GOODWILL AND OTHER INTANGIBLE ASSETS, NET

12 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

Goodwill

The Company tests goodwill and indefinite lived intangible assets for impairment at least annually as of May 1, or more frequently, if certain events or circumstances warrant. There were no impairments of goodwill at the Company’s reporting units in fiscal 2016 and 2015.

In the first half of fiscal 2014, the Company anticipated realizing significant improvements in cash flows in the China operations of its Skin & Body Care reporting unit beginning in the third quarter of fiscal 2014, due to the reorganization of the management team and distribution network in China and the launch of new product offerings. In the course of evaluating the results for the third quarter of fiscal 2014, the Company noted the net cash outflows associated with the TJoy mass channel business in China were significantly in excess of previous expectations and management concluded that the results in China represented an indicator of impairment that warranted an interim impairment test for goodwill and certain other intangible assets in the Skin & Body Care reporting unit. As a result, in fiscal 2014 the Company recognized the impairment of $316.9, of which $256.4 related to goodwill and $60.5 to other long lived assets, as described below and recorded in Asset impairment charges in the Consolidated Statements of Operations.

Goodwill as of June 30, 2016 and 2015 is presented below:



	Fragrances		Color Cosmetics			Skin & Body Care			Brazil Acquisition		Total
Gross balance at June 30, 2015	$	720.8	$	677.3		$	773.4		$	—	$	2,171.5
Accumulated impairments	—		—			(640.8		)	—		(640.8		)
Net balance at June 30, 2015	$	720.8	$	677.3		$	132.6		$	—	$	1,530.7

Changes during the year ended June 30, 2016:
Acquisitions ^{(a) (b)}	139.7		106.7			79.7			241.3		567.4
Foreign currency translation	27.6		16.5			17.8			56.9		118.8
Disposition	—		(4.2		)	—			—		(4.2		)

Gross balance at June 30, 2016	$	888.1	$	796.3		$	870.9		$	298.2	$	2,853.5
Accumulated impairments	—		—			(640.8		)	—		(640.8		)
Net balance at June 30, 2016	$	888.1	$	796.3		$	230.1		$	298.2	$	2,212.7

^(a)During the year ended June 30, 2016, the Company completed the Brazil Acquisition. This transaction was accounted for as a business combination (See Note 4).

^(b) During fiscal 2016, the Company acquired 100% of the issued share capital of Beamly Limited (the “digital marketing company”) for a purchase price of $17.9 in a transaction accounted for as a business combination, which resulted in the recognition of $13.7 of goodwill.

During fiscal 2016, the Company sold assets relating to the Cutex brand for a total disposal price of $29.2. The Company allocated $4.2 of goodwill to the brand as part of the sale. The Company recorded a gain of $24.8 which has been reflected in Gain on sale of assets in the Consolidated Statements of Operations for the fiscal year ended June 30, 2016.

Other Intangible Assets, net

Other intangible assets, net as of June 30, 2016 and 2015 are presented below:



	June 30, 2016		June 30, 2015
Indefinite-lived other intangible assets	$	1,417.0	$	1,274.0
Finite-lived other intangible assets, net	633.1		639.6
Total Other intangible assets, net	$	2,050.1	$	1,913.6

The changes in the carrying amount of indefinite-lived other intangible assets are presented below:



	Fragrances			Color Cosmetics			Skin & Body Care			Brazil Acquisition		Total
Gross balance at June 30, 2015	$	20.7		$	997.2		$	453.9		$	—	$	1,471.8
Accumulated impairments	—			(9.2		)	(188.6		)	—		(197.8		)
Balance—June 30, 2015	20.7			988.0			265.3			—		1,274.0

Changes during the period ended June 30, 2016
Acquisitions ^(a)	—			—			—			147.1		147.1
Foreign currency translation	(0.2		)	(3.5		)	(3.5		)	3.1		(4.1		)

Gross balance at June 30, 2016	20.5			993.7			450.4			150.2		1,614.8
Accumulated impairments	—			(9.2		)	(188.6		)	—		(197.8		)
Net balance at June 30, 2016	$	20.5		$	984.5		$	261.8		$	150.2	$	1,417.0

^(a) During the year ended June 30, 2016, the Company completed the Brazil Acquisition. This transaction was accounted for as a business combination (See Note 4).

Intangible assets subject to amortization are presented below:



	Cost		Accumulated Amortization			Accumulated Impairment			Net
June 30, 2015
License agreements	$	800.7	$	(501.1	)	$	—		$	299.6
Customer relationships	559.1		(232.8		)	—			326.3
Trademarks	119.1		(108.2		)	—			10.9
Product formulations	32.7		(29.9		)	—			2.8
Total	$	1,511.6	$	(872.0	)	$	—		$	639.6
June 30, 2016
License agreements	$	798.3	$	(532.2	)	$	—		$	266.1
Customer relationships ^(a)	611.7		(274.2		)	(5.5		)	332.0
Trademarks ^(a)	128.3		(108.6		)	—			19.7
Product formulations ^(a)	48.0		(32.7		)	—			15.3
Total	$	1,586.3	$	(947.7	)	$	(5.5	)	$	633.1

^(a)Additions to Customer relationships, Trademarks, and Product formulations of $44.6, $10.3 and $12.8, respectively, were recorded in connection with the Brazil Acquisition (see Note 4).

In conjunction with the Company’s analysis of its go-to-market strategy in Southeast Asia during the first quarter of fiscal 2016, the Company evaluated future cash flows for this asset group and determined that the carrying value exceeded the undiscounted cash flows. As a result, the Company evaluated the fair value of the long-lived assets in the asset group, through an analysis of discounted future cash flows, and determined that the customer relationships were fully impaired and thus recorded $5.5 of Asset impairment charges in the Consolidated Statements of Operations for the fiscal year ended June 30, 2016.

Intangible assets subject to amortization are amortized principally using the straight-line method and have the following weighted-average remaining lives:



Description
License agreements	9.5 years
Customer relationships	9.6 years
Trademarks	10.8 years
Product formulations	2.5 years

As of June 30, 2016, the remaining weighted-average life of all intangible assets subject to amortization is 9.4 years.

The estimated aggregate amortization expense for each of the following fiscal years ending June 30 is presented below:



2017	$	87.4
2018	86.9
2019	83.0
2020	77.6
2021	76.6

License Agreements

The Company records assets for license agreements (“licenses”) acquired in transactions accounted for as business combinations. These licenses provide the Company with the exclusive right to manufacture and market on a worldwide and/or regional basis, certain of the Company’s products which comprise a significant portion of the Company’s revenues. These licenses have initial terms covering various periods. Certain licenses provide for automatic extensions ranging from 3 to 10 year terms, at the Company’s discretion.

There were no licenses acquired during fiscal 2016 and 2015.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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