Delaware | 001-35964 | 13-3823358 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
350 Fifth Avenue New York, NY | 10118 | |
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits: |
Exhibit No. | Description | |
Coty Inc. | |||
(Registrant) | |||
Date: February 8, 2019 | By: | /s/Pierre-André Terisse | |
Pierre-André Terisse | |||
Chief Financial Officer |
Exhibit No. | Description | |
Results at a glance | Three Months Ended December 31, 2018 | Six Months Ended December 31, 2018 | |||||||||||||||||||
Change YoY | Change YoY | ||||||||||||||||||||
(in millions, except per share data) | Reported Basis | Organic (LFL) | Reported Basis | Organic (LFL) | |||||||||||||||||
Net revenues | $ | 2,511.2 | (4.8 | %) | 0.7 | % | $ | 4,542.5 | (6.8 | %) | (3.2 | %) | |||||||||
Operating (loss) income - reported | (804.6 | ) | NM | (825.3 | ) | NM | |||||||||||||||
Operating income - adjusted* | 322.3 | (7 | %) | 463.1 | (15 | %) | |||||||||||||||
Net (loss) income - reported | (960.6 | ) | NM | (972.7 | ) | NM | |||||||||||||||
Net income - adjusted* | 181.9 | (23 | %) | 262.4 | (16 | %) | |||||||||||||||
EPS (diluted) - reported | $ | (1.28 | ) | NM | $ | (1.30 | ) | NM | |||||||||||||
EPS (diluted) - adjusted* | $ | 0.24 | (25 | %) | $ | 0.35 | (17 | %) |
• | 2Q19 reported net revenues of $2,511.2 million decreased 4.8%, with a like-for-like (LFL) revenue growth of 0.7%. The strong sequential improvement in both the reported and LFL performance reflected the combination of several temporary factors, including: (i) Burberry entering the LFL revenue base and facing a depressed prior year comparable, (ii) the positive impact from changes in revenue recognition policy, (iii) the shift of Luxury shipments from 1Q19 into 2Q19 as a result of the U.S. Hurricane Florence, and (iv) some moderation in the supply chain-related headwinds discussed in 1Q19. |
• | We estimate these factors cumulatively benefited our LFL revenue growth rate by approximately 2%, implying a moderate underlying 2Q19 LFL decline. This performance reflects strong LFL growth in Luxury, underlying growth in Professional Beauty, and a high single digit decline in Consumer Beauty. |
• | Year-to-date reported net revenues of $4,542.5 million decreased by 6.8%, with a LFL revenue decline of 3.2%. We estimate that the underlying LFL net revenue trend was a decline of approximately 2% in 1H19, excluding the temporary factors above. |
• | 2Q19 reported gross margin of 61.9% increased by 80 bps from the prior-year period, while the adjusted gross margin of 62.1% increased by 50 bps, primarily driven by the divisional revenue mix shift toward Luxury and Professional Beauty, improvement in the Professional Beauty gross margin due to product mix, and the margin benefit from favorable FX. |
• | Year-to-date reported gross margin of 61.1% was flat with the prior-year, while the adjusted gross margin of 61.3% decreased by 20 bps, fueled by the gross margin contraction in 1Q19 connected to supply chain disruptions. |
• | 2Q19 reported operating loss of $804.6 million compared to 2Q18 reported operating income of $175.2 million, reflecting a $965.1 million non-cash impairment charge primarily connected to the Consumer Beauty division and select brand trademarks. |
• | 2Q19 adjusted operating income of $322.3 million declined by 7% from the prior year with an adjusted operating margin of 12.8%. The year-over-year decline in adjusted operating income reflected the |
• | 2Q19 adjusted operating income was also impacted by the temporary factors cited above, including: (i) the supply chain headwinds; (ii) the timing of Luxury shipments; (iii) revenue recognition; and (iv) the net impact of M&A, as the incremental Burberry contribution was partially offset by the lost profit from the FY18 brand rationalization program. The cumulative negative impact from these factors in 2Q19 was approximately $2M, which implies a high single digit decline in underlying adjusted operating income in the quarter. |
• | Year-to-date reported operating loss of $825.3 million compared to reported operating income of $204.7 million in the prior year. Year-to-date adjusted operating income of $463.1 million declined by 15% from the prior year with a margin of 10.2%. |
• | In 1H19, we estimate that adjusted operating income was adversely impacted by temporary factors of approximately $48 million, including over $90 million from the supply chain disruptions. Excluding these temporary impacts, the 1H19 underlying adjusted operating income would have declined approximately 6% year over year, with an operating margin of approximately 11%. |
• | 2Q19 reported net loss of $960.6 million compared to reported net income of $109.2 million in the prior-year, while the adjusted net income of $181.9 million declined 23%, driven by the lower adjusted operating income and the $41.8 million positive foreign tax settlement in the prior year period. |
• | Year-to-date reported net loss of $972.7 million compared to reported net income of $89.5 million in the prior-year, while the adjusted net income of $262.4 million decreased 16%. |
• | 2Q19 reported earnings per share of $(1.28) declined from $0.15 in the prior-year, and the adjusted EPS of $0.24 declined from $0.32 in the prior year. The year-over-year decline in reported EPS reflects the significant $965.1 million impairment charge discussed above, while the decline in the adjusted EPS is driven by the aforementioned tax benefit in 2Q18 which contributed $0.05 to EPS. |
• | Year-to-date reported earnings per share of $(1.30) declined from $0.12 in the prior-year, and the adjusted EPS of $0.35 declined from $0.42 in the prior year. |
• | In 2Q19, net cash provided by operating activities was $319.6 million, broadly in-line with 2Q18, as we drove strong conversion of operating income into operating cash flow, supported by working capital improvement. First half operating cash flow totaled $237.7 million, down $70.1 million from the same period of the prior year. |
