operations occur outside the United States. Each subsidiary’s local currency is considered to be its functional currency. Since the Company reports its financial position and results of operations in U.S. dollars, it is necessary to translate each foreign subsidiary’s financial position and results of operations into U.S. dollars prior to consolidation. Each foreign subsidiary’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet date, revenues and expenses are translated at average exchange rates over the period, and equity is recorded at historical exchange rates.

The resulting currency translation adjustments are recorded as a separate component of comprehensive income. Transaction gains and losses are included in “other income (expense)” in the consolidated statement of income and comprehensive income.

Revenue Recognition – Revenue is recognized when products are delivered, which is when the risks and rewards of ownership have transferred to the presenter or customer. The Company classifies selling discounts and rebates as a reduction of revenue at the time a sale is recorded. Management evaluates product returns and records a reserve, if material, based on historical experience. The Company generally requires cash or credit card payment at the point of sale. Amounts collected and remitted from credit card companies are generally received within a few days of purchase. These amounts are included in cash and cash equivalents, and such amounts that are received prior to delivery of the related product to customers are recorded as deferred revenue.

Deferred revenue includes cash amounts transacted with presenters or customers prior to product delivery, and totaled $8,915,390 at December 31, 2016.

Shipping and handling fees charged to presenters or customers are included in revenue, and shipping and handling costs paid by the Company are included in cost of sales in these consolidated financial statements. Sales and other transaction related taxes are excluded from revenue.

Refunds and Product Warranty – Presenters or customers returning products, including defective products, within the first 14 days following purchase are eligible for a full refund. Presenters or customers returning products, including defective products, 15 – 30 days following purchase are eligible for an 80% refund. In addition, presenters or customers may exchange product that is in unused and resalable condition for like products. The Company has established accruals for its estimated refund and product warranty obligations (see Note 7).

Presenter Incentives – Presenter incentives include cash payments made under the Company’s global sales compensation plan. Presenters earn incentives by arranging or facilitating a sale of commissionable product, with the ability to earn additional incentives for reaching volume objectives and other achievements. Presenters are not required to recruit or sponsor others and the Company does not pay commissions solely for recruiting or sponsoring.

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (continued)

The Company accrues presenter incentives expense at the time the underlying products are delivered. Presenter incentives paid on product that has been recorded as deferred revenue is recorded as a prepaid asset until the related revenue is earned (see Note 4).

Income Taxes – Younique USA is a non-taxpaying entity for U.S. federal and most state income tax purposes. However, Younique USA is subject to certain state taxes and fees which are recorded as income tax expense in these consolidated financial statements.

Younique International Holdings, LLC and Belize are not separate entities for income tax reporting purposes. Their accounts and transactions, if any, are included in the income tax return of their parent, Younique USA.

Younique Mexico, Younique Europe, Younique Spain and Younique Hong Kong utilize the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred taxes are provided based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax expense of benefit is the result of changes in deferred tax assets and liabilities. The above taxable entities recorded no significant deferred tax assets or liabilities at December 31, 2016.

The Company files income tax returns in the jurisdictions of the U.S., Mexico, Spain, Hong Kong, Netherlands and France. The income tax returns of the Company are subject to examination by taxing authorities generally for three to five years from the date they are filed.

The Company had no liabilities recorded for uncertain income tax positions and therefore had no accrued interest and penalties related to uncertain tax positions at December 31, 2016. Interest and penalties for uncertain income tax provisions, when applicable, would be recognized as a component of income tax expense.

Member Profit Interest Unit Based Compensation – The Company records equity compensation expense in the consolidated financial statements for member profit interest incentive units issued to employees and consultants based on the grant date fair value and an estimate of forfeitures derived from historical experience. Member profit interest unit based compensation expense is recognized on a straight-line bases over the vesting service period, which is typically four years from the date of issuance. All issued and outstanding profit interest units had vested at December 31, 2016.

Advertising – Advertising costs are expensed as incurred and totaled $102,875 for the year ended December 31, 2016.

Intercompany Accounts and Transactions – All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted – In August 2016, the Financial Accounting Standards Board (“FASB”) updated accounting guidance on the following eight specific cash flow classification issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (continued)

rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. Current GAAP does not include specific guidance on these eight cash flow classification issues. These updates are effective for the Company for its annual period beginning January 1, 2019, and interim periods therein, with early adoption permitted. The Company is currently assessing the impact these updates will have on its financial statements.

In March 2016 the FASB updated the accounting guidance related to stock compensation. This update simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The standard is effective for the Company for its annual period beginning January 1, 2018. The Company is evaluating the impact that this standard will have on its financial statements.

In February 2016, the FASB updated the accounting guidance related to leases as part of a joint project with the International Accounting Standards Board (“IASB”) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, a lessee will be required to recognize assets and liabilities for capital and operating leases with lease terms of more than 12 months. Additionally, this update will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The standard is effective for the Company for its annual period beginning January 1, 2020, and interim periods therein, with early adoption permitted. The Company is currently evaluating the potential impact this new standard may have on its financial statements.

In May 2014, in addition to several amendments issued during 2016, the FASB updated the accounting guidance related to revenue from contracts with customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. The standard defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for the Company for its annual period beginning January 1, 2019, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its financial statements.

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Summary of Significant Accounting Policies (continued)

The Company has reviewed all other recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its financial statements.

Note 3. Inventories, net

Inventories consist of the following as of December 31, 2016:

Raw materials	$	1,445,691
Work in process		6,687,687
Finished goods		49,892,894
Inventories, net	$	58,026,272

Inventories are shown net of an allowance for obsolete and slow moving inventory of $12,717,143 at December 31, 2016.

Note 4. Prepaids and Other Current Assets

Prepaids and other current assets consist of the following as of December 31, 2016:

Prepaid inventories	$	1,439,904
Prepaid events		561,174
Deferred presenter incentives		2,566,869
VAT and GST taxes receivable		1,363,182
Presenter gifts		443,982
Royalties receivable		133,224
Prepaid services and rent		1,041,926
Total prepaids and other current assets	$	7,550,261

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YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5. Property and Equipment

Property and equipment consist of the following as of December 31, 2016:

Furniture and office equipment	$	3,443,343
Computer equipment and software		3,024,967
Automotive equipment		53,358
Machinery and equipment		2,656,842
Leasehold improvements		1,939,302
Construction in progress		269,117
Total property and equipment		11,386,929
Accumulated depreciation and amortization		(2,554,560	)
Total property and equipment, net	$	8,832,369

Included in machinery and equipment at December 31, 2016, is $1,374,934 held under a capital lease obligation, which is net of $543,579 of accumulated amortization (see Note 9).

