NONCONTROLLING INTERESTS AND REDEEMABLE NONCONTROLLING INTERESTS

Noncontrolling Interests- On December 21, 2011, the Company purchased the remaining outstanding common stock of its majority-owned subsidiary in Greece from its noncontrolling interest partner for €6.1 million ($8.0). Upon acquisition of the additional ownership interest, the remaining noncontrolling interest was eliminated and the difference between the purchase price paid and the carrying value of the noncontrolling interest acquired was recognized as a reduction of Additional paid-in capital amounting to $6.6 in the Consolidated Balance Sheet as of June 30, 2012. As part of the purchase, the Company also granted the former noncontrolling interest partner a call option to buy back all of the shares it sold to the Company for a purchase price that approximates its fair value. Exercise of the call option is subject to the Company’s consent following a legal and financial diligence review by an independent accountant of the former noncontrolling interest’s financial position and business viability. The call option is exercisable for a period of five years and is potentially renewable.

The Company has the right to purchase the noncontrolling interests (“NCI”) in certain subsidiaries from the NCI holders (each such right, a “Call right”) at certain points in time. On August 23, 2013, the Company exercised its Call right for 7% of a certain Hong Kong subsidiary from the NCI holder, and it consummated the purchase on January 10, 2014 for $4.4. The $4.4 is recorded as a reduction to Additional paid-in capital (“APIC”) and NCI of $4.2 and $0.2, respectively. The effect of the change in the ownership percentage of the NCI on Net income attributable to Coty Inc. is presented below:



	Year Ended June 30,
	2014			2013		2012

Net (loss) income attributable to Coty Inc.	$	(97.4	)	$	168.0	$	(324.4	)

Decrease in APIC for purchase of Greece NCI	—			—		(6.6		)

Decrease in APIC for purchase of Hong Kong NCI	(4.2		)	—		—

Net (loss) income attributable to Coty Inc. and transfers from NCI	$	(101.6	)	$	168.0	$	(331.0	)

Redeemable Noncontrolling Interests-The redeemable noncontrolling interests consist of a 40.0% interest in a consolidated subsidiary in the United Arab Emirates and a 45.0% interest in a consolidated subsidiary in Hong Kong.

In addition to the Call right feature, the noncontrolling interest holders of the Company’s consolidated foreign subsidiaries in the United Arab Emirates (“Middle East”) and Hong Kong have the right to sell the noncontrolling interests to the Company at certain points in time (each such right, a “Put right”). The amount at which the Put right and Call right can be exercised is based on a formula prescribed by the stockholder agreements as summarized in the table below, multiplied by the noncontrolling interest holder’s percentage of stock-holding in the Company. Given the provision of the Put right, the entire noncontrolling interests are redeemable outside of the Company’s control and are recorded in the Consolidated Balance Sheets at the estimated redemption value. The Company adjusts the redeemable noncontrolling interests to the redemption values at the end of each reporting period with changes recognized as adjustments to APIC.



	Middle East	Hong Kong
Percentage of redeemable noncontrolling interest	40%	45%
Earliest exercise date(s)	7.0% in July 2014^(a);	June 2016
	remaining 33.0% or
	entire 40.0% in July 2029
Formula of redemption value^(b)	3-year average	3-year average
	of EBIT^(c) * 6	of EBIT^(c) * 8 plus
		retained earnings less
		liabilities^(d)

^(a)

The Company exercised its Call right on September 20, 2013 to purchase 7% of the Middle East subsidiary. The Company and the NCI holder amended the Shareholders' Agreement so that effective July 1, 2014, the Company will record its purchase of the additional 7% interest in the Coty M.E. subsidiary as of July 1, 2014. The Company expects to consummate the purchase during the first quarter of fiscal 2015 for a purchase price of $16.2. The Company also has the ability to exercise the Call right for the remaining noncontrolling interest of 33% on July 1, 2028, with such transaction to close on July 1, 2029.


^(b)	The redemption value formula related to Hong Kong is subject to a 110% of three year’s averaged net sales cap and net asset value minimum.


^(c)	EBIT is defined in the respective stockholder agreements as earnings before interest and income taxes.


^(d)	Liabilities are defined in the stockholder agreement as all financial indebtedness except bank overdraft required for normalized trading working capital.