• | Our 2Q19 free cash flow of $193.9 million was largely in-line with 2Q18 and reflected the strong operating cash flow result, and a moderate year-over-year decline in capex. First half free cash flow of $(21.6) million decreased from $75.6 million in the prior year, driven by weakness in 1Q19. |
• | Net debt of $7,488.5 million on December 31, 2018 decreased by $172.8 million from the balance of $7,661.3 million on September 30, 2018 driven by positive free cash flow and a benefit from foreign exchange. This resulted in a last twelve months Net debt to adjusted EBITDA ratio of 5.8x, consistent with the reported ratio on September 30, 2018. |
Three Months Ended December 31, 2018 | Six Months Ended December 31, 2018 | ||||||
Actual | Reported Basis YoY | LFL | Actual | Reported Basis YoY | LFL | ||
Net Revenues | 1,017.5 | 7.0% | 10.8% | $1,810.4 | 5.5% | 5.0% | |
Reported | Adjusted | Reported | Adjusted | ||||
Operating Income | 113.6 | 176.9 | 162.3 | 278.5 | |||
Operating Margin | 11.2% | 17.4% | 9.0% | 15.4% |
Three Months Ended December 31, 2018 | Six Months Ended December 31, 2018 | ||||||
Actual | Reported Basis YoY | LFL | Actual | Reported Basis YoY | LFL | ||
Net Revenues | 967.8 | (15.0%) | (7.3)% | 1,796.6 | (17.7%) | (10.6)% | |
Reported | Adjusted | Reported | Adjusted | ||||
Operating (Loss) Income | (906.9) | 54.1 | (925.5) | 68.9 | |||
Operating Margin | (93.7)% | 5.6% | (51.5)% | 3.8% |
Three Months Ended December 31, 2018 | Six Months Ended December 31, 2018 | ||||||
Actual | Reported Basis YoY | LFL | Actual | Reported Basis YoY | LFL | ||
Net Revenues | 525.9 | (4.0%) | (0.8%) | 935.5 | (4.4%) | (1.6)% | |
Reported | Adjusted | Reported | Adjusted | ||||
Operating Income | 73.8 | 91.1 | 78.8 | 114.9 | |||
Operating Margin | 14.0% | 17.3% | 8.4% | 12.3% |
Three Months Ended December 31, | ||||||||||||||
Net Revenues | Change | |||||||||||||
(in millions) | 2018 | 2017 | Reported Basis | Organic (LFL) | ||||||||||
North America | $ | 742.2 | $ | 741.8 | — | % | 2 | % | ||||||
Europe | 1,201.6 | 1,297.6 | (7 | %) | (1 | %) | ||||||||
ALMEA | 567.4 | 598.2 | (5 | %) | 4 | % | ||||||||
Total | $ | 2,511.2 | $ | 2,637.6 | (5 | %) | 1 | % |
• | North America net revenues of $742.2 million, or approximately 29% of total net revenues, was flat as reported and increased 2% on an adjusted basis reflecting strong growth in Luxury partially offset by lower revenues in Professional Beauty, as a result of the supply chain disruptions, coupled with continued pressure in Consumer Beauty. In the United States, incremental revenues from Burberry and continued innovation from Gucci, together with higher year-over-year revenues from CoverGirl, were offset by lower net revenues from Younique within the United States due to a decline in product sales and presenter sponsorship as we continue to refine our product offerings and compensation plan structure to drive improvements in presenter sales activity, recruitment and retention. |
• | Europe net revenues of $1,201.6 million, or approximately 48% of total net revenues, declined 7% on a reported basis and declined 1% on a LFL basis driven by weakness in Consumer Beauty as a result of performance challenges and supply chain disruptions, largely offset by growth in Luxury. On a brand level, declines in Bourjois and Rimmel in the U.K. and Eastern Europe were compounded by declines in mass fragrances in Western Europe and were offset by strong performances by Burberry and Calvin Klein across the region. |
• | ALMEA net revenues of $567.4 million, or approximately 23% of total net revenues, showed solid growth despite impact from the supply chain disruptions. Revenues decreased 5% as reported, but grew 4% LFL fueled by strong growth in Luxury and Professional Beauty. From a brand perspective, Wella Professional revenues were higher in Brazil and the rest of Latin America, while in Consumer Beauty Max Factor declined in China and the Middle East and Wella Retail was lower in Latin America. |
• | In 2Q19, net cash provided by operating activities was $319.6 million, broadly in-line with 2Q18, as we drove strong conversion of operating income into operating cash flow, supported by working capital improvement. The impact of integration and restructuring cash costs was approximately $81 million in 2Q19. The year-to-date operating cash flow totaled $237.7 million, down $70.1 million from the prior year. |
• | Our 2Q19 free cash flow of $193.9 million was largely in-line with 2Q18 and reflected the strong operating cash flow result, and a moderate year-over-year decline in capex. The first half free cash flow of $(21.6) million decreased from $75.6 million in the prior year, driven by weakness in 1Q19. |
• | In 2Q19, we distributed $94.6 million in quarterly dividends. |
• | Cash and cash equivalents of $417.5 million decreased modestly from $423.3 million on September 30, 2018. Total debt of $7,906.0 million decreased by $178.6 million from September 30, 2018, with net debt of $7,488.5 million down $172.8 million from the balance of $7,661.3 million on September 30, 2018. This net debt decrease reflects positive free cash flow and a benefit from foreign exchange, as well as the payment of $94.6 million of dividends. |
• | On November 11, 2018, Pierre Laubies was appointed as Coty CEO and Peter Harf assumed the position of Chairman of the Coty Board of Directors. |
