UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________

FORM 10-Q

(Mark One)

x
☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR
For the quarterly period ended March 31, 2022
__OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________ to _______________

For the transition period from__________________ to _______________

Commission File Number: 33-59560
REVLON CONSUMER PRODUCTS CORPORATION
(Exact name of registrant as specified in its charter)
Commission File NumberRegistrant; State of Incorporation; Address and Telephone NumberIRS Employer Identification No.
1-11178Revlon, Inc.13-3662955
Delaware
Delaware13-3662953
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
One New York Plaza
New York, New York10004
212-527-4000
33-59650Revlon Consumer Products Corporation13-3662953
Delaware
One New York Plaza
New York, New York 1000410004
(Address212-527-4000
Securities registered pursuant to Section 12(b) or 12(g) of principal executive offices)the Act:
(Zip Code)
Title of each classTrading Symbol(s)Name of each exchange on which registered
Revlon, Inc.Class A Common StockREVNew York Stock Exchange
Revlon Consumer Products CorporationNoneN/AN/A


Registrant's telephone number, including area code: 212-527-4000

Indicate by check mark whether the registrantregistrants (1) hashave filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant wasregistrants were required to file such reports), and (2) hashave been subject to such filing requirements for the past 90 days. Yes ¨ No x

Revlon, Inc.
Yes ☒
No ☐
Revlon Consumer Products Corporation
Yes ☐
No ☒

Indicate by check mark whether the registrant hasregistrants have submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x☒ No ¨


1

Indicate by check mark whether theeach registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large"large accelerated filer,” “accelerated" "accelerated filer,” “smaller" "smaller reporting company,”" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨Accelerated filerNon-accelerated filerSmaller Reporting CompanyEmerging Growth Company
Revlon, Inc.
Yes ☐No ☒
Accelerated filer ¨Yes ☒No ☐
Yes ☐No ☒
Yes☒
No ☐
Yes☐
No ☒
Revlon Consumer Products Corporation
Non-accelerated filer x (Do not check if a smaller reporting company)Yes ☐No ☒
Smaller reporting company ¨Yes ☐No ☒
Emerging growth company ¨Yes ☒No ☐
Yes☒
No ☐
Yes☐
No ☒
If an emerging growth company, indicate by check mark if the registrant hasregistrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨



Indicate by check mark whether theeach registrant is a shell company (as defined in Rule 12b-2 of the Act).      Yes ¨ No x

Revlon, Inc.Yes☐
No ☒
Revlon Consumer Products CorporationYes☐
No ☒
The number
Number of shares outstanding of the registrant's common stock was 5,260 sharesoutstanding as of September 30, 2017,March 31, 2022:
Revlon, Inc. Class A Common Stock:54,254,019
Revlon Consumer Products Corporation Common Stock:5,260

At such date, (i) 46,223,321 shares of Revlon, Inc. Class A Common Stock were beneficially owned by MacAndrews & Forbes Incorporated and certain of its affiliates; and (ii) all shares of whichRevlon Consumer Products Corporation ("Products Corporation") Common Stock were held by one affiliate, Revlon, Inc.




Products Corporation meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q as, among other things, all of Products Corporation's equity securities are owned directly by Revlon, Inc., which is a reporting company under the Securities Exchange Act of 1934, as amended, and which filed with the SEC on May 4, 2022 all of the material required to be filed pursuant to Section 13, 14 or 15(d) thereof. Products Corporation is therefore filing this Form 10-Q with a reduced disclosure format applicable to Products Corporation.
2


REVLON, CONSUMER PRODUCTS CORPORATIONINC. AND SUBSIDIARIES
INDEX


PART I - Financial Information
Item 1.Financial Statements of Revlon, Inc. and Subsidiaries
2
Consolidated
Financial Statements of Revlon Consumer Products Corporation and Subsidiaries
Item 2.
Item 3.
Item 4.
PART II - Other Information
Item 1.
Item 1A.
Item 5.
Item 6.Exhibits
Signatures





1


PART I - FINANCIAL INFORMATION
Item 1.

REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)

March 31, 2022December 31, 2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$70.0 $102.4 
Trade receivables (net of allowance for doubtful accounts of $8.8 and $9.0, respectively)337.8 383.8 
Inventories, net450.6 417.4 
Prepaid expenses and other assets133.9 136.0 
Total current assets992.3 1,039.6 
Property, plant and equipment (net of accumulated depreciation of $555.7 and $551.3, respectively)291.4 297.3 
Deferred income taxes54.0 42.8 
Goodwill562.5 562.8 
Intangible assets (net of accumulated amortization and impairment of $333.8 and $326.4, respectively)382.4 392.2 
Other assets92.2 97.8 
Total assets$2,374.8 $2,432.5 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Short-term borrowings$0.7 $0.7 
Current portion of long-term debt115.6 137.2 
Accounts payable263.7 217.7 
Accrued expenses and other current liabilities415.8 432.0 
Total current liabilities795.8 787.6 
Long-term debt3,307.1 3,305.5 
Long-term pension and other post-retirement plan liabilities143.9 147.3 
Other long-term liabilities206.6 206.2 
Stockholders’ deficiency:
Class A Common Stock, par value $0.01 per share: 900,000,000 shares authorized; 61,082,225 and 58,005,142 shares issued, respectively0.5 0.5 
Additional paid-in capital1,098.1 1,096.3 
Treasury stock, at cost: 2,412,079 and 1,992,957 shares of Class A Common Stock, respectively(40.8)(37.6)
Accumulated deficit(2,905.6)(2,838.6)
Accumulated other comprehensive loss(230.8)(234.7)
Total stockholders’ deficiency(2,078.6)(2,014.1)
Total liabilities and stockholders’ deficiency$2,374.8 $2,432.5 








See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
2

Table of Contents

REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(dollars in millions, except share and per share amounts)
(Unaudited)

Three Months Ended March 31,
20222021
Net sales$479.6 $445.0 
Cost of sales196.9 191.2 
      Gross profit282.7 253.8 
Selling, general and administrative expenses256.9 260.5 
Acquisition, integration and divestiture costs0.2 0.6 
Restructuring charges and other, net1.9 5.4 
      Operating income (loss)23.7 (12.7)
Other expenses:
   Interest expense, net62.1 58.9 
   Amortization of debt issuance costs9.1 8.7 
   Foreign currency losses, net7.8 3.3 
   Miscellaneous, net1.9 1.2 
      Other expenses80.9 72.1 
Loss from operations before income taxes(57.2)(84.8)
Provision for income taxes9.8 11.2 
Net loss$(67.0)$(96.0)
Other comprehensive income (loss):
   Foreign currency translation adjustments1.0 (4.9)
   Amortization of pension related costs, net of tax(a)(b)
2.9 3.5 
Other comprehensive income, net3.9 (1.4)
Total comprehensive loss$(63.1)$(97.4)
Basic and Diluted (loss) earnings per common share:$(1.23)$(1.79)
Weighted average number of common shares outstanding:
      Basic54,262,464 53,653,449 
      Diluted54,262,464 53,653,449 
(a) Net of tax benefit of nil for each of the three months ended March 31, 2022 and 2021.
(b) This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).









See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
3
Table of Contents
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
(dollars in millions, except share and per share amounts)
(Unaudited)

Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2022$0.5 $1,096.3 $(37.6)$(2,838.6)$(234.7)$(2,014.1)
Treasury stock acquired, at cost (a)
— — (3.2)— — (3.2)
Stock-based compensation amortization— 1.8 — — — 1.8 
Net loss— — — (67.0)— (67.0)
Other comprehensive (loss) income, net (b)
— — — — 3.9 3.9 
Balance at March 31, 2022$0.5 $1,098.1 $(40.8)$(2,905.6)$(230.8)$(2,078.6)
Common StockAdditional Paid-In CapitalTreasury StockAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholders’ Deficiency
Balance, January 1, 2021$0.5 $1,082.3 $(35.2)$(2,631.7)$(277.9)$(1,862.0)
Treasury stock acquired, at cost (a)
— — (2.4)— — (2.4)
Stock-based compensation amortization— 3.1 — — — 3.1 
Net loss— — — (96.0)— (96.0)
Other comprehensive (loss) income, net (b)
— — — — (1.4)(1.4)
Balance, March 31, 2021$0.5 $1,085.4 $(37.6)$(2,727.7)$(279.3)$(1,958.7)
(a) Pursuant to the share withholding provisions of the Fourth Amended and Restated Revlon, Inc. Stock Plan (as amended, the "Stock Plan"), the Company withheld an aggregate of 419,122 and 162,496 shares of Revlon Class A Common Stock during the three months ended March 31, 2022 and 2021, respectively, to satisfy certain minimum statutory tax withholding requirements related to the vesting of restricted shares and restricted stock units ("RSUs") for certain senior executives and employees. These withheld shares were recorded as treasury stock using the cost method, at a weighted-average price per share of $7.66 and $14.95 during the three months ended March 31, 2022 and 2021, respectively, based on the closing price of Revlon Class A Common Stock as reported on the New York Stock Exchange (the "NYSE") consolidated tape on each respective vesting date, for a total of approximately $3.2 million and $2.4 million during the three months ended March 31, 2022 and 2021. See Note 11, "Stock Compensation Plan," for details regarding restricted stock awards and RSUs under the Stock Plan.
(b) See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three months ended March 31, 2022 and 2021, respectively.

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
4
Table of Contents
REVLON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(Unaudited)

Three Months Ended March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(67.0)$(96.0)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization27.6 33.3 
   Foreign currency losses from re-measurement7.9 3.3 
   Amortization of debt discount0.2 0.4 
   Stock-based compensation amortization1.8 3.1 
Provision for (benefit from) deferred income taxes(11.4)1.7 
   Amortization of debt issuance costs9.1 8.7 
   Pension and other post-retirement cost1.1 1.3 
Paid-in-kind interest expense on the 2020 BrandCo Facilities4.7 4.6 
   Change in assets and liabilities:
Decrease in trade receivables45.8 33.7 
(Increase) decrease in inventories(33.4)18.7 
Decrease (increase) in prepaid expenses and other current assets2.1 (8.4)
Increase in accounts payable46.8 2.8 
Decrease in accrued expenses and other current liabilities(22.8)(22.5)
Decrease in deferred revenue(0.7)(1.3)
Pension and other post-retirement plan contributions(2.2)(13.7)
Purchases of permanent displays(4.2)(5.8)
Other, net1.3 7.7 
Net cash provided by (used in) operating activities6.7 (28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(2.3)(0.7)
Net cash used in investing activities(2.3)(0.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(0.3)(10.6)
Borrowings on term loans (a)
— 175.0 
Repayments on term loans (b)
(10.6)(61.2)
Net (repayments) borrowings under the revolving credit facilities(21.6)(59.3)
Payment of financing costs(1.8)(11.8)
Tax withholdings related to net share settlements of restricted stock and RSUs(3.2)(2.4)
Other financing activities(0.1)(0.1)
Net cash (used in) provided by financing activities(37.6)29.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(0.1)(1.3)
   Net decrease in cash, cash equivalents and restricted cash
(33.3)(0.8)
   Cash, cash equivalents and restricted cash at beginning of period (c)
120.9 102.5 
   Cash, cash equivalents and restricted cash at end of period (c)
$87.6 $101.7 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$67.7 $64.6 
Income taxes, net of refunds(0.5)(1.0)
Supplemental schedule of non-cash investing and financing activities:
Paid-in-kind interest capitalized to the 2020 BrandCo Facilities$4.7 $4.6 
(a) Borrowings on term loans for the three months ended March 31, 2021 includes borrowings under the SISO Term Loan Facility and the 2021 Foreign Asset-Based Term Facility of $100.0 million and $75.0 million, respectively. See Note 7, "Debt" in the Company's 2021 Form 10-K for additional information.
(b) Repayments on term loans for the three months ended March 31, 2022 includes repayments of $4.7 million under the 2020 BrandCo Term Loan Facility, $3.6 million for the 2020 Troubled-debt-restructuring future interest amortization, and $2.3 million under the 2016 Term Loan Facility. Repayments on term loans for the three months ended March 31, 2021 includes repayments under the 2018 Foreign Asset-Based Term Facility and the 2016 Term Loan Facility of $58.9 million and $2.3 million, respectively. See Note 7, "Debt" in the Company's 2021 Form 10-K for additional information.
(c)These amounts include restricted cash of $17.6 million and $16.1 million as of March 31,2022 and 2021, respectively. The balance as of March 31, 2022 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to support outstanding undrawn letters of credit. The balance as of March 31, 2021 represents: (i) cash on deposit in lieu of a mandatory prepayment and loan proceeds
5
Table of Contents
held in escrow until certain collateral perfection requirements were satisfied under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Consolidated Balance Sheets as of March 31, 2022 and March 31, 2021, respectively.

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
6
Table of Contents

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share and per share amounts)

September 30, 2017 December 31, 2016March 31, 2022December 31, 2021
(Unaudited)  (Unaudited)
ASSETS   ASSETS
Current assets:   Current assets:
Cash and cash equivalents$79.2
 $186.8
Cash and cash equivalents$70.0 $102.4 
Trade receivables, less allowance for doubtful accounts of $10.8 and $11.1 as of September 30, 2017 and December 31, 2016, respectively459.4
 423.9
Inventories555.4
 424.6
Prepaid expenses and other101.9
 84.9
Trade receivables (net of allowance for doubtful accounts of $8.8 and $9.0, respectively)Trade receivables (net of allowance for doubtful accounts of $8.8 and $9.0, respectively)337.8 383.8 
Inventories, netInventories, net450.6 417.4 
Prepaid expenses and other assetsPrepaid expenses and other assets129.8 131.8 
Receivable from Revlon, Inc.142.3
 132.7
Receivable from Revlon, Inc.167.0 165.0 
Total current assets1,338.2
 1,252.9
Total current assets1,155.2 1,200.4 
Property, plant and equipment, net of accumulated depreciation of $373.2 and $304.7 as of September 30, 2017 and December 31, 2016, respectively349.1
 320.5
Property, plant and equipment (net of accumulated depreciation of $555.7 and $551.3, respectively)Property, plant and equipment (net of accumulated depreciation of $555.7 and $551.3, respectively)291.4 297.3 
Deferred income taxes192.3
 136.1
Deferred income taxes62.7 51.6 
Goodwill703.1
 689.5
Goodwill562.5 562.8 
Intangible assets, net of accumulated amortization of $119.9 and $84.8 as of September 30, 2017 and December 31, 2016, respectively600.9
 636.6
Intangible assets (net of accumulated amortization and impairment of $333.8 and $326.4, respectively)Intangible assets (net of accumulated amortization and impairment of $333.8 and $326.4, respectively)382.4 392.2 
Other assets109.0
 103.1
Other assets92.2 97.8 
Total assets$3,292.6
 $3,138.7
Total assets$2,546.4 $2,602.1 
   
LIABILITIES AND STOCKHOLDER'S DEFICIENCY   LIABILITIES AND STOCKHOLDER'S DEFICIENCY
Current liabilities:   Current liabilities:
Short-term borrowings$11.8
 $10.8
Short-term borrowings$0.7 $0.7 
Current portion of long-term debt256.8
 18.1
Current portion of long-term debt115.6 137.2 
Accounts payable344.4
 296.9
Accounts payable263.7 217.7 
Accrued expenses and other347.5
 382.7
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities415.9 432.1 
Total current liabilities960.5
 708.5
Total current liabilities795.9 787.7 
Long-term debt2,656.0
 2,663.1
Long-term debt3,307.1 3,305.5 
Long-term pension and other post-retirement plan liabilities179.8
 184.1
Long-term pension and other post-retirement plan liabilities143.9 147.3 
Other long-term liabilities83.0
 89.8
Other long-term liabilities219.2 218.8 
Stockholder’s deficiency:   
RCPC preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and
outstanding as of September 30, 2017 and December 31, 2016, respectively

54.6
 54.6
Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding as of June 30, 2017 and December 31, 2016
—
 —
Stockholder's deficiency:Stockholder's deficiency:
Products Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstandingProducts Corporation Preferred stock, par value $1.00 per share; 1,000 shares authorized; 546 shares issued and outstanding54.6 54.6 
Products Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstandingProducts Corporation Common Stock, par value $1.00 per share; 10,000 shares authorized; 5,260 shares issued and outstanding— —
Additional paid-in capital970.3
 964.4
Additional paid-in capital1,022.7 1,020.9 
Accumulated deficit(1,375.7) (1,274.1)Accumulated deficit(2,766.2)(2,698.0)
Accumulated other comprehensive loss(235.9) (251.7)Accumulated other comprehensive loss(230.8)(234.7)
Total stockholder’s deficiency(586.7) (506.8)
Total liabilities and stockholder’s deficiency$3,292.6
 $3,138.7
Total stockholder's deficiencyTotal stockholder's deficiency(1,919.7)(1,857.2)
Total liabilities and stockholder's deficiencyTotal liabilities and stockholder's deficiency$2,546.4 $2,602.1 
















See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements


7
Table of Contents
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOMELOSS
(dollars in millions)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
        
Net sales$666.5
 $604.8
 $1,907.1
 $1,533.3
Cost of sales290.3
 243.4
 823.6
 568.8
      Gross profit376.2
 361.4
 1,083.5
 964.5
Selling, general and administrative expenses360.2
 283.4
 1,068.2
 786.0
Acquisition and integration costs12.7
 33.5
 40.2
 39.5
Restructuring charges and other, net6.4
 0.5
 11.3
 2.3
      Operating (loss) income(3.1) 44.0
 (36.2) 136.7
Other expenses:       
   Interest expense38.6
 27.4
 110.3
 69.3
   Amortization of debt issuance costs2.3
 1.7
 6.8
 4.6
   Loss on early extinguishment of debt—
 16.9
 —
 16.9
   Foreign currency (gains) losses, net(3.1) 1.2
 (16.8) 6.3
   Miscellaneous, net0.3
 (0.6) 1.8
 (0.1)
      Other expenses38.1
 46.6
 102.1
 97.0
(Loss) income from continuing operations before income taxes(41.2) (2.6) (138.3) 39.7
(Benefit from) provision for income taxes(10.0) 0.4
 (35.4) 18.3
(Loss) income from continuing operations, net of taxes(31.2) (3.0) (102.9) 21.4
Income (loss) from discontinued operations, net of taxes0.4
 (0.2) 1.3
 (2.3)
Net (loss) income$(30.8) $(3.2) $(101.6) $19.1
Other comprehensive income:    

 

   Foreign currency translation adjustments, net of tax (a)   
(1.2) 2.7
 5.3
 8.0
   Amortization of pension related costs, net of tax (b)(c)
2.0
 1.8
 6.1
 5.6
Pension curtailment gain, net of tax(d)
—
 —
 2.6
 —
Reclassification into earnings of accumulated losses from the de-designated 2013 Interest Rate Swap, net of tax(e)
0.6
 —
 1.8
 —
Revaluation of derivative financial instruments, net of reclassifications into earnings, net of tax(f)
—
 0.8
 —
 0.1
Other comprehensive income, net1.4
 5.3
 15.8
 13.7
Total comprehensive (loss) income$(29.4) $2.1
 $(85.8) $32.8
(Unaudited)

(a)
Net of tax benefit of $0.2 million and tax expense $0.7 million for the three months ended September 30, 2017 and 2016, respectively, and tax expense of $1.5 million and $1.3 million for the nine months ended September 30, 2017 and 2016, respectively.
(b)
Net of tax expense of $0.4 million for each of the three months ended September 30, 2017 and 2016, and $1.3 million and $1.1 million for nine months ended September 30, 2017 and 2016, respectively.
(c)This amount is included in the computation of net periodic benefit (income) costs. See Note 11, “Pension and Post-Retirement Benefits,” for additional information regarding net periodic benefit (income) costs.
(d)
Net of tax expense of $0.3 million for the nine months ended September 30, 2017.
(e)Net of tax benefit of $0.4 million and $1.1 million for the three and nine months ended September 30, 2017, respectively.
(f)Net of tax expense of $0.5 million and $0.1 million for the three and nine months ended September 30, 2016, respectively.


Three Months Ended March 31,
20222021
Net sales$479.6 $445.0 
Cost of sales196.9 191.2 
      Gross profit282.7 253.8 
Selling, general and administrative expenses254.8 259.5 
Acquisition, integration and divestiture costs0.2 0.6 
Restructuring charges and other, net1.9 5.4 
      Operating income (loss)25.8 (11.7)
Other expenses:
   Interest expense, net62.1 58.9 
   Amortization of debt issuance costs9.1 8.7 
   Foreign currency losses, net7.8 3.3 
   Miscellaneous, net5.3 1.2 
      Other expenses84.3 72.1 
Loss from operations before income taxes(58.5)(83.8)
Provision for income taxes9.7 11.1 
Net loss$(68.2)$(94.9)
Other comprehensive income (loss):
   Foreign currency translation adjustments1.0 (4.9)
   Amortization of pension related costs, net of tax(a)(b)
2.9 3.5 
Other comprehensive income, net3.9 (1.4)
Total comprehensive loss$(64.3)$(96.3)

(a)Net of tax benefit of nil for each of the three months ended March 31, 2022 and 2021.
(b)This amount is included in the computation of net periodic benefit costs (income). See Note 10, "Pension and Post-Retirement Benefits," for additional information regarding net periodic benefit costs (income).













See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements


8

Table of Contents
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDER'SSTOCKHOLDERS’ DEFICIENCY
(dollars in millions)

(Unaudited)

 Preferred Stock Additional Paid-In-Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholder's Deficiency
          
Balance, January 1, 2017$54.6
 $964.4
 $(1,274.1) $(251.7) $(506.8)
Stock-based compensation amortization—
 5.9
 —
 —
 5.9
Net loss—
 —
 (101.6) —
 (101.6)
Other comprehensive income, net (a)
—
 —
 —
 15.8
 15.8
Balance, September 30, 2017$54.6
 $970.3
 $(1,375.7) $(235.9) $(586.7)
Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2022$54.6 $1,020.9 $(2,698.0)$(234.7)$(1,857.2)
Stock-based compensation amortization— 1.8 — — 1.8 
Net loss— — (68.2)— (68.2)
Other comprehensive (loss) income, net (a)
— — — 3.9 3.9 
Balance, March 31, 2022$54.6 $1,022.7 $(2,766.2)$(230.8)$(1,919.7)

Preferred StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) IncomeTotal Stockholder's Deficiency
Balance, January 1, 2021$54.6 $1,006.9 $(2,486.6)$(277.9)$(1,703.0)
Stock-based compensation amortization— 3.1 — — 3.1 
Net loss— — (94.9)— (94.9)
Other comprehensive (loss) income, net (a)
— — — (1.4)(1.4)
Balance, March 31, 2021$54.6 $1,010.0 $(2,581.5)$(279.3)$(1,796.2)

(a)
See Note 13, “Accumulated Other Comprehensive Loss,” regarding the changes in the accumulated balances for each component of other comprehensive loss during the nine months ended September 30, 2017.



(a)See Note 13, "Accumulated Other Comprehensive Loss," regarding the changes in the accumulated balances for each component of other comprehensive loss during the three months ended March 31, 2022 and 2021, respectively.












