SEGMENT REPORTING

12 Months Ended

Jun. 30, 2019

The Company’s organizational structure is category focused, putting the consumer 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 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 determined that its three divisions are its operating segments and reportable segments. Each division has full end-to-end responsibility to optimize consumers’ beauty experience in the relevant categories and channels. The operating and reportable segments are:

Luxury — primarily focused on prestige fragrances, premium skin care and premium 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.

On July 1, 2019, the Company announced its turnaround plan, which includes planned changes to the reporting structure to the CODM. As part of these reporting structure changes, management expects to move from the current organizational structure into regional commercial business units in Europe, Middle East & Africa (“EMEA”), Americas and Asia Pacific for the combined Luxury and Consumer Beauty businesses. Such regional business units will be supported by central Luxury and Consumer Beauty marketing teams. Professional Beauty is expected to remain a distinct business unit. The Company anticipates that its operating and reporting segments would change upon completion of such reporting structure changes and the related changes in the financial information provided to the CODM, which is expected to occur in the third quarter of fiscal 2020.

Certain revenues and shared costs and the results of corporate initiatives are being 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 costs, costs related to acquisition activities and certain other expense items not attributable to ongoing operating activities of the segments.

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 11—Goodwill and Other Intangible Assets, net.



	Year Ended June 30,
SEGMENT DATA	2019			2018			2017
Net revenues:
Luxury	$	3,294.3		$	3,210.5		$	2,566.6
Consumer Beauty	3,539.3			4,268.1			3,688.2
Professional Beauty	1,814.9			1,919.4			1,395.5
Total	$	8,648.5		$	9,398.0		$	7,650.3
Depreciation and amortization:
Luxury	$	271.0		$	253.3		$	203.5
Consumer Beauty	329.8			340.4			256.2
Professional Beauty	135.2			143.3			95.4
Corporate	—			—			—
Total	$	736.0		$	737.0		$	555.1
Operating (loss) income:
Luxury	$	232.8		$	248.7		$	158.0
Consumer Beauty	(3,598.7		)	278.9			261.2
Professional Beauty	122.1			119.4			78.5
Corporate	(227.7		)	(493.7		)	(918.6		)
Total	$	(3,471.5	)	$	153.3		$	(420.9	)
Reconciliation:
Operating (loss) income	$	(3,471.5	)	$	153.3		$	(420.9	)
Interest expense, net	275.7			265.0			218.6
Loss on early extinguishment of debt	—			10.7			—
Other expense, net	30.9			30.1			18.5
Loss before income taxes	$	(3,778.1	)	$	(152.5	)	$	(658.0	)

The Company has determined its geographical structure to be North America (Canada and the United States), Europe and ALMEA (Asia, Latin America, the Middle East, Africa and Australia).



	Year Ended June 30,
GEOGRAPHIC DATA	2019		2018		2017
Net revenues:
North America	$	2,656.5	$	2,966.0	$	2,506.9
Europe	3,777.8		4,201.6		3,325.7
ALMEA	2,214.2		2,230.4		1,817.7
Total	$	8,648.5	$	9,398.0	$	7,650.3



	Year Ended June 30,
Long-lived assets:	2019		2018		2017
U.S.	$	5,613.2	$	7,408.5	$	7,662.4
Switzerland	5,444.4		8,000.2		6,899.8
Brazil	712.5		718.2		863.3
All other	2,326.6		2,441.1		3,187.3
Total	$	14,096.7	$	18,568.0	$	18,612.8

For Net revenues, a major country is defined as a group of subsidiaries in a country with combined revenues greater than 10% of consolidated net revenues or as otherwise deemed significant. The United States is the only country that accounts for more than 10% of total net revenues for fiscal years 2019, 2018 and 2017. The United States had net revenues of $2,418.7, $2,704.6 and $2,220.4 in fiscal 2019, 2018 and 2017, respectively.

For Long-lived assets, a major country is defined as a group of subsidiaries within a country with combined long-lived assets greater than 10% of consolidated long-lived assets or as otherwise deemed significant. Long-lived assets include property and equipment, goodwill and other intangible assets.

No customer or group of affiliated customers accounted for more than 10% of the Company’s Net revenues in fiscal 2019, 2018 and 2017 or are otherwise deemed significant.

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



	Year Ended June 30,
PRODUCT CATEGORY	2019		2018		2017
Fragrances	39.5	%	36.8	%	36.1	%
Color Cosmetics	26.0	%	28.2	%	29.6	%
Skin & Body Care	9.5	%	10.1	%	12.4	%
Hair Care	25.0	%	24.9	%	21.9	%
Total	100.0	%	100.0	%	100.0	%