• | On January 11, 2019, Coty announced a series of executive leadership changes to support its ongoing transformation and future growth. Pierre-André Terisse was appointed Chief Financial Officer and a member of the Executive Committee, effective February 1, 2019. Pierre Laubies assumed leadership for the formulation and implementation of the strategic vision for the Consumer Beauty division, supported by Gianni Pieraccioni who joined Coty as Chief Operating Officer, Consumer Beauty, and as a member of the Executive Committee, effective January 14, 2019. Luc Volatier was appointed Chief Global Supply Officer and a member of the Executive Committee, effective January 14, 2019. |
• | On January 14, 2019, Coty announced that Bart Becht resigned from Coty's Board of Directors and Anna-Lena Kamenetzky joined the Board of Directors. |
• | On February 8, 2019, Coty announced a dividend of $0.125 per share payable on March 15, 2019 to holders of record on February 28, 2019. This dividend will be considered a return of capital. |
• | the Company’s ability to achieve its global business strategies (including any changes to its strategy or operations as a result of its strategic review of the business), compete effectively in the beauty industry and achieve the benefits contemplated by its strategic initiatives within the expected time frame or at all; |
• | the Company’s ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including any relaunched or rebranded products, execution of new launches, and the anticipated costs and discounting associated with such relaunches and rebrands, and consumer receptiveness to its marketing and consumer engagement activities (including digital marketing and media); |
• | use of estimates and assumptions in preparing the Company’s financial statements, including with regard to revenue recognition, stock compensation expense, income taxes, the assessment of goodwill and other intangible and long-lived assets for impairments, the market value of inventory, pension expense and the fair value of acquired assets and liabilities associated with acquisitions; |
• | the impact of any future impairments; |
• | managerial, integration, operational, regulatory, legal and financial risks, including diversion of management attention to and management of, cash flows, expenses and costs associated with multiple ongoing and future strategic initiatives, internal reorganizations; |
• | the continued integration of the P&G Beauty Business and other recent acquisitions with the Company's business, operations, systems, financial data and culture and the ability to realize synergies, avoid future supply chain and other business disruptions, reduce costs (including through the Company's cash efficiency initiatives) and realize other potential efficiencies and benefits (including through the Company's restructuring initiatives) at the levels and at the costs and within the time frames contemplated or at all; |
• | increased competition, consolidation among retailers, shifts in consumers’ preferred distribution and marketing channels (including to digital and luxury channels), distribution and shelf-space resets or reductions, compression of go-to-market cycles, changes in product and marketing requirements by retailers, reductions in retailer inventory levels and order lead-times or changes in purchasing patterns, and other changes in the retail, e-commerce and wholesale environment in which the Company does business and sells its products and the Company's ability to respond to such changes; |
• | the Company and its business partners' and licensors' abilities to obtain, maintain and protect the intellectual property used in its and their respective businesses, protect its and their respective reputations (including those of its and their executives or influencers), public goodwill, and defend claims by third parties for infringement of intellectual property rights; |
• | any change to the Company's capital allocation and/or cash management priorities; |
• | any unanticipated problems, liabilities or other challenges associated with an acquired business which could result in increased risk or new, unanticipated or unknown liabilities, including with respect to environmental, competition and other regulatory, compliance or legal matters; |
• | the Company’s international operations and joint ventures, including enforceability and effectiveness of its joint venture agreements and reputational, compliance, regulatory, economic and foreign political risks, including difficulties and costs associated with maintaining compliance with a broad variety of complex local and international regulations; |
• | the Company's dependence on certain licenses (especially in its Luxury division) and the Company's ability to renew expiring licenses on favorable terms or at all; |
• | the Company's dependence on entities performing outsourced functions, including outsourcing of distribution functions, third-party manufacturers, logistics and supply chain suppliers, and other suppliers, including third-party software providers; |
• | administrative, development and other difficulties in meeting the expected timing of market expansions, product launches and marketing efforts; |
• | global political and/or economic uncertainties, disruptions or major regulatory or policy changes, and/or the enforcement thereof that affect our business, financial performance, operations or products, including the impact of Brexit, the current U.S. administration, the results of elections in European countries and in Brazil, changes in the U.S. tax code and recent changes and future changes in tariffs, retaliatory or trade protection measures, trade policies and other international trade regulations in the U.S. and in other regions where the Company operates including the European Union and China; |
• | currency exchange rate volatility and currency devaluation; |
• | the number, type, outcomes (by judgment, order or settlement) and costs of any current or future legal, compliance, tax, regulatory or administrative proceedings, investigations and/or litigation; |