See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements


9
Table of Contents
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
(Unaudited)

Three Months Ended March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(68.2)$(94.9)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization27.6 33.3 
   Foreign currency losses from re-measurement7.9 3.3 
   Amortization of debt discount0.2 0.4 
   Stock-based compensation amortization1.8 3.1 
  Provision for (benefit from) deferred income taxes(11.4)1.9 
   Amortization of debt issuance costs9.1 8.7 
   Pension and other post-retirement cost1.1 1.3 
Paid-in-kind interest expense on the 2020 BrandCo Facilities4.7 4.6 
   Change in assets and liabilities:
Decrease in trade receivables45.8 33.7 
(Increase) decrease in inventories(33.4)18.7 
Decrease (increase) in prepaid expenses and other current assets0.1 (11.8)
Increase in accounts payable46.8 2.8 
Decrease in accrued expenses and other current liabilities(22.8)(22.5)
Decrease in deferred revenue(0.7)(1.3)
Pension and other post-retirement plan contributions(2.2)(13.7)
Purchases of permanent displays(4.2)(5.8)
Other, net4.5 9.8 
Net cash used in operating activities6.7 (28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(2.3)(0.7)
Net cash used in investing activities(2.3)(0.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(0.3)(10.6)
Borrowings on term loans (a)— 175.0 
Repayments on term loans (b)(10.6)(61.2)
Net (repayments) borrowings under the revolving credit facilities(21.6)(59.3)
Payment of financing costs(1.8)(11.8)
Tax withholdings related to net share settlements of restricted stock and RSUs(3.2)(2.4)
Other financing activities(0.1)(0.1)
Net cash (used in) provided by financing activities(37.6)29.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(0.1)(1.3)
   Net decrease in cash, cash equivalents and restricted cash(33.3)(0.8)
   Cash, cash equivalents and restricted cash at beginning of period (c)
120.9 102.5 
   Cash, cash equivalents and restricted cash at end of period (c)
$87.6 $101.7 
Supplemental schedule of cash flow information:
   Cash paid during the period for:
Interest$67.7 $64.6 
Income taxes, net of refunds(0.5)(1.0)
Supplemental schedule of non-cash investing and financing activities:
Paid-in-kind interest capitalized to the 2020 BrandCo Facilities4.74.6 
(a) Borrowings on term loans for the three months ended March 31, 2021 includes borrowings under the SISO Term Loan Facility and the 2021 Foreign Asset-Based Term Facility of $100.0 million and 75.0 million, respectively. See Note 7, "Debt" in the Company's 2021 Form 10-K for additional information.
(b) Repayments on term loans for the three months ended March 31, 2022 includes repayments of $4.7 million under the 2020 BrandCo Term Loan Facility, $3.6 million for the 2020 Troubled-debt-restructuring future interest amortization, and $2.3 million under the 2016 Term Loan Facility. Repayments on term loans for the three months ended March 31, 2021 includes repayments under the 2018 Foreign Asset-Based Term Facility and the 2016 Term Loan Facility of $58.9 million and $2.3 million, respectively. See Note 7, "Debt" in the Company's 2021 Form 10-K for additional information.
(c) These amounts include restricted cash of $17.6 million and $16.1 million as of March 31,2022 and 2021, respectively. The balance as of March 31, 2022 represents: (i) cash on deposit in lieu of a mandatory prepayment under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to
10
Table of Contents
 Nine Months Ended September 30,
 2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net (loss) income$(101.6) $19.1
Adjustments to reconcile net (loss) income to net cash used in operating activities:   
   Depreciation and amortization111.7
 81.0
   Foreign currency (gains) losses from re-measurement(20.8) 5.5
   Amortization of debt discount0.9
 1.1
   Stock-based compensation amortization5.9
 4.8
   (Benefit from) provision for deferred income taxes(53.2) 9.3
   Loss on early extinguishment of debt—
 16.9
   Amortization of debt issuance costs6.8
 4.6
 Loss on sale of certain assets1.5
 0.2
   Pension and other post-retirement cost (income)1.9
 (0.5)
   Change in assets and liabilities, net of acquisitions:  

      Increase in trade receivables(25.1) (112.0)
      (Increase) decrease in inventories(121.6) 5.0
      Increase in prepaid expenses and other current assets(22.7) (32.1)
      Increase (decrease) in accounts payable36.4
 (3.5)
      Decrease in accrued expenses and other current liabilities(46.9) (34.4)
      Pension and other post-retirement plan contributions(5.8) (6.0)
      Purchases of permanent displays(37.3) (25.9)
      Other, net(4.3) (4.0)
Net cash used in operating activities(274.2) (70.9)
CASH FLOWS FROM INVESTING ACTIVITIES:   
Capital expenditures(69.5) (33.1)
Business acquisition, net of acquired cash—
 (1,028.7)
Proceeds from the sale of certain assets—
 0.5
Net cash used in investing activities(69.5) (1,061.3)
CASH FLOWS FROM FINANCING ACTIVITIES:   
Net increase (decrease) in short-term borrowings and overdraft1.2
 (2.6)
Net borrowings under the 2016 Revolving Credit Facility243.9
 65.4
Repayments under the 2016 Term Loan Facility

(13.5) —
Repayments under the Old Acquisition Term Loan—
 (15.1)
Prepayments under the 2011 Term Loan—
 (11.5)
Repayment of Old Acquisition Term Loan—
 (658.6)
Repayment of 2011 Term Loan—
 (651.4)
Borrowings under the 2016 Term Loan Facility—
 1,791.0
Proceeds from the issuance of 6.25% Senior Notes—
 450.0
Payment of financing costs(1.1) (61.5)
Tax withholdings related to net share settlements of restricted stock units and awards

(2.5) (2.6)
Other financing activities(1.3) (2.2)
Net cash provided by financing activities226.7
 900.9
Effect of exchange rate changes on cash and cash equivalents9.4
 3.6
   Net decrease in cash and cash equivalents
(107.6) (227.7)
   Cash and cash equivalents at beginning of period186.8
 326.9
   Cash and cash equivalents at end of period$79.2
 $99.2
Supplemental schedule of cash flow information:   
   Cash paid during the period for:   
Interest$124.5
 $68.4
Income taxes, net of refunds11.1
 19.4
support outstanding undrawn letters of credit. The balance as of March 31, 2021 represents: (i) cash on deposit in lieu of a mandatory prepayment and loan proceeds held in escrow until certain collateral perfection requirements were satisfied under the 2021 Foreign Asset-Based Term Agreement; and (ii) cash on deposit to support outstanding undrawn letters of credit. These balances were included within prepaid expenses and other current assets and other assets in the Company's Consolidated Balance Sheets as of March 31, 2022 and March 31, 2021, respectively.



See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
11
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)




Item 1. Financial Statements

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Revlon, Inc. ("Revlon" and together with its subsidiaries, the "Company") conducts its business exclusively through its direct wholly-owned operating subsidiary, Revlon Consumer Products Corporation ("Products Corporation") and together with its subsidiaries, including Elizabeth Arden,
Inc. ("Elizabeth Arden"), the "Company") is the direct wholly-owned operating subsidiary of Revlon, Inc. ("Revlon").subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, and Revlon, "MacAndrews & Forbes"), a corporation wholly-ownedbeneficially owned by Ronald O. Perelman. Mr. Perelman is Chairman of Revlon's and Products Corporation's Board of Directors.
The Company is a leading global beauty company with an iconic portfolio of brands. The Companybrands that develops, manufactures, markets, distributes and sells an extensive array of color cosmetics,cosmetics; hair color, hair care and hair treatments, fragrances,treatments; fragrances; skin care,care; beauty tools,tools; men’s grooming products,products; anti-perspirant deodorantsdeodorants; and other beauty care products across a variety of distribution channels. The Company is building a combined organization that is entrepreneurial, agile and boldly creative, with a passion for beauty. The Company has strategic brand builders developing a diverse portfolio
Basis of iconic brands that delight consumers around the world wherever and however they shop for beauty. The Company strives to be an ethical company that values inclusive leadership and is committed to sustainable and responsible growth. The Company operates in four reporting segments: the consumer division (“Consumer”); Elizabeth Arden; the professional division (“Professional”); and Other. The Company’s principal customers for its products in the Consumer segment include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Company's principal customers for its products in the Elizabeth Arden segment include prestige retailers, the mass retail channel, perfumeries, boutiques, department and specialty stores, travel retailers and distributors, as well as direct sales to consumers via Elizabeth Arden branded retail stores and e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. The Company's principal customers for its products in the Professional segment include hair and nail salons and distributors to professional salons in the U.S. and internationally. The Other segment primarily includes the operating results related to the development, marketing and distribution of certain licensed fragrances and other beauty products.Presentation
The accompanying unaudited Condensed Consolidated Financial Statements are unaudited. In management's opinion, all adjustments necessary for a fair presentationand related notes have been made. The Consolidated Financial Statements include the Company's accounts after the elimination of all material intercompany balances and transactions.
The preparation of the Company's Consolidated Financial Statementsprepared in conformityaccordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the Company's financial position, results of operations and stockholders' equity and cash flows for interim periods. Revlon reclassifies certain prior year amounts, as applicable, to conform to the current year presentation.
These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year.
Use of Estimates
The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as ofat the date of the financial statements and reported amounts of revenues and expenses during the periods presented.reporting period. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the Consolidated Financial Statements in the period they are determined to be necessary. Significant estimates made in the accompanying unaudited Condensed Consolidated Financial Statements include, but are not limited to, allowancesprovisions for doubtful accounts, inventory valuation reserves, expected sales returns and allowances, trade support costs,returns; certain assumptions related to the valuation of acquired intangible and long-lived assets and the recoverability of goodwill, intangible and long-lived assets,assets; income taxes, including deferred tax valuation allowances and reserves for estimated tax liabilities, restructuring costs,liabilities; and certain estimates and assumptions used in the calculation of the net periodic benefit (income) costs and the projected benefit obligations for the Company’s pension and other post-retirement plans, including the expected long-term return on pension plan assets and the discount rate used to value the Company’s pension benefit obligations. Theobligations which are based on full year assumptions and are included in the accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunctionproportion with the consolidated financial statements and related notes contained in Products Corporation's Annual Report on Form 10-K forestimated annual tax rates, the year ended December 31, 2016, filed with the SEC on March 3, 2017 (the "2016 Form 10-K") .passage of time or estimated annual sales, as applicable.
The Company's results of operations and financial position for the interim periods are not necessarily indicative of those to be expected for the full year.
Certain prior year amountsSignificant Accounting Policies
The Company made no material changes in the Consolidated Financial Statements have been reclassified to conformapplication of its significant accounting policies that were disclosed in Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the current period's presentation.audited consolidated financial statements as of and for the fiscal year ended December 31, 2021 included in the 2021 Form 10-K.

Liquidity and Ability to Continue as a Going Concern
Recently Adopted Accounting Pronouncements
In March 2016, the FASB issued Accounting Standard Update ("ASU") No. 2016-09, “ImprovementsThe ongoing and prolonged COVID-19 pandemic has had, and continues to Employee Share-Based Payment Accounting,” which simplifies certain aspects of accounting for share-based payment transactions, including transactions in which an employee uses shares to satisfy the employer’s minimum statutory income tax withholding obligation, forfeitures and income taxes when awards vest or are settled. The Company adopted ASU No. 2016-09 beginning on January 1, 2017 and the adoption of this new guidance did not have, a materialsignificant adverse effect on the Company’s business around the globe, which could continue for the foreseeable future. The COVID-19 pandemic has adversely impacted net sales in all major commercial regions that are important to the Company’s business. COVID-19’s adverse impact on the Company’s resultsglobal economy has contributed to the imposition of face mask mandates, lockdowns and other significant restrictions in the United States and abroad from time to time; global supply chain disruptions, including manufacturing and transportation delays, due to closures, employee absences, port congestion, labor and container shortages, and shipment delays, increased transportation costs, and shortages in raw materials, tight labor markets and inflationary pressures for a number of industries, including consumer retail, and related consumer products shortages and price increases; closures, bankruptcies and/ or reduced operations financialof retailers, beauty salons, spas, offices and manufacturing facilities; labor shortages with employers in many industries, including consumer retail, experiencing increased competition to recruit, hire and retain employees; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
12
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



condition and/or financial statement disclosures. The adoption of ASU No. 2016-09and export restrictions. These adverse economic conditions have resulted in tax withholdings relatedthe general slowdown of the global economy, in turn contributing to a significant decline in net share settlementssales within each of restricted stock unitsthe Company’s reporting segments and awardsregions. However, with the roll out of COVID-19 vaccinations in 2021 and the easing of COVID-19 restrictions in the United States and in many of the Company’s key markets around the globe, the Company saw a gradual rebound in consumer spending and consumption in 2021, which continued into 2022. The Company continues to closely monitor the associated impacts of COVID-19, including the impacts of any new variants of COVID-19 and subsequent “waves” of the pandemic, and will take appropriate actions in an effort to mitigate the COVID-19 pandemic’s negative effects on the Company’s operations and financial results.

Each reporting period, the Company assesses its ability to continue as a going concern for one year from the date the financial statements are issued. At March 31, 2022, the Company had a liquidity position of $132.1 million, consisting of: (i) $70.0 million of unrestricted cash and cash equivalents (with approximately $62.2 million held outside the U.S.); (ii) $65.1 million in available borrowing capacity under Amendment No. 9 to the Amended 2016 Revolving Credit Facility (which had $268.0 million drawn at such date); and less (iii) approximately $3.0 million of outstanding checks. The Company's evaluation includes its ability to meet its future contractual obligations and other conditions and events that may impact its liquidity.

The Company continues to focus on cost reduction and risk mitigation actions to address the ongoing impact from the COVID-19 pandemic as well as other risks in the business environment. It expects to generate additional liquidity through continued cost control initiatives as well as funds provided by selling certain assets or other strategic transactions in connection with the Company's ongoing Strategic Review. If sales decline, the Company’s cost control initiatives may include reductions in discretionary spend and reductions in investments in capital and permanent displays. Management believes that the debt transactions completed during the first quarter of 2022, along with existing cash and cash equivalents and cost control initiatives provides the Company with sufficient liquidity to meet its obligations and maintain business operations for the next twelve months.
However, there can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis, as, among other things, the Company’s liquidity can be impacted by a number of factors, including its level of sales, costs and expenditures, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of $2.6 million, previously reported inliquidity available under the Unaudited Consolidated Statementasset-based revolving credit agreement, dated as of Cash Flows forSeptember 7, 2016, by and among Products Corporation and certain of its subsidiaries, as borrowers, the first nine monthsCompany, as holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (as amended, the "Amended 2016 Revolving Credit Agreement" and the credit facility thereunder, the "Amended 2016 Revolving Credit Facility") and the 2021 Foreign Asset-Based Term Facility (as defined herein). For example, subject to certain exceptions, revolving loans under the Amended 2016 Revolving Credit Facility and term loans under the 2021 Foreign Asset-Based Term Facility must be prepaid to the extent that such outstanding loans exceed the applicable borrowing base, consisting of 2016 as a component of cash flows from operating activities, to be reclassified as a component of cash flows from financing activities.certain accounts receivable, inventory and real estate.
Recently Issued AccountingPronouncements
In July 2015,March 2020, the FASB issued ASU No. 2015-11, "Inventory2020-04, "Reference Rate Reform (Topic 330)848): SimplifyingFacilitation of the MeasurementEffects of Inventory,Reference Rate Reform on Financial Reporting." which simplifiesThe new guidance under ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the subsequent measurement of inventories by requiring inventoryLondon Interbank Offered Rate ("LIBOR") or another reference rate expected to be measured atdiscontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The FASB voted to propose extending the lower of cost or net realizable value, rather than atsunset date under Topic 848 to December 31, 2024 for the lower of cost or market. Net realizable valueshift from LIBOR when that rate and other rates expire. The FASB is defined asexpected to come to a decision later this year. The Company's debt arrangements have provisions in place for a replacement reference rate and the estimated selling price inCompany continues to assess the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company adoptedimpact, if any, that ASU No. 2015-11 beginning on January 1, 2017 and the adoption of this new guidance did not2020-04 is expected to have a material impact on the Company’s results of operations, financial condition and/or financial statement disclosures.

Recently Issued Accounting Pronouncements
In March 2017,June 2016, the FASB issued ASU No. 2017-07, “Improving2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which was subsequently amended in November 2018 through ASU No. 2018-19, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses." ASU No. 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. Further, the Presentationnew credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms. In November 2019, the FASB issued ASU No. 2019-10, which, among other things, deferred the application of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which changes the way that employers present net periodic pension costnew guidance on credit losses for smaller reporting companies ("NPPC"SRC") and net periodic postretirement benefit cost ("NPPBC") within the income statement. The amendment requires an employer to present the service cost component of NPPC and NPPBC in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. The other components of NPPC and NPPBC would be presented separately from this line item and below any subtotal of operating income; companies will need to disclose the line items used to present these other components of NPPC and NPPBC, if not separately presented in the statement of operations. In addition, only the service cost component would be eligible for capitalization in assets. This guidance is effective retrospectively for annual and quarterly periodsfiscal years beginning after December 15, 2017, with early adoption permitted. The2022,
13
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


including interim periods within those fiscal years. This guidance will be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., a modified-retrospective approach). Under the above-mentioned deferral, the Company expects to adopt ASU No. 2017-072016-03, and the related ASU No. 2018-19 amendments, beginning as of January 1, 2018,2023. The Company made an initial assessment of the impact of the new credit loss model and does not expect this new guidance will have a material impact as the majority of the receivables are short-term. The Company will continue to assess the impact that this guidance is expected to have on the Company’s results of operations, financial condition and/or financial statement disclosures.


In May 2014,
2. RESTRUCTURING CHARGES

Revlon Global Growth Accelerator Program

On March 2, 2022, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09Company announced that it is extending and expanding its existing Revlon Global Growth Accelerator (“RGGA”) program through 2024. The extension and expansion will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective.allow the Company to continue to focus on identifying and implementing new opportunities programmatically. The underlying principle of ASU No. 2014-09 is thatextension and expansion will provide an entity should recognize revenueadditional year to depictimplement larger projects and help make up for supply chain headwinds and the transfer of promised goods or services to customers in an amount that reflectsextended COVID restrictions throughout the consideration for which the entity expects to be entitled in exchange for those goods or services. Entities may adopt ASU No. 2014-09 either retrospectively for all periods presented in the financial statements (i.e., the full retrospective method) or as a cumulative-effect adjustment as of the date of adoption (i.e., the modified retrospective method), without applying it to comparative years’ financial statements.globe.

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers: Deferral of the Effective Date,” which allows for a deferral of the adoption date for ASU No. 2014-09 until January 1, 2018, while permitting early adoption no earlier than January 1, 2017.


The Company plansmajor initiatives underlying the RGGA Program will remain and include:
•    Strategic Growth: Boost organic sales growth behind our strategic pillars – brands, markets, and channels -- to adopt ASU No. 2014-09 on January 1, 2018deliver mid-single digit Compound Average Annual Growth Rate through 2024.
•    Operating Efficiencies: Drive additional operational efficiencies and anticipates adopting this standard usingcost savings for margin improvement and to fuel investments in growth.
•    Build Capabilities: Build capabilities and embed the modified retrospective method. The Company is currently in the processRevlon culture of evaluating its revenue streams under the requirements of ASU No. 2014-09one vision, one team.

Since inception and based on the progress of this examination to date, the Company anticipates that its adoption of ASU No. 2014-09 will not result in any material adjustment to its results of operations and financial condition. The Company is also analyzing ASU No. 2014-09's expanded disclosure requirements, and whether the adoption of ASU No. 2014-09 will require any changes to its accounting policies, processes, systems and/or internal controls.


2. BUSINESS COMBINATIONS
The Elizabeth Arden Acquisition
On September 7, 2016 (the "Elizabeth Arden Acquisition Date"), the Company completed the acquisition of Elizabeth Arden, Inc. ("Elizabeth Arden" and the "Elizabeth Arden Acquisition") for a total cash purchase price of $1,034.3 million pursuant to an agreement and plan of merger (the "Merger Agreement") by and among Revlon, Products Corporation, RR Transaction Corp. ("Acquisition Sub," then a wholly-owned subsidiary of Products Corporation), and Elizabeth Arden. On the Elizabeth Arden Acquisition Date, Elizabeth Arden merged (the “Merger”) with and into Acquisition Sub, with Elizabeth Arden surviving the Merger as a wholly-owned subsidiary of Products Corporation. Elizabeth Arden is a global prestige beauty products company with an iconic portfolio of brands that are highly complementary to the Company's existing brand portfolio and are sold worldwide. In North America, Elizabeth Arden’s principal customers include prestige retailers, specialty stores, the mass retail channel,
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

distributors, department stores and other retailers, as well as direct sales to consumers via its Elizabeth Arden Red Door branded retail stores and ElizabethArden.com e-commerce business. Elizabeth Arden products are also sold through the Elizabeth Arden Red Door Spa beauty salons and spas. Internationally, Elizabeth Arden’s portfolio of owned and licensed brands is sold to perfumeries, boutiques, department stores, travel retailers and distributors.
Products Corporation financed the Elizabeth Arden Acquisition with the proceeds from (i) a 7-year $1,800.0 million senior secured term loan facility (the “2016 Term Loan Facility” and such agreement being the “2016 Term Loan Agreement”); (ii) $35.0 million of borrowings under a 5-year $400.0 million senior secured asset-based revolving credit facility (the “2016 Revolving Credit Facility” and such agreement being the “2016 Revolving Credit Agreement” and such facility, together with the 2016 Term Loan Facility, being the “2016 Senior Credit Facilities” and such agreements being the "2016 Credit Agreements"); (iii) $450.0 million aggregate principal amount of Products Corporation’s 6.25% Senior Notes due 2024 (the “6.25% Senior Notes”); and (iv) approximately $126.7 million of cash on hand.

Elizabeth Arden's results of operations are included in the Company’s Consolidated Financial Statements commencing on the Elizabeth Arden Acquisition Date.

For the nine months ended September 30, 2017, the Company incurred $38.1 million of acquisition and integration costs in its Consolidated Statement of Operations and Comprehensive (Loss) Income related to the Elizabeth Arden Acquisition, which consist of $0.8 million of acquisition costs and $37.3 million of integration costs. The acquisition costs primarily include legal and consulting fees to complete the Elizabeth Arden Acquisition. The integration costs consist of non-restructuring costs related to integrating Elizabeth Arden's operations into the Company's business.

Purchase Price Allocation
The Company accounted for the Elizabeth Arden Acquisition as a business combination during the third quarter of 2016. The Company finalized the allocation of the Elizabeth Arden purchase price to the Elizabeth Arden assets acquired and liabilities assumed in the third quarter of 2017, which resulted in several adjustments to their estimated fair value as previously reported (the "Measurement Period Adjustments"). The table below summarizes the allocation of the total consideration of $1,034.3 million paid on the Elizabeth Arden Acquisition Date.
 
Estimated Fair Value as Previously Reported(a)
 Measurement Period Adjustments Fair Value as Adjusted
Cash$41.1
 $—
 $41.1
Accounts Receivable132.6
 —
 132.6
Inventories323.3
 —
 323.3
Prepaid expenses and other current assets30.7
 —
 30.7
Property and equipment91.2
 —
 91.2
Deferred taxes, net (b)
68.7
 10.0
 78.7
Intangible assets(c)
336.8
 (15.4) 321.4
Goodwill221.7
 12.3
 234.0
Other assets16.6
 —
 16.6
     Total assets acquired$1,262.7
 $6.9
 $1,269.6
Accounts payable(116.0) —
 (116.0)
Accrued expenses (d)
(109.3) 1.7
 (107.6)
Other long-term liabilities(e)
(3.1) (8.6) (11.7)
     Total liabilities assumed$(228.4) $(6.9) $(235.3)
     Total consideration transferred$1,034.3
 $—
 $1,034.3
(a)As previously reported in Products Corporation's 2016 Form 10-K.

(b)The Measurement Period Adjustments to deferred taxes, net related to net increases in deferred tax assets as a result of the changes to the estimated fair values and remaining useful lives of acquired trade name intangible assets and the recognition of non-qualified benefit plan obligations of Elizabeth Arden, as discussed further below.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

(c) The Measurement Period Adjustments to intangible assets related to a revised approach in the determination of the fair values for the acquired Elizabeth Arden trade names. During the first quarter of 2017, the Company obtained further clarity into the product portfolio acquired through the Elizabeth Arden Acquisition, and, recognizing that each brand has its own distinct profile with its own defining attributes, as well as differing expected useful lives, determined that a revised valuation approach was needed. The Company valued the acquired trade names within the Elizabeth Arden product portfolio, including Visible Difference, Elizabeth Arden Ceramide, Prevage, Eight Hour Cream, Elizabeth Arden Red Door, Elizabeth Arden Green Tea and Elizabeth Arden 5th Avenue. The Company determined the fair values of each acquired trade name using a risk-adjusted discounted cash flow approach, specifically the relief-from-royalty method. The relief-from-royalty method requires identifying the hypothetical cash flows generated by an assumed royalty rate that a third party would pay to license the trade names, and discounting them back to the Elizabeth Arden Acquisition Date. The royalty rate used in the valuation of each acquired trade name was based on a consideration of market rates for similar categories of assets.

The difference between the preliminary valuation of the Elizabeth Arden trade name and the sum of the fair values of the individual trade names within the Elizabeth Arden product portfolio resulted in an increase to goodwill of $15.4 million, which was recorded in the fiscal quarter ended March 31, 2017. As a result of this revised approach, the Company recognized amortization expense of approximately $1.8 million in its Unaudited Consolidated Statement of Operations and Comprehensive (Loss) Income during the first nine months of 2017 related to the amortization of the acquired trade names from the date of acquisition through December 31, 2016.

(d)The Measurement Period Adjustments to accrued expenses during the nine months ended September 30, 2017 related to changes in estimated payments for acquisition-related costs.

(e)The Measurement Period Adjustments to other long-term liabilities during the nine months ended September 30, 2017 related to the recognition of the projected benefit obligation of a certain foreign non-qualified benefit plan of Elizabeth Arden.

In determining the fair values of net assets acquired in the Elizabeth Arden Acquisition and resulting goodwill, the Company considered, among other factors, the analyses of Elizabeth Arden's historical financial performance and an estimate of the future performance of the acquired business, as well as the intended use of the acquired assets.

The intangible assets acquired in the Elizabeth Arden Acquisition based on the estimate of the fair values of the identifiable intangible assets are as follows:
 
As Previously Reported(a)
   Adjusted
 Estimated Fair Values Remaining Useful Life at the Elizabeth Arden Acquisition Date (in years) 
Measurement Period Adjustments(b)
 Fair Values Remaining Useful Life at the Elizabeth Arden Acquisition Date
(in years)
Trademarks, indefinite-lived$142.0
 Indefinite $(103.0) $39.0
 Indefinite
Trademarks, finite-lived15.0
 15 87.6
 102.6
 5 - 20
Technology2.5
 10 —
 2.5
 10
Customer relationships123.0
 16 —
 123.0
 16
License agreements22.0
 19 —
 22.0
 19
Distribution rights31.0
 18 —
 31.0
 18
Favorable lease commitments1.3
 3 —
 1.3
 3
     Total acquired intangible assets$336.8
   $(15.4)
(b) 
$321.4
  
(a)As previously reported in Products Corporation's 2016 Form 10-K.

(b) The Measurement Period Adjustments to the Elizabeth Arden acquired trade names resulted in a $15.4 million increase to goodwill, which was recorded in the fiscal quarter ended March 31, 2017.

In the fiscal quarter ended March 31, 2017, the2022, the Company recorded a $54.8 million deferred tax liability related to the $321.4 million of acquired intangible assets outlined in the above table. This deferred tax liability represents the tax effect of the difference between the $321.4 million assigned fair value of the intangible assets and the $148.6 million tax basis of such assets.

