JOINT VENTURE ARRANGEMENTS

9 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Joint Venture Arrangements

JOINT VENTURE ARRANGEMENTS

On January 1, 2014, a joint venture agreement entered into by the Company through a majority-owned subsidiary and two third parties to create a new subsidiary in the United Arab Emirates (“U.A.E.”) became effective. In connection with the capitalization of the joint venture (“JV”), the Company contributed 18.0 million AED ($4.9) in cash. The JV will focus on the sale, promotion and distribution of fragrances, skin and body care and color cosmetics products in the local markets of the U.A.E. The Company is required to purchase the shares of one of the third parties at the termination of the agreement. The Company has determined such shares to be a mandatorily redeemable financial instrument to be recorded as a liability in Other noncurrent liabilities on the Condensed Consolidated Balance Sheet. The liability is calculated based upon a pre-determined formula in accordance with the SPA. At March 31, 2014, the liability was nil due to initial start-up costs included in the formula. Additionally, the Company will guarantee up to 18.0 million AED ($4.9) in bank financing to support initial operation requirements if required. The JV is consolidated by the Company as it was determined to be a VIE. The Company is considered the primary beneficiary with 49% ownership since the Company has: (a) the power to direct, supervise, and manage the activities of the VIE that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. Accordingly, the Company includes the assets and liabilities and results of operations of this JV in its consolidated financial statements.

The assets of the JV are restricted in that they are not available for general business use outside the context of the JV and the creditors (or beneficial interest holders) do not have recourse to us or to our other assets. The JV has total assets and total liabilities of $18.1 and $12.4 as of March 31, 2014, respectively.