• | the Company’s ability to manage seasonal factors and other variability and to anticipate future business trends and needs; |
• | disruptions in operations and sales, including due to disruptions in supply chain, logistics, restructurings and other business alignment activities, manufacturing or information technology systems, labor disputes, extreme weather and natural disasters, and the impact of such disruptions on the Company's ability to generate profits, stabilize or grow revenues or cash flows, comply with its contractual obligations and accurately forecast demand and supply needs and/or future results; |
• | restrictions imposed on the Company through its license agreements, credit facilities and senior unsecured bonds or other material contracts, its ability to generate cash flow to repay, refinance or recapitalize debt and otherwise comply with its debt instruments, and changes in the manner in which the Company finances its debt and future capital needs; |
• | increasing dependency on information technology and the Company’s ability to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, costs and timing of implementation and effectiveness of any upgrades or other changes to information technology systems, including the Company's digital transformation initiatives, and the cost of compliance or the Company's failure to comply with any privacy or data security laws (including the European Union General Data Protection Regulation or to protect against theft of customer, employee and corporate sensitive information; |
• | the Company's ability to attract and retain key personnel and the impact of the recent senior management transitions; |
• | the distribution and sale by third parties of counterfeit and/or gray market versions of the Company’s products; and |
• | other factors described elsewhere in this document and from time to time in documents that the Company file with the SEC. |
• | Costs related to acquisition activities: The Company excludes acquisition-related costs and acquisition accounting impacts such as those related to transaction costs and costs associated with the revaluation of |
• | Restructuring and other business realignment costs: The Company excludes costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance. In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs. By excluding the above referenced expenses from the non-GAAP financial measures, management is able to evaluate the Company’s ability to utilize existing assets and estimate their long-term value. Furthermore, management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of the Company’s operating performance. |
• | Asset impairment charges: We have excluded the impact of asset impairments as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of our operating performance. |
• | Amortization expense: The Company excludes the impact of amortization of finite-lived intangible assets, as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Management believes that the adjustment of these items supplement the GAAP information with a measure that can be used to assess the sustainability of the Company’s operating performance. Although the Company excludes amortization of intangible assets from the non-GAAP expenses, management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. |
• | Interest and other (income) expense: The Company excludes foreign currency impacts associated with acquisition-related and debt financing related forward contracts, as well as debt financing transaction costs as the nature and amount of such charges are not consistent and are significantly impacted by the timing and size of such transactions. |
• | Loss on early extinguishment of debt: We have excluded loss on extinguishment of debt as this represents a non-cash charge, and the amount and frequency of such charges is not consistent and is significantly impacted by the timing and size of debt financing transactions. |
• | Noncontrolling interest: This adjustment represents the after-tax impact of the non-GAAP adjustments included in Net income attributable to noncontrolling interests based on the relevant non-controlling interest percentage. |
• | Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income. The tax impact of the non-GAAP adjustments are based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred. |
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||
(in millions, except per share data) | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net revenues | $ | 2,511.2 | $ | 2,637.6 | $ | 4,542.5 | $ | 4,875.9 | ||||||||
Cost of sales | 956.7 | 1,024.9 | 1,765.8 | 1,899.1 | ||||||||||||
as % of Net revenues | 38.1 | % | 38.9 | % | 38.9 | % | 38.9 | % | ||||||||
Gross profit | 1,554.5 | 1,612.7 | 2,776.7 | 2,976.8 | ||||||||||||
Gross margin | 61.9 | % | 61.1 | % | 61.1 | % | 61.1 | % | ||||||||
Selling, general and administrative expenses | 1,284.0 | 1,319.2 | 2,406.3 | 2,510.3 | ||||||||||||
as % of Net revenues | 51.1 | % | 50.0 | % | 53.0 | % | 51.5 | % | ||||||||
Amortization expense | 88.5 | 89.6 | 181.0 | 167.8 | ||||||||||||
Restructuring costs | 21.5 | 21.7 | 37.0 | 32.9 | ||||||||||||
Acquisition-related costs | — | 7.0 | — | 61.1 | ||||||||||||
Asset impairment charges | 965.1 | — | 977.7 | — | ||||||||||||
Operating (loss) income | (804.6 | ) | 175.2 | (825.3 | ) | 204.7 | ||||||||||
as % of Net revenues | (32.0 | %) | 6.6 | % | (18.2 | %) | 4.2 | % | ||||||||
Interest expense, net | 68.3 | 60.3 | 132.4 | 126.7 | ||||||||||||
Other expense, net | 4.8 | 4.2 | 7.5 | 8.7 | ||||||||||||
(Loss) income before income taxes | (877.7 | ) | 110.7 | (965.2 | ) | 69.3 | ||||||||||
as % of Net revenues | (35.0 | %) | 4.2 | % | (21.2 | %) | 1.4 | % | ||||||||
Provision (benefit) for income taxes | 78.3 | (7.9 | ) | 0.9 | (33.2 | ) | ||||||||||
Net (loss) income | (956.0 | ) | 118.6 | (966.1 | ) | 102.5 | ||||||||||