The goodwill and intangible assets acquired in the Elizabeth Arden Acquisition are notexpected to be deductible for income tax purposes.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Unaudited Pro Forma Results

The following table presents the Company's pro forma consolidated net sales and income from continuing operations before income taxes for the three and nine months ended September 30, 2016, respectively. The unaudited pro forma results include the historical consolidated statements of operations of the Company and Elizabeth Arden, giving effect to the Elizabeth Arden Acquisitionpre-tax restructuring and related financing transactions as if they had occurred at the beginningcharges of the earliest period presented.
 Unaudited Pro Forma Results
 Three Months Ended September 30, Nine Months Ended September 30,
 2016 2016
Net sales$745.1
 $2,058.2
Income (loss) from continuing operations, before income taxes0.4
 (22.0)

The pro forma results, prepared in accordance with U.S. GAAP, include the following pro forma adjustments related to the Elizabeth Arden Acquisition:

(i) as a result of a $38.0$105.9 million increase in the fair value of acquired inventory at the Acquisition Date, the Company recognized a $4.2 million increase in its cost of sales during the three and nine months ended September 30, 2016 in its consolidated financial statements. The pro forma adjustments include an adjustment to reverse the $4.2 million recognized in the third quarter of 2016 within cost of sales because it will not have a recurring impact;

(ii) the elimination of $58.1 million and $64.7 million of acquisition and integration costs recognized by the Company and Elizabeth Arden during the three and nine months ended September 30, 2016, respectively;

(iii) nil and $1.4 million pro forma decrease in depreciation as a result of the fair value adjustments to property and equipment for the three and nine months ended September 30, 2016, respectively;

(iv) a $1.7 million and $4.6 million pro forma increase in amortization expense of acquired finite-lived intangible assets recorded in connection with the Elizabeth Arden Acquisition for the threeRGGA, consisting primarily of (i) $78.5 million of employee severance, other personnel benefits and nine months ended September 30, 2016, respectively;other costs; and

(v) a pro forma increase in interest expense (ii) $27.4 million of lease and amortization of debt issuance costs related to financing the Elizabeth Arden Acquisition and related debt restructuring transactions as summarized in the following table:
 Three Months Ended Nine Months Ended
($ in millions)September 30, 2016 September 30, 2016
Interest Expense   
Pro forma interest on 2016 Senior Credit Facilities and 6.25% Senior Notes$29.1
 $86.7
Reversal of Elizabeth Arden’s historical interest expense(5.6) (19.5)
Company historical interest expense, as reflected in the historical consolidated financial statements(20.3) (45.2)
Total adjustment for pro forma interest expense$3.2
 $22.0
Debt issuance costs   
Pro forma amortization of debt issuance costs$2.0
 $6.1
Company historical amortization of debt issuance costs, as reflected in the historical consolidated financial statements(1.1) (3.3)
Reversal of Elizabeth Arden’s historical amortization of debt issuance costs(0.4) (1.3)
Total adjustment for pro forma amortization of debt issuance costs$0.5
 $1.5

The unaudited pro forma results do not include: (1) any incremental revenue generation, synergies or cost reductionsother restructuring-related charges that may be achieved as a result of the Elizabeth Arden Acquisition; or (2) the impact of non-operating or non-recurring items directly related to the Elizabeth Arden Acquisition. In addition, the unaudited pro forma results do not purport to project the future consolidated operating results of the combined company.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)


3. RESTRUCTURING CHARGES
EA Integration Restructuring Program
In December 2016, in connection with integrating the Elizabeth Arden and Revlon organizations, the Company began the process of implementing certain integration activities, including consolidating offices, eliminating certain duplicative activities and streamlining back-office support (the “EA Integration Restructuring Program”). The EA Integration Restructuring Program is designed to reduce the Company’s selling,were recorded within Selling, general and& administrative expenses ("SG&A"). As a result and Cost of the EA Integration Restructuring Program, the Company expects to eliminate approximately 350 positions worldwide.sales.
In connection with implementing the EA Integration Restructuring Program, the Company expects to recognize approximately $65 million to $75 million of total pre-tax restructuring charges (the “EA Integration Restructuring Charges”), consisting of: (i) approximately $40 million to $50 million of employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges.


A summary of the restructuring and relatedRGGA charges incurred since its inception in March 2020 and through September 30, 2017 in connection with the EA Integration Restructuring ProgramMarch 31, 2022 is presented in the following table:
Restructuring Charges and Other, Net
Employee Severance and Other Personnel BenefitsOther CostsTotal Restructuring ChargesLeases (a)Other Related Charges (b)Total Restructuring and Related Charges
Charges incurred through December 31, 2021$52.7 $23.9 $76.6 $17.7 $7.6 $101.9 
Charges incurred during the three months ended March 31, 20220.5 1.4 1.9 1.4 0.7 4.0 
Cumulative charges incurred through March 31, 2022$53.2 $25.3 $78.5 $19.1 $8.3 $105.9 
 Restructuring Charges and Other, Net      
 Employee Severance and Other Personnel Benefits 
Lease Termination and Other Costs(a)
 Total Restructuring Charges 
Inventory Adjustments(b)
 
Other Related Charges(c)
 Total Restructuring and Related Charges
Charges incurred through December 31, 2016$31.5
 $0.2
 $31.7
 $0.5
 $2.3
 $34.5
Charges incurred during the nine months ended September 30, 201710.1
 4.0
 14.1
 0.5
 1.0
 15.6
Cumulative charges incurred through September 30, 2017$41.6
 $4.2
 $45.8
 $1.0
 $3.3
 $50.1

(a) Includes primarily lease termination costs of approximately $3.9 million recorded in the third quarter of 2017 related to certain Elizabeth Arden office space.
(b) Inventory adjustments are recorded within cost of sales in the Company’s Consolidated Statement of Operations and Comprehensive (Loss) Income.
(c) Other related Lease-related charges are recorded within SG&A in the Company’s Consolidated Statement of Operations and Comprehensive (Loss) Income.Loss.

(b) Other related charges are recorded within SG&A and cost of sales in the Company’s Consolidated Statement of Operations and Comprehensive Loss.

A summary of the RGGA restructuring charges incurred since its inception in March 2020 and through September 30, 2017 in connection with the EA Integration Restructuring ProgramMarch 31, 2022 by reportable segment is presented in the following table:
  Charges incurred during the nine months ended Cumulative charges incurred through
  September 30, 2017 September 30, 2017
Elizabeth Arden $7.3
 $13.8
Consumer 2.9
 7.1
Professional 0.3
 5.9
Unallocated Corporate Expenses 3.6
 19.0
     Total $14.1
 $45.8


The Company expects that cash payments will total $65 million to $75 million in connection with the EA Integration Restructuring Charges, of which $30.5 million was paid in the nine months ended September 30, 2017. The remaining balance is expected to be substantially paid by the end of 2020.

Charges incurred in the three months ended March 31, 2022Cumulative charges incurred through March 31, 2022
Revlon$0.8 $28.8 
Elizabeth Arden0.3 19.3 
Portfolio0.5 18.5 
Fragrances0.3 11.9 
Total$1.9 $78.5 
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
14
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Restructuring Reserve
The liability balance and related activity for each of the Company's restructuring programs are presented in the following table:
Utilized, Net
Liability
Balance at January 1, 2022		Expense, Net

Cash
Liability Balance at March 31, 2022
RGGA:
Employee severance and other personnel benefits$1.9 $0.5 $(0.5)$1.9 
Other— 1.4 (1.4)— 
Total RGGA1.9 1.9 (1.9)1.9 
Other restructuring initiatives:
Employee severance and other personnel benefits0.8 — — 0.8 
Total other restructuring initiatives0.8 — — 0.8 
Total restructuring reserve$2.7 $1.9 $(1.9)$2.7 
       Utilized, Net  
Liability
Balance at January 1, 2017
 Expense (Income), Net Foreign Currency Translation 

Cash
 

Non-cash
 Liability Balance at September 30, 2017
            
EA Integration Restructuring Program:(a)
           
Employee severance and other personnel benefits$31.5
 $10.1
 $—
 $(27.5) $—
 $14.1
Other3.0
 5.5
 —
 (3.0) —
 5.5
2015 Efficiency Program:(b)
           
Employee severance and other personnel benefits4.5
 (3.2) —
 (0.9) —
 0.4
Other0.2
 —
 —
 —
 —
 0.2
Other immaterial actions: (c)

 
 
 
 
 
Employee severance and other personnel benefits2.6
 0.7
 —
 (0.8) —
 2.5
Other1.0
 0.5
 0.1
 (0.1) —
 1.5
Total restructuring reserve$42.8
 $13.6
 $0.1
 $(32.3) $—
 $24.2


(a) Includes $1.5 million in charges related to inventory adjustments and other restructuring-related charges that were reflected within cost of sales and SG&A, respectively, in the Company’s September 30, 2017 Unaudited Consolidated Statement of Operations and Comprehensive (Loss) Income.

(b) In September 2015, the Company initiated restructuring actions to drive certain organizational efficiencies across the Company's Consumer and Professional segments (the "2015 Efficiency Program"). These actions were planned to occur through 2017 and are expected to reduce general and administrative expenses within the Consumer and Professional segments. During the third quarter of 2017, the Company performed a review of the 2015 Efficiency Program and determined that employees in certain positions that were initially identified to be eliminated would continue to be employed by the Company in varying positions in connection with integrating the Elizabeth Arden and Revlon organizations. As a result, the Company reversed approximately $3.2 million in previously accrued restructuring charges recognized in connection with the 2015 Efficiency Program. Of the total expected cash payments related to the 2015 Efficiency Program, $7.0 million was paid through September 30, 2017, with a remaining balance of approximately $0.6 million expected to be paid by the end of 2017. A summary of the restructuring and related charges incurred through September 30, 2017 in connection with the 2015 Efficiency Program by reportable segment is presented in the following table:
  2015 Efficiency Program cumulative charges incurred through
  September 30, 2017
Consumer $3.6
Professional 3.5
Unallocated Corporate Expenses 0.5
     Total $7.6

(c) Consists primarily of $0.8 million in charges related to the program that Elizabeth Arden commenced prior to the Elizabeth Arden Acquisition to further align their organizational structure and distribution arrangements for the purpose of improving its go-to-trade capabilities and execution and to streamline their organization (the "Elizabeth Arden 2016 Business Transformation Program").

At September 30, 2017 and December 31, 2016, allAll of the restructuring reserve balances were included within accrued expenses and other current liabilities in the Company's Consolidated Balance Sheets.



3. INVENTORIES

The Company's net inventory balances consisted of the following:
March 31,December 31,
20222021
Finished goods302.3 $277.0 
Raw materials and supplies131.8 125.3 
Work-in-process16.5 15.1 
$450.6 $417.4 

4. PROPERTY, PLANT AND EQUIPMENT
The Company's property, plant and equipment, net balances consisted of the following:
March 31,December 31,
20222021
Land and improvements$10.6 $10.8 
Building and improvements42.8 43.5 
Machinery and equipment79.8 82.2 
Office furniture, fixtures and capitalized software58.7 62.6 
Leasehold improvements17.4 18.0 
Construction-in-progress6.7 8.8 
Right-of-Use assets75.4 71.4 
Property, plant and equipment and Right-of-Use assets, net$291.4 $297.3 

Depreciation and amortization expense on property, plant and equipment and right-of-use assets for the three months ended March 31, 2022 and March 31, 2021 was $14.2 million and $17.1 million, respectively. Accumulated depreciation and amortization was $555.7 million and $551.3 million as of March 31, 2022 and December 31, 2021, respectively.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
15
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



5. GOODWILL AND INTANGIBLE ASSETS, NET
4. DISCONTINUED OPERATIONS
On December 30, 2013,In accordance with ASC Topic 350, “Intangibles – Goodwill and Other,” the Company announcedperforms its annual impairment test during the fourth quarter of each year. The Company also reviews goodwill for impairment whenever events or changes in circumstances indicate that it was implementing the December 2013 Program, which primarily included exitingcarrying value of its direct manufacturing, warehousinggoodwill may not be recoverable. After the close of each interim quarter, management assesses whether there exists any indicators of impairment requiring the Company to perform an interim goodwill impairment analysis.


The following table presents the changes in goodwill by segment for thethree months ended March 31,2022:
RevlonPortfolioElizabeth ArdenFragrancesTotal
Balance at January 1, 2022$265.0 $87.8 $89.3 $120.7 $562.8 
Foreign currency translation adjustment(0.1)(0.1)— (0.1)(0.3)
Balance at March 31, 2022$264.9 $87.7 $89.3 $120.6 $562.5 
Cumulative goodwill impairment charges(a)
$(166.2)
(a) Amount refers to cumulative impairment charges recognized in 2020 and sales business operations in mainland China withinprior years. No impairment charges were recorded during the Consumer segment.three months ended March 31, 2022.
The results of the China discontinued operations are included within Income (loss) from discontinued operations, net of taxes, and relate entirely to the Consumer segment. The summary comparative financial results of discontinued operations are as follows:





































16
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net sales$—
 $—
 $—
 $—
Income (loss) from discontinued operations, before taxes0.7
 (0.2) 1.6
 (2.3)
Provision for income taxes0.3
 —
 0.3
 —
Income (loss) from discontinued operations, net of taxes0.4
 (0.2) 1.3
 (2.3)
Table of Contents

Assets and liabilities of the China discontinued operations included in the Consolidated Balance Sheets consist of the following:
 September 30, 2017 December 31, 2016
Cash and cash equivalents$1.3
 $1.7
Trade receivables, net0.2
 0.2
Total current assets1.5
 1.9
Total assets$1.5
 $1.9
 
 
Accounts payable$0.5
 $0.5
Accrued expenses and other3.4
 3.3
Total current liabilities3.9
 3.8
Total liabilities$3.9
 $3.8


5. INVENTORIES
The Company's inventory balances consist of the following:
 September 30, 2017 December 31, 2016
Raw materials and supplies$119.9
 $72.9
Work-in-process19.7
 33.5
Finished goods415.8
 318.2
 $555.4
 $424.6


REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
millions, except share and per share amounts)

(Unaudited)
6. GOODWILL AND INTANGIBLE ASSETS, NET


Goodwill

The following table presentstables present details of the changes in goodwill by segment duringCompany's total intangible assets as of March 31, 2022 and December 31, 2021:

March 31, 2022
Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$270.1 $(146.2)$123.9 11
Customer relationships246.9 (125.8)121.1 9
Patents and internally-developed intellectual property23.8 (17.8)6.0 5
Distribution rights31.0 (9.6)21.4 12
Other1.3 (1.3)— 0
Total finite-lived intangible assets$573.1 $(300.7)$272.4 
Indefinite-lived intangible assets:
Trade names (a)
$110.0 N/A$110.0 
Total indefinite-lived intangible assets$110.0 N/A$110.0 
Total intangible assets$683.1 $(300.7)$382.4 
December 31, 2021
Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted-Average Useful Life (in Years)
Finite-lived intangible assets:
Trademarks and licenses$270.8 $(142.9)$127.9 12
Customer relationships247.2 (122.7)124.5 10
Patents and internally-developed intellectual property23.8 (17.4)6.4 5
Distribution rights31.0 (9.2)21.8 13
Other1.3 (1.3)— 0
Total finite-lived intangible assets$574.1 $(293.5)$280.6 
Indefinite-lived intangible assets:
Trade names (a)
$111.6 N/A$111.6 
Total indefinite-lived intangible assets$111.6 N/A$111.6 
Total intangible assets$685.7 $(293.5)$392.2 
(a) Indefinite-lived trade names include accumulated impairment of $33.1 million from 2020.

Amortization expense for finite-lived intangible assets was $8.2 million and $8.4 million for the ninethree months ended September 30, 2017:March 31, 2022 and 2021, respectively.
17
 Consumer Professional Elizabeth Arden  Other Total
Balance at January 1, 2017$227.5
 $240.3
 $221.7
 $—
 $689.5
Measurement Period Adjustments(a)
—
 —
 12.3
 —
 12.3
Foreign currency translation adjustment—
 1.3
 —
 —
 1.3
Balance at September 30, 2017$227.5
 $241.6
 $234.0
 $—
 $703.1
          
Cumulative goodwill impairment charges(b)
$(9.7) $—
 $—
 $(16.7) $(26.4)
Table of Contents

(a)Refer to Note 2, "Business Combinations," for more information on the Measurement Period Adjustments related to the Elizabeth Arden Acquisition.

(b) Cumulative goodwill impairment charges relate to impairments recognized in 2015 within the Consumer segment and in 2016 within the Other segment.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Intangible Assets, Net

The following tables present detailsCompany's accrued expenses and other current liabilities consisted of the Company's total intangible assets:
following:
 September 30, 2017
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and Licenses$270.4
 $(67.4) $203.0
 13
Customer relationships250.3
 (41.7) 208.6
 13
Patents and Internally-Developed IP20.8
 (7.9) 12.9
 7
Distribution rights31.0
 (2.3) 28.7
 17
Other1.3
 (0.6) 0.7
 2
Total finite-lived intangible assets$573.8
 $(119.9) $453.9
  
        
Indefinite-lived intangible assets:       
Trade Names$147.0
 $—
 $147.0
  
Total indefinite-lived intangible assets$147.0
 $—
 $147.0
  
        
Total intangible assets$720.8
 $(119.9) $600.9
  
        
 December 31, 2016
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life (in Years)
Finite-lived intangible assets:       
Trademarks and Licenses$177.9
 $(47.9) $130.0
 13
Customer relationships247.6
 (30.1) 217.5
 14
Patents and Internally-Developed IP20.3
 (6.1) 14.2
 8
Distribution rights31.0
 (0.5) 30.5
 18
Other1.3
 (0.2) 1.1
 3
Total finite-lived intangible assets$478.1
 $(84.8) $393.3
  
        
Indefinite-lived intangible assets:       
Trade Names$243.3
 $—
 $243.3
  
Total indefinite-lived intangible assets$243.3
 $—
 $243.3
  
        
Total intangible assets$721.4
 $(84.8) $636.6
  
March 31,December 31,
20222021
Advertising, marketing and promotional costs$89.9 $113.3 
Sales returns and allowances77.4 92.3 
Taxes74.4 52.8 
Compensation and related benefits40.6 33.7 
Professional services and insurance30.9 28.5 
Interest25.8 31.3 
Freight and distribution costs15.7 18.4 
Short-term lease liability15.1 12.9 
Restructuring reserve2.7 2.7 
Software1.8 2.2 
Other (a)
41.5 43.9 
Total$415.8 $432.0 

Amortization expense(a) Accrued Other for finite-lived intangible assets was $10.4Products Corporation as of March 31, 2022 and December 31, 2021 were $41.6 million and $6.2$44.0 million, forrespectively.


7. DEBT

The table below details the three months endedCompany's debt balances, net of discounts and debt issuance costs.
March 31,December 31,
20222021
Amended 2016 Revolving Credit Facility (Tranche A) due 2024$85.9 $108.0 
SISO Term Loan Facility due 2024125.5 126.2 
2021 Foreign Asset-Based Term Facility due 202471.6 71.2 
2020 ABL FILO Term Loans due 202350.0 50.0 
2020 Troubled-debt-restructuring: future interest39.0 42.6 
2020 BrandCo Term Loan Facility due 20251,756.6 1,749.7 
2016 Term Loan Facility: 2016 Term Loan due 2023 and 2025866.5 867.9 
6.25% Senior Notes due 2024427.3 426.9 
Spanish Government Loan due 20250.3 0.2 
Debt$3,422.7 $3,442.7 
Less current portion(115.6)(137.2)
Long-term debt$3,307.1 $3,305.5 
Short-term borrowings (*)
$0.7 $0.7 
(*)The weighted average interest rate on these short-term borrowings outstanding at both March 31, 2022 and December 31, 2021 was 11.4%.

Amendment No. 9 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and Second-In, Second-Out ("SISO") Term Loan Facility
On March 31, 2022, Products Corporation entered into Amendment No. 9 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 9”).
Amendment No. 9, among other things, made certain changes to the calculation of the borrowing base. Amendment No. 9 has the effect of temporarily increasing the borrowing base under the Amended 2016 Revolving Credit Agreement by up to $25 million until the earlier of (i) September 30, 201729, 2022 and 2016, respectively. Amortization expense for finite-lived intangible assets was $32.6 million and $18.2 million for(ii) the nine months ended September 30, 2017 and 2016, respectively.

occurrence of an event of default or payment default (the “Amendment No. 9 Accommodation Period”). During the Amendment No. 9 Accommodation Period, Amendment No. 9 also
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
18
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



establishes a reserve against availability under the Amended 2016 Revolving Credit Agreement in the amount of $10 million until June 29, 2022 and $15 million thereafter. Products Corporation was required to pay customary fees in connection with Amendment No. 9.
The Company incurred approximately $1.8 million of new debt issuance costs in connection with Amendment No. 9 to the 2016 Revolving Credit Agreement and SISO Term Loan Facility, which are amortized in accordance with the straight-line method within "Amortization of debt issuance costs" over the term of the Amendment No. 9 Accommodation Period.

First Amendment to 2021 Asset-Based Term Agreement
On March 30, 2022, Revlon Finance LLC, a Delaware limited liability company and wholly-owned subsidiary of Revlon (the “FABTL Borrower”), entered into the First Amendment (the “First Amendment”) to the 2021 Foreign Asset-Based Term Agreement.
The following table reflectsFirst Amendment, among other things, made certain changes to the estimated future amortization expense, a portion of which is subject to exchange rate fluctuations, for the Company's finite-lived intangible assets as of September 30, 2017:
 Estimated Amortization Expense
2017$7.4
201839.4
201936.7
202036.0
202134.9
Thereafter299.5
Total$453.9


7. ACCRUED EXPENSES AND OTHER
The Company's accrued expenses and other current liabilities consistcalculation of the following:
 September 30, 2017 December 31, 2016
Compensation and related benefits$54.6
 $75.8
Advertising and promotional costs75.4
 66.7
Sales returns and allowances50.6
 51.9
Taxes41.3
 39.0
Restructuring reserve21.9
 38.0
Interest10.3
 24.4
Other93.4
 86.9
 $347.5
 $382.7


8. LONG-TERM DEBT
The Company's debt balances consistborrowing base that have the effect of temporarily increasing the borrowing base for one year after the effective date of the following:First Amendment. Initially the increase in the borrowing base is estimated to be approximately $7 million. The FABTL Borrower is required to pay customary fees in connection with the First Amendment.
Prior Year Debt Transactions
 September 30, 2017 December 31, 2016
2016 Term Loan Facility: 2016 Term Loan due 2023, net of discounts and debt issuance costs (a)
$1,738.8
 $1,747.8
2016 Revolving Credit Facility due 2021, net of debt issuance costs (b)
238.7
 —
6.25% Senior Notes due 2024, net of debt issuance costs (c)
440.0
 439.1
5.75% Senior Notes due 2021, net of debt issuance costs (d)
494.8
 493.8
Spanish Government Loan due 2025  (e)
0.5
 0.5
 2,912.8
 2,681.2
Less current portion (*)   
(256.8) (18.1)
 $2,656.0
 $2,663.1

(*) At September 30, 2017,Amendment No. 8 to the Company classified $256.8 million as its current portion of long-term debt, comprised primarily of $238.7 million of net borrowings under theAmended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and $18.0 millionSecond-In, Second-Out Term Loan Facility
On May 7, 2021, Products Corporation entered into Amendment No. 8 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 8”). Amendment No. 8, among other things, made certain amendments pursuant to which: (i) the maturity date applicable to the “Tranche A” revolving loans and SISO Term Loan Facility (as defined further below in this section within "Amendment No. 7 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and SISO Term Loan Facility") was extended from June 8, 2023 to May 7, 2024, subject to a springing maturity to the earlier of: (x) 91 days prior to the maturity of amortization payments on the 2016 Term Loan Facility scheduledon September 7, 2023, to bethe extent such term loans are then outstanding, and (y) to the extent the Company’s first-in, last-out term loans (the “2020 ABL FILO Term Loans”) are then outstanding, the earliest stated maturity of the 2020 ABL FILO Term Loans; (ii) the commitments under the “Tranche A” revolving facility were reduced from $300 million to $270 million and under the SISO Term Loan Facility were upsized from $100 million to $130 million, (iii) the financial covenant was changed from (A)(x) a minimum excess availability requirement of $20 million when the fixed charge coverage ratio is greater than 1.00x or (y) a minimum excess availability requirement of $30 million when the fixed charge coverage ratio is less than 1.00x to (B) a springing minimum fixed charge coverage ratio of 1.00x when excess availability is less than $27.5 million, (iv) certain advance rates in respect of the borrowing base under the credit agreement were increased, and (v) the perpetual cash dominion requirement was replaced with a springing cash dominion requirement triggered only when excess availability is less than $45 million. In addition, Amendment No. 8 increased the interest rate margin applicable to the “Tranche A” revolving loans to 3.75% from a range of 2.50-3.00% and decreased the LIBOR “floor” applicable thereto from 1.75% to 0.50%.

On May 7, 2021, the Company also entered into a successor agent appointment and agency transfer agreement pursuant to which MidCap Funding IV Trust ("MidCap") succeeded Citibank, N.A. as the collateral agent and administrative agent for the Amended 2016 Revolving Credit Agreement. Products Corporation paid overcertain customary fees to MidCap and the next four calendar quarters. At lenders under the Amended 2016 Revolving Credit Facility in connection with Amendment No. 8.

