EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost for pension plans and other post-employment benefit plans recognized in the Condensed Consolidated Statements of Operations are presented below for the three and nine months ended March 31, 2017 and 2016:



	Three Months Ended March 31,
	Pension Plans											Other Post- Employment Benefits
	U.S.					International						U.S.						International				Total
	2017		2016			2017			2016			2017			2016			2017		2016		2017			2016
Service cost	$	—	$	—		$	15.4		$	1.7		$	0.3		$	0.3		$	0.3	$	—	$	16.0		$	2.0
Interest cost	0.2		0.8			2.0			0.9			0.4			0.5			0.1		—		2.7			2.2
Expected return on plan assets	—		(0.6		)	(2.6		)	(0.3		)	—			—			—		—		(2.6		)	(0.9		)
Amortization of prior service cost (credit)	—		—			0.1			0.1			(1.5		)	(1.4		)	—		—		(1.4		)	(1.3		)
Amortization of net loss	0.4		0.3			1.1			0.8			—			—			—		—		1.5			1.1
Settlement loss recognized	—		—			—			—			—			—			—		—		—			—
Net periodic benefit cost (credit)	$	0.6	$	0.5		$	16.0		$	3.2		$	(0.8	)	$	(0.6	)	$	0.4	$	—	$	16.2		$	3.1



	Nine Months Ended March 31,
	Pension Plans												Other Post- Employment Benefits
	U.S.						International						U.S.						International				Total
	2017			2016			2017			2016			2017			2016			2017		2016		2017			2016
Service cost	$	—		$	—		$	24.5		$	5.1		$	0.9		$	0.9		$	0.6	$	—	$	26.0		$	6.0
Interest cost	1.5			2.4			4.7			2.7			1.2			1.5			0.2		—		7.6			6.6
Expected return on plan assets	(0.9		)	(1.8		)	(4.4		)	(0.9		)	—			—			—		—		(5.3		)	(2.7		)
Amortization of prior service cost (credit)	—			—			0.3			0.3			(4.5		)	(4.2		)	—		—		(4.2		)	(3.9		)
Amortization of net loss	1.4			0.9			3.3			2.4			—			—			—		—		4.7			3.3
Settlement loss recognized	15.9			—			—			—			—			—			—		—		15.9			—
Net periodic benefit cost (credit)	$	17.9		$	1.5		$	28.4		$	9.6		$	(2.4	)	$	(1.8	)	$	0.8	$	—	$	44.7		$	9.3

U.S. Del Laboratories, Inc. Pension Plan Settlement

The Company settled obligations to U.S. Del Laboratories, Inc. pension plan (the “Plan”) participants during the first and second quarters of fiscal year 2017 resulting in the recognition of pre-tax settlement losses of $15.9, included in Selling, general and administrative expenses in the Condensed Consolidated Statement of Operations for the nine months ended March 31, 2017. The settlement occurred in two phases as described below. In the first phase, lump sum payments were made to a group of plan participants and in the second phase, the Company transferred the remainder of the Plan’s obligation to a third-party insurance company by purchasing annuity contracts. As of December 31, 2016 the Plan had been fully terminated as a result of these actions.

In the first phase, which occurred during the three months ended September 30, 2016, the Plan’s assets and benefit obligation were remeasured, immediately prior to lump sum payments, using a discount rate of 3.7% compared to 3.8% as of June 30, 2016. As a result of the re-measurement, the net pension liability decreased by $2.9 as compared to the June 30, 2016 net pension liability. The net pension liability decrease was primarily a result of differences in interest rate and mortality assumptions used by Company to measure the plan liability as of June 30, 2016 compared to those assumptions used to determine lump sum benefits to be paid to participants, as mandated by the IRS. The decrease in the Plan’s net pension liability resulted in a corresponding increase in other comprehensive (loss) income for the three months ended September 30, 2016. In connection with this partial settlement the Company recognized a pre-tax settlement loss of $3.1, during the three months ended September 30, 2016, due to accelerated recognition of losses previously deferred within accumulated other comprehensive loss.

