RESTRUCTURING COSTS

Restructuring costs for the years ended June 30, 2014, 2013 and 2012 are presented below:



	Year Ended June 30,
	2014		2013		2012
Organizational Redesign	$	13.0	$	—	$	—
China Optimization	9.8		—		—
Productivity Program	14.2		25.3		—
Other restructuring programs ^(a)	0.3		4.1		11.1
Total	$	37.3	$	29.4	$	11.1

^(a) Includes Service Agreement Termination, Acquisition Integration Program and the 2009 Cost Savings Program.

Organizational Redesign

During the fourth quarter of fiscal 2014, the Company’s Board of Directors approved a program associated with a new organizational structure (“Organizational Redesign”) that aims to reinforce the Company’s growth path and strengthen its position as a global leader in beauty. The Company anticipates that the Organizational Redesign will result in pre-tax restructuring and related costs of $145.0 to $180.0, all of which will result in cash payments. The Company anticipates substantial completion of all project activities by the end of fiscal 2017, with the remaining costs primarily charged to Corporate.

The Company incurred $13.0 of restructuring charges during fiscal 2014 in the Corporate segment.

The related liability balance and activity for the restructuring costs are presented below:



	Severance and Employee Benefits			Other Exit Costs			Total Program Costs
Initial provision	$	9.4		$	3.6		$	13.0
Payments	(0.3		)	(0.4		)	(0.7		)
Payables	—			(1.3		)	(1.3		)
Balance—June 30, 2014	$	9.1		$	1.9		$	11.0

The Company currently estimates that the total remaining accrual of $11.0 will result in cash expenditures of $9.1 and $1.9 in fiscal 2015 and 2016, respectively.

China Optimization

During the fourth quarter of fiscal 2014, the Company entered into a distribution agreement with a third-party distributor for certain of the Company’s brands sold through the mass distribution channel in China and announced the discontinuation of the Company’s TJoy brand. In conjunction with these events, the Company commenced implementation of restructuring and product rationalization activities of the Company's mass business in China (“China Optimization”) that are expected to generate operating efficiencies. The China Optimization pre-tax restructuring costs and related charges are expected to be approximately $35.0 to $45.0, of which $35.9 was incurred as of June 30, 2014. Of the $35.9, $23.0, $10.3, and $2.6 were recorded in the Skin and Body Care, Corporate and Color Cosmetics segments, respectively. The Company expects to complete all program activities during fiscal 2015, with the remaining costs primarily charged to Corporate.

The related liability balance and activity for the restructuring costs are presented below:



	Restructuring Costs						Related Charges
	Severance and Employee Benefits		Other Exit Costs		Total Restructuring Costs		Product Returns		Inventory Write-offs		Other Charges		Total Restructuring and Related Charges
Initial provision	$	9.6	$	0.2	$	9.8	$	15.4	$	8.5	$	2.2	$	35.9

Product returns are recorded as a reduction to gross sales, inventory write-offs as cost of sales and other charges as Selling, general and administrative in the Company’s Consolidated Statements of Operations for the year ended June 30, 2014. Additionally, the Company recorded $16.0 of income tax benefit associated with the TJoy brand discontinuation. As a result of China Optimization, the Company classified $6.8 of land and building as assets held for sale within Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheets as of June 30, 2014.

The Company currently estimates that the total remaining restructuring accrual of $9.8 will result in cash expenditures in fiscal 2015.

Productivity Program

During the fourth quarter of fiscal 2013, the Company’s Board of Directors approved a number of business integration and productivity initiatives aimed at enhancing long-term operating margins (the “Productivity Program”). Such activities primarily relate to integration of supply chain and selling activities within the Skin & Body Care segment, as well as certain commercial organization re-design activities, primarily in Europe and optimization of selected administrative support functions.

The Company anticipates completing the implementation of all project activities by the end of fiscal 2016. The total charge associated with the Productivity Program is expected to be approximately $70.0 to $75.0, of which $39.5 and $25.3 was incurred as of June 30, 2014 and June 30, 2013, respectively, in Corporate.

The related liability balance and activity for the restructuring costs are presented below:



	Severance and Employee Benefits			Third-Party Contract Terminations			Other Exit Costs			Total Program Costs
Initial provision	$	24.7		$	0.5		$	0.1		$	25.3
Payments	(2.9		)	(0.1		)	—			(3.0		)
Effect of exchange rates	(0.1		)	—			—			(0.1		)
Balance—July 1, 2013	21.7			0.4			0.1			22.2
Restructuring charges	13.7			0.3			2.1			16.1
Payments	(18.0		)	(0.5		)	(2.0		)	(20.5		)
Changes in estimates ^(a)	(1.9		)	—			—			(1.9		)
Effect of exchange rates	0.3			—			—			0.3
Balance—June 30, 2014	$	15.8		$	0.2		$	0.2		$	16.2

^(a) The decrease in severance and employee benefits is primarily attributable to employees who have voluntarily left positions that were later eliminated.

The Company currently estimates that the total remaining accrual of $16.2 will result in cash expenditures of approximately $12.8 and $3.4 in fiscal 2015 and 2016, respectively.

Other Restructuring Programs

During fiscal 2013 and 2012, the Company maintained several restructuring initiatives aimed at integrating acquired companies and reducing costs. The related liability was $1.2 and $6.6 and related costs were $0.3 and $4.1 as of June 30, 2014 and 2013, respectively. The Company paid $4.8 and $9.7 in fiscal 2014 and 2013 related to its Other Restructuring Programs and changed its estimates for other restructuring charges by $(0.9) and $0.2 in fiscal 2014 and 2013. The Company currently estimated that the total remaining accrual of $1.2 will result in cash expenditures in fiscal 2015.