Amendment No. 8 included an extinguishment, as defined by ASC 470, Debt, with the prior lenders under the Company's Tranche A Revolving Credit facility and the substitution of such lenders under the revolving credit facility with a new lender, MidCap, with which the Company had no prior loans outstanding. In connection with this transaction:

•Fees of $0.8 million paid to the old lenders that were extinguished under the Tranche A Revolving Credit facility were expensed within SG&A on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2016,2021;
•Deferred financing costs associated with the Company classified $18.1 million as its current portion of long-term debt, comprised primarily of $18.0 million of amortization payments on the 2016 Term Loan Facility.

(a)See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in Products Corporation's 2016 Form 10-K for certain details regarding Products Corporation's 2016 Term Loan that matures on the earlier of: (x) the seventh anniversary of the Elizabeth Arden Acquisition Date; and (y) the 91st dayextinguished, old lenders prior to the maturityeffective date of Products Corporation’s 5.75% Senior Notes dueAmendment No. 8, amounting to approximately $4.7 million, were expensed within "Amortization of debt issuance costs” on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021 if, on that date (and solely for so; and
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
19
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



•Fees of approximately $2.1 million paid to the new lender and third parties were recorded as deferred financing costs and are amortized in accordance with the straight-line method over the revised term of Tranche A through May 7, 2024.
long as)
The above-mentioned Amendment No. 8 also included an extinguishment and a modification of a term loan in connection with the existing SISO Term Loan Facility. More specifically, in accordance with ASC 470, Debt:

•Extinguishment accounting was applied to one existing prior lender, which was no longer involved with the SISO Term Loan Facility after Amendment No. 8. In connection with such extinguishment, deferred financing costs of approximately $1.4 million were expensed within "Amortization of debt issuance costs” on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021; and
•Modification accounting was applied to those exiting lenders for which the cash flow effect between the amount owed to them before and after the consummation of Amendment No. 8, on a present value basis, was less than 10% and, thus, the debt instruments were not considered to be substantially different. In connection with such modification, fees of approximately $0.9 million paid to the lenders were recorded as deferred financing costs and are amortized within "Amortization of debt issuance costs” (together with previously exiting deferred financing costs associated with these lenders of approximately $4.0 million), in accordance with the new effective interest rate computed over the revised term of the SISO Term Loan Facility. Additionally, approximately $0.4 million of fees paid to third parties were expensed within SG&A on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021.

Amendment No. 7 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and SISO Term Loan Facility
On March 8, 2021, Products Corporation entered into Amendment No. 7 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 7”). Amendment No. 7, among other things, made certain amendments pursuant to which: (i) the maturity date applicable to the “Tranche A” revolving loans under the Amended 2016 Revolving Credit Agreement was extended from September 7, 2021 to June 8, 2023; (ii) the commitments under the “Tranche A” revolving facility were reduced from $400 million to $300 million; and (iii) a new $100 million senior secured second-in, second-out term loan facility maturing June 8, 2023 (the “SISO Term Loan Facility”) was established and Products Corporation borrowed $100 million of term loans thereunder.Except as to pricing, maturity, enforcement priority and certain voting rights, the terms of the SISO Term Loan Facility are substantially consistent with the first-in, last-out “Tranche B” term loan facility under the Amended 2016 Revolving Credit Agreement, including as to guarantees and collateral.

Term loans under the SISO Term Loan Facility accrue interest at the LIBOR rate, subject to a floor of 1.75%, plus a margin of 5.75%.In addition, Amendment No. 7 increased the interest rate margin applicable to the “Tranche A” revolving loans by 0.50% to a range of 2.50% to 3.0%, depending on average excess revolving availability.Products Corporation paid certain customary fees to Citibank, N.A. and the lenders under the Amended 2016 Revolving Credit Facility in connection with Amendment No. 7.

Amendment No. 7 represented an exchange of an existing revolving credit agreement with a new revolving credit agreement with the same lenders as defined by ASC 470, Debt, under the revolving credit facility. All pre-existing unamortized deferred financing costs associated with the old revolving credit agreement of approximately $0.8 million were added to the newly incurred deferred financing costs of approximately $4.2 million and their total of approximately $5.1 million started to be amortized in accordance with the straight-line method over the term of Tranche A through June 8, 2023. Additionally, approximately $4.3 million of new deferred financing costs were incurred in connection with the SISO Term Loan Facility with the new lenders, which are amortized in accordance with the effective interest method over the term of the facility.

2021 Foreign Asset-Based Term Facility
On March 2, 2021 (the “2021 ABTL Closing Date”), Revlon Finance LLC (the “ABTL Borrower”), a wholly owned indirect subsidiary of Products Corporation, certain foreign subsidiaries of Products Corporation party thereto as guarantors, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent (the “ABTL Agent”), entered into an Asset-Based Term Loan Credit Agreement (the “2021 Foreign Asset-Based Term Agreement”, and the term loan facility thereunder, the “2021 Foreign Asset-Based Term Facility”).

Principal and Maturity: The 2021 Foreign Asset-Based Term Facility provides for a U.S. dollar-denominated senior secured asset-based term loan facility in an aggregate principal amount of $75 million, the full amount of which was funded on
20
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


the closing of the facility. On the 2021 ABTL Closing Date, approximately $7.5 million of the proceeds of the 2021 Foreign Asset-Based Term Facility were deposited in an escrow account by the ABTL Agent pending completion of certain post-closing perfection actions with respect to certain foreign real property of the guarantors constituting collateral securing the 2021 Foreign Asset-Based Term Facility. Such perfection actions were subsequently completed, and the escrowed funds were released to the ABTL Borrower. The 2021 Foreign Asset-Based Term Facility has an uncommitted incremental facility pursuant to which it may be increased from time to time by up to the amount of the borrowing base in effect at the time such incremental facility is incurred, subject to certain conditions and the agreement of the lenders providing such increase. The proceeds of the loans under the 2021 Foreign Asset-Based Term Facility were used: (i) to repay in full the obligations under the 2018 Foreign Asset-Based Term Facility (the “ABTL Refinancing”); (ii) to pay fees and expenses in connection with the 2021 Foreign Asset-Based Term Facility and the ABTL Refinancing; and (iii) for working capital and other general corporate purposes. The 2021 Foreign Asset-Based Term Facility matures on March 2, 2024, subject to a springing maturity date of August 1, 2023 if, on such date, any principal amount of loans under the term loan credit agreement, dated as of September 7, 2016, by and among Products Corporation, as the borrower, the Company, as holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (as amended by Amendment No. 1 dated as of May 7, 2020, the “2016 Term Loan Agreement” and the credit facility thereunder, the “2016 Term Loan Facility”) due September 7, 2023 remain outstanding.

The 2021 Foreign Asset-Based Term Agreement requires the maintenance of a borrowing base supporting the borrowing thereunder, to be evidenced with the delivery of biweekly borrowing base certificates customary for facilities of this type, with more frequent reporting required upon the triggering of certain events. The borrowing base calculation under the 2021 Foreign Asset-Based Term Facility is based on the sum of: (i) 80% of eligible accounts receivable (later increased to 90% for one year from the effective date of the First Amendment); (ii) 65% of the net orderly liquidation value of eligible finished goods inventory receivable (later increased to 75% for one year from the effective date of the First Amendment); and (iii) 45% of the mortgage value of eligible real property, in each case with respect to certain of Products Corporation’s subsidiaries organized in Australia, Bermuda, Germany, Italy, Spain and Switzerland (the “ABTL Borrowing Base Guarantors”). The borrowing bases in each jurisdiction are subject to certain customary availability reserves set by the ABTL Agent.

Guarantees and Security: The 2021 Foreign Asset-Based Term Facility is guaranteed by the Borrowing Base Guarantors, as well as by the direct parent entities of each ABTL Borrowing Base Guarantor (not including Revlon, Inc. or Products Corporation) on a limited recourse basis (the “ABTL Parent Guarantors”) and by certain subsidiaries of Products Corporation organized in Mexico (the “ABTL Other Guarantors” and, together with the ABTL Borrower and the ABTL Borrowing Base Guarantors, the “ABTL Loan Parties”). The obligations of the ABTL Loan Parties and the ABTL Parent Guarantors under the 2021 Foreign Asset-Based Term Facility are secured by first-ranking pledges of the equity of each ABTL Loan Party (other than the Other Guarantors), the inventory and accounts receivable of the ABTL Borrowing Base Guarantors, the material bank accounts of each Loan Party, the material intercompany indebtedness owing to any Loan Party (including any intercompany loans made with the proceeds of the 2021 Foreign Asset-Based Term Facility) and certain other material assets of the ABTL Borrowing Base Guarantors, subject to customary exceptions and exclusions. The 2021 Foreign Asset-Based Term Facility includes a cash dominion feature customary for transactions of this type.

Interest and Fees: Interest is payable on each interest payment date as set forth in the 2021 Foreign Asset-Based Term Agreement, and in any event at least quarterly, and accrues on borrowings under the 2021 Foreign Asset-Based Term Facility at a rate per annum equal to the LIBOR rate, with a floor of 1.50%, plus an applicable margin equal to 8.50%. The ABTL Borrower is obligated to pay certain fees and expenses in connection with the 2021 Foreign Asset-Based Term Facility, including a fee payable to Blue Torch Finance LLC for its services as Agent. Loans under the 2021 Foreign Asset-Based Term Facility may be prepaid without premium or penalty, subject to a prepayment premium equal to 3.0% of the aggregate principal amount of loans prepaid or repaid during the first year after the 2021 ABTL Closing Date, 2.0% of the aggregate principal amount of loans prepaid or repaid during the second year after the 2021 ABTL Closing Date and 1.0% of the aggregate principal amount of loans prepaid or repaid thereafter.

Affirmative and Negative Covenants: The 2021 Foreign Asset-Based Term Agreement contains certain affirmative and negative covenants that, among other things, limit the ABTL Loan Parties’ ability to, subject to various exceptions and qualifications: (i) incur additional debt; (ii) incur liens; (iii) sell, transfer or dispose of assets; (iv) make investments; (v) make dividends and distributions on, or repurchases of, equity; (vi) make prepayments of contractually subordinated or junior lien debt; (vii) enter into certain transactions with their affiliates, including amending certain material intercompany agreements or trade terms; (viii) enter into sale-leaseback transactions; (ix) change their lines of business; (x) restrict dividends from their subsidiaries or restrict liens; (xi) change their fiscal year; and (xii) modify the terms of certain debt. The ABTL Parent Guarantors are subject to certain customary holding company covenants. The ability of the Loan Parties to make certain intercompany asset sales, investments, restricted payments and prepayments of intercompany debt is contingent on certain
21
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


"cash movement conditions" or "payment conditions" being met, which among other things, require a certain level of liquidity for the applicable Loan Party to effect such type of transactions. The 2021 Foreign Asset-Based Term Agreement also contains a financial covenant requiring the ABTL Loan Parties to maintain a minimum average balance of cash and cash equivalents of $3.5 million, tested monthly, based on the last 10 business days of each month, subject to certain cure rights. The 2021 Foreign Asset-Based Term Agreement also contains certain customary representations, warranties and events of default.

Prepayments: The ABTL Borrower must prepay loans under the 2021 Foreign Asset-Based Term Facility to the extent that outstanding loans exceed the borrowing base. In lieu of a mandatory prepayment, the Loan Parties may deposit cash into a designated U.S. bank account with the ABTL Agent that is subject to a control agreement (such cash, the “Qualified Cash”). If an event of default occurs and is continuing, the Qualified Cash may be applied, at the ABTL Agent’s option, to prepay the loans under the 2021 Foreign Asset-Based Term Facility. If the borrowing base subsequently exceeds the outstanding loans, the ABTL Borrower can withdraw Qualified Cash from such bank account to the extent of such excess. In addition, the 2021 Foreign Asset-Based Term Facility is subject to mandatory prepayments from the net proceeds from the incurrence by the Loan Parties of debt not permitted thereunder.

The proceeds from the 2021 Foreign Asset-Based Term Facility were used to extinguish the entire amount outstanding under the 2018 Foreign Asset-Based Term Facility as of the closing date, which was due on July 9, 2021. In connection with such extinguishment, approximately $1.0 million of pre-existing unamortized deferred financing costs were expensed within "Amortization of Debt Issuance Costs" on the Company’s Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021. In accordance with the terms of the 2021 Foreign Asset-Based Term Agreement, approximately $13.8 million of the proceeds from the transaction are held in escrow and are recorded within "Prepaid expenses and other assets" on the Company's Consolidated Balance Sheet as of December 31, 2021.

The Company incurred approximately $3.2 million of new debt issuance costs in connection with the closing of the 2021 Foreign Asset-Based Term Facility, which are amortized within "Amortization of debt issuance costs" in accordance with the effective interest method over the term of the facility.

2020 Troubled Debt Restructuring

As a result of the consummation of the exchange offer pertaining to Products Corporation's 5.75% Senior Notes remain outstanding(the "5.75% Senior Notes Exchange Offer"), and (ii) Products Corporation’s available liquidity does not exceedfollowing the aggregate principal amountapplicability of the then outstanding 5.75% Senior Notes by at least $200.0 million. The aggregate principal amount outstanding underTroubled Debt Restructuring guidance in ASC 470, Debt, the 2016 Term Loan Facility at September 30, 2017 was $1,782.0 million.

(b) See Note 11, "Long-Term Debt," toCompany recorded $57.8 million of future interest payments. During the Consolidated Financial Statements in Products Corporation's 2016 Form 10-K for certain details regarding Products Corporation's 2016 Revolving Credit Facility, which maturesthree months ended March 31, 2022, the Company recorded $3.6 million of amortization of such future interest as an offset within "Interest expense, net" on the earlier of: (x) the fifth anniversaryCompany's Unaudited Condensed Consolidated Statement of the Elizabeth Arden Acquisition Date;Operations and (y) the 91st day prior to the maturityComprehensive Loss.
22
Table of Products Corporation’s 5.75% Senior Notes if, on that date (and solely for so long as), (i) any of Products Corporation’s 5.75% Senior Notes remain outstandingContents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and (ii) Products Corporation’s available liquidity does not exceed the aggregate principal amount of the then outstanding 5.75% Senior Notes by at least $200.0 million. Total borrowings at face amount under the 2016 Revolving Credit Facility at September 30, 2017 were $243.9 million (excluding $10.0 million of outstanding undrawn letters of credit).per share amounts)
(c) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in Products Corporation's 2016 Form 10-K for certain details regarding Products Corporation's 6.25% Senior Notes that mature on August 1, 2024. The aggregate principal amount outstanding under the 6.25% Senior Notes at September 30, 2017 was $450 million.(Unaudited)
(d) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in Products Corporation's 2016 Form 10-K for certain details regarding Products Corporation's 5.75% Senior Notes that mature on February 15, 2021. The aggregate principal amount outstanding under the 5.75% Senior Notes at September 30, 2017 was $500 million.
(e) See Note 11, "Long-Term Debt," to the Consolidated Financial Statements in Products Corporation's 2016 Form 10-K for certain details regarding the euro-denominated loan payable to the Spanish government that matures on June 30, 2025.


Covenants
Products Corporation was in compliance with all applicable covenants under the 2016 Senior Credit FacilitiesBrandCo credit agreement, dated as of September 30, 2017. At September 30, 2017,May 7, 2020, by and among Products Corporation, as borrower, the aggregate principal amounts outstanding underCompany, as holdings, the lenders party thereto and Jefferies Finance, LLC as administrative agent and collateral agent (as amended by Amendment No. 1 dated as of November 13, 2020, the "2020 BrandCo Credit Agreement" and the credit facilities thereunder, the "2020 BrandCo Facilities"); the Amended 2016 Revolving Credit Agreement and the 2016 Term Loan Facility andAgreement (collectively, the 2016 Revolving"2016 Credit Facility were $1,782.0 million and $243.9 million, respectively. Availability underAgreements"); the $400.0 million 2016 Revolving Credit Facility at September 30, 2017, based upon the calculated borrowing base of $400.0 million, less $10.0 million of outstanding undrawn letters of credit, less $20.5 million of outstanding checks and less $243.9 million then drawn on the 2016 Revolving Credit Facility, was $125.6 million.
Products Corporation was in compliance2021 Foreign Asset-Based Term Agreement; as well as with all applicable covenants under the indenturesindenture governing Products Corporation'sits 6.25% Senior Notes due 2024 (such notes, the "6.25% Senior Notes" and 5.75%the related indenture, the "6.25% Senior Notes (together, the "Senior Notes Indentures"Indenture"), in each case as of September 30, 2017.March 31, 2022. At March 31, 2022, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:

CommitmentBorrowing BaseAggregate principal amount outstanding at March 31, 2022
Availability at March 31, 2022 (a)
Tranche A Revolving Credit Facility$270.0 $153.1 $88.0 $65.1 
SISO Term Loan Facility130.0 130.0 130.0 — 
2020 ABL FILO Term Loans50.0 43.2 $50.0 $— 

(a) Availability as of March 31, 2022 is based upon the Tranche A Revolving borrowing base then in effect under Amendment No.9 to the Amended 2016 Revolving Credit Facility of $153.1 million (which includes a $6.8 million reserve for the shortfall of the borrowing base that supports the 2020 ABL FILO Term Loans compared to the corresponding aggregate principal amount outstanding of $50 million), less $88.0 million then drawn.

9.The Company’s foreign subsidiaries held $62.2 million out of the Company's total $70.0 million in cash and cash equivalents as of March 31, 2022. While the cash held by the Company’s foreign subsidiaries is primarily used to fund their operations, the Company regularly assesses its global cash needs and the available sources of cash to fund these needs, which regularly includes repatriating foreign-held cash to settle historical intercompany loans and other intercompany payables.

8. FAIR VALUE MEASUREMENTS

Assets and liabilities are required to be categorized into three levels of fair value based upon the assumptions used to pricevalue the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing the fair value measurement of assets and liabilities are as follows:
•Level 1: Fair valuing the asset or liability using observable inputs, such as quoted prices in active markets for identical assets or liabilities;

•Level 2: Fair valuing the asset or liability using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and

•Level 3: Fair valuing the asset or liability using unobservable inputs that reflect the Company’s own assumptions regarding the applicable asset or liability.
As of both March 31, 2022 and December 31, 2021, the Company did not have any financial assets and liabilities that were required to be measured at fair value.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
23
Table of Contents
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
millions, except share and per share amounts)

(Unaudited)
As of September 30, 2017, the fair values of the Company’s financial assets and liabilities that are required to be measured at fair value are categorized in the table below:

 Total Level 1 Level 2 Level 3
Assets:       
Derivatives:       
FX Contracts(a)     
$0.5
 $—
 $0.5
 $—
Total assets at fair value$0.5
 $—
 $0.5
 $—
Liabilities:       
Derivatives:       
FX Contracts(a)    
$2.9
 $—
 $2.9
 $—
2013 Interest Rate Swap(b)
1.9
 —
 1.9
 —
Total liabilities at fair value$4.8
 $—
 $4.8
 $—

As of DecemberMarch 31, 2016, the fair values of the Company’s financial assets and liabilities that are required to be measured at fair value are categorized in the table below:
 Total Level 1 Level 2 Level 3
Assets:       
Derivatives:       
FX Contracts(a)     
$2.3
 $—
 $2.3
 $—
Total assets at fair value$2.3
 $—
 $2.3
 $—
Liabilities:       
Derivatives:       
FX Contracts(a)    
$1.1
 $—
 $1.1
 $—
2013 Interest Rate Swap(b)
4.7
 —
 4.7
 —
Total liabilities at fair value$5.8
 $—
 $5.8
 $—

(a)The fair value of the Company’s foreign currency forward exchange contracts ("FX Contracts") was measured based on observable market transactions for similar transactions in actively quoted markets of spot and forward rates on the respective dates. See Note 10, “Financial Instruments."
(b)The fair value of Products Corporation's 2013 Interest Rate Swap (as hereinafter defined) was measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve on the respective dates. See Note 10, “Financial Instruments.”

As of September 30, 2017,2022, the fair value and carrying value of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
March 31, 2022
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$— $2,744.7 $— $2,744.7 $3,422.7 
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $2,615.4
 $—
 $2,615.4
 $2,912.8

As of December 31, 2016,2021, the fair valuesvalue and carrying valuesvalue of the Company’s long-term debt, including the current portion of long-term debt, are categorized in the table below:
December 31, 2021
Fair Value
Level 1Level 2Level 3TotalCarrying Value
Liabilities:
Long-term debt, including current portion(a)
$— $2,864.0 $— $2,864.0 $3,442.7 
 Fair Value  
 Level 1 Level 2 Level 3 Total Carrying Value
Liabilities:         
Long-term debt, including current portion$—
 $2,770.9
 $—
 $2,770.9
 $2,681.2
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

(a) The fair value of the Company's long-term debt, including the current portion of long-term debt, is based on quoted market prices for similar issuesissuances and maturities.
The carrying amounts of the Company's cash and cash equivalents, trade receivables, notes receivable, accounts payable and short-term borrowings approximate their respective fair values.



10.9. FINANCIAL INSTRUMENTS

Letters of Credit

Products Corporation maintains standby and trade letters of credit for various corporate purposes under which Products Corporation is obligated, of which $10.0 million and $10.4$8.4 million (including amounts available under credit agreements in effect at that time) were maintained at September 30, 2017as of both March 31, 2022 and December 31, 2016, respectively.2021. Included in these amounts are approximately $6.8$6.1 million and $7.3 million at September 30, 2017 and December 31, 2016, respectively, in standby letters of credit that primarily support Products Corporation’s self-insurance programs.workers compensation, general liability and automobile insurance programs, in each case as outstanding as of both March 31, 2022 and December 31, 2021. At March 31, 2022 and December 31, 2021, respectively, all of the outstanding letters of credit were collateralized with a deposit of cash at the issuing financial institution. The estimated liability under such programs is accrued by Products Corporation.


Derivative Financial Instruments
10. PENSION AND POST-RETIREMENT BENEFITS

Net Periodic Benefit Cost
The Company uses derivative financial instruments, primarily: (i) FX Contracts, intendedcomponents of net periodic benefit costs for the purpose of managing foreign currency exchange risk by reducingCompany's pension and the effects of fluctuations in foreign currency exchange rates on the Company’s net cash flows; and (ii) interest rate hedging transactions, such as the 2013 Interest Rate Swap, intendedother post-retirement benefit plans for the purposethree months ended March 31, 2022 and 2021, respectively, were as follows:
Pension PlansOther
Post-Retirement Benefit Plans
Three Months Ended March 31,
2022202120222021
Net periodic benefit costs:
Service cost$0.3 $0.3 $— $— 
Interest cost2.7 2.30.1 — 
Expected return on plan assets(4.9)(4.9)— — 
Amortization of actuarial loss2.8 3.40.1 0.2
Total net periodic benefit costs$0.9 $1.1 $0.2 $0.2 

24
Table of managing interest rate risk associated with Products Corporation’s variable rate indebtedness.Contents
Foreign Currency Forward Exchange Contracts
The FX Contracts are entered into primarily to hedge the anticipated net cash flows resulting from inventory purchases and intercompany payments denominated in currencies other than the local currencies of the Company’s foreign and domestic operations and generally have maturities of less than one year.
The U.S. Dollar notional amount of the FX Contracts outstanding at September 30, 2017 and December 31, 2016 was $162.5 million and $79.6 million, respectively.
Interest Rate Swap Transaction
In November 2013, Products Corporation executed a forward-starting floating-to-fixed interest rate swap transaction (the "2013 Interest Rate Swap") that, at its inception, was based on a notional amount of $400 million in respect of indebtedness under Products Corporation’s 2013 term loan, that was incurred in connection with completing the October 2013 acquisition of The Colomer Group (the "Old Acquisition Term Loan"). The 2013 Interest Rate Swap initially had a floor of 1.00% that in December 2016 was amended to 0.75%. In connection with entering into the 2016 Term Loan Facility, the 2013 Interest Swap was carried over to apply to a notional amount of $400 million in respect of indebtedness under such loan for the remaining balance of the term of such swap. The Company initially designated the 2013 Interest Rate Swap as a cash flow hedge of the variability of the forecasted three-month LIBOR interest rate payments initially related to the $400 million notional amount under the Old Acquisition Term Loan over the three-year term of the 2013 Interest Rate Swap (and subsequently to the $400 million notional amount under the 2016 Term Loan Facility for the remaining balance of the term of such swap). Under the terms of the 2013 Interest Rate Swap, commencing in May 2015, Products Corporation receives from the counterparty a floating interest rate based on the higher of the three-month U.S. Dollar LIBOR or the floor percentage in effect, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which, with respect to the 2016 Term Loan Facility, effectively fixes the interest rate on such notional amount at 5.5709% over the remaining balance of the three-year term of the 2013 Interest Rate Swap). At September 30, 2017, the fair value of the 2013 Interest Rate Swap was a liability of $1.9 million and the accumulated loss recorded in accumulated other comprehensive loss was $1.2 million, net of tax.
As a result of completely refinancing the Old Acquisition Term Loan with a portion of the proceeds from Product's Corporation's consummation of the 2016 Senior Credit Facilities and the 6.25% Senior Notes Offering in connection with consummating the Elizabeth Arden Acquisition, the critical terms of the 2013 Interest Rate Swap no longer matched the terms of the underlying debt under the 2016 Term Loan Facility. At the refinancing date, which was the same as the September 7, 2016 Elizabeth Arden Acquisition Date (the "De-designation Date"), the 2013 Interest Rate Swap was determined to no longer be highly effective and the Company discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap, changes in fair value are accounted for as a component of other non-operating expenses. Accumulated deferred losses of $6.3 million, or $3.9 million net of tax, at the De-designation Date, that were previously recorded as a component of accumulated other comprehensive loss, will be amortized into earnings over the remaining term of the 2013 Interest Rate Swap. At September 30,
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
millions, except share and per share amounts)

(Unaudited)
2017, $2.1 million, or $1.2 million net of tax, remains as a component of accumulated other comprehensive loss related to the 2013 Interest Rate Swap. See "Quantitative Information – Derivative Financial Instruments" below.
The Company expects that $1.2 million of the deferred net losses, net of taxes, related to the 2013 Interest Rate Swap will be amortized into earnings over the next 12 months.
Credit Risk
Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of the derivative instruments in asset positions, which totaled $0.5 million and $2.3 million as of September 30, 2017 and December 31, 2016, respectively. The Company attempts to minimize exposure to credit risk by generally entering into derivative contracts with counterparties that have investment-grade credit ratings and are major financial institutions. The Company also periodically monitors any changes in the credit ratings of its counterparties. Given the current credit standing of the Company's counterparties to its derivative instruments, the Company believes that the risk of loss under these derivative instruments arising from any non-performance by any of the counterparties is remote.