Note 6. Intangible Assets, net

Intangible assets consist of the following as of December 31, 2016:

Software source code	$	350,000
Formulas		600,000
		950,000
Less accumulated amortization		(193,769	)
Intangible assets, net	$	756,231

Future amortization expense is expected to be as follows:

Year Ending
December 31,
2017	$	155,000
2018		155,000
2019		155,000
2020		155,000
2021		130,000
Thereafter		6,231
	$	756,231

-12-

YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7. Accrued Expenses

Accrued expenses consist of the following as of December 31, 2016:

Presenter incentives	$	9,741,809
Sales tax		7,746,260
Payroll and related		3,085,353
Customs and duties		2,304,377
Related party payable (see Note 8)		58,811
Accrued fees		1,611,119
Refunds and product warranty		748,966
Other accrued expense		736,018
Total accrued expenses	$	26,032,713

Note 8. Related Party Transactions

The Company made discretionary charitable contributions to an affiliated Charitable Foundation (the Foundation), which was founded by a member of the Company, totaling $2,770,834 during the year ended December 31, 2016, which is recorded in selling, general, and administrative expense in these consolidated financial statements. Additionally, the Company facilitates presenter and customer donation payments to the Foundation through a collect and remit arrangement. During the year ended December 31, 2016, the Company remitted $621,870 on behalf of presenters and customers and had a liability of $58,811 due to the Foundation recorded in accrued expenses in the consolidated balance sheet (see Note 7).

Note 9. Capital Lease Obligation

During 2015, the Company acquired equipment under a capital lease agreement with an interest rate of 5.4%. The obligation is collateralized by the related equipment and future minimum payments under the capital lease are as follows:

	Year Ending		Gross Lease
	December 31,		Payments
		2017	$	603,049
		2018		603,049
		2019		68,474
Total minimum lease payments				1,274,572
Less amount representing interest				(72,920)
				1,201,652
Present value of net minimum lease payments
Current portion				(551,453)
			$	650,199

-13-

YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10. Income Taxes

Income tax expense for the year ended December 31, 2016, consist of the following:

Current:
Foreign	$	386,412
Federal		-
State		315,390
		701,802
Deferred:
Foreign		-
Federal		-
State		-
		-
	$	701,802

Note 11. Concentrations

Cash Concentration – The Company primarily maintains its cash balances in financial institutions based in the United States that are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 for each financial institution per entity. As of December 31, 2016, uninsured cash held in financial institutions totaled $30,575,884.

Note 12. Commitments and Contingencies

Legal Proceedings – In the course of business the Company is subject to certain litigation, claims and assessment, including patent infringement claims. Management believes the ultimate resolution of outstanding legal matters will have no significant impact on the consolidated results of operations and or financial position of the Company.

Required Tax Distributions – The Company shall distribute to the Members an amount equal to 45% of the Company’s net taxable income that was allocated to each such Member by April 15^th following the end of each fiscal year.

Employment and Consultant Agreements – The Company has entered into various agreements with certain key employees and consultants that are standard and customary in the industry. The agreements outline salary and compensation commitments as well as severance, bonuses, and other incentives that are contingent on future performance or events. Management believes these agreements will not have any material impact on the consolidated results of operations and or financial position of the Company.

-14-

YOUNIQUE, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12. Commitments and Contingencies (continued)

Operating Leases – The Company leases various office and warehouse facilities and equipment under non-cancelable operating leases, which expire between December 2019 and May 2026. Minimum future lease obligations at December 31, 2016, are as follows:

Year Ending
December 31,
2017	$	3,329,544
2018		3,423,188
2019		3,519,667
2020		2,767,479
2021		2,853,959
Thereafter		13,725,277
	$	29,619,114

Total lease expense for the year ended December 31, 2016, totaled $3,117,734.

Note 13. 401(k) Retirement Plan

The Company has a defined contribution 401(k) retirement plan. The Company’s contributions to the plan are based on matching 100% of the first 3% and 50% of the next 2% of base compensation that a participant contributes to the plan. Employees may contribute a maximum of 60% of pretax annual compensation subject to the IRS limits. The Company contributed $805,888 to participant 401(k) accounts for the year ended December 31, 2016.

Note 14. Subsequent Events

During January 2017, the Company commenced operations in Italy.

On February 1, 2017 (the Closing Date), Coty Inc., a Delaware corporation (Parent), completed the transactions contemplated by the Contribution Agreement, dated January 10, 2017 (the Contribution Agreement).

Pursuant to the Contribution Agreement, on the Closing Date, the Members contributed all of the issued and outstanding units of Younique USA to NewCo (the Contribution), in exchange for NewCo (i) paying approximately $600,000,000, subject to customary adjustments, to the Members (the Cash Consideration), and (ii) issuing membership interests in NewCo to the Members. As a result of the Contribution, Younique USA and subsidiaries are now a wholly-owned subsidiary of NewCo, with Parent and the Members owning 60% and 40%, respectively, of the issued and outstanding membership interests of NewCo.

Management has evaluated subsequent events through March 20, 2017, the date through which the consolidated financial statements were available to be issued.

-15-

EX-99.2

Exhibit 99.2

Unaudited Condensed Combined Pro Forma Financial Statements of Coty

The following unaudited condensed combined pro forma financial statements and notes thereto have been prepared by Coty Inc. (“Coty”) to give effect to the acquisitions of Younique, LLC, a Utah limited liability company (“Younique”) and certain assets and liabilities related to The Procter & Gamble Company’s (“P&G”) global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands (the “P&G Beauty Business”). On February 1, 2017, Coty contributed $600.0 million of cash consideration, net of acquired cash and debt assumed, to Foundation, LLC (“Foundation”) in exchange for a 60% membership interest in Foundation and the existing Younique membership holders contributed their 100% membership interest in Younique to Foundation in exchange for a 40% membership interest in Foundation, including the $600.0 million of cash consideration (the “Younique Acquisition”).

On October 1, 2016, Coty completed the merger (the “Merger”) of Green Acquisition Sub Inc. (“Merger Sub”) with and into Galleria Co. (“Galleria”), with Galleria surviving the merger and becoming a wholly owned subsidiary of Coty, as contemplated by the Transaction Agreement, dated as July 8, 2015, as amended (the “Transaction Agreement”), by and among P&G, Galleria, Coty and Merger Sub.

The Younique and P&G Beauty Business acquisitions are each being accounted for as business combinations using the acquisition method with Coty as the accounting acquirer in accordance with ASC 805, Business Combinations. Under this method of accounting the purchase price is allocated to assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition. The process of valuing the tangible and intangible assets and liabilities of Younique and the P&G Beauty Business is not finalized. Accordingly, the purchase price allocation pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited condensed combined pro forma financial statements. Material revisions to Coty’s current estimates could be necessary as the valuation and accounting policy conformity processes are finalized. As a result, the actual amounts of depreciation and amortization expenses may be materially different from that presented.

The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of Coty and Younique as of December 31, 2016, giving effect to the Younique Acquisition as if it had occurred on December 31, 2016. The historical consolidated balance sheet of Coty as of December 31, 2016 reflects the assets and liabilities from the P&G Beauty Business acquisition.

