SEGMENT REPORTING

The Company’s organizational structure is category focused, putting the consumers first, by specifically targeting how and where they shop and what and why they purchase. Operating and reportable segments (referred to as “segments”) reflect the way the Company is managed and for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has designated its Chief Executive Officer as the CODM.

The Company has the following three divisions which represent its operating segments and reportable segments:

Luxury — primarily focused on prestige fragrances, premium skin care and premium color cosmetics;

Consumer Beauty — primarily focused on color cosmetics, retail hair coloring and styling products, mass fragrance, mass skin care and body care;

Professional Beauty — primarily focused on hair and nail care products for professionals.

Certain revenues and shared costs and the results of corporate initiatives are managed outside of the three segments by Corporate. The items within Corporate relate to corporate-based responsibilities and decisions and are not used by the CODM to measure the underlying performance of the segments. Corporate primarily includes restructuring and realignment costs, costs related to acquisition activities and certain other expense items not attributable to ongoing operating activities of the segments.

With the adoption of ASU No. 2017-07 (see Note 2—Summary of Significant Accounting Policies), the non-service cost components of net periodic benefit cost have been removed from consolidated operating expenses and included in consolidated other expense, net. For segment reporting, however, all components of net periodic benefit cost are included in segment operating results as these components continue to comprise the basis on which the CODM analyzes segment results. In order to reconcile the total of segment operating (loss) income to consolidated operating (loss) income, reclassification adjustments related to the non-service costs components have been included in Corporate in the table below.

With the exception of goodwill and acquired intangible assets, the Company does not identify or monitor assets by segment. The Company does not present assets by reportable segment since various assets are shared between reportable segments. The allocation of goodwill and acquired intangible assets by segment is presented in Note 9—Goodwill and Other Intangible Assets, net.



	Three Months Ended December 31,						Six Months Ended December 31,
SEGMENT DATA	2018			2017			2018			2017
Net revenues:
Luxury	$	1,017.5		$	951.2		$	1,810.4		$	1,715.6
Consumer Beauty	967.8			1,138.6			1,796.6			2,182.0
Professional Beauty	525.9			547.8			935.5			978.3
Total	$	2,511.2		$	2,637.6		$	4,542.5		$	4,875.9
Operating income (loss):
Luxury	$	113.6		$	85.1		$	162.3		$	141.8
Consumer Beauty	(906.9		)	99.3			(925.5		)	161.2
Professional Beauty	73.8			73.5			78.8			71.8
Corporate	(85.1		)	(82.7		)	(140.9		)	(170.1		)
Total	$	(804.6	)	$	175.2		$	(825.3	)	$	204.7
Reconciliation:
Operating (loss) income	$	(804.6	)	$	175.2		$	(825.3	)	$	204.7
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

Presented below are the percentage of revenues associated with the Company’s product categories:



	Three Months Ended December 31,				Six Months Ended December 31,
PRODUCT CATEGORY	2018		2017		2018		2017
Fragrance	43.5	%	40.7	%	42.3	%	39.1	%
Color Cosmetics	23.3		24.1		24.7		26.3
Hair Care	24.4		24.5		24.3		24.2
Skin & Body Care	8.8		10.7		8.7		10.4
Total Coty Inc.	100.0	%	100.0	%	100.0	%	100.0	%