Quantitative Information – Derivative Financial Instruments
The fair values of the Company's derivative financial instruments in its Consolidated Balance Sheets were as follows:
 Fair Values of Derivative Instruments
 Assets Liabilities
 Balance Sheet September 30,
2017		 December 31,
2016		 Balance Sheet September 30,
2017		 December 31,
2016
 Classification Fair Value Fair Value Classification Fair Value Fair Value
Derivatives not designated as hedging instruments:        
FX Contracts(a)   
Prepaid expenses and other $0.5
 $2.3
 Accrued Expenses $2.9
 $1.1
2013 Interest Rate Swap(b)
Prepaid expenses and other —
 —
 Accrued expenses and other 1.9
 3.7
 Other assets —
 —
 Other long-term liabilities —
 1.0

(a) The fair values of the FX Contracts at September 30, 2017 and December 31, 2016 were measured based on observable market transactions of spot and forward rates at September 30, 2017 and December 31, 2016, respectively.

(b) The fair values of the 2013 Interest Rate Swap at September 30, 2017 and December 31, 2016 were measured based on the implied forward rates from the U.S. Dollar three-month LIBOR yield curve at September 30, 2017 and December 31, 2016, respectively.

The effects of the Company's derivative financial instruments on its Consolidated Statements of Operations and Comprehensive (Loss) Income were as follows for the periods presented:
 Amount of Gain (Loss) Recognized in Other Comprehensive (Loss) Income
Three Months Ended September 30,
Nine Months Ended September 30,
2017
2016
2017
2016
Derivatives previously designated as hedging instruments:       
2013 Interest Rate Swap, net of tax (a)
$0.6
 $0.8
 $1.8
 $0.1
(a) Net of tax benefit of $0.4 million and $0.5 million for the three months ended September 30, 2017 and2016, respectively, and $1.1 million and $0.1 million for the nine months ended September 30, 2017 and 2016, respectively.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

 Statement of Operations Classification Amount of Gain (Loss) Recognized in Net (Loss) Income
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Derivatives designated as hedging instruments:        
2013 Interest Rate SwapInterest Expense $(0.9) $(1.0) $(2.9) $(3.2)
Derivatives not designated as hedging instruments:        
FX ContractsForeign currency gain (loss), net $(2.4) $(0.3) $(4.0) $(0.8)
2013 Interest Rate SwapMiscellaneous, net —
 —
 (0.1) —


11. PENSION AND POST-RETIREMENT BENEFITS
The components of net periodic benefit costs (income) for the Company’s pension and the other post-retirement benefit plans for the third quarter of 2017 and 2016 were as follows:
 

Pension Plans		 Other
Post-Retirement
Benefit Plans
 Three Months Ended September 30,
 2017 2016 2017 2016
Net periodic benefit costs (income): 
Service cost$0.6
 $0.1
 $—
 $—
Interest cost4.9
 5.2
 0.1
 0.1
Expected return on plan assets(7.1) (7.7) —
 —
Amortization of actuarial loss2.3
 2.2
 —
 —
Total net periodic benefit costs (income)$0.7
 $(0.2) $0.1
 $0.1
In the three months ended September 30, 2017,March 31, 2022, the Company recognized net periodic benefit cost of $0.8$1.1 million, compared to net periodic benefit incomecost of $0.1$1.3 million in the three months ended September 30, 2016. The increase in costs was primarily due to lower expected return on plan assets and higher service costs during the three months ended September 30, 2017.March 31, 2021.
The components of net periodic benefit costs (income) for the Company's pension and other post-retirement benefit plans for the first nine months of 2017 and 2016 were as follows:
 

Pension Plans		 
Other
Post-Retirement
Benefit Plans

 Nine Months Ended September 30,
 2017 2016 2017 2016
Net periodic benefit costs (income): 
Service cost$1.9
 $0.4
 $—
 $—
Interest cost14.7
 15.5
 0.3
 0.3
Expected return on plan assets(21.4) (23.3) —
 —
Amortization of actuarial loss7.1
 6.6
 0.2
 0.1
Curtailment gain(0.8) —
 —
 —
Total net periodic benefit costs (income)1.5
 (0.8) 0.5
 0.4
Portion allocated to Revlon Holdings(0.1) (0.1) —
 —
 $1.4
 $(0.9) $0.5
 $0.4
In the nine months ended September 30, 2017, the Company recognized net periodic benefit cost of $1.9 million, compared to net periodic benefit income of $0.5 million in the nine months ended September 30, 2016. The increase in costs was primarily
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

due to lower expected return on plan assets and higher service cost during the nine months ended September 30, 2017, partially offset by a curtailment gain resulting from a certain foreign non-qualified benefit plan.
Net periodic benefit costs (income) are reflected in the Company's unaudited Condensed Consolidated Financial Statements as follows:
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net periodic benefit costs (income):       
Cost of sales$(2.5) $(0.6) $(0.8) $(1.9)
Selling, general and administrative expense3.3
 0.5
 2.7
 1.4
Total net periodic benefit costs (income)$0.8
 $(0.1) $1.9
 $(0.5)
follows for the periods presented:
Three Months Ended March 31,
20222021
Net periodic benefit costs:
Selling, general and administrative expense$0.3 $0.4 
Miscellaneous, net0.8 0.9 
Total net periodic benefit costs$1.1 $1.3 
The Company expects that it will have net periodic benefit cost of approximately $3.0$4.6 million for its pension and other post-retirement benefit plans for all of 2017,during 2022, compared with net periodic benefit incomecost of $0.6$4.8 million in 2016.2021.

Contributions:
The Company’s intent is to fund at least the minimum contributions required to meet applicable federal employee benefit laws and local laws, or to directly pay benefit payments where appropriate. During the third quarter of 2017, $1.7three months ended March 31, 2022, $2.0 million and $0.2 million were contributed to the Company’sCompany's pension plans and other post-retirement benefit plans, respectively. During the first nine months of 2017, $5.2 million and $0.6 million were contributed to the Company’s pension plans and other post-retirement benefit plans, respectively. During 2017,2022, the Company expects to contribute approximately $10.0$8.8 million in the aggregate to its pension and other post-retirement benefit plans.
Relevant aspects
As a result of the CARES Act passed by the U.S. Congress in March 2020 to address the economic environment resulting from COVID-19, and in accordance with the Limited Relief for Pension Funding and Retirement Plan Distributions provision of such act, the Company deferred to 2021 approximately $11.8 million of contributions that were otherwise scheduled to be paid to its 2 qualified defined benefit pension plans non-qualified pension plansat different earlier dates during 2020. The deferral was in effect only for 2020 and other post-retirement benefit plans sponsoredunder the CARES relief provisions the Company was required to pay the contributions by Products Corporation are disclosed in Note 14, "Pension and Post-Retirement Benefits,"no later than January 4, 2021, including interest at the plans’ 2020 effective interest rate from the original due date to the actual payment date. The Company paid the contributions by the due date.

11. STOCK COMPENSATION PLAN
Revlon's amended Stock Plan provides for awards of stock options, stock appreciation rights, restricted or unrestricted stock and restricted stock units ("RSUs") to eligible employees and directors of Revlon and its affiliates, including Products Corporation. On June 3, 2021 Revlon’s stockholders approved an amendment to the Stock Plan to reserve an additional 2,000,000 shares and extend the term until August 2030. As a result, an aggregate of 8,565,000 shares were reserved for issuance as Awards under the Stock Plan, of which there remained approximately 0.2 million shares (reduced by approximately 0.4 million shares reserved for issuance upon approval of the Fifth Amended and Restated Revlon, Inc. Stock Plan) available for grant as of March 31, 2022.

2022 Incentive Program

During the first quarter of 2022, the Company granted approximately 3.1 million equity awards (includes approximately 0.4 million shares reserved for issuance upon approval of the Fifth Amended and Restated Revlon, Inc. Stock Plan) with 2 tranches of 100% time-based RSU components, all pursuant to the Stock Plan. Approximately 0.4 million vest at 100% in March 2023 and approximately 2.7 million vests as follows: 50% in March 2023; 50% in March 2024. The awards are subject to continued employment through the respective vesting dates.

2019 Transaction Incentive Program
During the second quarter of 2021, the Company granted approximately 78,000 TIP awards with both a cash component and RSU component, all pursuant to the Stock Plan. These TIP awards are 100% time-based and vests as follows: 50% in June 2022; 50% in June 2023. The awards are subject to continued employment through the respective vesting dates.
As of March 31, 2022, a total of approximately 70,362 time-based RSUs had been granted and are outstanding under the Revlon 2019 Transaction Incentive Program (the "2019 TIP").
25
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


The 2019 TIP also provided for the following cash-based awards payable to certain employees, subject to continued employment through the respective vesting dates: (i) Tier 1 - $6.8 million payable in 2 equal installments as of December 31, 2020 and December 31, 2021; and (ii) Tier 2 - $2.5 million payable in 1 installment as of December 31, 2020. Such RSUs and cash-based awards were eligible for vesting following a termination without cause or due to death or disability or if not assumed upon a change in control (the “Special Vesting Rules”). The total amount amortized for this Tier 1 cash-based awards since the program's inception and through March 31, 2022 is approximately $7.7 million, of which $0.2 million were recorded during the three months ended March 31, 2022, respectively. The amortization of such awards is recorded within "Acquisition, integration and divestiture costs" in the Company's Consolidated Financial Statements of Operations and Comprehensive Loss.

Long-Term Incentive Program
During the first quarter of 2022, the Company granted nil time-based RSU awards. During the first quarter of 2021, the Company granted approximately 1.5 million time-based RSU awards under the Stock Plan (the "2021 LTIP RSUs") to certain employees. The 2021 LTIP RSUs are 100% time-based and vests as follows: 50% in Products Corporation's 2016 Form 10-K.March 2022; 25% in March 2023; 25% in March 2024.



Time-Based LTIP and TIP RSUs
The Company recognized $3.8 million of net compensation expense related to the time-based LTIP and TIP RSUs for the three months ended March 31, 2022. As of March 31, 2022, the Company had $38.7 million of total deferred compensation expense related to non-vested, time-based LTIP and TIP RSUs. The cost is recognized over the vesting period of the awards, as described above.

Performance-based LTIP RSUs
The Company recognized $2.1 million of income, net of adjustments, to compensation expense related to the performance-based LTIP RSUs for the three months ended March 31, 2022. As of March 31, 2022, the Company had $12.1 million of total deferred compensation expense related to non-vested, performance-based LTIP RSUs. The cost is recognized over the service period of the awards, as described above.

Acceleration of Vesting
Under the aforementioned provisions for acceleration of vesting, as of March 31, 2022 and since the time these provisions became effective in September 2019, 57,763 LTIP RSUs and 47,743 2019 TIP Tier 1 RSUs were vested on an accelerated basis due to involuntary terminations, resulting in accelerated amortization of approximately $2.0 million. In addition, since the time these provisions became effective in September 2019 and through the three months ended March 31, 2022 under the same accelerated vesting provisions, the Company also recorded approximately $1.8 million of accelerated amortization in connection with the cash portion of the 2019 TIP Tier 1 and Tier 2 awards that were vested on an accelerated basis due to involuntary terminations. No accelerated amortization was recorded for the three months ended March 31, 2022 in connection with the LTIP RSUs, the 2019 TIP RSUs and the 2019 TIP cash portion. See the roll-forward table in the following sections of this Note 11 for activity related to the three months ended March 31, 2022.

26
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


During the three months ended March 31, 2022, the activity related to time-based and performance-based RSUs previously granted to eligible employees and the grant date fair value per share related to these RSUs were as follows under the LTIP, 2019 TIP and 2022 Incentive programs, respectively:
Time-Based LTIPPerformance-Based LTIP
RSUs (000's)Weighted-Average Grant Date Fair Value per RSURSUs (000's)Weighted-Average Grant Date Fair Value per RSU
Outstanding as of December 31, 2021
2019 TIP RSUs (a)
74.6 $13.16 n/a$— 
LTIP RSUs:
20211,548.6 10.58 — — 
2020253.9 14.96 377.7 14.96 
201969.8 22.58 211.2 22.55 
Total LTIP RSUs1,872.3 588.9 
Total LTIP and TIP RSUs Outstanding as of December 31, 20211,946.9 588.9 
Granted
2022 Incentive Program3,122.4 10.24 — — 
2019 TIP RSUs Granted (a)
— — — — 
LTIP RSUs:
2021— — — — 
2020— — — — 
2019— — — — 
Total LTIP RSUs Granted— — 
Vested
LTIP RSUs:
2021(751.8)10.59 — — 
2020
(122.8)14.96 — — 
2019
(66.6)22.55 (44.3)22.55 
Total LTIP RSUs Vested(941.2)(44.3)
Forfeited/Canceled
2019 TIP RSUs Forfeited/Canceled (a)
(4.3)13.16 — — 
LTIP RSUs:
2021(52.0)10.59 — — 
2020(11.9)14.96 (20.1)14.96 
2019(3.2)22.55 (166.9)22.55 
Total LTIP RSUs Forfeited/Canceled(67.1)(187.0)
Outstanding as of March 31, 2022
2022 Incentive Program3,122.4 10.24 — — 
2019 TIP RSUs70.3 13.16 n/a— 
LTIP RSUs:
2021744.8 10.57 — — 
2020119.2 14.96 357.6 14.96 
2019— — — — 
Total LTIP RSUs864.0 357.6 
Total LTIP and TIP RSUs Outstanding as of March 31, 20224,056.7 357.6 
(a) The 2019 TIP provides for RSU awards that are only time-based.



27
Table of Contents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


12. INCOME TAXES
The Company's provision for income taxes represents federal, foreign, state and local income taxes. The Company's effective tax rate differs from the applicable federal statutory rate due to the effect of state and local income taxes, tax rates and income in foreign jurisdictions, foreign earnings taxable in the U.S., non-deductible expenses and other items.jurisdictions. The Company’s tax provision changes quarterly based on various factors including, but not limited to, the geographical level and mix of earnings,earnings; enacted tax legislation,legislation; foreign, state and local income taxes,taxes; changes in valuation allowances; tax audit settlementssettlements; and the interaction of various global tax strategies.
For the third quarter of 2017 and 2016, the Company recorded a benefit from income taxes of $10.0 million and a provision of $0.4 million, respectively. The $10.4 million increase in the benefit from income taxes was primarily due to the level and mix of earnings between jurisdictions.
The Company recorded a benefit fromprovision for income taxes of $35.4$9.8 million (Products Corporation - $9.7 million) for the first ninethree months of 2017ended March 31, 2022 and a provision for income taxes of $18.3$11.2 million (Products Corporation - $11.1 million) for first ninethe three months of 2016,ended March 31, 2021, respectively. The $53.7$1.4 million decrease (Products Corporation - $1.4 million) in the provision for income taxes in the three months ended March 31, 2022, compared to the three months ended March 31, 2021, was primarily due to the pre-tax loss from continuing operations in the first nine monthsgeographical level and mix of 2017.earnings, net change of valuation allowance on its net federal and certain deferred tax assets, partially offset by state taxes for certain U.S. entities.
The Company's effective tax rate for the three months ended September 30, 2017March 31, 2022 and March 31, 2021 was lower than the federal statutory rate of 35%21% primarily due to losses for which no tax benefit can be recognized, as well as state taxes for certain U.S. entities.
In assessing the recoverability of its deferred tax assets, the Company continually evaluates all available positive and negative evidence to assess the amount of deferred tax assets which are more likely than not to be realized. Deferred tax assets are reduced by a valuation allowance if some portion or all of the deferred tax assets will not be realized.A valuation allowance is a non-cash charge, and it in no way limits the Company's ability to utilize its deferred tax assets, including its ability to utilize tax loss and credit carryforward amounts.
For further information, see Note 13, "Income Taxes," to the Consolidated Financial Statements in the Company's 2021 Form 10-K.


13. ACCUMULATED OTHER COMPREHENSIVE LOSS

A roll-forward of the Company's accumulated other comprehensive loss as of March 31, 2022 is as follows:
Foreign Currency TranslationActuarial (Loss) Gain on Post-retirement BenefitsOtherAccumulated Other Comprehensive Loss
Balance at January 1, 2022$(25.8)$(208.6)$(0.3)$(234.7)
Foreign currency translation adjustment, net of tax (b)
1.0 — — 1.0 
Amortization of pension related costs, net of tax (a) (b)
— 2.9 — 2.9 
Other comprehensive (loss) income$1.0 $2.9 $— $3.9 
Balance at March 31, 2022$(24.8)$(205.7)$(0.3)$(230.8)
(a) Amounts represent the change in accumulated other comprehensive loss as a result of the levelamortization of actuarial losses (gains) arising during each year related to the Company’s pension and mixother post-retirement plans. See Note 10, "Pension and Post-retirement Benefits," for further information on the Company’s pension and other post-retirement plans.
(b) Amounts presented are net of earnings between jurisdictions, foreign dividends and earnings taxable in the U.S., partially offset by the effecttax expense of certain favorable discrete items.
The Company's effective tax ratenil for the nine months ended September 30, 2017 was lower than the federal statutory rate of 35% as a resulteach of the levelyears ended March 31, 2022 and mix2021.



28
Table of earnings between jurisdictions, foreign dividends and earnings taxable in the U.S., and state and local taxes, partially offset by the effect of certain favorable discrete items.Contents


REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
millions, except share and per share amounts)

(Unaudited)
13. ACCUMULATED OTHER COMPREHENSIVE LOSS
The components of accumulated other comprehensive loss as of September 30, 2017 were as follows:
 Foreign Currency Translation Actuarial (Loss) Gain on Post-retirement Benefits Deferred Gain (Loss) - Hedging Other Accumulated Other Comprehensive Loss
Balance at January 1, 2017$(24.0) $(224.4) $(3.0) $(0.3) $(251.7)
Currency translation adjustment, net of tax of $1.5 million5.3
 —
 —
 —
 5.3
Amortization of pension related costs, net of tax of $1.3 million(a)     
—
 6.1
 —
 —
 6.1
Amortization of deferred losses related to the de-designated 2013 Interest Rate Swap, net of tax benefit of $1.1 million(b)   
—
 —
 1.8
 —
 1.8
Curtailment gain, net of tax of $0.3 million(c)
—
 2.6
 —
 —
 2.6
Other comprehensive income$5.3
 $8.7
 $1.8
 $—
 $15.8
Balance at September 30, 2017$(18.7) $(215.7) $(1.2) $(0.3) $(235.9)
(a)
Amounts represent the change in accumulated other comprehensive loss as a result of the amortization of actuarial losses (gains) arising during each year related to the Company’s pension and other post-retirement plans. See Note 11, “Pension and Post-retirement Benefits,” for further discussion of the Company’s pension and other post-retirement plans.
(b)
See Note 10, "Financial Instruments," for further discussion of the 2013 Interest Rate Swap.
(c)
As a result of the Elizabeth Arden Acquisition, the Company recognized $2.6 million in curtailment gains related to a foreign non-qualified defined benefit plan of Elizabeth Arden.
As shown above, other comprehensive income includes changes in the fair value of the 2013 Interest Rate Swap prior to de-designation. Following is a roll-forward of the amounts reclassified out of accumulated other comprehensive loss into earnings as of September 30, 2017:
  
2013
Interest Rate Swap
Beginning accumulated losses at June 30, 2017 $(1.8)
Reclassifications into earnings (net of $0.4 million tax benefit)(a)    
 0.6
Ending accumulated losses at September 30, 2017 $(1.2)
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2016 $(3.0)
Reclassifications into earnings (net of $1.1 million tax benefit)(a)
 1.8
Ending accumulated losses at September 30, 2017 $(1.2)
(a)
Reclassified to interest expense.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Following is a roll-forward of the amounts reclassified out of accumulated other comprehensive loss into earnings as of September 30, 2016:
  
2013
Interest Rate Swap
Beginning accumulated losses at June 30, 2016 $(4.5)
Reclassifications into earnings (net of $0.4 million tax benefit)(a)
 0.7
Change in fair value (net of $0.1 million tax benefit) 0.1
Ending accumulated losses at September 30, 2016 $(3.7)
  
2013
Interest Rate Swap
Beginning accumulated losses at December 31, 2015 $(3.8)
Reclassifications into earnings (net of $1.2 million tax expense)(a)
 2.0
Change in fair value (net of $1.1 million tax benefit) (1.9)
Ending accumulated losses at September 30, 2016 $(3.7)
(a)
Reclassified to interest expense.


14. SEGMENT DATA AND RELATED INFORMATION
Operating segments include components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Company's “Chief Executive Officer”) in deciding how to allocate resources and in assessing the Company's performance. Segments
As a result of the similarities in the procurement, manufacturing and distribution processes for the Company’s products, much of the information provided in the Unauditedunaudited Condensed Consolidated Financial Statements and provided in the segment table below is similar to, or the same as, that reviewed on a regular basis by the Company's Chief Executive Officer. As of September 30, 2017, and since the Elizabeth Arden Acquisition Date, the Elizabeth Arden organization has continued to operate and be evaluated on a stand-alone basis.
At September 30, 2017, the Company’s operations are organized into the following reportable segments:
Consumer - The Company’s Consumer segment is comprised of productsCompany operates in 4 brand-centric reporting units that are marketed, distributedaligned with its organizational structure based on 4 global brand teams: Revlon; Elizabeth Arden; Portfolio; and sold in large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores,Fragrances, which represent the Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetic stores and perfumeries in the U.S. and internationally under brands such as Revlon, Almay, SinfulColors and Pure Ice in cosmetics; Revlon ColorSilk in women’s hair color; Revlon in beauty tools; and Mitchum in anti-perspirant deodorants. The Consumer segment also includes a skin care line under the Natural Honey brand and hair color line under the Llongueras brand (licensed from a third party) that are sold in large volume retailers and other retailers, primarily in Spain, as well as Cutex nail care products.
Elizabeth Arden - The Elizabeth Arden segment markets, distributes and sells fragrances, skin care and color cosmetics to prestige retailers, specialty stores, the mass retail channel, distributors, perfumeries, department stores, boutiques, travel retailers and other retailers in the U.S. and internationally, as well as direct sales to consumers via its Elizabeth Arden Red Door branded retail stores, Elizabeth Arden.com e-commerce business and Elizabeth Arden Red Door spa beauty salons and spas under brands such as Skin Illuminating, SUPERSTART, Prevage, Eight Hour Cream, Elizabeth Arden Ceramide and Visible Difference in the Elizabeth Arden skin care brands; Elizabeth Arden Red Door, Elizabeth Arden 5th Avenue, Elizabeth Arden Green Tea and UNTOLD in Elizabeth Arden fragrances; Juicy Couture, John Varvatos and Wildfox Couture in designer fragrances; and Curve, Elizabeth Taylor, Britney Spears, Christina Aguilera, Halston,Ed Hardy, Geoffrey Beene, Alfred Sung, Giorgio Beverly Hills, Lucky Brand, PS Fine Cologne for Men, White Shoulders and Jennifer Anistonin heritage fragrances.
Professional - The Company’s Professional segment markets, distributes and sells professional products primarily to hair and nail salons and professional salon distributors in the U.S. and internationally under brands such as Revlon Professional in hair color, hair care and hair treatments; CND in nail polishes and nail enhancements, including CND Shellac and CND Vinylux nail polishes; and American Crew in men’s grooming products. The Professional segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products, which are sold in both professional salons and in large volume retailers and other retailers, primarily in the U.S. 
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Other - The Other segment includes the operating results related to the development, marketing and distribution of certain licensed fragrances and other beauty products. The results included within the Other segment are not material to the Company’s consolidated results of operations.
Company's 4 reporting segments.
The Company's management evaluates segment profit which is definedfor each of the Company's reportable segments. The Company allocates corporate expenses to each reportable segment to arrive at segment profit, and these expenses are included in the internal measure of segment operating performance. The Company defines segment profit as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses, for each of the Company's reportable segments.expenses. Segment profit also excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the reportable segments' underlying operating performance, which includes the impacts of: (i) restructuring and related charges; (ii) acquisition and integration costs; (iii) deferred compensation costs; (iv) costs of sales resulting from a fair value adjustment to inventory acquired in the Elizabeth Arden Acquisition; and (v) charges related to the Elizabeth Arden 2016 Business Transformation Program.performance. Such items are shown below in the table reconciling segment profit to consolidated income from continuing operations before income taxes. Unallocated corporate expenses primarily include general and administrative expenses related to the corporate organization. These expenses are recorded in unallocated corporate expenses, as these items are centrally directed and controlled and are not included in internal measures of segment operating performance. The Company does not have any material inter-segment sales.
The accounting policies for each of the reportable segments are the same as those described in Note 1, “Description"Description of Business and Summary of Significant Accounting Policies.”" The Company's assets and liabilities are managed centrally and are reported internally in the same manner as the Unauditedunaudited Condensed Consolidated Financial Statements; thus, no additional information regarding assets and liabilities of the Company’s reportable segments is produced for the Company's Chief Executive Officer or included in these Unauditedunaudited Condensed Consolidated Financial Statements.








REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
29
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)
millions, except share and per share amounts)

(Unaudited)


The following table is a comparative summary of the Company’s net sales and segment profit for Revlon and Products Corporation by reportable segment for eachthe periods presented.

Revlon, Inc.
Three Months Ended March 31,
20222021
Segment Net Sales:
Revlon$182.1 $162.0 
Elizabeth Arden114.9 112.2 
Portfolio99.2 96.0 
Fragrances83.4 74.8 
Total$479.6 $445.0 
Segment Profit:
Revlon$23.6 $8.0 
Elizabeth Arden5.9 9.2 
Portfolio17.3 13.1 
Fragrances11.6 7.9 
Total$58.4 $38.2 
Reconciliation:
Total Segment Profit$58.4 $38.2 
Less:
Depreciation and amortization27.6 33.3 
Non-cash stock compensation expense1.8 3.1 
Non-Operating items:
Restructuring and related charges4.0 7.3 
Acquisition, integration and divestiture costs0.2 0.6 
Financial control remediation and sustainability actions and related charges— 0.2 
COVID-19 charges— 6.2 
Capital structure and related charges1.1 0.2 
      Operating income (loss)23.7 (12.7)
Less:
Interest Expense62.1 58.9 
Amortization of debt issuance costs9.1 8.7 
   Foreign currency losses, net7.8 3.3 
Miscellaneous, net1.9 1.2 
Loss from operations before income taxes$(57.2)$(84.8)



30
Table of the threeContents
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and nine months ended September 30, 2017 and 2016.per share amounts)
(Unaudited)


 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Segment Net Sales:       
Consumer$306.7
 $342.8
 $932.8
 $1,022.3
Elizabeth Arden248.1
 135.2
 639.3
 135.2
Professional107.0
 118.8
 320.4
 357.2
Other4.7
 8.0
 14.6
 18.6
Total$666.5
 $604.8
 $1,907.1
 $1,533.3
        
Segment Profit:       
Consumer$33.0
 $81.0
 $134.5
 $220.4
Elizabeth Arden31.6
 32.5
 65.5
 32.5
Professional18.9
 23.7
 44.5
 73.4
Other(1.0) (0.1) (2.5) (0.9)
Total$82.5
 $137.1
 $242.0
 $325.4
        
Reconciliation:       
Segment Profit$82.5
 $137.1
 $242.0
 $325.4
Less:

 

    
Unallocated corporate expenses26.5
 21.9
 88.1
 52.3
Depreciation and amortization37.9
 28.8
 111.7
 81.0
Non-cash stock compensation expense1.5
 1.5
 5.9
 4.8
Non-Operating items:       
Restructuring and related charges6.6
 0.5
 12.3
 2.3
Acquisition and integration costs12.7
 33.5
 40.2
 39.5
Elizabeth Arden 2016 Business Transformation Program0.1
 1.7
 0.8
 1.7
Elizabeth Arden inventory purchase accounting adjustment, cost of sales—
 4.2
 17.2
 4.2
Cutex International inventory purchase accounting adjustment, cost of sales—
 0.2
 —
 0.3
Deferred compensation0.3
 0.8
 2.0
 2.6
Operating (loss) income(3.1) 44.0
 (36.2) 136.7
Less:       
Interest Expense38.6
 27.4
 110.3
 69.3
Amortization of debt issuance costs2.3
 1.7
 6.8
 4.6
Loss on early extinguishment of debt—
 16.9
 —
 16.9
Foreign currency (gains) losses, net(3.1) 1.2
 (16.8) 6.3
Miscellaneous, net0.3
 (0.6) 1.8
 (0.1)
(Loss) income from continuing operations before income taxes$(41.2) $(2.6) $(138.3) $39.7
Products Corporation
Three Months Ended March 31,
20222021
Segment Net Sales:
Revlon$182.1 $162.0 
Elizabeth Arden114.9 112.2 
Portfolio99.2 96.0 
Fragrances83.4 74.8 
Total$479.6 $445.0 
Segment Profit:
Revlon$24.4 $8.4 
Elizabeth Arden6.4 9.5 
Portfolio17.7 13.2 
Fragrances12.0 8.1 
Total$60.5 $39.2 
Reconciliation:
Total Segment Profit$60.5 $39.2 
Less:
Depreciation and amortization27.6 33.3 
Non-cash stock compensation expense1.8 3.1 
Non-Operating items:
Restructuring and related charges4.0 7.3 
Acquisition, integration and divestiture costs0.2 0.6 
Financial control remediation and sustainability actions and related charges— 0.2 
COVID-19 charges— 6.2 
Capital structure and related charges1.1 0.2 
      Operating income (loss)25.8 (11.7)
Less:
Interest Expense62.1 58.9 
Amortization of debt issuance costs9.1 8.7 
   Foreign currency losses, net7.8 3.3 
Miscellaneous, net5.3 1.2 
Loss from operations before income taxes$(58.5)$(83.8)


As of September 30, 2017, after giving effect to the Elizabeth Arden Acquisition,March 31, 2022, the Company had operations established in 27approximately 25 countries outside of the U.S. and its products are sold throughout the world. Generally, net sales by geographic area are presented by attributing revenues from external customers on the basis of where the products are sold.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
31
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



The following tables present the Company's segment net sales by geography and total net sales by classes of similar products for the periods presented:
Three Months Ended March 31, 2022
RevlonElizabeth ArdenPortfolioFragrancesTotal
Geographic Area:
 Net Sales
   North America$101.6 $26.0 $64.7 $52.7 $245.0 
   EMEA*43.9 27.3 26.9 19.2 117.3 
   Asia7.7 56.1 0.7 6.2 70.7 
   Latin America*11.9 1.4 3.6 2.8 19.7 
   Pacific*17.0 4.1 3.3 2.5 26.9 
$182.1 $114.9 $99.2 $83.4 $479.6 
Three Months Ended March 31, 2021
RevlonElizabeth ArdenPortfolioFragrancesTotal
Geographic Area:
 Net Sales
   North America$83.0 $28.4 $63.5 $51.3 $226.2 
   EMEA*37.6 26.0 24.9 15.6 104.1 
   Asia11.0 51.6 0.7 3.0 66.3 
   Latin America*11.4 1.3 3.1 2.3 18.1 
   Pacific*19.0 4.9 3.8 2.6 30.3 
$162.0 $112.2 $96.0 $74.8 $445.0 
* The EMEA region includes Europe, the Middle East and Africa; the Latin America region includes Mexico, Central America and South America; and the Pacific region includes Australia and New Zealand.

Three Months Ended March 31,
20222021
Classes of similar products:
   Net sales:
Color cosmetics$134.7 28%$113.4 26%
Fragrance117.7 25%107.4 24%
Hair care116.3 24%109.7 25%
Beauty care40.2 8%37.8 8%
Skin care70.7 15%76.7 17%
$479.6 $445.0 

The following table presents the Company's long-lived assets by geographic area:
March 31, 2022December 31, 2021
Long-lived assets, net:
United States$1,113.2 84%$1,134.3 84%
International215.3 16%215.8 16%
$1,328.5 $1,350.1 

32
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017
2016
Geographic area:               
   Net sales:               
United States$311.7
 47% $326.1
 54% $916.2
 48% $836.8
 55%
International354.8
 53% 278.7
 46% 990.9
 52% 696.5
 45%
 $666.5
   $604.8
   $1,907.1
   $1,533.3
  

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


 September 30, 2017 December 31, 2016
Long-lived assets, net:      
United States$1,478.2
 84% $1,494.3
 85%
International283.9
 16% 255.4
 15%
 $1,762.1
  $1,749.7
  

 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017
2016
Classes of similar products:               
   Net sales:               
Color cosmetics$221.3
 33% $245.5
 41% $681.6
 36% $731.7
 48%
Fragrance197.6
 30% 127.8
 21% 487.7
 26% 154.9
 10%
Hair care126.0
 19% 135.3
 22% 383.7
 20% 402.1
 26%
Beauty care69.3
 10% 94.1
 16% 198.0
 10% 236.9
 15%
Skin care52.3
 8% 2.1
 —% 156.1
 8% 7.7
 1%
 $666.5
   $604.8
   $1,907.1
   $1,533.3
  



15. REVLON, INC. BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE
Following are the components of Revlon's basic and diluted loss per common share for the periods presented:
Three months ended March 31,
20222021
Numerator:
Loss from operations, net of taxes$(67.0)$(96.0)
Net loss$(67.0)$(96.0)
Denominator:
Weighted-average common shares outstanding – Basic54,262,464 53,653,449 
Effect of dilutive restricted stock and RSUs— — 
Weighted-average common shares outstanding – Diluted54,262,464 53,653,449 
Basic and Diluted (loss) earnings per common share:
Net loss per common share$(1.23)$(1.79)
Unvested restricted stock and RSUs under the Stock Plan(a)
822,446 376,812 
(a) These are outstanding common stock equivalents that were not included in the computation of Revlon's diluted earnings per common share because their inclusion would have had an anti-dilutive effect.


16. CONTINGENCIES

Citibank Litigation

In the matter captioned In re Citibank August 11, 2020 Wire Transfers, No. 20-cv-06539-JMF (S.D.N.Y. Feb. 16, 2021) (the “Citi Decision”), the United States District Court for the Southern District of New York held that certain wire transfers mistakenly paid by Citibank, N.A. (“Citi”) from its own funds on August 11, 2020 to holders of term loans issued to Revlon under a Term Credit Agreement dated as of September 7, 2016 (as amended, the “2016 Facility”) were final and complete transactions not subject to revocation. The wire payments at issue were made to all lenders under the 2016 Facility in amounts equaling the principal and interest outstanding on the loans at that time. Certain lenders that received the payments returned the funds soon after the mistaken transfer, but holders of approximately $504 million did not, and as a result of the Citi Decision those lenders are entitled to keep the funds in discharge of their debt.

Citi has appealed the Citi Decision. Citi has also asserted subrogation rights, but, as yet, there has been no determination of those rights (if any) under the 2016 Facility and Revlon has not taken a position on this issue. In these circumstances, it is the current intention of the Company to continue to make the scheduled payments under the 2016 Facility as if the full amount of the 2016 Facility remains outstanding.

The Company is involved in various routine legal proceedings incidental to the ordinary course of its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

As previously disclosed, following the announcement of the execution of the Elizabeth Arden Merger Agreement, several putative shareholder class action lawsuits and a derivative lawsuit were filed challenging the Merger. In addition to the complaints filed on behalf of plaintiffs Parker, Christiansen, Ross and Stein on July 25, 2016, a lawsuit (Hutson v. Elizabeth Arden, Inc., et al., Case No. CACE-16-013566) (referred to as the “Hutson complaint”) was filed in the Seventeenth Judicial Circuit in and for Broward County, Florida (the “Court”) against Elizabeth Arden, the members of the board of directors of Elizabeth Arden, Revlon, Products Corporation and Acquisition Sub. In general, the Hutson complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary duties to Elizabeth Arden’s shareholders with respect to the Merger, by, among other things, approving the Merger pursuant to an unfair process and at an inadequate and unfair price; and (ii) Revlon, Products Corporation and Acquisition Sub aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board. The plaintiff seeks relief similar to that sought in the Parker case.
By Order dated August 4, 2016, all five cases were consolidated by the Court into a Consolidated Amended Class Action. Thereafter, on August 11, 2016 a Consolidated Amended Class Action Complaint was filed, seeking to enjoin defendants from consummating the Merger and/or from soliciting shareholder votes. To the extent that the Merger was consummated, the Consolidated Amended Class Action Complaint seeks to rescind the Merger or recover rescissory or other compensatory damages, along with costs and fees. The grounds for relief set forth in the Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints, as previously disclosed. Class counsel advised that post consummation of the Merger they were going to file a Second Consolidated Amended Class Action Complaint. The Second Consolidated Amended
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Class Action Complaint (which superseded the Consolidated Amended Class Action Complaint) was ultimately filed on or about January 26, 2017. Like the Consolidated Amended Class Action complaint, the grounds for relief set forth in the Second Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints.
The Company believes the allegations contained in the Second Consolidated Amended Class Action Complaint are without merit and intends to vigorously defend against them. Additional lawsuits arising out of or relating to the Elizabeth Arden Merger Agreement or the Merger may be filed in the future. The defendants' motions to dismiss the Second Consolidated Amended Class Action Complaint were filed on March 28, 2017. Plaintiffs' response was filed on June 6, 2017 and defendants' replies were filed on July 13, 2017. A hearing on the defendants' motion to dismiss was held on September 19, 2017 and the parties await the Court's decision.
The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. However, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period.



33
16.COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


17. RELATED PARTY TRANSACTIONS
Transfer and Reimbursement Agreements
Pursuant to the previously disclosed reimbursement agreements (the "Reimbursement Agreements") between
Revlon, Products Corporation and MacAndrews & Forbes Inc. (a wholly-owned subsidiary of MacAndrews & Forbes):have entered into reimbursement agreements (the "Reimbursement Agreements") pursuant to which: (i) MacAndrews & Forbes is obligated to provide (directly or through its affiliates) certain professional and administrative services, including, without limitation, employees, to the Company, and to purchase services from third-party providers, such as insurance, legal, accounting and air transportation services, on behalf of the Company, to the extent requested by Products Corporation; and (ii) Products Corporation is obligated to provide certain professional and administrative services, including, without limitation, employees, to MacAndrews & Forbes and to purchase services from third-party providers, such as insurance, legal and accounting services, on behalf of MacAndrews & Forbes, to the extent requested by MacAndrews & Forbes, provided that in each case the performance of such services does not cause an unreasonable burden to MacAndrews & Forbes or Products Corporation, as the case may be.
The Company reimburses MacAndrews & Forbes for the allocable costs of the services that MacAndrews & Forbes purchases for or provides to the Company and for the reasonable out-of-pocket expenses that MacAndrews & Forbes incurs in connection with the provision of such services. MacAndrews & Forbes reimburses Products Corporation for the allocable costs of the services that Products Corporation purchases for or provides to MacAndrews & Forbes and for the reasonable out-of-pocket expenses incurred by Products Corporation in connection with the purchase or provision of such services. Each of the Company, on the one hand, and MacAndrews & Forbes, on the other, has agreed to indemnify the other party for losses arising out of the services provided by it under the Reimbursement Agreements, other than losses resulting from its willful misconduct or gross negligence.
The Reimbursement Agreements may be terminated by either party on 90 days' notice. The Company does not intend to request services under the Reimbursement Agreements unless their costs would be at least as favorable to the Company as could be obtained from unaffiliated third parties.
The Company participates in MacAndrews & Forbes' directors and officers liability insurance program (the “D"D&O Insurance Program”Program"), as well as its other insurance coverages, such as property damage, business interruption, liability and other coverages, which cover the Company, as well as MacAndrews & Forbes and its subsidiaries. The limits of coverage for certain of the policies are available on an aggregate basis for losses to any or all of the participating companies and their respective directors and officers. The Company reimburses MacAndrews & Forbes from time-to-time for their allocable portion of the premiums for such coverage or the Company pays the insurers directly, which premiums the Company believes are more favorable than the premiums that the Company would pay were it to secure stand-alone coverage. Any amounts paid by the Company directly to MacAndrews & Forbes in respect of premiums are included in the amounts paid under the Reimbursement Agreements. To ensure the availability of directors and officers liability insurance coverage through January 2023, the Company and MacAndrews & Forbes agreed to collectively make payments under MacAndrews & Forbes’ D&O Insurance Program. During 2021, the Company made a payment of approximately $1.3 million in respect of its participation in the D&O Insurance Program. During the three months ended March 31, 2022, the Company made no payment in respect of its participation in the D&O Insurance Program. As of March 31, 2022, the Company has $0.3 million balance outstanding in respect of its participation in the D&O Insurance Program.
The net activity related to services purchased under the Transfer and Reimbursement Agreements during the ninethree months ended September 30, 2017March 31, 2022 and 20162021 was $3.6less than $0.1 million expense and $1.3$0.1 million respectively, which primarily included partial payments made by the Company to MacAndrews & Forbes during the first quarter of 2017 and 2016 for premiums related to the Company's allocable portion of the 5-year renewal of the D&O Insurance Program for the period from January 31, 2012 through January 31, 2017 (which insurance coverage was renewed in January 2017 through January 2020).income, respectively. As of September 30, 2017March 31, 2022 and December 31, 2016,2021, a payable balance of less than $0.1 million, and a receivable balance of $0.5$0.1 million, and a payable balance of $0.2 million, respectively, from, MacAndrews & Forbes, respectively, was included in the Company's Unaudited Consolidated Balance Sheet for transactions subject to the Transfer and Reimbursement Agreements.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
Tax Sharing Agreements

As a result of a debt-for-equity exchange transaction completed in March 2004 (the "2004 Revlon Exchange Transactions"), as of March 25, 2004, Revlon, Products Corporation and their U.S. subsidiaries were no longer included in the MacAndrews & Forbes Group for U.S. federal income tax purposes.

Registration Rights Agreement

Prior to the consummation of Revlon's initial public equity offering in February 1996, Revlon and Revlon Worldwide Corporation (which subsequently merged into REV Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of MacAndrews & Forbes ("REV Holdings")), the then direct parent of Revlon entered into a registration rights agreement (the "Registration Rights Agreement"). In February 2003, MacAndrews & Forbes executed a joinder agreement to
34
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



the Registration Rights Agreement, pursuant to which REV Holdings, MacAndrews & Forbes and certain transferees of Revlon's Common Stock held by REV Holdings (the "Holders") have the right to require Revlon to register under the Securities Act all or part of the Class A Common Stock owned by such Holders, including, without limitation, the shares of Class A Common Stock purchased by MacAndrews & Forbes in connection with Revlon's 2003 $50.0 million equity rights offering and the shares of Class A Common Stock which were issued to REV Holdings upon its conversion of all 3,125,000 shares of its Class B Common Stock in October 2013 (a "Demand Registration"). In connection with closing the 2004 Revlon Exchange Transactions and pursuant to the 2004 Investment Agreement, MacAndrews & Forbes executed a joinder agreement that provided that MacAndrews & Forbes would also be a Holder under the Registration Rights Agreement and that all shares acquired by MacAndrews & Forbes pursuant to the 2004 Investment Agreement are deemed to be registrable securities under the Registration Rights Agreement. This included all of the shares of Class A Common Stock acquired by MacAndrews & Forbes in connection with Revlon’s March 2006 $110 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes, and Revlon’s January 2007 $100 million rights offering of shares of its Class A Common Stock and related private placement to MacAndrews & Forbes. Pursuant to the Registration Rights Agreement, in 2009 Revlon registered under the Securities Act all 9,336,905 shares of Class A Common Stock issued to MacAndrews & Forbes in the 2009 exchange offer, in which, among other things, Revlon issued to MacAndrews & Forbes shares of Class A Common Stock at a ratio of one share of Class A Common Stock for each $5.21 of outstanding principal amount of the then-outstanding Senior Subordinated Term Loan that MacAndrews & Forbes contributed to Revlon.

Revlon may postpone giving effect to a Demand Registration for a period of up to 30 days if Revlon believes such registration might have a material adverse effect on any plan or proposal by Revlon with respect to any financing, acquisition, recapitalization, reorganization or other material transaction, or if Revlon is in possession of material non-public information that, if publicly disclosed, could result in a material disruption of a major corporate development or transaction then pending or in progress or could result in other material adverse consequences to Revlon. In addition, the Holders have the right to participate in registrations by Revlon of its Class A Common Stock (a "Piggyback Registration"). The Holders will pay all out-of-pocket expenses incurred in connection with any Demand Registration. Revlon will pay any expenses incurred in connection with a Piggyback Registration, except for underwriting discounts, commissions and expenses attributable to the shares of Class A Common Stock sold by such Holders.

As of March 31, 2022, MacAndrews & Forbes beneficially owned approximately 85.2% of Revlon's Class A Common Stock, which at such date was Revlon's only class of capital stock outstanding. As a result, MacAndrews & Forbes is able to elect Revlon’s entire Board of Directors and control the vote on all matters submitted to a vote of Revlon's stockholders. MacAndrews & Forbes is beneficially owned by Ronald O. Perelman. Mr. Perelman is Chairman of Revlon’s and Products Corporation's Board of Directors.

Other

Certain of Products Corporation’s debt obligations, including the 2016 Credit Agreements and Products Corporation's Senior Notes, have been, and may in the future be, supported by, among other things, guarantees from all of Products Corporation's domestic subsidiaries (subject to certain limited exceptions) and, for the 2016 Credit Agreements, guarantees from Revlon. The obligations under such guarantees are secured by, among other things, all of the capital stock of Products Corporation and, its domestic subsidiaries (subject to certain limited exceptions) and 66% of the capital stock of Products Corporation's and its domestic subsidiaries' first-tier foreign subsidiaries.

During the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, the Company engaged several companies in which MacAndrews & Forbes had a controlling interest to provide the Company with various ordinary course business services. These services included processing approximately $24.4$3.6 million and $35.1$2.5 million of coupon redemptions for the Company's retail customers for the ninethree months ended September 30, 2017March 31, 2022 and 2016,2021, respectively, for which the Company paidincurred fees of approximately $0.2 million and $0.3$0.1 million for each of the ninethree months ended September 30, 2017March 31, 2022 and 2016, respectively,2021, and other similar advertising, coupon redemption and raw material supply services, for which the Company paid feeshad net payables aggregating to less than $0.1 million and $0.5 million as of March 31, 2022 and December 31, 2021. As of March 31, 2022 and December 31, 2021, payable balances of approximately $0.3$1.9 million and $4.2 million, respectively, were included in the Company's Consolidated Balance Sheet for each of the nine months ended September 30, 2017 and 2016.aforementioned coupon redemption services. The Company believes that its engagement of each of these affiliates was on arm's length terms, taking into account each firm's expertise in its respective field, and that the fees paid or received were at least as favorable as those available from unaffiliated parties.



On May 4, 2022, the Company and Mr. Beattie entered into Amendment No. 3 to his Amended and Restated Consulting Agreement, dated as of March 11, 2020, pursuant to which he will continue to provide advisory services to the Company until
35
17.COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


April 1, 2023 (such amendment, “Amendment No. 3”).As compensation for Mr. Beattie’s advisory services, the Company agreed to grant him restricted stock units with an intended value of approximately $250,000, which will vest in installments during the period of his services.The foregoing description of Amendment No. 3 is qualified in its entirety by reference to the full text of Amendment No. 3, which is filed as Exhibit 10.1 to this Form 10-Q.

36
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions, except share and per share amounts)
(Unaudited)


18. PRODUCTS CORPORATION AND SUBSIDIARIES GUARANTOR FINANCIAL INFORMATION


Products Corporation's 5.75% Senior Notes and 6.25% Senior Notes are fully and unconditionally guaranteed on a senior basis by certain of Products Corporation’s direct and indirect wholly-owned domestic subsidiaries including Elizabeth Arden and certain of its subsidiaries (the "5.75% Senior Notes Guarantors" and the "6.25% Senior Notes Guarantors," respectively, and together the "Guarantor"Guarantors Subsidiaries").

The following Condensed Consolidating Unaudited Financial Statements present the financial information as of September 30, 2017March 31, 2022 and December 31, 2016,2021, and for each of the three months ended September 30, 2017March 31, 2022 and 2016 for2021 for: (i) Products Corporation on a stand-alone basis; (ii) the Guarantor Subsidiaries on a stand-alone basis; (iii) the subsidiaries of Products Corporation that did not guarantee and do not guarantee Products Corporation's 5.75% Senior Notes and 6.25% Senior Notes (the "Non-Guarantor Subsidiaries") on a stand-alone basis; andand; (iv) Products Corporation, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis. The Condensed Consolidating Unaudited Financial Statements are presented on the equity method, under which the investments in subsidiaries are recorded at cost and adjusted to the applicable share of the subsidiary's cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.



Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of March 31, 2022
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$6.9 $1.0 $62.1 $— $70.0 
Trade receivables, less allowances for doubtful accounts89.8 84.6 163.4 — 337.8 
Inventories, net143.2 119.3 188.1 — 450.6 
Prepaid expenses and other232.8 (5.2)69.2 — 296.8 
Intercompany receivables4,672.3 4,666.7 787.8 (10,126.8)— 
Investment in subsidiaries1,130.1 (208.7)— (921.4)— 
Property, plant and equipment, net150.8 57.2 83.4 — 291.4 
Deferred income taxes— 8.0 54.7 — 62.7 
Goodwill404.8 30.0 127.7 — 562.5 
Intangible assets, net19.8 166.0 196.6 — 382.4 
Other assets55.2 10.0 27.0 — 92.2 
      Total assets$6,905.7 $4,928.9 $1,760.0 $(11,048.2)$2,546.4 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$— $— $0.7 $— $0.7 
Current portion of long-term debt115.5 — 0.1 — 115.6 
Accounts payable107.6 42.0 114.1 — 263.7 
Accrued expenses and other161.4 63.0 191.5 — 415.9 
Intercompany payables4,992.4 4,182.0 952.1 (10,126.5)— 
Long-term debt3,235.3 — 71.8 — 3,307.1 
Other long-term liabilities224.9 106.2 32.0 — 363.1 
      Total liabilities8,837.1 4,393.2 1,362.3 (10,126.5)4,466.1 
Stockholder’s (deficiency) equity(1,931.4)535.7 397.7 (921.7)(1,919.7)
Total liabilities and stockholder’s (deficiency) equity$6,905.7 $4,928.9 $1,760.0 $(11,048.2)$2,546.4 















REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
37
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Products Corporation and Subsidiaries Condensed Consolidating Balance Sheets
As of December 31, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
ASSETS
Cash and cash equivalents$4.0 $2.1 $96.3 $— $102.4 
Trade receivables, less allowances for doubtful accounts114.6 102.4 166.8 — 383.8 
Inventories, net129.3 127.9 160.2 — 417.4 
Prepaid expenses and other222.8 5.7 68.3 — 296.8 
Intercompany receivables4,542.8 4,396.2 700.5 (9,639.5)— 
Investment in subsidiaries1,055.5 (218.9)— (836.6)— 
Property, plant and equipment, net157.6 59.9 79.8 — 297.3 
Deferred income taxes— 7.7 43.9 — 51.6 
Goodwill404.8 30.0 128.0 — 562.8 
Intangible assets, net20.3 170.3 201.6 — 392.2 
Other assets57.7 12.2 27.9 — 97.8 
      Total assets$6,709.4 $4,695.5 $1,673.3 $(10,476.1)$2,602.1 
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$— $— $0.7 $— $0.7 
Current portion of long-term debt137.1 — 0.1 — 137.2 
Accounts payable89.8 42.1 85.8 — 217.7 
Accrued expenses and other161.9 84.9 185.3 — 432.1 
Intercompany payables4,737.2 4,045.5 856.5 (9,639.2)— 
Long-term debt3,234.1 — 71.4 — 3,305.5 
Other long-term liabilities176.8 115.7 73.6 — 366.1 
      Total liabilities8,536.9 4,288.2 1,273.4 (9,639.2)4,459.3 
Stockholder’s (deficiency) equity(1,827.5)407.3 399.9 (836.9)(1,857.2)
Total liabilities and stockholder’s (deficiency) equity$6,709.4 $4,695.5 $1,673.3 $(10,476.1)$2,602.1 
38
Condensed Consolidating Balance Sheets
As of September 30, 2017
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$0.2
 $7.1
 $71.9
 $—
 $79.2
Trade receivables, less allowances for doubtful accounts68.3
 142.8
 248.3
 —
 459.4
Inventories135.6
 218.1
 201.7
 —
 555.4
Prepaid expenses and other164.8
 22.1
 57.3
 —
 244.2
Intercompany receivables1,063.5
 810.7
 133.7
 (2,007.9) —
Investment in subsidiaries1,575.5
 0.1
 —
 (1,575.6) —
Property, plant and equipment, net171.4
 72.6
 105.1
 —
 349.1
Deferred income taxes79.8
 —
 112.5
 —
 192.3
Goodwill188.7
 264.0
 250.4
 —
 703.1
Intangible assets, net45.4
 143.2
 412.3
 —
 600.9
Other assets45.6
 31.3
 32.1
 —
 109.0
      Total assets$3,538.8
 $1,712
 $1,625.3
 $(3,583.5) $3,292.6
LIABILITIES AND STOCKHOLDER’S DEFICIENCY   
Short-term borrowings$—
 $—
 $11.8
 $—
 $11.8
Current portion of long-term debt256.7
 —
 0.1
 —
 256.8
Accounts payable122.4
 96.2
 125.8
 —
 344.4
Accrued expenses and other141.0
 42.2
 164.3
 —
 347.5
Intercompany payables738.7
 798.1
 471.1
 (2,007.9) —
Long-term debt2,655.5
 —
 0.5
 —
 2,656
Other long-term liabilities211.2
 23.5
 28.1
 —
 262.8
      Total liabilities4,125.5
 960.0
 801.7
 (2,007.9) 3,879.3
Stockholder’s deficiency(586.7) 752.0
 823.6
 (1,575.6) (586.7)
Total liabilities and stockholder’s deficiency$3,538.8
 $1,712.0
 $1,625.3
 $(3,583.5) $3,292.6


REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended March 31, 2022
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$112.6 $122.3 $244.7 $— $479.6 
Cost of sales55.3 53.8 87.8 — 196.9 
Gross profit57.3 68.5 156.9 — 282.7 
Selling, general and administrative expenses99.6 49.9 105.3 — 254.8 
Acquisition, integration and divestiture costs0.2 — — — 0.2 
Restructuring charges and other, net1.6 0.1 0.2 — 1.9 
Operating (loss) income(44.1)18.5 51.4 — 25.8 
Other (income) expense:
Intercompany interest, net(1.4)0.6 0.8 — — 
Interest expense60.2 — 1.9 — 62.1 
Amortization of debt issuance costs9.1 — — — 9.1 
Foreign currency losses, net8.2 0.1 (0.5)— 7.8 
Miscellaneous, net14.2 (86.8)77.9 — 5.3 
Other expense (income), net90.3 (86.1)80.1 — 84.3 
(Loss) income from operations before income taxes(134.4)104.6 (28.7)— (58.5)
Provision for (benefit from) for income taxes— 5.8 3.9 — 9.7 
(Loss) income from operations, net of taxes(134.4)98.8 (32.6)— (68.2)
Equity in income (loss) of subsidiaries69.1 1.7 — (70.8)— 
Net (loss) income$(65.3)$100.5 $(32.6)$(70.8)$(68.2)
Other comprehensive (loss) income4.0 10.9 3.6 (14.6)3.9 
Total comprehensive (loss) income$(61.3)$111.4 $(29.0)$(85.4)$(64.3)
39
Condensed Consolidating Balance Sheets
As of December 31, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
ASSETS         
Cash and cash equivalents$20.0
 $34.3
 $132.5
 $—
 $186.8
Trade receivables, less allowances for doubtful accounts104.6
 104.8
 214.5
 —
 423.9
Inventories96.8
 150.5
 177.3
 —
 424.6
Prepaid expenses and other155.3
 15.1
 47.2
 —
 217.6
Intercompany receivables790.1
 635.7
 127.8
 (1,553.6) —
Investment in subsidiaries1,610.1
 3.0
 —
 (1,613.1) —
Property, plant and equipment, net142.1
 84.0
 94.4
 —
 320.5
Deferred income taxes26.2
 (1.1) 111.0
 —
 136.1
Goodwill188.7
 251.7
 249.1
 —
 689.5
Intangible assets, net49.0
 149.1
 438.5
 —
 636.6
Other assets50.8
 29.4
 22.9
 —
 103.1
      Total assets$3,233.7
 $1,456.5
 $1,615.2
 $(3,166.7) $3,138.7
LIABILITIES AND STOCKHOLDER’S DEFICIENCY
Short-term borrowings$—
 $—
 $10.8
 $—
 $10.8
Current portion of long-term debt18.0
 —
 0.1
 —
 18.1
Accounts payable99.7
 90.7
 106.5
 —
 296.9
Accrued expenses and other183.0
 63.5
 136.2
 —
 382.7
Intercompany payables554.5
 530.9
 468.2
 (1,553.6) —
Long-term debt2,662.6
 —
 0.5
 —
 2,663.1
Other long-term liabilities222.7
 20.3
 30.9
 —
 273.9
      Total liabilities3,740.5
 705.4
 753.2
 (1,553.6) 3,645.5
Stockholder’s deficiency(506.8) 751.1
 862.0
 (1,613.1) (506.8)
Total liabilities and stockholder’s deficiency$3,233.7
 $1,456.5
 $1,615.2
 $(3,166.7) $3,138.7


REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Products Corporation and Subsidiaries Condensed Consolidating Statement of Operations and Comprehensive (Loss) Income
Three Months Ended March 31, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
Net Sales$96.1 $118.2 $230.7 $— $445.0 
Cost of sales47.6 56.0 87.6 — 191.2 
Gross profit48.5 62.2 143.1 — 253.8 
Selling, general and administrative expenses98.2 52.4 108.9 — 259.5 
Acquisition, integration and divestiture costs0.5 — 0.1 — 0.6 
Restructuring charges and other, net1.2 1.5 2.7 — 5.4 
Operating (loss) income(51.4)8.3 31.4 — (11.7)
Other (income) expenses:
Intercompany interest, net(0.3)0.6 (0.3)— — 
Interest expense57.8 — 1.1 — 58.9 
Amortization of debt issuance costs8.7 — — — 8.7 
Foreign currency losses, net(0.6)(1.7)5.6 — 3.3 
Miscellaneous, net14.5 2.7 (16.0)— 1.2 
Other expense (income), net80.1 1.6 (9.6)— 72.1 
Loss from operations before income taxes(131.5)6.7 41.0 — (83.8)
Provision for (benefit from) income taxes0.7 (0.1)10.5 — 11.1 
(Loss) income from operations, net of taxes(132.2)6.8 30.5 — (94.9)
Equity in (loss) income of subsidiaries43.3 6.0 — (49.3)— 
Net (loss) income$(88.9)$12.8 $30.5 $(49.3)$(94.9)
Other comprehensive (loss) income(1.2)7.1 2.8 (10.1)(1.4)
Total comprehensive (loss) income$(90.1)$19.9 $33.3 $(59.4)$(96.3)
40
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Three months ended September 30, 2017
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$144.6
 $206.0
 $316.2
 $(0.3) $666.5
Cost of sales59.5
 101.1
 130.0
 (0.3) 290.3
Gross profit85.1
 104.9
 186.2
 —
 376.2
Selling, general and administrative expenses104.5
 93.5
 162.2
 —
 360.2
Acquisition and integration costs11.0
 0.9
 0.8
 —
 12.7
Restructuring charges and other, net(5.4) 9.7
 2.1
 —
 6.4
Operating (loss) income(25.0) 0.8
 21.1
 —
 (3.1)
Other expenses (income):         
Intercompany interest, net(1.3) 0.4
 0.9
 —
 —
Interest expense38.4
 —
 0.2
 —
 38.6
Amortization of debt issuance costs2.3
 —
 —
 —
 2.3
Foreign currency (gains) losses, net(1.6) 0.8
 (2.3) —
 (3.1)
Miscellaneous, net(10.3) (12.6) 23.2
 —
 0.3
Other expenses (income), net27.5

(11.4)
22.0

—

38.1
(Loss) income from continuing operations before income taxes(52.5) 12.2
 (0.9) —
 (41.2)
(Benefit from) provision for income taxes(15.8) 3.2
 2.6
 —
 (10.0)
(Loss) income from continuing operations, net of taxes(36.7)
9.0

(3.5)
—

(31.2)
Income from discontinued operations, net of taxes—
 —
 0.4
 —
 0.4
Equity in loss of subsidiaries5.9
 4.4
 —
 (10.3) —
Net (loss) income$(30.8)
$13.4

$(3.1)
$(10.3)
$(30.8)
Other comprehensive income (loss)1.4
 (2.7) (2.1) 4.8
 1.4
Total comprehensive (loss) income$(29.4)
$10.7

$(5.2)
$(5.5)
$(29.4)
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 2022
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by (used in) operating activities$38.0 $(37.0)$5.7 $— $6.7 
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities(1.2)(0.4)(0.7)— (2.3)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft0.2 (0.5)— — (0.3)
Borrowings on term loans— — — — — 
Repayments on term loans(10.6)— — — (10.6)
Net (repayments) borrowings under the revolving credit facilities(21.6)— — — (21.6)
Payment of financing costs(1.8)— — — (1.8)
Tax withholdings related to net share settlements of restricted stock and RSUs(3.2)— — — (3.2)
Other financing activities— — (0.1)— (0.1)
Net cash provided by (used in) financing activities(37.0)(0.5)(0.1)— (37.6)
Effect of exchange rate changes on cash, cash equivalents and restricted cash— 38.8 (38.9)— (0.1)
Net increase (decrease) in cash, cash equivalents and restricted cash(0.2)0.9 (34.0)— (33.3)
Cash, cash equivalents and restricted cash at beginning of period$(55.4)$(3.9)$180.2 $— $120.9 
Cash, cash equivalents and restricted cash at end of period$(55.6)$(3.0)$146.2 $— $87.6 
41
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Three Months Ended September 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$184.7
 $168.5
 $242.3
 $9.3
 $604.8
Cost of sales47.4
 82.7
 104.0
 9.3
 243.4
Gross profit137.3
 85.8
 138.3
 —
 361.4
Selling, general and administrative expenses119.1
 56.3
 108.0
 —
 283.4
Acquisition and integration costs33.3
 0.2
 —
 —
 33.5
Restructuring charges and other, net0.1
 —
 0.4
 —
 0.5
Operating (loss) income(15.2) 29.3
 29.9
 —
 44.0
Other expenses (income):         
Intercompany interest, net(2.2) —
 2.2
 —
 —
Interest expense27.2
 —
 0.2
 —
 27.4
Amortization of debt issuance costs1.7
 —
 —
 —
 1.7
Loss on early extinguishment of debt16.9
 —
 —
 —
 16.9
Foreign currency losses (gains), net0.4
 (0.4) 1.2
 —
 1.2
Miscellaneous, net(10.3) (4.4) 14.1
 —
 (0.6)
Other expenses (income), net33.7
 (4.8) 17.7
 —
 46.6
(Loss) income from continuing operations before income taxes(48.9) 34.1
 12.2
 —
 (2.6)
(Benefit from) provision for income taxes(8.8) 10.2
 (1.0) —
 0.4
(Loss) income from continuing operations, net of taxes(40.1) 23.9
 13.2
 —
 (3.0)
Loss from discontinued operations, net of taxes—
 —
 (0.2) —
 (0.2)
Equity in loss of subsidiaries36.9
 3.1
 —
 (40.0) —
Net (loss) income$(3.2) $27.0
 $13.0
 $(40.0) $(3.2)
Other comprehensive income (loss)5.3
 0.6
 1.0
 (1.6) 5.3
Total comprehensive income (loss)$2.1
 $27.6
 $14.0
 $(41.6) $2.1
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



Products Corporation and Subsidiaries Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 2021
Products CorporationGuarantor SubsidiariesNon-Guarantor SubsidiariesEliminationsConsolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities$5.4 $(41.6)$7.8 $— $(28.4)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash (used in) provided by investing activities(1.9)0.4 0.8 — (0.7)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in short-term borrowings and overdraft(3.5)(4.9)(2.2)— (10.6)
Borrowings on term loans175.0 — — — 175.0 
Repayments on Term Loans(61.2)— — — (61.2)
Net (repayments) borrowings under the revolving credit facilities(59.3)— — — (59.3)
Payments of financing costs(11.8)— — — (11.8)
Tax withholdings related to net share settlements of restricted stock and RSUs(2.4)— — — (2.4)
Other financing activities(0.1)— — — (0.1)
Net cash provided by (used in) financing activities36.7 (4.9)(2.2)— 29.6 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(21.9)47.7 (27.1)— (1.3)
Net increase (decrease) in cash, cash equivalents and restricted cash18.3 1.6 (20.7)— (0.8)
Cash, cash equivalents and restricted cash at beginning of period$6.5 $7.8 $88.2 $— $102.5 
Cash, cash equivalents and restricted cash at end of period$24.8 $9.4 $67.5 $— $101.7 


42
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
For the Nine Months Ended September 30, 2017
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$493.2
 $529.2
 $886.5
 $(1.8) $1,907.1
Cost of sales185.5
 257.4
 382.5
 (1.8) 823.6
Gross profit307.7
 271.8
 504.0
 —
 1,083.5
Selling, general and administrative expenses341.1
 270.6
 456.5
 —
 1,068.2
Acquisition and integration costs35.1
 2.5
 2.6
 —
 40.2
Restructuring charges and other, net(9.1) 14.7
 5.7
 —
 11.3
Operating (loss) income(59.4) (16.0) 39.2
 —
 (36.2)
Other expenses (income):         
Intercompany interest, net(5.7) 1.1
 4.6
 —
 —
Interest expense109.9
 —
 0.4
 —
 110.3
Amortization of debt issuance costs6.8
 —
 —
 —
 6.8
Foreign currency (gains) losses, net(3.4) 1.3
 (14.7) —
 (16.8)
Miscellaneous, net(45.0) (22.4) 69.2
 —
 1.8
Other expenses (income), net62.6
 (20.0) 59.5
 —
 102.1
(Loss) income from continuing operations before income taxes(122.0) 4.0
 (20.3) —
 (138.3)
(Benefit from) provision for income taxes(62.2) 13.9
 12.9
 —
 (35.4)
(Loss) income from continuing operations, net of taxes(59.8) (9.9) (33.2) —
 (102.9)
Income from discontinued operations, net of taxes—
 —
 1.3
 —
 1.3
Equity in loss of subsidiaries(41.8) 2.3
 —
 39.5
 —
Net (loss) income$(101.6) $(7.6) $(31.9) $39.5
 $(101.6)
Other comprehensive income (loss)15.8
 (9.7) 0.7
 9.0
 15.8
Total comprehensive (loss) income$(85.8) $(17.3) $(31.2) $48.5
 $(85.8)

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)millions, except share and per share amounts)
(Unaudited)



19. SUBSEQUENT EVENTS

On April 25, 2022, Revlon filed a prospectus supplement with the SEC, under which it may offer and sell shares of its Class A Common Stock (the “Shares”), through Jefferies LLC, as sales agent, having an aggregate offering price of up to $25 million from time to time through an “at-the-market” equity offering program (the “ATM Offering”). The Company currently intends to use the net proceeds from any sales of Shares under the ATM Offering for general corporate purposes, which may include additions to working capital, capital expenditures, repayment of debt, the financing of possible acquisitions and investments or stock repurchases. In order to meet the continued demand for the Company’s products, some or all of the net proceeds from any sales of Shares under the ATM Offering may be used to help alleviate supply chain disruptions previously disclosed by the Company. The timing and amount of any sales will depend on a variety of factors to be determined by the Company.

The ATM Offering was registered under the Securities Act of 1933, as amended, pursuant to a registration statement on Form S-3 (File No. 333-264032) filed by the Company with the SEC and declared effective on April 8, 2022. The terms of the ATM Offering are described in the prospectus dated April 8, 2022, as supplemented by the prospectus supplement dated April 25, 2022.



43
Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)
For the Nine Months Ended September 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
Net Sales$612.8
 $337.1
 $588.3
 $(4.9) $1,533.3
Cost of sales192.6
 144.9
 236.2
 (4.9) 568.8
Gross profit420.2
 192.2
 352.1
 —
 964.5
Selling, general and administrative expenses366.8
 129.1
 290.1
 —
 786.0
Acquisition and integration costs38.9
 0.2
 0.4
 —
 39.5
Restructuring charges and other, net0.1
 0.7
 1.5
 —
 2.3
Operating income14.4
 62.2
 60.1
 —
 136.7
Other expenses (income):         
Intercompany interest, net(6.5) 0.1
 6.4
 —
 —
Interest expense68.8
 —
 0.5
 —
 69.3
Amortization of debt issuance costs4.6
 —
 —
 —
 4.6
Loss on early extinguishment of debt16.9
 —
 —
 —
 16.9
Foreign currency losses (gains), net2.5
 (0.7) 4.5
 —
 6.3
Miscellaneous, net(45.0) (0.6) 45.5
 —
 (0.1)
Other expenses (income), net41.3
 (1.2) 56.9
 —
 97.0
(Loss) income from continuing operations before income taxes(26.9) 63.4
 3.2
 —
 39.7
(Benefit from) provision for income taxes(17.3) 36.4
 (0.8) —
 18.3
(Loss) income from continuing operations, net of taxes(9.6) 27.0
 4.0
 —
 21.4
Loss from discontinued operations, net of taxes—
 —
 (2.3) —
 (2.3)
Equity in loss of subsidiaries28.7
 (9.0) —
 (19.7) —
Net income (loss)$19.1
 $18.0
 $1.7
 $(19.7) $19.1
Other comprehensive income (loss)13.7
 (6.9) (7.2) 14.1
 13.7
Total comprehensive income (loss)$32.8
 $11.1
 $(5.5) $(5.6) $32.8

REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2017
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash used in operating activities$(204.1) $(23.2) $(46.9) $—
 $(274.2)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Net cash used in investing activities$(43.5) $(2.9) $(23.1) $—
 $(69.5)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net increase (decrease) in short-term borrowings and overdraft2.1
 (1.1) 0.2
 —
 1.2
Net borrowings under the 2016 Revolving Credit Facility243.9
 —
 —
 —
 243.9
Repayments under the 2016 Term Loan Facility(13.5) —
 —
 —
 (13.5)
Payment of financing costs(1.1) —
 —
 —
 (1.1)
Tax withholdings related to net share settlements of restricted stock units and awards(2.5) —
 —
 —
 (2.5)
Other financing activities(1.1) —
 (0.2) —
 (1.3)
Net cash provided by (used in) financing activities$227.8
 $(1.1) $—
 $—
 $226.7
Effect of exchange rate changes on cash and cash equivalents—
 —
 9.4
 —
 9.4
Net decrease in cash and cash equivalents(19.8) (27.2) (60.6) —
 (107.6)
Cash and cash equivalents at beginning of period$20.0
 $34.3
 $132.5
 $—
 $186.8
Cash and cash equivalents at end of period$0.2
 $7.1
 $71.9
 $—
 $79.2


REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(except where otherwise noted, all tabular amounts in millions)

Condensed Consolidating Statement of Cash Flows
For the Nine Months Ended September 30, 2016
 Products Corporation Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:         
Net cash used in operating activities$(16.9) $(91.4) $37.4
 $—
 $(70.9)
CASH FLOWS FROM INVESTING ACTIVITIES:         
Capital expenditures(23.6) (2.5) (7.0) —
 (33.1)
Business acquisition, net of cash acquired(993.2) —
 (35.5) —
 (1,028.7)
Proceeds from the sale of certain assets0.1
 0.4
 —
 —
 0.5
Net cash used in investing activities$(1,016.7) $(2.1) $(42.5) $—
 $(1,061.3)
CASH FLOWS FROM FINANCING ACTIVITIES:         
Net (decrease) increase in short-term borrowings and overdraft(11.2) 3.4
 5.2
 —
 (2.6)
Net borrowings under the 2016 Revolving Credit Facility65.4
 —
 —
 —
 65.4
Repayments under the Acquisition Term Loan(15.1) —
 —
 —
 (15.1)
Prepayments under the 2011 Term Loan(11.5) —
 —
 —
 (11.5)
Repayment of Old Acquisition Term Loan(658.6) —
 —
 —
 (658.6)
Repayment of 2011 Term Loan(651.4) —
 —
 —
 (651.4)
Borrowings under the 2016 Term Loan Facility1,791.0
 —
 —
 —
 1,791.0
Proceeds from the issuance of 6.25% Senior Notes450.0
 —
 —
 —
 450.0
Payment of financing costs(61.5) —
 —
 —
 (61.5)
Tax withholdings related to net share settlements of restricted stock units and awards(2.6) —
 —
 —
 (2.6)
Other financing activities(2.0) —
 (0.2) —
 (2.2)
Net cash provided by financing activities$892.5
 $3.4
 $5.0
 $—
 $900.9
Effect of exchange rate changes on cash and cash equivalents—
 (0.5) 4.1
 —
 3.6
Net decrease in cash and cash equivalents(141.1) (90.6) 4.0
 —
 (227.7)
Cash and cash equivalents at beginning of period$141.5
 $93.0
 $92.4
 $—
 $326.9
Cash and cash equivalents at end of period$0.4
 $2.4
 $96.4
 $—
 $99.2

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)





Item 2. Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations



The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the information contained in the Unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this document, and in the Company's other public filings with the Securities and Exchange Commission (“SEC”), including our 2021 Form 10-K. As discussed in more detail in the Section entitled “Forward-Looking Statements,” this discussion contains forward-looking statements, which involve risks and uncertainties.

COVID-19 Pandemic

The ongoing and prolonged COVID-19 pandemic has had, and continues to have, a significant adverse effect on the Company’s business around the globe, which could continue for the foreseeable future. The COVID-19 pandemic has adversely impacted net sales in all major commercial regions that are important to the Company’s business. COVID-19’s adverse impact on the global economy has contributed to the imposition of face mask mandates, lockdowns and other significant restrictions in the United States and abroad from time to time; global supply chain disruptions, including manufacturing and transportation delays, due to closures, employee absences, port congestion, labor and container shortages, and shipment delays, increased transportation costs, and shortages in raw materials, tight labor markets and inflationary pressures for a number of industries, including consumer retail, and related consumer products shortages and price increases; closures, bankruptcies and/ or reduced operations of retailers, beauty salons, spas, offices and manufacturing facilities; labor shortages with employers in many industries, including consumer retail, experiencing increased competition to recruit, hire and retain employees; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse economic conditions have resulted in the general slowdown of the global economy, in turn contributing to a significant decline in net sales within each of the Company’s reporting segments and regions. However, with the roll out of COVID-19 vaccinations in 2021 and the easing of COVID-19 restrictions in the United States and in many of the Company’s key markets around the globe, the Company saw a gradual rebound in consumer spending and consumption in 2021, which continued into 2022. The Company continues to closely monitor the associated impacts of COVID-19, including the impacts of any new variants of COVID-19 and subsequent “waves” of the pandemic, and will take appropriate actions in an effort to mitigate the COVID-19 pandemic’s negative effects on the Company’s operations and financial results.