as % of Net revenues | (38.1 | %) | 4.5 | % | (21.3 | %) | 2.1 | % | ||||||||
Net income (loss) attributable to noncontrolling interests | 0.6 | (1.9 | ) | 1.8 | (4.1 | ) | ||||||||||
Net income attributable to redeemable noncontrolling interests | 4.0 | 11.3 | 4.8 | 17.1 | ||||||||||||
Net (loss) income attributable to Coty Inc. | $ | (960.6 | ) | $ | 109.2 | $ | (972.7 | ) | $ | 89.5 | ||||||
as % of Net revenues | (38.3 | %) | 4.1 | % | (21.4 | %) | 1.8 | % | ||||||||
Net (loss) income attributable to Coty Inc. per common share: | ||||||||||||||||
Basic | $ | (1.28 | ) | $ | 0.15 | $ | (1.30 | ) | $ | 0.12 | ||||||
Diluted | $ | (1.28 | ) | $ | 0.15 | $ | (1.30 | ) | $ | 0.12 | ||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic | 751.1 | 749.6 | 751.0 | 749.1 | ||||||||||||
Diluted | 751.1 | 752.7 | 751.0 | 752.5 |
Three Months Ended December 31, 2018 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments(a) | Adjusted (Non-GAAP) | Foreign Currency Translation | Adjusted Results at Constant Currency | |||||||||||||||
Net revenues | $ | 2,511.2 | $ | 2,511.2 | $ | 83.7 | $ | 2,594.9 | ||||||||||||
Gross profit | 1,554.5 | 4.6 | 1,559.1 | 45.5 | 1,604.6 | |||||||||||||||
Gross margin | 61.9 | % | 62.1 | % | 61.8 | % | ||||||||||||||
Operating (loss) income | (804.6 | ) | 1,126.9 | 322.3 | 12.3 | 334.6 | ||||||||||||||
as % of Net revenues | (32.0 | %) | 12.8 | % | 12.9 | % | ||||||||||||||
Net (loss) income attributable to Coty Inc. | $ | (960.6 | ) | $ | 1,142.5 | $ | 181.9 | |||||||||||||
as % of Net revenues | (38.3 | %) | 7.2 | % | ||||||||||||||||
EPS (diluted) | $ | (1.28 | ) | $ | 0.24 | |||||||||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments(a) | Adjusted (Non-GAAP) | |||||||||||||||||
Net revenues | $ | 2,637.6 | $ | 2,637.6 | ||||||||||||||||
Gross profit | 1,612.7 | 11.3 | 1,624.0 | |||||||||||||||||
Gross margin | 61.1 | % | 61.6 | % | ||||||||||||||||
Operating income | 175.2 | 173.1 | 348.3 | |||||||||||||||||
as % of Net revenues | 6.6 | % | 13.2 | % | ||||||||||||||||
Net income attributable to Coty Inc. | $ | 109.2 | $ | 128.0 | $ | 237.2 | ||||||||||||||
as % of Net revenues | 4.1 | % | 9.0 | % | ||||||||||||||||
EPS (diluted) | $ | 0.15 | $ | 0.32 | ||||||||||||||||
Six Months Ended December 31, 2018 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments(a) | Adjusted (Non-GAAP) | Foreign Currency Translation | Adjusted Results at Constant Currency | |||||||||||||||
Net revenues | $ | 4,542.5 | $ | — | $ | 4,542.5 | $ | 140.9 | $ | 4,683.4 | ||||||||||
Gross profit | 2,776.7 | 9.8 | 2,786.5 | 74.1 | 2,860.6 | |||||||||||||||
Gross margin | 61.1 | % | 61.3 | % | 61.1 | % | ||||||||||||||
Operating (loss) income | (825.3 | ) | 1,288.4 | 463.1 | 19.7 | 482.8 | ||||||||||||||
as % of Net revenues | (18.2 | %) | 10.2 | % | 10.3 | % | ||||||||||||||
Net (loss) income attributable to Coty Inc. | $ | (972.7 | ) | $ | 1,235.1 | $ | 262.4 | |||||||||||||
as % of Net revenues | (21.4 | %) | 5.8 | % | ||||||||||||||||
EPS (diluted) | $ | (1.30 | ) | $ | 0.35 | |||||||||||||||
Six Months Ended December 31, 2017 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments(a) | Adjusted (Non-GAAP) | |||||||||||||||||
Net revenues | $ | 4,875.9 | $ | 4,875.9 | ||||||||||||||||
Gross profit | 2,976.8 | 25.3 | 3,002.1 | |||||||||||||||||
Gross margin | 61.1 | % | 61.6 | % | ||||||||||||||||
Operating income | 204.7 | 339.5 | 544.2 | |||||||||||||||||
as % of Net revenues | 4.2 | % | 11.2 | % | ||||||||||||||||
Net income attributable to Coty Inc. | $ | 89.5 | $ | 224.0 | $ | 313.5 | ||||||||||||||
as % of Net revenues | 1.8 | % | 6.4 | % | ||||||||||||||||
EPS (diluted) | $ | 0.12 | $ | 0.42 |
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||||
(in millions) | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||
Reported Operating (Loss) Income | (804.6 | ) | 175.2 | NM | (825.3 | ) | 204.7 | NM | ||||||||||
% of Net revenues | (32.0 | %) | 6.6 | % | (18.2 | %) | 4.2 | % | ||||||||||
Asset impairment charges (a) | 965.1 | — | N/A | 977.7 | — | N/A | ||||||||||||
Amortization expense (b) | 88.5 | 89.6 | (1 | %) | 181.0 | 167.8 | 8 | % | ||||||||||
Restructuring and other business realignment costs (c) | 73.3 | 75.6 | (3 | %) | 129.7 | 106.2 | 22 | % | ||||||||||
Costs related to acquisition activities (d) | — | 7.9 | (100 | %) | — | 65.5 | (100 | %) | ||||||||||
Total adjustments to Reported Operating Income | 1,126.9 | 173.1 | >100% | 1,288.4 | 339.5 | >100% | ||||||||||||
Adjusted Operating Income | 322.3 | 348.3 | (7 | %) | 463.1 | 544.2 | (15 | %) | ||||||||||
% of Net revenues | 12.8 | % | 13.2 | % | 10.2 | % | 11.2 | % |
(a) | In the three months ended December 31, 2018 we incurred $965.1 of asset impairment charges primarily due to $832.5 related to goodwill, $90.8 related to indefinite-lived other intangible assets (mainly related to the CoverGirl and Clairol trademarks) and $7.0 related to finite-lived other intangible assets. Additionally, the Company identified indicators of impairment related to the philosophy trademark that is part of the Luxury reporting unit and recorded an asset impairment charge of $22.8. The Company also fully impaired a Corporate equity security investment and recorded an asset impairment charge of $12.0. |
(b) | In the three months ended December 31, 2018, amortization expense decreased to $88.5 from $89.6 in the three months ended December 31, 2017. In the three months ended December 31, 2018, amortization expense of $40.5, $30.7, and $17.3 was reported in the Luxury, Consumer Beauty and Professional Beauty segments, respectively. In the three months ended December 31, 2017, amortization expense of $40.3, $32.6, and $16.7 was reported in the Luxury, Consumer Beauty and Professional Beauty segments, respectively. |