The unaudited condensed combined pro forma statements of operations for the six months ended December 31, 2016 and the year ended June 30, 2016 combine the historical consolidated statements of operations of Coty, Younique and P&G Beauty Business for such periods, giving effect to the Younique and P&G Beauty Business acquisitions as if they had occurred on July 1, 2015. The unaudited condensed combined pro forma statements of operations include P&G Beauty Business’ historical results of operations from July 1, 2016 through September 30, 2016, as P&G Beauty Business’ results of operations subsequent to Coty’s October 1, 2016 acquisition of P&G Beauty Business are included in Coty’s historical consolidated statement of operations.

The unaudited pro forma condensed combined balance sheet as of December 31, 2016 and the unaudited pro forma condensed combined statements of operations for the six months ended December 31, 2016 and for the year ended June 30, 2016 are based on: (i) historical consolidated statements of operations of Coty (which include the results of P&G Beauty Business subsequent to Coty’s October 1, 2016 acquisition of P&G Beauty Business); (ii) the historical consolidated statement of income of Younique; and (iii) and the historical consolidated statements of operations of P&G Beauty Business.

The historical consolidated financial information has been adjusted to give effect to pro forma adjustments that are factually supportable, directly attributable to the Younique and P&G Beauty Business acquisitions, and with respect to the statement of operations, expected to have a continuing impact.

The unaudited condensed combined pro forma financial statements should be read in conjunction with:

· Coty’s audited historical consolidated financial statements as of and for the fiscal year ended June 30, 2016;

· Coty’s unaudited historical condensed consolidated financial statements as of and for the six months ended December 31, 2016;

· Younique’s audited historical consolidated financial statements as of and for the fiscal year ended December 31, 2016;

· P&G Beauty Business’ audited historical combined financial statements as of and for the fiscal year ended June 30, 2016; and

· accompanying notes to the unaudited condensed combined pro forma financial statements.

The unaudited condensed combined pro forma financial statements have been prepared for illustrative purposes only, and are not necessarily indicative of the operating results or financial position that would have occurred if the Younique and P&G Beauty Business

1

acquisitions had been consummated on the dates indicated, nor is necessarily indicative of the results of operations or financial condition that may be expected for any future period or date.

The unaudited condensed combined pro forma financial information does not reflect pro forma adjustments for the realization of any future expected cost savings or other synergies from the Younique and P&G Beauty Business acquisitions as a result of any planned cost savings initiatives following the completion of the business combinations.

2

Coty Inc. & Subsidiaries
Unaudited Condensed Combined Pro Forma Balance Sheet
At December 31, 2016
(Dollars in millions)

	Historical Coty			Historical Younique			Younique Pro Forma Adjustments (Note 3)			Combined Pro Forma
Assets
Current assets
Cash and cash equivalents	$	939.2		$	41.6		$	(116.3	)	$	864.5
Trade receivables, net		1,450.3			-			-			1,450.3
Inventories		1,014.8			58.0			66.9			1,139.7
Prepaid expenses and other current assets		353.2			7.6			-			360.8
Deferred income taxes		151.8			-			-			151.8
Total current assets		3,909.3			107.2			(49.4	)		3,967.1
Property and equipment		1,418.7			8.8			55.0			1,482.5
Goodwill		7,390.1			-			521.4			7,911.5
Other intangible assets, net		8,816.6			0.8			315.8			9,133.2
Deferred income taxes		71.5			-			25.4			96.9
Other noncurrent assets		284.8			0.6	(1)		-			285.4
Total assets	$	21,891.0		$	117.4		$	868.2		$	22,876.6
Liabilities and equity
Current liabilities
Accounts payable	$	1,401.0		$	7.6		$	-		$	1,408.6
Accrued expenses and other current liabilities		1,520.6			34.9	(2)		5.2			1,560.7
Short-term debt and current portion of long-term debt		186.7			0.6	(3)		-			187.3
Income and other taxes payable		20.8			0.3			-			21.1
Deferred income taxes		8.7			-			25.4			34.1
Total current liabilities		3,137.8			43.4			30.6			3,211.8
Long-term debt, net		6,308.4			0.7	(4)		500.0			6809.1
Pension and other post-employment benefits		589.2			-			-			589.2
Deferred income taxes		1,611.4			-			-			1,611.4
Other noncurrent liabilities		363.1			-			-			363.1
Total liabilities		12,009.9			44.1			530.6			12,584.6
Redeemable noncontrolling interests		70.9			-			410.9			481.8
Equity
Preferred stock, $0.01 par value; 20.0 shares authorized, 2.7 issued and outstanding, at December 31, 2016 on a historical and pro forma basis		-			-			-			-
Class A Common Stock, $0.01 par value; 1,000.0 shares authorized, 812.0 issued, and 747.0 outstanding, at December 31, 2016 on a historical and pro forma basis		8.1			1.7	(5)		(1.7	)		8.1
Class B Common Stock, $0.01 par value; 0.0 shares authorized, issued and outstanding at December 31, 2016 on a historical and pro forma basis		-			-			-			-
Additional paid-in capital		11,500.5			-			-			11,500.5
Accumulated surplus		9.8			70.9	(5)		(70.9	)		9.8
Accumulated other comprehensive loss		(283.5	)		0.7	(5)		(0.7	)		(283.5	)
Treasury stock—at cost, shares: 65.0 at December 31, 2016		(1,441.8	)		-			-			(1,441.8	)
Total stockholders’ equity		9,793.1			73.3			(73.3	)		9,793.1
Noncontrolling interests		17.1			-			-			17.1
Total equity		9,810.2			73.3			(73.3	)		9,810.2
Total liabilities, redeemable noncontrolling interests and equity	$	21,891.0		$	117.4		$	868.2		$	22,876.6

3

(1)	Aligning line title of the historical Younique “Deposits” to “Other noncurrent assets.”
(2)	Aligning line titles of the historical Younique “Deferred revenues” and “Accrued expenses” to “Accrued expenses and other current liabilities.”
(3)	Aligning line titles of the historical Younique “Current portion of capital lease obligation” to “Short-term debt and current portion of long-term debt.”
(4)	Aligning line title of the historical Younique “Capital lease obligation, net of current portion” to “Long-term debt, net.”
(5)	Aligning line title of the historical Younique “Members’ Equity” to “Class A Common Stock”, “Accumulated surplus”, and “Accumulated other comprehensive loss.”

See notes to Unaudited Condensed Combined Pro Forma Financial Statements.

