RESTRUCTURING COSTS

Restructuring costs for the three and nine months ended March 31, 2015 and 2014 are presented below:



	Three Months Ended March 31,						Nine Months Ended March 31,
	2015			2014			2015			2014
Organizational Redesign	$	2.9		$	—		$	55.5		$	—
China Optimization	(0.4		)	—			(0.5		)	—
Productivity Program	1.5			4.0			1.5			10.3
Other	$	(0.1	)	$	(0.1	)	$	(0.1	)	$	(0.1	)
Total	$	3.9		$	3.9		$	56.4		$	10.2

Organizational Redesign

During the fourth quarter of fiscal 2014, the Company’s Board of Directors (“the Board”) 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 $68.5 of restructuring costs as of March 31, 2015 in Corporate.

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



	Severance and Employee Benefits			Other Exit Costs			Total Program Costs
Balance—July 1, 2014	$	9.1		$	1.9		$	11.0
Restructuring charges	57.5			1.8			59.3
Payments	(18.7		)	(2.4		)	(21.1		)
Changes in estimates ^(a)	(3.8		)	—			(3.8		)
Effect of exchange rates	(5.2		)	(0.1		)	(5.3		)
Payables	—			(1.0		)	(1.0		)
Balance—March 31, 2015	$	38.9		$	0.2		$	39.1


^(a)	The decrease in severance and employee benefits is primarily attributable to the retention of employees previously accrued and voluntary resignation of employees previously accrued.

The Company currently estimates that the total remaining accrual of $39.1 will result in cash expenditures of $10.4, $24.0, $4.0, and $0.7 in fiscal 2015, 2016, 2017, and 2018 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 of the Company’s mass business in China (“China Optimization”) that is expected to generate operating efficiencies. The Company anticipates that China Optimization will result in pre-tax restructuring costs of approximately $10.0, all of which will result in cash payments. The Company incurred $9.3 of restructuring costs as of March 31, 2015 in Corporate. 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
	Severance and Employee Benefits			Other Exit Costs			Total Restructuring Costs
Balance—July 1, 2014	$	9.6		$	0.2		$	9.8
Restructuring charges	—			0.1			0.1
Payments	(8.5		)	(0.1		)	(8.6		)
Changes in estimates	(0.6		)	—			(0.6		)
Effects of exchange rates	0.2			(0.2		)	—
Balance—March 31, 2015	$	0.7		$	—		$	0.7

The Company currently estimates that the total remaining restructuring accrual of $0.7 will primarily result in cash expenditures in fiscal 2016.

In October 2014, the Company agreed to sell certain TJoy assets for cash of 86.0 million RMB ($14.1) in conjunction with China Optimization. The agreement allowed the Company to continue using the facility through the completion of the sale in January 2015. As a result the Company recognized the gain of $7.2 offset by a $1.9 estimated real estate tax expense in Selling, general and administrative expenses in the Company’s Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2015.

Additionally, during the three and nine months ended March 31, 2015, the Company recorded a change in estimate of $3.0 income and $2.7 income related to inventory obsolescence and sales returns respectively, recorded in connection with the China Optimization at June 30, 2014. These amounts are reflected in Cost of sales and Net revenues, respectively, in the Company’s Consolidated Statements of Income.

Productivity Program

During the fourth quarter of fiscal 2013, the Board 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 redesign activities, primarily in Europe and optimization of selected administrative support functions.

The Company anticipates implementing all project activities by fiscal 2016. The total charge associated with the Productivity Program is expected to be approximately $70.0 to $75.0. The Company incurred $41.0 of restructuring costs as of March 31, 2015 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
Balance—July 1, 2014	$	15.8		$	0.2		$	0.2		$	16.2
Restructuring charges	2.1			—			0.2			2.3
Payments	(7.5		)	—			(0.2		)	(7.7		)
Changes in estimates ^(a)	(0.8		)	—			—			(0.8		)
Effect of exchange rates	(1.1		)	(0.2		)	(0.1		)	(1.4		)
Balance—March 31, 2015	$	8.5		$	—		$	0.1		$	8.6


^(a)	The decrease in severance and employee benefits is attributable to lower final settlements negotiated as well as the retention of employees previously accrued.

The Company currently estimates that the total remaining accrual of $8.6 will result in cash expenditures of approximately $2.6, $5.3, and $0.7 in fiscal 2015, 2016, and 2017 respectively.