(c) | In the three months ended December 31, 2018, we incurred restructuring and other business structure realignment costs of $73.3. We incurred Restructuring costs of $21.5 primarily related to Global Integration Activities and 2018 Restructuring Actions, included in the Condensed Consolidated Statements of Operations. We incurred business structure realignment costs of $51.8 primarily related to our Global Integration Activities and certain other programs. This amount primarily |
(d) | In the three months ended December 31, 2018, we did not incur costs related to acquisition activities. In the three months ended December 31, 2017, we incurred $7.9 of costs related to acquisition activities. We recognized Acquisition-related costs of $7.0, included in the Condensed Consolidated Statements of Operations. These costs may include finder’s fees, legal, accounting, valuation, and other professional or consulting fees, and other internal costs which may include compensation related expenses for dedicated internal resources. We also incurred approximately $0.9 in Costs of sales primarily reflecting revaluation of acquired inventory in connection with the acquisition of the Burberry Beauty Business in the Condensed Consolidated Statements of Operations. |
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | |||||||||||||||||||||
(in millions) | (Loss) Income Before Income Taxes | Provision for Taxes | Effective Tax Rate | Income Before Income Taxes | (Benefit) Provision for Taxes | Effective Tax Rate | ||||||||||||||||
Reported (Loss) Income Before Taxes | $ | (877.7 | ) | $ | 78.3 | (8.9 | )% | $ | 110.7 | $ | (7.9 | ) | (7.1 | )% | ||||||||
Adjustments to Reported Operating Income (a) (b) | 1,126.9 | (19.2 | ) | 173.1 | 37.2 | |||||||||||||||||
Adjusted Income Before Taxes | $ | 249.2 | $ | 59.1 | 23.7 | % | $ | 283.8 | $ | 29.3 | 10.3 | % |
(a) | See a description of adjustments under “Reconciliation of Reported Operating Income to Adjusted Operating Income”. |
(b) | The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax benefit/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The benefit/provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non–GAAP measure of profitability. |
Six Months Ended December 31, 2018 | Six Months Ended December 31, 2017 | ||||||||||||||||||||
(in millions) | (Loss) Before Income Taxes | Provision for Income Taxes | Effective Tax Rate | Income Before Income Taxes | (Benefit) Provision for Income Taxes | Effective Tax Rate | |||||||||||||||
Reported (Loss) Income Before Taxes | $ | (965.2 | ) | $ | 0.9 | (0.1 | )% | $ | 69.3 | $ | (33.2 | ) | (47.9 | )% | |||||||
Adjustments to Reported Operating Income (a) (b) | 1,288.4 | 45.9 | 339.5 | 96.8 | |||||||||||||||||
Adjusted Income Before Taxes | $ | 323.2 | $ | 46.8 | 14.5 | % | $ | 408.8 | $ | 63.6 | 15.6 | % |
(a) | See a description of adjustments under “Reconciliation of Reported Operating Income to Adjusted Operating Income”. |
(b) | The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability. |
Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||||||||||
(in millions) | 2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Reported Net (Loss) Income Attributable to Coty Inc. | $ | (960.6 | ) | $ | 109.2 | NM | $ | (972.7 | ) | $ | 89.5 | NM | ||||||||||
% of Net revenues | (38.3 | %) | 4.1 | % | (21.4 | %) | 1.8 | % | ||||||||||||||
Adjustments to Reported Operating Income (a) | 1,126.9 | 173.1 | >100% | 1,288.4 | 339.5 | >100% | ||||||||||||||||
Adjustments to noncontrolling interests (b) | (3.6 | ) | (7.9 | ) | 54 | % | (7.4 | ) | (18.7 | ) | 60 | % | ||||||||||
Change in tax provision due to adjustments to Reported Net Income Attributable to Coty Inc. | 19.2 | (37.2 | ) | >100% | (45.9 | ) | (96.8 | ) | 53 | % | ||||||||||||
Adjusted Net Income Attributable to Coty Inc. | $ | 181.9 | $ | 237.2 | (23 | %) | $ | 262.4 | $ | 313.5 | (16 | %) | ||||||||||
% of Net revenues | 7.2 | % | 9.0 | % | 5.8 | % | 6.4 | % | ||||||||||||||
Per Share Data | ||||||||||||||||||||||
Adjusted weighted-average common shares | ||||||||||||||||||||||
Basic | 751.1 | 749.6 | 751.0 | 749.1 | ||||||||||||||||||
Diluted | 752.5 | 752.7 | 752.6 | 752.5 | ||||||||||||||||||
Adjusted Net Income Attributable to Coty Inc. per Common Share | ||||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.32 | $ | 0.35 | $ | 0.42 | ||||||||||||||
Diluted | $ | 0.24 | $ | 0.32 | $ | 0.35 | $ | 0.42 |
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net cash provided by operating activities | $ | 319.6 | $ | 316.7 | $ | 237.7 | $ | 307.8 | |||||||
Capital expenditures | (125.7 | ) | (120.8 | ) | (259.3 | ) | (232.2 | ) | |||||||
Free cash flow | $ | 193.9 | $ | 195.9 | $ | (21.6 | ) | $ | 75.6 |
(in millions) | December 31, 2018 | |||
Total debt | $ | 7,906.0 | ||
Cash | 417.5 | |||
Net debt | $ | 7,488.5 |
(in millions) | Twelve Months Ended December 31, 2018 | |||
Adjusted operating income(a) | $ | 919.5 | ||
Depreciation (b) | 377.4 | |||
Pension Adjustment (c) | (0.8 | ) | ||
Adjusted EBITDA | 1,296.9 |
Twelve Months Ended December 31, | |||
Net Debt | 7,488.5 | ||
EBITDA | 1,296.9 | ||
Net Debt/Adjusted EBITDA | 5.77 |
Three Months Ended December 31, | ||||||||||||||||||||||||||||
Net Revenues | Change | Reported Operating Income (Loss) | Adjusted Operating Income | |||||||||||||||||||||||||
(in millions) | 2018 | 2017 | Reported Basis | Constant Currency | 2018 | Change | 2018 | Change | ||||||||||||||||||||
Luxury | $ | 1,017.5 | $ | 951.2 | 7 | % | 10 | % | $ | 113.6 | 33 | % | $ | 176.9 | 41 | % | ||||||||||||
Consumer Beauty | 967.8 | 1,138.6 | (15 | %) | (11 | %) | (906.9 | ) | NM | 54.1 | (59 | %) | ||||||||||||||||
Professional | 525.9 | 547.8 | (4 | %) | (1 | %) | 73.8 | 0 | % | 91.1 | 1 | % | ||||||||||||||||
Corporate | — | — | N/A | — | % | (85.1 | ) | (3 | %) | 0.2 | (75 | %) | ||||||||||||||||
Total | $ | 2,511.2 | $ | 2,637.6 | (5 | %) | (2 | %) | $ | (804.6 | ) | NM | $ | 322.3 | (7 | %) | ||||||||||||
