The Company's equity investments, classified as Equity investments on the Condensed Consolidated Balance Sheets are represented by the following:


	December 31, 2021		June 30, 2021
Equity method investments:
KKW Holdings (a)	$	14.8	$	16.2
Equity investments at fair value:
Wella (b)	1,175.0		1,260.0

Total equity investments	$	1,189.8	$	1,276.2

(a)On January 4, 2021, the Company completed its purchase of 20% of the outstanding equity of KKW Holdings. The Company accounts for this minority investment under the equity method, given it has the ability to exercise significant influence over, but not control, the investee. The carrying value of the Company’s investment includes basis differences allocated to amortizable intangible assets.

During the three and six months ended December 31, 2021, the Company recognized ($0.8) and $(1.4), respectively, representing its share of the investee’s net loss in Other (income) expense, net within the Condensed Consolidated Statements of Operations.

(b)On November 30, 2020, the Company completed the previously announced strategic transaction with KKR for the sale of a 60% stake in Coty’s Wella Business. As of December 31, 2021 and June 30, 2021, the Company's stake in Wella was 25.9% and 40.0%, respectively.

On October 20, 2021, the Company completed the sale of a 9.4% stake in Wella to an affiliate of KKR, KKR Rainbow Aggregator L.P. ("KKR Aggregator”) in exchange for the redemption of 290,465 shares of KKR Aggregator's Series B Convertible Preferred Stock shares in Coty and a portion of unpaid dividends (the "First Exchange"). On November 30, 2021, Coty completed the sale of an additional 4.7% stake in Wella to KKR Aggregator in exchange for the redemption of KKR Aggregator's remaining convertible preferred shares in Coty (the "Second Exchange"), reducing the Company’s total shareholding in Wella to 25.9%. Refer to Note 16—Equity and Convertible Preferred Stock.

The following table presents summarized financial information of the Company’s equity method investees for the period ending December 31, 2021. Amounts presented represent combined totals at the investee level and not the Company’s proportionate share:


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020 (a)		2021		2020 (a)
Summarized Statements of Operations information:
Net revenues	$	744.3	$	215.2	$	1,363.5	$	215.2
Gross profit	508.4		147.0		938.1		147.0
Operating income	76.2		(5.1)		101.8		(5.1)
Income before income taxes	49.4		(13.5)		56.9		(13.5)
Net income	36.5		(12.7)		42.0		(12.7)

(a)As the sale of the Wella Business occurred on November 30, 2020, Wella's prior year summarized financials only comprise of one month of activity. Additionally, as the investment in KKW did not occur until January 4, 2021, the prior year summarized financials do not include the financial activity of KKW.

The following table summarizes movements in equity investments with fair value option that are classified within Level 3 for the period ended December 31, 2021. There were no internal movements to or from Level 3 from Level 1 or Level 2 for the period ended December 31, 2021.


Equity investments at fair value:
Balance as of June 30, 2021	$	1,260.0
First Exchange	(390.6)
Second Exchange	(212.7)

Total gains/(losses) included in earnings	518.3
Balance as of December 31, 2021	$	1,175.0

The following table summarizes the significant unobservable inputs used in Level 3 valuation of the Company's investments carried at fair value as of December 31, 2021. Included in the table are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

Fair value

Valuation Technique

Unobservable input

Range

Equity investments at fair value

1,175.0

Discounted cash flows

Discount rate

11.25% (a)

Growth rate

1.5% - 4.2% (a)

Market multiple

Revenue multiple

2.0x (b)

EBITDA multiple

12.0x – 19.0x (b)

(a)The primary unobservable inputs used in the fair value measurement of the Company's equity investments with fair value option, when using a discounted cash flow method, are the discount rate and revenue growth rate. Significant increases (decreases) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement. The Company estimates the discount rate based on the investees' projected cost of equity and debt. The revenue growth rate is forecasted for future years by the investee based on their best estimates. Significant increases (decreases) in the revenue growth rate in isolation would result in a significantly higher (lower) fair value measurement.

(b)The primary unobservable inputs used in the fair value measurement of the Company's equity investments with fair value option, when using a market multiple method, are the revenue multiple and EBITDA multiple. Significant increases (decreases) in the revenue multiple or EBITDA multiple in isolation would result in a significantly higher (lower) fair value measurement. The market multiples are derived from a group of guideline public companies.