JOINT VENTURE ARRANGEMENTS

12 Months Ended

Jun. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Joint Venture Arrangements

JOINT VENTURE ARRANGEMENTS

United Arab Emirates

On January 1, 2014, a shareholders agreement (“U.A.E. Shareholders Agreement”) entered into by the Company through a majority-owned subsidiary and two third parties to create a new subsidiary (“U.A.E. JV”) in the U.A.E. became effective. In connection with the capitalization of the JV, the Company contributed 18.0 million AED ($4.9) in cash and the third parties contributed 6.0 million AED ($1.6). The U.A.E. JV 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 will also guarantee up to 18.0 million AED ($4.9) in bank financing to support initial operation requirements if required and as a result of this additional financing requirement, the U.A.E. JV was determined to be a VIE. The Company 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 the U.A.E. JV in its consolidated financial statements.

The Company is required under the U.A.E. Shareholders Agreement to purchase all of the shares held by one of the third parties equal to 25% of the outstanding shares of the U.A.E. JV at the termination of the agreement. The Company has determined such shares to be a mandatorily redeemable financial instrument and is recorded as a liability in Other noncurrent liabilities on the Consolidated Balance Sheet. The liability is calculated based upon a pre-determined formula in accordance with the shareholders agreement and was $3.7 at June 30, 2014.

The assets of the JV are restricted in that they are not available for general business use outside the context of the U.A.E. JV and the creditors (or beneficial interest holders) do not have recourse to the Company or to its other assets. The U.A.E. JV has total assets and total liabilities of $18.0 and $10.5 as of June 30, 2014, respectively.

Brazil

On April 4, 2013, the Company entered into agreements with a third party to establish an entity that exclusively markets and sells beauty products in retail channels in Brazil. The third party provided 4.9 million Brazilian reais ($2.2) of funding for 49% of the shares of the entity during the year ended June 30, 2014. The funding is classified as Other noncurrent liabilities as of June 30, 2014 since the Company is obligated to repay the funding to the third party on April 4, 2023, which is the maximum contract term. The liability is calculated as the combination of contributed capital and the pro-rata share of income less dividends paid to the third party and was $1.8 at June 30, 2014. The third party is entitled to its proportionate share of the earnings of the Brazil entity, payable annually for the expected life of the contract.