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DISCONTINUED OPERATIONS
 12 Months Ended
Jun. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS
On June 1, 2020, the Company entered into a definitive agreement with Rainbow UK Bidco Limited (“KKR Bidco”), regarding a strategic transaction for the sale of Coty’s Professional and Retail Hair businesses, including the Wella, Clairol, OPI and ghd brands, (together, the “Wella Business”), valuing the business at $4,300.0 on a cash- and debt-free basis. The transaction was completed on November 30, 2020 and Coty retained an initial ownership of 40% of the Wella Company. As of June 30, 2022, the Company owned a 25.9% stake in the Wella Company. See Note 13—Equity Investments for additional information.
In accordance with applicable accounting guidance for the disposal of long-lived assets, the results of the Wella Business are presented as discontinued operations in the prior period leading up to the date of the sale, and, as such, have been excluded from both continuing operations and segment results for all periods presented. The Wella Business was comprised of the Professional Beauty and Retail Hair businesses.
The following table has selected financial information included in Net income from discontinued operations for the Wella Business.
Year Ended June 30,
2022 (a)
2021 (b)
2020
Net revenues$— $986.3 $2,020.1 
Cost of sales— 322.5 689.7 
Gross profit— 663.8 1,330.4 
Selling, general and administrative expenses— 443.7 1,009.2 
Amortization expense— — 95.5 
Restructuring costs— (0.7)7.5 
Asset impairment charges— — — 
Operating income— 220.8 218.2 
Interest expense, net— 21.3 49.7 
(Gain) loss on sale of business(6.1)246.4 — 
Other (income) expense, net— (1.0)(0.9)
Income (loss) from discontinued operations before income taxes6.1 (45.9)169.4 
Income tax on discontinued operations0.4 91.4 82.2 
Net income (loss) from discontinued operations$5.7 $(137.3)$87.2 
(a)Net income from discontinued operations for the year ended June 30, 2022 reflect certain working capital adjustments net of the related income tax impact.
(b)As the sale of the Wella Business occurred on November 30, 2020, discontinued operations activity, other than the Loss on sale of business, comprises five months for the fiscal year ended 2021.
The following is selected financial information included in cash flows from discontinued operations for the Wella Business held for sale:
Year Ended June 30,
202220212020
NON-CASH OPERATING ITEMS
Depreciation and amortization$— $— $131.8 
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures$— $8.7 $24.7 
The gain/(loss) on sale of the Wella Business included in Net income (loss) from discontinued operations in the Consolidated Statements of Operations was $6.1 and $(246.4) for the years ended June 30, 2022 and 2021, respectively. Initial cash proceeds received by the Company for the sale of its 60% stake in the Wella Business were $2,451.7 and the Company retained an equity interest of 40%. The loss on sale reflects the net assets sold, taxes and other costs to sell the Wella Business.
On December 22, 2021, the Company entered into an agreement with KKR Bidco related to post-closing adjustments to the purchase consideration for the Wella Business. As part of this agreement, the Company may receive future contingent proceeds. Earning the contingent proceeds is based on the future recovery of certain tax credits of the Wella Business.
The Company accounts for the initial measurement of contingent consideration under a loss recovery approach. As of the time the contingent consideration arrangement was entered into, the Company was unable to determine that it was probable that any of the contingent consideration would be earned. Therefore, no contingent consideration gain was initially recognized. Subsequent measurement of the total contingent consideration will be based on the guidance for gain contingencies and any gain will be recorded at the time the consideration is earned.
During the second quarter of fiscal 2022, a $34.0 advance of future contingent proceeds was paid to the Company and is subject to claw back if recovery targets related to the Wella Business tax credits are not achieved. During fiscal 2022, certain recovery targets were achieved and the Company recognized a $0.7 gain related to the advance payment, reported in Other income, net. The remaining $33.3 is unearned and will be included in Other noncurrent liabilities in the Consolidated Balance Sheet until the contingency is resolved.