Six Months Ended December 31, | ||||||||||||||||||||||||||||
Net Revenues | Change | Reported Operating Income | Adjusted Operating Income | |||||||||||||||||||||||||
(in millions) | 2018 | 2017 | Reported Basis | Constant Currency | 2018 | Change | 2018 | Change | ||||||||||||||||||||
Luxury | $ | 1,810.4 | $ | 1,715.6 | 6 | % | 8 | % | $ | 162.3 | 14 | % | $ | 278.5 | 29 | % | ||||||||||||
Consumer Beauty | 1,796.6 | 2,182.0 | (18 | %) | (14 | %) | (925.5 | ) | NM | 68.9 | (69 | %) | ||||||||||||||||
Professional | 935.5 | 978.3 | (4 | %) | (2 | %) | 78.8 | 10 | % | 114.9 | 7 | % | ||||||||||||||||
Corporate | — | — | N/A | — | % | (140.9 | ) | 17 | % | 0.8 | (50 | %) | ||||||||||||||||
Total | $ | 4,542.5 | $ | 4,875.9 | (7 | %) | (4 | %) | $ | (825.3 | ) | NM | $ | 463.1 | (15 | %) |
Three Months Ended December 31, | ||||||||||||||
Net Revenues | Change | |||||||||||||
(in millions) | 2018 | 2017 | Reported Basis | Constant Currency | ||||||||||
North America | $ | 742.2 | $ | 741.8 | 0 | % | 0 | % | ||||||
Europe | 1,201.6 | 1,297.6 | (7 | %) | (4 | %) | ||||||||
ALMEA | 567.4 | 598.2 | (5 | %) | 2 | % | ||||||||
Total | $ | 2,511.2 | $ | 2,637.6 | (5 | %) | (2 | %) | ||||||
Six Months Ended December 31, | ||||||||||||||
Net Revenues | Change | |||||||||||||
(in millions) | 2018 | 2017 | Reported Basis | Constant Currency | ||||||||||
North America | $ | 1,387.1 | $ | 1,494.3 | (7 | %) | (7 | %) | ||||||
Europe | 2,073.8 | 2,264.1 | (8 | %) | (6 | %) | ||||||||
ALMEA | 1,081.6 | 1,117.5 | (3 | %) | 4 | % | ||||||||
Total | $ | 4,542.5 | $ | 4,875.9 | (7 | %) | (4 | %) |
Three Months Ended December 31, 2018 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) | Foreign Currency Translation | Adjusted Results at Constant Currency | |||||||||||||||
OPERATING INCOME (LOSS) | ||||||||||||||||||||
Luxury | $ | 113.6 | $ | (63.3 | ) | $ | 176.9 | $ | 4.6 | $ | 181.5 | |||||||||
Consumer Beauty | (906.9 | ) | (961.0 | ) | 54.1 | 4.0 | 58.1 | |||||||||||||
Professional Beauty | 73.8 | (17.3 | ) | 91.1 | 3.7 | 94.8 | ||||||||||||||
Corporate | (85.1 | ) | (85.3 | ) | 0.2 | — | 0.2 | |||||||||||||
Total | $ | (804.6 | ) | $ | (1,126.9 | ) | $ | 322.3 | $ | 12.3 | $ | 334.6 | ||||||||
OPERATING MARGIN | ||||||||||||||||||||
Luxury | 11.2 | % | 17.4 | % | 17.4 | % | ||||||||||||||
Consumer Beauty | (93.7 | %) | 5.6 | % | 5.8 | % | ||||||||||||||
Professional Beauty | 14.0 | % | 17.3 | % | 17.4 | % | ||||||||||||||
Corporate | N/A | N/A | N/A | |||||||||||||||||
Total | (32.0 | %) | 12.8 | % | 12.9 | % | ||||||||||||||
Three Months Ended December 31, 2017 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) | |||||||||||||||||
OPERATING INCOME (LOSS) | ||||||||||||||||||||
Luxury | $ | 85.1 | $ | (40.3 | ) | $ | 125.4 | |||||||||||||
Consumer Beauty | 99.3 | (32.6 | ) | 131.9 | ||||||||||||||||
Professional Beauty | 73.5 | (16.7 | ) | 90.2 | ||||||||||||||||
Corporate | (82.7 | ) | (83.5 | ) | 0.8 | |||||||||||||||
Total | $ | 175.2 | $ | (173.1 | ) | $ | 348.3 | |||||||||||||
OPERATING MARGIN | ||||||||||||||||||||
Luxury | 8.9 | % | 13.2 | % | ||||||||||||||||
Consumer Beauty | 8.7 | % | 11.6 | % | ||||||||||||||||
Professional Beauty | 13.4 | % | 16.5 | % | ||||||||||||||||
Corporate | N/A | N/A | ||||||||||||||||||
Total | 6.6 | % | 13.2 | % |
Six Months Ended December 31, 2018 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) | Foreign Currency Translation | Adjusted Results at Constant Currency | |||||||||||||||
OPERATING INCOME (LOSS) | ||||||||||||||||||||
Luxury | $ | 162.3 | $ | (116.2 | ) | $ | 278.5 | $ | 8.0 | $ | 286.5 | |||||||||
Consumer Beauty | (925.5 | ) | (994.4 | ) | 68.9 | 6.4 | 75.3 | |||||||||||||
Professional Beauty | 78.8 | (36.1 | ) | 114.9 | 5.3 | 120.2 | ||||||||||||||
Corporate | (140.9 | ) | (141.7 | ) | 0.8 | — | 0.8 | |||||||||||||
Total | $ | (825.3 | ) | $ | (1,288.4 | ) | $ | 463.1 | $ | 19.7 | $ | 482.8 | ||||||||
OPERATING MARGIN | ||||||||||||||||||||
Luxury | 9.0 | % | 15.4 | % | 15.5 | % | ||||||||||||||
Consumer Beauty | (51.5 | %) | 3.8 | % | 4.0 | % | ||||||||||||||
Professional Beauty | 8.4 | % | 12.3 | % | 12.5 | % | ||||||||||||||
Corporate | N/A | N/A | N/A | |||||||||||||||||
Total | (18.2 | %) | 10.2 | % | 10.3 | % | ||||||||||||||
Six Months Ended December 31, 2017 | ||||||||||||||||||||
(in millions) | Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) | |||||||||||||||||
OPERATING INCOME (LOSS) | ||||||||||||||||||||
Luxury | $ | 141.8 | $ | (73.5 | ) | $ | 215.3 | |||||||||||||
Consumer Beauty | 161.2 | (59.0 | ) | 220.2 | ||||||||||||||||
Professional Beauty | 71.8 | (35.3 | ) | 107.1 | ||||||||||||||||
Corporate | (170.1 | ) | (171.7 | ) | 1.6 | |||||||||||||||
Total | $ | 204.7 | $ | (339.5 | ) | $ | 544.2 | |||||||||||||
OPERATING MARGIN | ||||||||||||||||||||
Luxury | 8.3 | % | 12.5 | % | ||||||||||||||||
Consumer Beauty | 7.4 | % | 10.1 | % | ||||||||||||||||
Professional Beauty | 7.3 | % | 10.9 | % | ||||||||||||||||
Corporate | N/A | N/A | ||||||||||||||||||
Total | 4.2 | % | 11.2 | % |
Three Months Ended December 31, 2018 vs. Three Months Ended December 31, 2017 Net Revenue Change | ||||||||||||
Net Revenues Change YoY | Reported Basis | Constant Currency | Impact from Divestitures1 | Organic (LFL) | ||||||||
Luxury | 7 | % | 10 | % | (1 | )% | 11 | % | ||||
Consumer Beauty | (15 | )% | (11 | )% | (4 | )% | (7 | )% | ||||
Professional Beauty | (4 | )% | (1 | )% | — | % | (1 | %) | ||||
Total Company | (5 | )% | (2 | )% | (3 | )% | 1 | % |
1 | Divestitures reflect the net revenue reduction from the termination of Guess and the divestitures of the license of Playboy and the license of Cerruti in the three months ended December 31, 2017. |
Six Months Ended December 31, 2018 vs. Six Months Ended December 31, 2017 Net Revenue Change | ||||||||||||