4

Coty Inc. & Subsidiaries
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Six Months Ended December 31, 2016
(Dollars in millions, except for per share data)

	Historical Coty			Historical Younique			Younique Pro Forma Adjustments (Note 3)			Younique Acquisition Pro Forma			Historical P&G Beauty Business (3)			P&G Beauty Business Pre- Merger Adjustments (Note 4)			Historical P&G Beauty Business After Pre-Merger Adjustments			P&G Beauty Business Pro Forma Merger Adjustments (Note 5)			Combined Pro Forma
Net revenues	$	3,376.9		$	176.3		$	-		$	3,553.2		$	1,159.0		$	(128.0	)	$	1,031.0		$	-		$	4,584.2
Cost of sales		1,337.1			71.6			4.6			1,413.3			450.0			(53.0	)		397.0			(29.7	)		1,780.6
Gross profit		2,039.8			104.7			(4.6	)		2,139.9			709.0			(75.0	)		634.0			29.7			2,803.6
Selling, general and administrative expenses		1,649.1			74.8	(1)		0.1			1,724.0			842.0			(41.0	)		801.0			(73.3	)		2,451.7
Amortization expense		116.4			-			13.7			130.1			-			-			-			70.0			200.1
Restructuring costs		23.2			-			-			23.2			-			-			-			18.3			41.5
Acquisition-related costs		217.4			-			(0.7	)		216.7			-			-			-			(79.4	)		137.3
Asset impairment charges		-			-			-			-			-			-			-			-			-
Gain on sale of asset		-			-			-			-			-			-			-			-			-
Operating income		33.7			29.9			(17.7	)		45.9			(133.0	)		(34.0	)		(167.0	)		94.1			(27.0	)
Interest expense, net		98.3			0.2			10.4			108.9			13.0			5.7			18.7			(4.4	)		123.2
Loss on early extinguishment of debt		-			-			-			-			-			-			-			-			-
Other expense (income), net		0.7			4.4	(2)		(4.4	)		0.7			(13.0	)		-			(13.0	)		(29.3	)		(41.6	)
Income before income taxes		(65.3	)		25.3			(23.7	)		(63.7	)		(133.0	)		(39.7	)		(172.7	)		127.8			(108.6	)
(Benefit) provision for income taxes		(127.2	)		0.5			0.6			(126.1	)		(19.0	)		(8.3	)		(27.3	)		29.4			(124.0	)
Net income		61.9			24.8			(24.3	)		62.4			(114.0	)		(31.4	)		(145.4	)		98.4			15.4
Net income attributable to noncontrolling interests		10.7			-			-			10.7			-			-			-			-			10.7
Net income attributable to redeemable noncontrolling interests		4.4			-			(0.2	)		4.6			-			-			-			-			4.6
Net income attributable to Coty Inc.	$	46.8		$	24.8		$	(24.5	)	$	47.1		$	(114.0	)	$	(31.4	)	$	(145.4	)	$	98.4		$	0.1
Net income attributable to Coty Inc. per common share:
Basic	$	0.09																							$	0.00
Diluted		0.09																								0.00
Weighted-average common shares outstanding:
Basic		539.8																								744.7
Diluted		545.8																								750.7

(1)	Aligning line titles of the historical Younique “Presenter Incentives” to “Selling, general and administrative expenses.”
(2)	Aligning line title of the historical Younique “Foreign currency transaction losses” and “Gain on disposal of property and equipment” to “Other expense (income), net.”
(3)	Reflects P&G Beauty Business’ statement of operations for July 1, 2016 through September 30, 2016. P&G Beauty Business’ results of operations subsequent to Coty’s October 1, 2016 acquisition of P&G Beauty Business are included in the Historical Coty column.

See notes to the Unaudited Condensed Combined Pro Forma Financial Statements.

5

Coty Inc. & Subsidiaries
Unaudited Condensed Combined Pro Forma Statement of Operations
For the Year Ended June 30, 2016
(Dollars in millions, except for per share data)

	Historical Coty			Historical Younique			Younique Pro Forma Adjustments (Note 3)			Younique Acquisition Pro Forma			Historical P&G Beauty Business			P&G Beauty Business Pre- Merger Adjustments (Note 4)			Historical P&G Beauty Business After Pre-Merger Adjustments		P&G Beauty Business Pro Forma Merger Adjustments (Note 5)			Combined Pro Forma
Net revenues	$	4,349.1		$	377.8		$	-		$	4,726.9		$	4.911.0		$	(506.0	)	$	4,405.0	$	-		$	9,131.9
Cost of sales		1,746.0			104.9			3.9			1,854.8			1.662.0			(156.0	)		1,506.0		(24.2	)		3,336.6
Gross profit		2,603.1			272.9			(3.9	)		2,872.1			3,249.0			(350.0	)		2,899.0		24.2			5,795.3
Selling, general and administrative expenses		2,027.8			133.6	(1)		7.7			2,169.1			3,013.0			(319.0	)		2,694.0		(94.8	)		4,768.3
Amortization expense		79.5			-			27.2			106.7			-			-			-		279.8			386.5
Restructuring costs		86.9			-			-			86.9			-			-			-		50.0			136.9
Acquisition-related costs		174.0			-			-			174.0			-			-			-		(163.8	)		10.2
Asset impairment charges		5.5			-			-			5.5			48.0			(48.0	)		-		-			5.5
Gain on sale of asset		(24.8	)		-			(0.1	)		(24.9	)		-			-			-		-			(24.9	)
Operating income		254.2			139.3			(38.7	)		354.8			188.0			17.0			205.0		(47.0	)		512.8
Interest expense, net		81.9			0.1			15.9			97.9			29.0			43.3			72.3		(13.0	)		157.2
Loss on early extinguishment of debt		3.1			-			-			3.1			-			-			-		-			3.1
Other expense (income), net		30.4			4.1	(2)		(4.1	)		30.4			(8.0	)		8.0			-		-			30.4
Income before income taxes		138.8			135.1			(50.5	)		223.4			167.0			(34.3	)		132.7		(34.0	)		322.1
(Benefit) provision for income taxes		(40.4	)		0.3			32.2			(7.9	)		101.0			(20.0	)		81.0		(7.8	)		65.3
Net income		179.2			134.8			(82.6	)		231.3			66.0			(14.3	)		51.7		(26.2	)		256.8
Net income attributable to noncontrolling interests		7.6			-			-			7.6			-			-			-		-			7.6
Net income attributable to redeemable noncontrolling interests		14.7			-			20.9			35.6			-			-			-		-			35.6
Net income attributable to Coty Inc.	$	156.9		$	134.8		$	(103.5	)	$	188.1		$	66.0		$	(14.3	)	$	51.7	$	(26.2	)	$	213.7
Net income attributable to Coty Inc. per common share:
Basic	$	0.45																						$	0.28
Diluted		0.44																							0.28
Weighted-average common shares outstanding:
Basic		345.5																							755.2
Diluted		354.2																							763.9

(1)	Aligning line titles of the historical Younique “Presenter Incentives” to “Selling, general and administrative expenses.”
(2)	Aligning line title of the historical Younique “Foreign currency transaction losses” and “Gain on disposal of property and equipment” to “Other expense (income), net.”

See notes to the Unaudited Condensed Combined Pro Forma Financial Statements.