In the second phase, which occurred during the three months ended December 31, 2016, the Company transferred the remainder of the Plan’s pension obligation to a third-party insurance provider by purchasing annuity contracts. The settlement was facilitated by a cash contribution of $8.8 followed by liquidation of the Plan’s assets totaling $47.0 at the settlement date. As a result of this transaction the Company recognized a pre-tax settlement loss of $12.8, during the three months ended December 31, 2016, due to accelerated recognition of losses previously deferred within accumulated other comprehensive loss.

During the three months ended September 30, 2016, the Company recognized a curtailment gain of $1.8 in connection with involuntary employee terminations as part of the Acquisition Integration Program, which significantly reduced the expected years of future service of employees within one of the Company’s international pension plans. The curtailment gain is included in Restructuring costs in the Company’s Condensed Consolidated Statements of Operations for the nine months ended March 31, 2017. Refer to Note 5 - Restructuring Costs for further information about the Acquisition Integration Program.

P&G Beauty Business Employee Benefit Plans

In connection with the P&G Beauty Business acquisition, the Company assumed certain international pension and other post-employment benefit plan obligations and assets. The following is a summary of the preliminary fair value of the acquired pension and other post-employment plan obligations and assets as of the October 1, 2016 acquisition date:



	Pension Plans			Other Post-Employment Benefits			Total
Benefit obligation	$	545.9		$	15.4		$	561.3
Fair value of plan assets	156.2			0.4			156.6
Funded status	$	(389.7	)	$	(15.0	)	$	(404.7	)

With respect to the acquired pension and other post-employment benefit plans, amounts recognized in the Company’s Condensed Consolidated Balance Sheet as of October 1, 2016 are presented below:



	Pension Plans			Other Post-Employment Benefits			Total
Noncurrent assets	$	—		$	—		$	—
Current liabilities	(0.9		)	—			(0.9		)
Noncurrent liabilities	(388.8		)	(15.0		)	(403.8		)
Funded Status	(389.7		)	(15.0		)	(404.7		)
Net amount recognized	$	(389.7	)	$	(15.0	)	$	(404.7	)

The accumulated benefit obligation for the defined benefit pension plans acquired was $479.1 as of October 1, 2016.

Pension plans acquired with accumulated benefit obligations in excess of plan assets and projected benefit obligations in excess of plan assets as of October 1, 2016 are presented below:



	Pension plans with accumulated benefit obligations in excess of plan assets		Pension plans with projected benefit obligations in excess of plan assets
Projected benefit obligation	$	545.9	$	545.9
Accumulated benefit obligation	479.1		479.1
Fair value of plan assets	156.2		156.2

Pension and Other Post-Employment Benefit Assumptions

The weighted-average assumptions used to determine the Company’s projected benefit obligation above are presented below:



	Pension Plans		Other Post-Employment Benefits
Discount rates	1.1	%	1.6	%
Future compensation growth rates	2.5	%	4.2	%

The weighted-average assumptions used to determine the Company’s net periodic benefit cost for the three months ended March 31, 2017 are presented below:



	Pension Plans		Other Post-Employment Benefits
Discount rates	1.1	%	1.6	%
Future compensation growth rates	2.5	%	4.2	%
Expected long-term rates of return on plan assets	4.4	%	6.0	%

Asset Allocations

The target asset allocations for the acquired P&G Beauty Business pension plans as of March 31, 2017 and by asset category are presented below:



	Target		% of Plan Assets
			October 1, 2016
Equity securities	56.3	%	32.9	%
Fixed income securities	35.7	%	20.8	%
Cash and other investments	8.1	%	46.3	%

Contributions

The Company plans to contribute approximately $16.0 to fund the acquired pension plans in fiscal 2017.