Net Revenues Change YoY | Reported | Constant Currency | Impact from the Acquisition and Divestitures 1 | Organic (LFL) | ||||||||
Luxury | 6 | % | 8 | % | 3 | % | 5 | % | ||||
Consumer Beauty | (18 | )% | (14 | )% | (4 | )% | (10 | )% | ||||
Professional Beauty | (4 | %) | (2 | )% | — | % | (2 | %) | ||||
Total Company | (7 | )% | (4 | )% | (1 | )% | (3 | )% |
1 | Acquisitions reflect the net revenue contribution from the acquisition of Burberry in the three months ended September 30, 2018 and the net revenue reduction from the termination of Guess and the divestitures of the license of Playboy and the license of Cerruti in the six months ended December 31, 2017. |
(in millions) | December 31, 2018 | June 30, 2018 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 417.5 | $ | 331.6 | ||||
Restricted cash | 27.5 | 30.6 | ||||||
Trade receivables—less allowances of $72.8 and $81.8, respectively | 1,542.7 | 1,536.0 | ||||||
Inventories | 1,164.6 | 1,148.9 | ||||||
Prepaid expenses and other current assets | 562.1 | 603.9 | ||||||
Total current assets | 3,714.4 | 3,651.0 | ||||||
Property and equipment, net | 1,625.7 | 1,680.8 | ||||||
Goodwill | 7,665.0 | 8,607.1 | ||||||
Other intangible assets, net | 7,929.4 | 8,284.4 | ||||||
Deferred income taxes | 182.7 | 107.4 | ||||||
Other noncurrent assets | 153.5 | 299.5 | ||||||
TOTAL ASSETS | $ | 21,270.7 | $ | 22,630.2 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,818.9 | $ | 1,928.6 | ||||
Accrued expenses and other current liabilities | 1,738.8 | 1,844.4 | ||||||
Short-term debt and current portion of long-term debt | 255.7 | 218.9 | ||||||
Income and other taxes payable | 51.6 | 52.1 | ||||||
Total current liabilities | 3,865.0 | 4,044.0 | ||||||
Long-term debt, net | 7,560.9 | 7,305.4 | ||||||
Pension and other post-employment benefits | 519.6 | 533.3 | ||||||
Deferred income taxes | 840.6 | 842.5 | ||||||
Other noncurrent liabilities | 385.7 | 388.5 | ||||||
Total liabilities | 13,171.8 | 13,113.7 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
REDEEMABLE NONCONTROLLING INTERESTS | 487.6 | 661.3 | ||||||
EQUITY: | ||||||||
Preferred Stock | — | — | ||||||
Common Stock | 8.1 | 8.1 | ||||||
Additional paid-in capital | 10,734.9 | 10,750.8 | ||||||
Accumulated deficit | (1,729.7 | ) | (626.2 | ) | ||||
Accumulated other comprehensive income | 33.6 | 158.8 | ||||||
Treasury stock | (1,441.8 | ) | (1,441.8 | ) | ||||
Total Coty Inc. stockholders’ equity | 7,605.1 | 8,849.7 | ||||||
Noncontrolling interests | 6.2 | 5.5 | ||||||
Total equity | 7,611.3 | 8,855.2 | ||||||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | $ | 21,270.7 | $ | 22,630.2 |
Six Months Ended December 31, | |||||||
(in millions) | 2018 | 2017 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income | $ | (966.1 | ) | $ | 102.5 | ||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 367.7 | 350.5 | |||||
Deferred income taxes | (55.9 | ) | (75.1 | ) | |||
Provision for bad debts | 9.4 | 9.0 | |||||
Provision for pension and other post-employment benefits | 18.2 | 22.2 | |||||
Share-based compensation | 8.2 | 16.2 | |||||
Asset impairment charges | 977.7 | — | |||||
Non-cash restructuring charges | 23.8 | 0.2 | |||||
Other | 26.4 | (5.3 | ) | ||||
Change in operating assets and liabilities, net of effects from purchase of acquired companies: | |||||||
Trade receivables | (45.5 | ) | (246.6 | ) | |||
Inventories | (35.2 | ) | (22.2 | ) | |||
Prepaid expenses and other current assets | 19.7 | (47.6 | ) | ||||
Accounts payable | (28.6 | ) | 18.7 | ||||
Accrued expenses and other current liabilities | (87.4 | ) | 185.6 | ||||
Income and other taxes payable | 12.8 | 19.5 | |||||
Other noncurrent assets | 24.7 | (14.9 | ) | ||||
Other noncurrent liabilities | (32.2 | ) | (4.9 | ) | |||
Net cash provided by operating activities | 237.7 | 307.8 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (259.3 | ) | (232.2 | ) | |||
Payment for business combinations and asset acquisitions, net of cash acquired | (40.8 | ) | (264.6 | ) | |||
Proceeds from sale of asset | — | 2.8 | |||||
Net cash used in investing activities | (300.1 | ) | (494.0 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net proceeds from short-term debt, original maturity less than three months | 39.7 | 71.5 | |||||
Proceeds from revolving loan facilities | 1,076.6 | 1,437.0 | |||||
Repayments of revolving loan facilities | (644.8 | ) | (1,166.4 | ) | |||
Repayments of term loans and other long-term debt | (95.6 | ) | (95.5 | ) | |||
Dividend payment | (188.4 | ) | (188.1 | ) | |||
Net proceeds from issuance of Class A Common Stock and Series A Preferred Stock | 0.9 | 13.7 | |||||
Net proceeds from foreign currency contracts | 2.4 | 8.2 | |||||
Distributions to noncontrolling interests, redeemable noncontrolling interests and mandatorily redeemable financial instruments | (22.9 | ) | (40.0 | ) | |||
Payment of debt issuance costs | (10.7 | ) | (4.0 | ) | |||
Other | (3.5 | ) | (3.2 | ) | |||
Net cash provided by financing activities | 153.7 | 33.2 | |||||
EFFECT OF EXCHANGE RATES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (8.5 | ) | 8.0 | ||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 82.8 | (145.0 | ) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period | 362.2 | 570.7 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH—End of period | $ | 445.0 | $ | 425.7 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | |||||||
Cash paid during the period for interest | $ | 140.7 | $ | 129.4 | |||
Cash received during the period for settlement of interest rate swaps | 43.2 | — | |||||
Cash paid during the period for income taxes, net of refunds received | 57.6 | 57.5 | |||||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES: | |||||||
Accrued capital expenditure additions | $ | 83.3 | $ | 72.6 | |||
Non-cash contingent consideration for business combination | — | 5.0 |