6

COTY INC. & SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS

(Dollars in tables in millions, except per share data)

Note 1—Basis of Pro Forma Presentation

The unaudited condensed combined pro forma statements of operations for the six months ended December 31, 2016 and the year ended June 30, 2016 combine Younique’s unaudited historical consolidated statement of income for the six months ended December 31, 2016 and unaudited historical consolidated statement of income for the year ended June 30, 2016, as well as P&G Beauty Business’ unaudited historical combined statement of operations for the three months ended September 30, 2016 and audited historical financial combined statement of operations for the year ended June 30, 2016 with Coty’s unaudited historical condensed consolidated statement of operations for the six months ended December 31, 2016 (which include the results of P&G Beauty Business subsequent to Coty’s October 1, 2016 acquisition of P&G Beauty Business) and audited historical consolidated statement of operations for the fiscal year ended June 30, 2016. The unaudited condensed combined pro forma balance sheet combines the audited historical consolidated balance sheet of Younique as of December 31, 2016, with Coty’s unaudited historical condensed consolidated balance sheet as of December 31, 2016 (which includes the assets and liabilities of P&G Beauty Business.)

Coty’s fiscal year ends on June 30 and Younique’s fiscal year ends on December 31. For Younique’s fiscal years ended December 31, 2015 and 2016, the net revenues were $283.5 million and $395.9 million, respectively. In order to prepare the unaudited condensed combined pro forma statement of operations for the year ended June 30, 2016, Younique’s operating results were derived from Younique’s historical audited consolidated statement of income and comprehensive income for the year ended December 31, 2016, Younique’s historical unaudited consolidated statement of income for the six months periods ended December 31, 2016 and December 31, 2015.

				Younique’s			Younique’s			Younique’s
	Younique’s			Historical Six			Historical Six			Historical 12
	Historical Year			Months Ended			Months Ended			Months Ended
	Ended 12/31/16			12/31/16			12/31/15			6/30/16
	(see Exhibit 99.1) (a)			(b)			(c)			(d) = (a) - (b) + (c)
Revenue, net	$	395.9		$	176.3		$	158.2		$	377.8
Cost of sales		130.1			71.6			46.4			104.9
Gross profit		265.8			104.7			111.8			272.9
Operating expenses:
Presenter incentives		87.3			36.8			32.5			83.0
Selling, general and administrative		65.5			38.0			23.1			50.6
Total operating expenses		152.8			74.8			55.6			133.6
Operating income		113.0			29.9			56.2			139.3
Other income (expenses):
Foreign currency transaction losses		(7.0	)		(4.4	)		(1.6	)		(4.2	)
Gain on disposal of property and equipment		0.1			-			-			0.1
Interest expense		(0.3	)		(0.2	)		-			(0.1	)
Total other expenses		(7.2	)		(4.6	)		(1.6	)		(4.2	)
Income before income taxes		105.8			25.3			54.6			135.1
Income tax expense		0.7			0.5			0.1			0.3
Net income	$	105.1		$	24.8		$	54.5		$	134.8

The historical financial information for Younique and P&G Beauty Business are adjusted in the unaudited condensed combined pro forma financial statements to give effect to unaudited pro forma adjustments that are (1) directly attributable to the Younique and P&G Beauty Business acquisitions, (2) factually supportable, and (3) with respect to the unaudited pro forma condensed combined statements of operations, expected to have a continuing impact on the combined operating results.

Note 2—Preliminary Purchase Price Allocations

The Younique and P&G Beauty Business acquisitions are each being accounted for as a business combination with Coty as the accounting acquirer. Accordingly, Coty’s cost to purchase Younique and P&G Beauty Business was allocated to the assets acquired and the liabilities assumed based upon their respective fair values on February 1, 2017 and October 1, 2016, respectively.

7

Younique

The preliminary purchase price was $600.0 million, net of acquired cash and debt assumed. Additionally, Coty recorded $410.9 million of redeemable noncontrolling interest for the 40% membership interest that is owned by the noncontrolling shareholder. Coty estimated the preliminary fair value of acquired assets and liabilities as of the date of the Younique Acquisition based on information currently available. Coty is still evaluating the fair value of the assets and liabilities assumed in the Younique Acquisition. As Coty finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Coty 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 of Younique as of the February 1, 2017 acquisition date:

Net working capital	$	108.8
Cash and cash equivalents		17.5
Trademark - definite		122.0
Product formulations		0.6
Goodwill		521.4
Customer relationships		194.0
Property and equipment		9.1
Software		55.0
Short-term and long-term debt		(1.2	)
Total equity value	$	1,027.2
Total equity value	$	1,027.2
Redeemable noncontrolling interest		410.9
Net cash and debt acquired		16.3
Total purchase price	$	600.0

P&G Beauty Business

Coty estimated the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on information currently available. Coty is still evaluating the fair value of the assets and liabilities assumed. As Coty finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. Coty 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 of the P&G Beauty Business as of the October 1, 2016 acquisition date:

The purchase price is as follows:
Equity consideration exchanged	$	9,628.6
Galleria debt assumed by Coty		1,941.8
Total purchase price	$	11,570.4
Preliminary allocation of purchase price:
Cash and cash equivalents	$	387.6
Inventories		506.7
Property, plant and equipment		770.4
Goodwill		5,081.8
Trademarks - indefinite		1,890.0
Trademarks - definite		879.1
Customer relationships		1,795.8
License agreements		1,836.0
Product formulations		183.8
Other net working capital		10.8
Net other assets		54.9
Unfavorable contract liabilities		(130.0	)
Pension liabilities		(394.9	)
Deferred tax liability, net		(1,301.6	)
Total purchase price allocation	$	11,570.4

Note 3—Younique Pro Forma Adjustments

As further described below, the following table reflects the pro forma adjustments as of December 31, 2016 to record the Younique

8

Acquisition, including adjustments to record the acquisition accounting:

	Younique Pro
	Forma
	Adjustments
Assets
Current assets
Cash and cash equivalents	$	(116.3	)	(f)
Trade receivables-less allowances		-
Inventories		66.9		(a)
Prepaid expenses and other current assets		-
Deferred income taxes		-
Total current assets		(49.4	)
Property and equipment		55.0		(b)
Goodwill		521.4		(b)
Other intangible assets, net		316.6		(b)
		(0.8	)	(c)
Deferred income taxes		25.4		(e)
Other noncurrent assets		-
Total assets	$	868.2
Liabilities and equity
Current liabilities
Accounts payable	$	-
Accrued expenses and other current liabilities		5.2		(f)
Short-term debt and current portion of long-term debt		-
Income and other taxes payable		-
Deferred income taxes		25.4		(e)
Total current liabilities		30.6
Long-term debt		500.0		(f)
Pension and other post-employment benefits		-
Deferred income taxes		-
Other noncurrent liabilities		-
Total liabilities		530.6
Redeemable noncontrolling interests		410.9		(d)
Equity
Preferred Stock		-
Class A Common Stock		(1.7	)	(c)
Class B Common Stock		-
Additional paid-in capital		-
Accumulated surplus		(70.9	)	(c)
Accumulated other comprehensive loss		(0.7	)	(c)
Treasury stock-at cost		-
Total stockholders’ equity		(73.3	)
Total liabilities, redeemable noncontrolling interests and equity	$	868.2

9

As further described below, the following table reflects the pro forma adjustments for the six months ended December 31, 2016 to record the Younique Acquisition, including (i) reclassification of Younique balances to align with Coty’s accounting classifications, (ii) adjustments to record the acquisition accounting, and (iii) other adjustments:

					Acquisition								Younique Pro
	Reclassification				Accounting				Other				Forma
	Adjustments				Adjustments				Adjustments				Adjustments
Net revenues	$	-			$	-			$	-			$	-
Cost of sales		4.6		(g)		-				-				4.6
Gross profit		(4.6	)			-				-				(4.6	)
Selling, general and administrative expenses		(5.4	)	(g), (h), (i), (j)		5.5		(k)		-				0.1
Amortization expense		0.2		(i)		13.5		(l)		-				13.7
Restructuring costs		-				-				-				-
Acquisition-related costs		0.8		(j)		(1.5	)	(m)		-				(0.7	)
Asset impairment charges		-				-				-				-
Gain on sale of asset		-				-				-				-
Operating income		(0.2	)			(17.5	)			-				(17.7	)
Interest expense, net		4.2		(h)		6.2		(n)		-				10.4
Loss on early extinguishment of debt		-				-				-				-
Other expense (income), net		(4.4	)	(h)		-				-				(4.4	)
Income before income taxes		-				(23.7	)			-				(23.7	)
(Benefit) provision for income taxes		-				(9.0	)	(p)		9.6		(p)		0.6
Net income		-				(14.7	)			(9.6	)			(24.3	)
Net income attributable to noncontrolling interests		-				-				-				-
Net income attributable to redeemable noncontrolling interests		-				0.2		(o)		-				0.2
Net income attributable to Coty Inc.	$	-			$	(14.9	)		$	(9.6	)		$	(24.5	)

As further described below, the following table reflects the pro forma adjustments for the fiscal year ended June 30, 2016 to record the Younique Acquisition, including (i) reclassification of Younique balances to align with Coty’s accounting classifications, (ii) adjustments to record the acquisition accounting, and (iii) other adjustments:

	Reclassification Adjustments				Acquisition Accounting Adjustments				Other Adjustments				Younique Pro Forma Adjustments
Net revenues	$	-			$	-			$	-			$	-
Cost of sales		3.9		(g)		-				-				3.9
Gross profit		(3.9	)			-				-				(3.9	)
Selling, general and administrative expenses		(3.3	)	(g), (h), (i)		11.0		(k)		-				7.7
Amortization expense		0.1		(i)		27.1		(l)		-				27.2
Restructuring costs		-				-				-				-
Acquisition-related costs		-				-				-				-
Asset impairment charges		-				-				-				-
Gain on sale of asset		(0.1	)			-				-				(0.1	)
Operating income		(0.6	)			(38.1	)			-				(38.7	)
Interest expense, net		3.5		(h)		12.4		(n)		-				15.9
Loss on early extinguishment of debt		-				-				-				-
Other expense (income), net		(4.1	)	(h)		-				-				(4.1	)
Income before income taxes		-				(50.5	)			-				(50.5	)
(Benefit) provision for income taxes		-				(19.2	)	(p)		51.3		(p)		32.2
Net income		-				(31.3	)			(51.3	)			(82.6	)
Net income attributable to noncontrolling interests		-				-				-				-
Net income attributable to redeemable noncontrolling interests		-				20.9		(o)		-				20.9
Net income attributable to Coty Inc.	$	-			$	(52.2	)		$	(51.3	)		$	(103.5	)

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(a)	Adjustment to record inventory at its preliminary estimated fair value.
(b)	Reflects the recognition of $521.4 million of goodwill, $316.6 million of finite-lived intangible assets and the recognition of $55.0 million of software acquired related to a social media sales interface. The estimated fair value of finite-lived intangible assets acquired represents an increase over Younique’s historical finite-lived intangible assets relating to Younique at February 1, 2017. The preliminary estimated fair value allocated to finite-lived intangible assets consists primarily of a trademark, customer relationships and product formulations. The actual adjustments may differ materially based on the final determination of fair value and are subject to change. Management relied on methods under the income approach—specifically the relief-from royalty method for the trademark and multi-period excess earnings method for customer relationships. For product formulations, management utilized the replacement cost method under the cost approach. For the software, Coty utilized the replacement cost method under the cost approach.
(c)	Reflects the elimination of Younique’s historical intangible assets and historical members’ equity in connection with the Younique Acquisition.
(d)	Represents the recognition of the redeemable noncontrolling interest at fair value related to the 40% membership interest owned by the noncontrolling shareholders.
(e)	Represents deferred tax assets and liabilities that were recognized for differences between the book and tax basis for the assets and liabilities on Younique’s consolidated balance sheet as such attributes flows through the limited liability company structure to Coty. The deferred tax assets and liabilities represent the tax effect of the difference between the estimated assigned fair value of the assets/liabilities and the tax basis of such assets/liabilities. The estimate was determined by multiplying the difference in the tax basis of the respective asset/liability over the book value by a blended statutory tax rate estimate of 38%. The blended statutory tax rate is the weighted average of the statutory tax rates, based on the fair market values of the acquired assets and the jurisdictions in which the acquired assets are located. This rate may change as Coty performs a complete tax analysis. In addition, the actual deferred tax liabilities may differ materially based on changes to the valuation allowance on the combined business which is not included for the purposes of these pro forma financial statements.
(f)	Reflects assumed funds used which included an estimated $116.3 million of cash and the estimated incremental $500.0 million credit facility drawn in connection with the Younique Acquisition. Reflects $5.2 million of Younique’s acquisition-related costs that were not incurred as of December 31, 2016 and were incurred at the closing of the Younique Acquisition through an adjustment to “Accrued expenses and other current liabilities.”
(g)	Reflects reclassification of expenses related to conventions and events from “Selling, general and administrative expenses” to “Cost of sales.”
(h)	Reflects the reclassification of foreign currency loss from “Other expense (income), net” to “Selling, general and administrative expenses” and “Interest expense, net” to conform with Coty’s accounting policy.
(i)	Reflects conforming presentation of amortization expense of intangible assets from “Selling, general and administrative expenses” to “Amortization expense.”
(j)	Reflects conforming presentation of acquisition-related costs from “Selling, general and administrative expenses” to “Acquisition-related costs.”
(k)	Represents the additional depreciation of property and equipment, net resulting from the Younique Acquisition. Coty depreciates the step-up in fair value of the software acquired over 5 years.
(l)	Represents the additional straight-line amortization of the trademark, customer relationships, and product formulations resulting from the Younique Acquisition. Coty assumed a 20 year useful life for the trademark, 8 to 14 year useful lives for customer relationships, and 5 year useful lives for product formulations. The estimated useful lives were determined based on a review of the time period over which economic benefit is estimated to be generated as well as additional factors. Factors considered include contractual life, the period over which a majority of cash flow is expected to be generated, and/or management’s view based on historical experience with similar assets. Reflective of the preliminary purchase price adjustment, for every 5% increase to the fair value of finite-lived intangibles which is an approximate increase of $15.8 million in the fair value of finite-lived intangibles, amortization expense would increase by $0.7 million and $1.4 million for the six months ended December 31, 2016 and the year ended June 30, 2016, respectively assuming useful life ranges as estimated above.
(m)	Reflects the reversal of acquisition-related costs, which primarily include legal, accounting, valuation, other professional or consulting fees, and other internal costs which can include compensation related expenses for dedicated internal resources, as these costs were non-recurring and relate specifically to the Younique Acquisition. Coty incurred $0.7 million of acquisition-related costs in the six months ended December 31, 2016. Younique incurred $0.8 million of acquisition-related costs in the six months ended December 31, 2016.

11

(n)	Reflects the incremental interest expense on $500.0 million credit facility drawn in connection with the Younique Acquisition. The interest rate used to compute the incremental interest expense was 2.48% assuming LIBOR rate of 0.98% plus an adjustment of 150 basis points.
(o)	Reflects net income attributable to redeemable noncontrolling interest related to the 40% membership interest owned by the noncontrolling shareholders.
(p)	For purposes of these unaudited pro forma condensed combined statements of operations, Coty used a blended statutory income tax rate estimate of 38% for the six months ended December 31, 2016 and the year ended June 30, 2016. The blended statutory tax rate is the weighted average of the statutory tax rates, based on the fair market values of the acquired assets and the jurisdictions in which the acquired assets are located. Additionally, an adjustment was made to record the income tax applicable to the flow through net income from the LLC on Coty’s federal tax returns. This rate may change as Coty performs a complete tax analysis.

Note 4—P&G Beauty Business Pre-Merger Adjustments

The following table reflects adjustments for the three months ended September 30, 2016 to present the adjusted P&G Beauty Business before the Merger including (i) the Dolce & Gabbana and Christina Aguilera fragrance licenses (together, the “Excluded Brands”), the Rochas, Laura Biagiotti, Naomi Campbell and Giorgio Beverly Hills brands that were divested by P&G, Puma, which was discontinued by P&G (the divested and discontinued brands together, the “Divested Brands”) and certain other assets and liabilities that were transferred as part of the transactions contemplated by the Transaction Agreement (the “Transactions”) and (ii) the recapitalization of the P&G Beauty Business:

	Carve-Out of Excluded Brands and Divested Brands (a)			Recapitalization				Total P&G Beauty Business Pre-Merger Adjustments
Net revenues	$	(128.0	)	$	-			$	(128.0	)
Cost of sales		(53.0	)		-				(53.0	)
Gross profit		(75.0	)		-				(75.0	)
Selling, general and administrative expenses		(41.0	)		-				(41.0	)
Amortization expense		-			-				-
Restructuring costs		-			-				-
Acquisition-related costs		-			-				-
Asset impairment charges		-			-				-
Gain on sale of asset		-			-				-
Operating income (loss)		(34.0	)		-				(34.0	)
Interest expense, net		-			5.7		(e)		5.7
Loss on early extinguishment of debt		-			-				-
Other expense (income), net		-			-				-
Income (loss) before income taxes		(34.0	)		(5.7	)			(39.7	)
(Benefit) provision for income taxes		(7.0	)		(1.3)		(f)		(8.3	)
Net income		(27.0	)		(4.4	)			(31.4	)
Net income attributable to noncontrolling interests		-			-				-
Net income attributable to redeemable noncontrolling interests		-			-				-
Net income attributable to Coty Inc.	$	(27.0	)	$	(4.4	)		$	(31.4	)

The following table reflects adjustments for the year ended June 30, 2016 to present the adjusted P&G Beauty Business before the Merger including (i) the Excluded Brands, the Divested Brands and certain other assets and liabilities that were transferred as part of the Merger and (ii) the recapitalization of the P&G Beauty Business:

12

	Carve-Out of Excluded Brands and Divested Brands (a)			Other Excluded Brand and Divested Brand Adjustments				Recapitalization				Total P&G Beauty Brands Pre-Merger Adjustments
Net revenues	$	(506.0	)	$	-			$	-			$	(506.0	)
Cost of sales		(156.0	)		-				-				(156.0	)
Gross profit		(350.0	)		-				-				(350.0	)
Selling, general and administrative expenses		(236.0	)		(83.0	)	(b)		-				(319.0	)
Amortization expense		-			-				-				-
Restructuring costs		-			-				-				-
Acquisition-related costs		-			-				-				-
Asset impairment charges		-			(48.0	)	(c)		-				(48.0	)
Gain on sale of asset		-			-				-				-
Operating income (loss)		(114.0	)		131.0				-				17.0
Interest expense, net		-			-				43.3		(e)		43.3
Loss on early extinguishment of debt		-			-				-				-
Other expense (income), net		-			8.0		(d)		-				8.0
Income (loss) before income taxes		(114.0	)		123.0				(43.3	)			(34.3	)
(Benefit) provision for income taxes		(23.0	)		6.0		(c)		(10.0	)	(f)		(20.0	)
					(3.0	)	(d)
					10.0		(b)
Net income		(91.0	)		110.0				(33.3	)			(14.3	)
Net income attributable to noncontrolling interests		-			-				-				-
Net income attributable to redeemable noncontrolling interests		-			-				-				-
Net income attributable to Coty Inc.	$	(91.0	)	$	110.0			$	(33.3	)		$	(14.3	)

(a)	The historical financial information of P&G Beauty Business includes results from the Excluded Brands and the Divested Brands. As such, P&G Beauty Business’ historical balances are adjusted to reflect these brands not being transferred with Galleria. Coty’s management believes that these adjustments are factually supportable as (i) the historical financial information of the Excluded Brands and the Divested Brands is derived from P&G’s management reporting systems; (ii) the revenues of the Excluded Brands and the Divested Brands do not include any allocations; and (iii) the expenses of the Excluded Brands and the Divested Brands do not include any allocations, and only direct administrative personnel costs and expenses related to the Excluded Brands and the Divested Brands are excluded from the pro forma statements of operations.
(b)	Reflects adjustment to remove one-time termination fees from P&G Beauty Business’ historical statement of operations for the year ended June 30, 2016 as the fees relate to the termination and sale of the Dolce & Gabbana fragrance license, which is excluded from the Transactions. The tax impact of this expense was a reduction of $10.0 million.
(c)	Reflects reversal of P&G Beauty Business one -time, non-cash, before-tax impairment charge of $48.0 million in the fiscal year ended June 30, 2016 in order to reflect the Dolce & Gabbana license intangible asset at its updated value estimate of net realizable value, reflecting the impact of the decision to exclude the Dolce & Gabbana license from the Transactions. The tax impact of this impairment was a reduction of $6.0 million.
(d)	Reflects adjustment to remove gain on sale of assets from P&G Beauty Business’ historical statement of operations for the year ended June 30, 2016 as the gain relates to the sale of brands not transferring with Galleria Company. The tax expense associated with this gain on sales of assets was $3.0 million for the year ended June 30, 2016.
(e)	Reflects the incremental interest expense as a result of debt assumed of $1.9 billion from Galleria Company. The weighted average interest rate used to compute the incremental interest expense was 3.08% assuming LIBOR rates ranging from 0.750% to 0.875% plus an adjustment of 150 to 300 basis points for each term loan as described in the credit agreement.
(f)	Coty used a blended statutory income tax rate estimate of 23% for the three months September 30, 2016 and the year ended June 30, 2016 for both the Excluded Brands and Divested Brands. The blended statutory tax rate is the weighted average of the statutory tax rates, based on the fair market values of the acquired assets and the jurisdictions in which the acquired assets are located.

13

Note 5—P&G Beauty Business Pro Forma Adjustments

As further described below, the following table reflects the pro forma adjustments for the three months ended September 30, 2016 to record the Merger, including (i) reclassification of P&G Beauty Business balances to align with Coty’s accounting classifications and (ii) adjustments to record the acquisition accounting:

	Reclassification Adjustments				Acquisition Accounting Adjustments				Total P&G Beauty Business Pro Forma Merger Adjustments
Net revenues	$	-			$	-			$	-
Cost of sales		(14.8	)	(a)		(6.0	)	(c)		(29.7	)
						(8.9	)	(d)
Gross profit		14.8				14.9				29.7
Selling, general and administrative expenses		(3.5	)	(a)		(63.5	)	(d)		(73.3	)
		(6.0	)	(b)		(0.3	)	(c)
Amortization expense		6.0		(b)		64.0		(e)		70.0
Restructuring costs		18.3		(a)		-				18.3
Acquisition-related costs		-				(79.4	)	(d)		(79.4	)
Asset impairment charges		-				-				-
Gain on sale of asset		-				-				-
Operating income		-				94.1				94.1
Interest expense, net		-				(4.4	)	(d)		(4.4	)
Loss on early extinguishment of debt		-				-				-
Other expense (income), net		-				(29.3	)	(d)		(29.3	)
Income before income taxes		-				127.8				127.8
(Benefit) provision for income taxes		-				29.4		(f)		29.4
Net income		-				98.4				98.4
Net income attributable to noncontrolling interests		-				-				-
Net income attributable to redeemable noncontrolling interests		-				-				-
Net income attributable to Coty Inc.	$	-			$	98.4			$	98.4

As further described below, the following table reflects the pro forma adjustments for the fiscal year ended June 30, 2016 to record the Merger, including (i) reclassification of P&G Beauty Business balances to align with Coty’s accounting classifications and (ii) adjustments to record the acquisition accounting:

	Reclassification Adjustments				Acquisition Accounting Adjustments				Total P&G Beauty Business Pro Forma Merger Adjustments
Net revenues	$	-			$	-			$	-
Cost of sales		(25.0	)	(a)		11.2		(c)		(24.2	)
						(10.4	)	(d)
Gross profit		25.0				(0.8	)			24.2
Selling, general and administrative expenses		(25.0	)	(a)		(43.5	)	(d)		(94.8	)
		(27.0	)	(b)		0.7		(c)
Amortization expense		27.0		(b)		252.8		(e)		279.8
Restructuring costs		50.0		(a)		-				50.0
Acquisition-related costs		-				(163.8	)	(d)		(163.8	)
Asset impairment charges		-				-				-
Gain on sale of asset		-				-				-
Operating income		-				(47.0	)			(47.0	)
Interest expense, net		-				(13.0	)	(d)		(13.0	)
Loss on early extinguishment of debt		-				-				-
Other expense (income), net		-				-				-
Income before income taxes		-				(34.0	)			(34.0	)
(Benefit) provision for income taxes		-				(7.8	)	(f)		(7.8	)
Net income		-				(26.2	)			(26.2	)
Net income attributable to noncontrolling interests		-				-				-
Net income attributable to redeemable noncontrolling interests		-				-				-
Net income attributable to Coty Inc.	$	-			$	(26.2	)		$	(26.2	)

(a)	Reflects conforming presentation of restructuring costs from “Cost of sales” and “Selling, general and administrative expenses” to “Restructuring costs.”
(b)	Reflects conforming presentation of amortization expense of intangible assets from “Selling, general and administrative expenses” to “Amortization expense.”

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(c)	Represents the additional depreciation adjustment of acquired “Property and equipment” resulting from the increase in fair value of these assets from the Merger. As different categories of acquired property and equipment become fully depreciated over different useful lives, a fair value and remaining useful life were assessed for each asset class. Coty grouped pools of assets with similar useful lives, and divided the aggregated fair value by the remaining useful life for that pool of assets to derive the straight-line depreciation expenses. Coty assumed a 13-year weighted-average useful life. For each $20.0 million fair value adjustment increase to Property and equipment, assuming a weighted-average useful life of 13 years, depreciation expense would increase by approximately $0.4 million and $1.5 million for the three months ended September 30, 2016 and the year ended June 30, 2016 using the straight-line method of depreciation.
(d)	Reflects the reversal of acquisition-related costs, which primarily include legal, accounting, valuation, other professional or consulting fees, and other internal costs which can include compensation related expenses for dedicated internal resources, as these costs are non-recurring and relate specifically to the Transactions. Coty incurred $79.4 million and $163.8 million of acquisition-related costs in the three months ended September 30, 2016 and the year ended June 30, 2016, respectively. P&G Beauty Business incurred $106.1 million and $66.9 million of acquisition-related costs in the three months ended September 30, 2016 and the year ended June 30, 2016, of which $8.9 million and $10.4 million is reflected in “Cost of sales,” $63.5 million and $43.5 million is reflected in “Selling, general and administrative expenses,” $4.4 million and $13.0 million is reflected in “Interest expense, net” and $29.3 million and $0 is reflected in “Other expense (income), net” in the three months ended September 30, 2016, and the year ended June 30, 2016, respectively.
(e)	Represents the additional straight-line amortization of trademarks, customer relationships, license agreements, product formulations, technology, and off-market contracts resulting from the Merger. Coty assumed ten to 30 year useful lives for trademarks, 1.5 to 17 year useful lives for customer relationships, ten to 30 year useful lives for license agreements, five to 29 year useful lives for product formulations, a five year useful life for technology, and a ten year useful life for off-market contracts. The estimated useful lives were determined based on a review of the time period over which economic benefit is estimated to be generated as well as additional factors. Factors considered include contractual life, the period over which a majority of cash flow is expected to be generated, and/or management’s view based on historical experience with similar assets. Reflective of the preliminary purchase price adjustment, for every 5% increase to the fair value of finite-lived intangibles which is an approximate increase of $228.2 million in the fair value of finite-lived intangibles, amortization expense would increase by $3.5 million and $14.0 million for the three months ended September 30, 2016 and year ended June 30, 2016, respectively assuming useful life ranges as estimated above.
(f)	For purposes of these unaudited pro forma condensed combined statements of operations, Coty used a blended statutory income tax rate estimate of 23% for the three months ended September 30, 2016 and the year ended June 30, 2016. The blended statutory tax rate is the weighted average of the statutory tax rates, based on the fair market values of the acquired assets and the jurisdictions in which the acquired assets are located. This rate may change as Coty performs a complete tax analysis.

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