Recent Events
Due to the ongoing Russia-Ukraine conflict and government sanctions imposed in the region, the Company suspended operations with its indirect subsidiary, Beautyge Russia. While sales from Russia do not constitute a material portion of the Company's overall sales, the Company continues to closely monitor the associated impact of the ongoing Russia-Ukraine conflict, including any future significant escalation or expansion thereof, on its business, and will take appropriate actions to mitigate any negative impacts the conflict may have on the Company's operations and financial results.

Overview


Overview of the Business
Revlon, Consumer Products CorporationInc. ("Products CorporationRevlon" and together with its subsidiaries, including Elizabeth Arden, Inc. (“Elizabeth Arden”), the "Company") is theconducts its business exclusively through its direct wholly-owned operating subsidiary, of Revlon Inc.Consumer Products Corporation ("Revlon"Products Corporation")., and its subsidiaries. Revlon is an indirect majority-owned subsidiary of MacAndrews & Forbes Incorporated (together with certain of its affiliates other than the Company, and Revlon, "MacAndrews & Forbes"), a corporation wholly-ownedbeneficially owned by Ronald O. Perelman.
The Company operates in four segments: the consumer division (“Consumer”); the professional division (“Professional”);brand-centric reporting segments that are aligned with its organizational structure based on four global brand teams: Revlon; Elizabeth Arden; Portfolio; and Other.Fragrances. The Company manufactures, markets and sells an extensive array of beauty and personal care products worldwide, including color cosmetics, fragrances,cosmetics; fragrances; skin care,care; hair color, hair care and hair treatments,treatments; beauty tools,tools; men's grooming products,products; anti-perspirant deodorantsdeodorants; and other beauty care products.
On September 7, 2016 (the "Acquisition Date"), the Company completed the acquisition of Elizabeth Arden (the “Elizabeth Arden Acquisition”). The results of operations for the Elizabeth Arden business are presented in the Elizabeth Arden segment and are included in the Company’s Consolidated Financial Statements commencing on the Acquisition Date. Refer to Note 2, "Business Combinations," to the Unaudited Consolidated Financial Statements in this Form 10-Q for further details related to the Elizabeth Arden Acquisition.
44

The Company's Business Strategy for Value Creation
Our strategy is based on three key pillars:
Strengthen Our Portfolio of Brands. The Company intends to continue to develop the leadership and aspiration for our flagship brands; Revlon, Elizabeth Arden and Almay. The Company is continuing to develop our product offerings across beauty segments with a focus on large and/or fast growing categories. We are leveraging our creativity, insights and agility to accelerate innovation to develop trend-relevant and first-of-its kind beauty solutions. We aim to delight our customers with high performing products, superior services and unique experiences that exceed their expectations. And we will continue to communicate our brands' heritage, expertise and purpose to create authentic, meaningful and lasting connections with consumers of all ages.
Strategically Expand Consumer's Access to Our Brands. The Company is taking steps to ensure that consumers have real-time access to our brands wherever and however they shop for beauty. We are strengthening and diversifying our channels, especially direct to consumer. We are accelerating our development in high-growth channels, with a focus on specialty, e-commerce and m-commerce. Our goal is to continue to win in traditional channels (including mass, drug, selective and department stores) and expand our combined reach into travel retail. The Company is taking actions to strengthen its position in the U.S., to ensure our growth base and expand into untapped geographic regions, with a focus on growth in Asia.
Develop a Cost Structure That Fuels Investment in Our Brands. The Company aims to grow profitably, improve our operating performance and align our strategic investments behind the biggest growth opportunities and innovation that differentiates our brands. We continue to improve our category mix by shifting toward higher gross margin categories (e.g., skin care and fragrance) and we aim to reduce sales returns, markdowns and inventory levels. Our objective is to continue to optimize our resource allocation.
Changes in consumer shopping patterns for beauty products in which consumers have continued to increasingly engage with beauty brands through e-commerce and other social media channels have resulted in slower retail traffic in brick-and-mortar stores in the mass retail channel in North America. This shift in consumer behavior has resulted in continuing declines in the brick-and-mortar retail channel that the Company expects will persist over time. To address the pace and impact of this new commercial landscape, the Company has shifted some of its brand marketing spend toward enhancing its e-commerce and social media capabilities to ensure that consumers have real-time access to our brands wherever and however they shop for beauty and facilitate increased penetration of e-commerce and social media channels.
The Company believes that its renewed focus on e-commerce and its evolving marketing and sales initiatives will support the foundation for driving a successful long-term omni-channel strategy and significantly increase its e-commerce penetration. In July 2017, the Company appointed Grey as its new global creative agency of record to provide integrated communications services, including traditional and digital advertising and promotion and activation marketing for the Company’s brands, including Revlon, Elizabeth Arden, Almay, CND, Cutex and SinfulColors, along with many of its key fragrance brands, including Charlie, Britney Spears, Curve, Tapout and Elizabeth Taylor. To drive its digital transformation, the Company engaged Sapient Razorfish during the third quarter of 2017 to assist the Company on the following e-commerce initiatives: (i) developing and implementing effective

REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)




Business Strategy
content
The Company remains focused on its 3 key strategic pillars to enhancedrive its future success and growth. First, strengthening its iconic brands through innovation and relevant product portfolios; second, building its capabilities to better communicate and connect with its consumers through media channels where they spend the most time; and third, ensuring availability of its products where consumers shop, both in-store and increasingly online. The Company has continued to deliver against the objectives of the Revlon Global Growth Accelerator (“RGGA”) program, which includes rightsizing our organization with the objectives of driving improved profitability, cash flow and liquidity. The Company is also managing the business to conserve cash and liquidity, as well as focusing on stabilizing the business, growing e-commerce and preparing the foundation for achieving future growth.

Strategic Review

MacAndrews & Forbes and the Company continue to explore strategic transactions involving the Company and third parties (the "Strategic Review").

For additional information regarding the Company's online retail position; (ii) improvingbusiness, see Part 1, Item 1 "Business" in the Company's consumer engagement across social media platforms; and (iii) transforming the Company's technology and data to support efficient management of the Company's digital infrastructure.2021 Form 10-K.
While executing these strategic initiatives may increase the Company’s expenses and debt, they are expected to have a long-term positive impact on the Company’s overall revenues and profitability.



Overview of Net Sales and Earnings Results
Consolidated net sales in the third quarter of 2017 were $666.5 million, a $61.7 million increase, or 10.2%, as compared to $604.8 million in the third quarter of 2016. Excluding the $4.2 million favorable impact of foreign currency fluctuations (referred to herein as "FX," "XFX" or on an "XFX basis"), consolidated net sales increased by $57.5 million, or 9.5%, during the third quarter of 2017. The XFX increase in the third quarter of 2017 was primarily driven by a $112.9 million increase in net sales as a result of the Elizabeth Arden Acquisition completed in September 2016; partially offset by a $37.5 million, or 10.9%, decrease in Consumer segment net sales and a $14.6 million, or 12.3%, decrease in Professional segment net sales.
Consolidated net sales in the first ninethree months of 2017ended March 31, 2022 were $1,907.1$479.6 million, a $373.8$34.6 million increase, or 24.4%7.8%, as compared to $1,533.3$445.0 million in the first ninethree months of 2016.ended March 31, 2021. Excluding the $3.8$9.4 million unfavorable FX impact, consolidated net sales increased by $377.7$44.0 million, or 24.6%9.9%, during the first ninethree months of 2017.ended March 31, 2022. The XFX net sales increase of $44.0 million in the three months ended March 31, 2022 was due to: a $25.0 million, or 15.4%, increase in the first nine months of 2017 was primarily driven byRevlon segment net sales; a $504.1$9.6 million, or 12.8%, increase in Fragrances segment net sales assales; a result of the$5.2 million, or 5.4%, increase in Portfolio segment net sales; and a $4.2 million, or 3.7%, increase in Elizabeth Arden Acquisition completed in September 2016; partially offset by a $86.9 million, or 8.5%, decrease in Consumer segment net sales and a $36.9 million, or 10.3%, decrease in Professional segment net sales.

Consolidated loss from continuing operations, net of taxes, in the third quarter of 2017three months ended March 31, 2022 was $31.2$67.0 million, compared to consolidated loss from continuing operations, of $3.0 million, net of taxes, of $96.0 million in the third quarter of 2016.three months ended March 31, 2021. The $28.2$29.0 million decrease in consolidated income from continuing operations, net of taxes, in the third quarter of 2017 was primarily due to:
$76.8 million of higher selling, general and administrative expenses ("SG&A"), primarily driven by the inclusion of the SG&A expenses of the Elizabeth Arden segment; and
a $11.2 million increase in interest expense incurred during the third quarter of 2017, primarily as a result of the debt-related transactions completed during 2016 in connection with financing the Elizabeth Arden Acquisition, as well as higher borrowings under the 2016 Revolving Credit Facility;
with the foregoing partially offset by:
a $20.8 million decrease in acquisition and integration costs related to the Elizabeth Arden Acquisition;
$16.9 million of losses from debt extinguishment that were recorded in the third quarter of 2016 as a result of debt transactions completed in connection with the Elizabeth Arden Acquisition; and
$14.8 million of higher gross profit in the third quarter of 2017, primarily due to the inclusion of gross profit from the Elizabeth Arden segment, partially offset by lower gross profit within the Consumer and Professional segments.

Consolidated loss from continuing operations, net of taxes in the first nine months of 2017 was $102.9 million, compared to consolidated income from continuing operations of $21.4 million, net of taxes, in the first nine months of 2016. The $124.3 million decrease in consolidated income from continuing operations, net of taxes, in the first nine months of 2017 was primarily due to:
•$282.228.9 million of higher SG&A expenses, primarily driven by the inclusion of the SG&A expenses of the Elizabeth Arden segment; and
a $41.0 million increase in interest expense incurred during the first nine months of 2017, primarily as a result of the debt-related transactions completed during 2016 in connection with financing the Elizabeth Arden Acquisition, as well as higher borrowings under the 2016 Revolving Credit Facility;
with the foregoing partially offset by:
$119.0 million of higher gross profit in the first ninethree months of 2017,ended March 31, 2022, primarily due to higher net sales in the inclusionthree months endedMarch 31, 2022, primarily due to retail channels continuing to show increased demand and signs of gross profitimprovement from the Elizabeth Arden segment, partially offseteffects of the ongoing COVID-19 pandemic as compared to the prior year period;
•$3.6 million of lower SG&A expenses in the three months ended March 31, 2022, compared to the prior year period, primarily driven by lower gross profit withinproduct display costs, favorable FX impacts and lower brand support expenses;
•a $3.5 million decrease in restructuring charges, primarily related to lower expenditures under RGGA in the Consumer and Professional segments;three months ended March 31, 2022, compared to the expenditures incurred primarily under the 2020 Revlon Restructuring Program in the three months ended March 31, 2021;
•a $53.7$1.4 million decrease in the provision for income taxes in the three months ended March 31, 2022, compared to the prior year period, primarily due to the pretax loss from continuing operationsgeographical level and mix of earnings, net change of valuation allowance on its net federal and certain deferred tax assets, partially offset by state taxes for certain U.S. entities; and
•a $0.4 million decrease in acquisition, integration and divestiture costs in the first ninethree months ended March 31, 2022, compared to the prior year period, primarily driven by higher amortization of 2017;the cash-based awards under the Revlon 2019 TIP in the prior year period;
with the foregoing partially offset by:
•$4.5 million of unfavorable variance in foreign currency, resulting from $7.8 million in foreign currency losses during the three months endedMarch 31, 2022, compared to $3.3 million in foreign currency losses during the three months endedMarch 31, 2021; and
•a $3.2 million increase in interest expense in the three months ended March 31, 2022, compared to the prior year period, primarily driven by higher borrowing and higher interest rates under the SISO Facility and 2021 Foreign Asset-Based Term Facility entered in March 2021;
45
REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)




$23.1•a $0.7 million of favorable varianceincrease in foreign currency gains, resulting from $16.8 millionother miscellaneous expenses, net, in foreign currency gains during the first ninethree months of 2017, asended March 31, 2022, compared to $6.3the prior year period, primarily due to financing fees in connection with the recent refinancing transactions; and
•a $0.4 million increase in amortization of foreign currency losses duringdebt issuance costs in the first ninethree months of 2016.
These items are discussedended March 31, 2022, compared to the prior year period, primarily due to the additional debt issuance costs recorded and amortized in more detail within "Results of Operations" and within "Financial Condition, Liquidity and Capital Resources" below.


connection with the recent refinancing transactions.
Operating Segments


The Company operates in four reporting segments: the consumer division (“Consumer”);Revlon, Elizabeth Arden; the professional division (“Professional”);Arden, Portfolio and Other:Fragrances.
The Consumer segment is comprised ofFor additional information regarding the Company's consumer brands, which primarily include Revlon, Almay, SinfulColors and Pure Ice in color cosmetics; Revlon ColorSilk in women’s hair color; Revlon in beauty tools; and Mitchum in anti-perspirant deodorants. The Company’s principal customers for its consumer products include large volume retailers, chain drug and food stores, chemist shops, hypermarkets, general merchandise stores, the Internet/e-commerce, television shopping, department stores, one-stop shopping beauty retailers, specialty cosmetics stores and perfumeries in the U.S. and internationally. The Consumer segment also includes a skin care line under the Natural Honey brand and a hair color line under the Llongueras brand (licensed from a third party) soldOperating Segments, see Note14, "Segment Data" to large volume retailers and other retailers, primarily in Spain, which were acquired as part of the Colomer Acquisition, as well as Cutex nail care products, which (combined with other Cutex businesses that the Company acquired in 1998) were acquired as part of the October 2015 and May 2016 acquisitions of the Cutex businesses and related assets in the U.S. (the "Cutex U.S. Acquisition") and in certain international territories (the "Cutex International Acquisition" and together with the Cutex U.S. Acquisition, the "Cutex Acquisitions"), respectively.
The Elizabeth Arden segment includes the operating results of the Elizabeth Arden business and related purchase accounting for the Company's September 2016 Elizabeth Arden Acquisition. Elizabeth Arden is a global prestige beauty products company with an iconic portfolio of prestige fragrance, skin care and cosmetic brands, which includes the Elizabeth Arden skin care brands, color cosmetics and fragrances; designer fragrances such as Juicy Couture, John Varvatos and Wildfox Couture;and heritage fragrances such as Curve, Elizabeth Taylor, Britney Spears and Christina Aguilera.
Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
The Professional segment is comprised primarily of the Company's professional brands, which include Revlon Professional in hair color, hair care and hair treatments; CND-branded productsin nail polishes and nail enhancements; and American Crew in men’s grooming products, all of which are sold worldwide to professional salons. The Company’s principal customers for its professional products include hair and nail salons and distributors to professional salons in the U.S. and internationally. The Professional segment also includes a multi-cultural hair care line consisting of Creme of Nature hair care products sold to professional salons, large volume retailers and other retailers, primarily in the U.S.

The Other segment primarily includes the operating results related to the development, marketing and distribution of certain licensed fragrances and other beauty products. The results included within the Other segment are not material to the Company’s consolidated results of operations.


Results of Operations — Revlon, Inc.

Consolidated Net Sales:

Third quarter results:
Consolidated net sales in the third quarter of 2017 were $666.5 million, a $61.7 million increase, or 10.2%, as compared to $604.8 million in the third quarter of 2016. Excluding the $4.2 million favorable FX impact, consolidated net sales increased by $57.5 million, or 9.5%, during the third quarter of 2017. The XFX increase in the third quarter of 2017 was primarily driven by a $112.9 million increase in net sales as a result of the Elizabeth Arden Acquisition completed in September 2016; partially offset by a $37.5 million, or 10.9%, decrease in Consumer segment net sales and a $14.6 million, or 12.3%, decrease in Professional segment net sales.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


Year-to-date results:
Consolidated net sales in the first nine months of 2017 were $1,907.1 million, a $373.8 million increase, or 24.4%, as compared to $1,533.3 million in the first nine months of 2016. Excluding the $3.8 million unfavorable FX impact, consolidated net sales increased by $377.7 million, or 24.6%, during the first nine months of 2017. The XFX increase in the first nine months of 2017 was primarily driven by a $504.1 million increase in net sales as a result of the Elizabeth Arden Acquisition completed in September 2016; partially offset by a $86.9 million, or 8.5%, decrease in Consumer segment net sales and a $36.9 million, or 10.3%, decrease in Professional segment net sales.
See "Segment Results" below for further discussion.


Segment Results:

The Company's management evaluates segment profit which is definedfor each of the Company's reportable segments. The Company allocates corporate expenses to each reportable segment to arrive at segment profit, as these expenses are included in the internal measure of segment operating performance. The Company defines segment profit as income from continuing operations before interest, taxes, depreciation, amortization, stock-based compensation expense, gains/losses on foreign currency fluctuations, gains/losses on the early extinguishment of debt and miscellaneous expenses, for each of the Company's reportable segments.expenses. Segment profit also excludes unallocated corporate expenses and the impact of certain items that are not directly attributable to the segments' underlying operating performance, which includes the impact of: (i) restructuring and related charges; (ii) acquisition and integration costs; (iii) deferred compensation costs; (iv) charges related to the Elizabeth Arden 2016 Business Transformation Program; and (v) costs of sales resulting from a fair value adjustment to inventory acquired in the Elizabeth Arden Acquisition. Unallocated corporate expenses primarily include general and administrative expenses related to the corporate organization. These expenses are recorded in unallocated corporate expenses as these items are centrally directed and controlled and are not included in internal measures of segment operating performance. The Company does not have any material inter-segment sales. For a reconciliation of segment profit to incomeloss from continuing operations before income taxes, see Note 14, "Segment Data and Related Information," to the Company's Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
The following table provides a comparative summary of the Company's segment results for the three months ended September 30, 2017 and 2016:
 Net Sales Segment Profit
 Three Months Ended September 30, Change 
XFX Change (a)
 Three Months Ended September 30, Change 
XFX Change (a)
 2017 2016 $ % $ % 2017 2016 $ % $ %
Consumer$306.7
 $342.8
 $(36.1) (10.5)% $(37.5) (10.9)% $33.0
 $81.0
 $(48.0) (59.3)% $(48.0) (59.3)%
Elizabeth Arden(b)
248.1
 135.2
 112.9
 83.5 % 112.9
 83.5 % 31.6
 32.5
 (0.9) (2.8)% (0.9) (2.8)%
Professional107.0
 118.8
 (11.8) (9.9)% (14.6) (12.3)% 18.9
 23.7
 (4.8) (20.3)% (5.1) (21.5)%
Other4.7
 8.0
 (3.3) (41.3)% (3.3) (41.3)% (1.0) (0.1) (0.9) (900.0)% (0.9) (900.0)%
Total$666.5
 $604.8
 $61.7
 10.2 % $57.5
 9.5 % $82.5
 $137.1
 $(54.6) (39.8)% $(54.9) (40.0)%
(a) XFX excludes the impact of foreign currency fluctuations.
(b) 2016 Net Sales and Segment Profit represent results for the partial period of September 7, 2016 through September 30, 2016.

The following table provides a comparative summary of the Company's segment results for the nine months ended September 30, 2017 and 2016:
 Net Sales Segment Profit
 Nine Months Ended September 30, Change 
XFX Change (a)
 Nine Months Ended September 30, Change 
XFX Change (a)
 2017 2016 $ % $ % 2017 2016 $ % $ %
Consumer$932.8
 $1,022.3
 $(89.5) (8.8)% $(86.9) (8.5)% $134.5
 $220.4
 $(85.9) (39.0)% $(85.3) (38.7)%
Elizabeth Arden(b)
639.3
 135.2
 504.1
 372.9 % 504.1
 372.9 % 65.5
 32.5
 33.0
 101.5 % 33.0
 101.5 %
Professional320.4
 357.2
 (36.8) (10.3)% (36.9) (10.3)% 44.5
 73.4
 (28.9) (39.4)% (29.4) (40.1)%
Other14.6
 18.6
 (4.0) (21.5)% (2.6) (14.0)% (2.5) (0.9) (1.6) (177.8)% (1.9) (211.1)%
Total$1,907.1
 $1,533.3
 $373.8
 24.4 % $377.7
 24.6 % $242.0
 $325.4
 $(83.4) (25.6)% $(83.6) (25.7)%
(a) XFX excludes the impact of foreign currency fluctuations.
(b) 2016 Net Sales and Segment Profit represent results for the partial period of September 7, 2016 through September 30, 2016.
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


Consumer Segment
Third quarter results:
Consumer segment net sales in the third quarter of 2017 were $306.7 million, a $36.1 million or 10.5% decrease, compared to $342.8 million in the third quarter of 2016. Excluding the $1.4 million favorable FX impact, total Consumer net sales in the third quarter of 2017 decreased by $37.5 million, or 10.9%, compared to the third quarter of 2016. This decrease was primarily driven by continuing consumption declines in core beauty categories in the mass retail channel in North America, inventory de-stocking by certain retail customers and higher sales returns and incentives, which had a negative impact on net sales of Revlon color cosmetics, Almay color cosmetics and SinfulColors color cosmetics, partially offset by strong sales growth internationally for Revlon color cosmetics.
Consumer segment profit in the third quarter of 2017 was $33.0 million, a $48.0 million, or 59.3%, decrease, as compared to $81.0 million in the third quarter of 2016. This decrease was primarily driven by lower gross profit as a result of the net sales declines in North America, higher sales returns and incentives, as well as higher brand support.

Year-to-date results:
Consumer segment net sales in the first nine months of 2017 were $932.8 million, a $89.5 million or 8.8% decrease, compared to $1,022.3 million in the first nine months of 2016. Excluding the $2.6 million unfavorable FX impact, total Consumer net sales in the first nine months of 2017 decreased by $86.9 million, or 8.5%, compared to the first nine months of 2016. This decrease was primarily driven by continuing consumption declines in core beauty categories in the mass retail channel in North America, which had a negative impact on net sales of Revlon color cosmetics, Almay color cosmetics and SinfulColors color cosmetics, as well as higher sales returns and incentives. These net sales decreases were partially offset by continued net sales growth internationally for Revlon color cosmetics.
Consumer segment profit in the first nine months of 2017 was $134.5 million, a $85.9 million, or 39.0%, decrease, as compared to $220.4 million in the first nine months of 2016. Excluding the $0.6 million unfavorable FX impact, Consumer segment profit in the first nine months of 2017 decreased by $85.3 million, or 38.7%, compared to the first nine months of 2016. This decrease was primarily driven by lower gross profit as a result of the net sales declines in North America and higher sales returns and incentives, partially offset by lower brand support expenses.

Elizabeth Arden Segment

Third quarter and Year-to-date results:

The Elizabeth Arden segment is comprised of the operations that the Company acquired in the Elizabeth Arden Acquisition, which closed on September 7, 2016. As such, the results for the three and nine months ended September 30, 2016 reflect only amounts for the partial period of September 7, 2016 through September 30, 2016. Therefore, an analysis of net sales and segment profit for the Elizabeth Arden segment for the three and nine months ended September 30, 2017 is not included in this Form 10-Q, as the Company does not have full comparable prior period net sales or segment profit for the Elizabeth Arden segment.

Professional Segment

Third quarter results:
Professional segment net sales in the third quarter of 2017 were $107.0 million, a $11.8 million or 9.9% decrease, as compared to $118.8 million in the third quarter of 2016. Excluding the $2.8 million favorable FX impact, total Professional segment net sales in the third quarter of 2017 decreased by $14.6 million, or 12.3%, as compared to the third quarter of 2016. This decrease was driven primarily by continued net sales declines of CND nail products, as well as American Crew men's grooming products, as the Company continues its efforts to manage trade inventory for the American Crew brand.
Professional segment profit in the third quarter of 2017 was $18.9 million, a $4.8 million or 20.3% decrease, as compared to $23.7 million in the third quarter of 2016. This decrease was primarily driven by lower gross profit as a result of declines in net sales, partially offset by lower brand support expenses.

Year-to-date results:
Professional segment net sales in the first nine months of 2017 were $320.4 million, a $36.8 million or 10.3% decrease, as compared to $357.2 million in the first nine months of 2016. Excluding the $0.1 million favorable FX impact, total Professional segment net sales in the first nine months of 2017 decreased by $36.9 million, or 10.3%, as compared to the first nine months of
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


2016. This decrease was driven primarily by lower net sales of CND nail products and American Crew men's grooming products, partially offset by higher net sales of Revlon Professional hair products.
Professional segment profit in the first nine months of 2017 was $44.5 million, a $28.9 million or 39.4% decrease, as compared to $73.4 million in the first nine months of 2016, primarily driven by the lower net sales, partially offset by lower brand support expenses.

Geographic Results:
The following tables provide a comparative summary of the Company's net sales by regionsegment results for the three months ended September 30, 2017 and 2016:periods presented.

 Three Months Ended September 30,


Change 
XFX Change(a)
 2017 2016 $ % $ %
Consumer           
North America$157.5
 $210.8
 $(53.3) (25.3)% $(53.8) (25.5)%
International149.2
 132.0
 17.2
 13.0 % 16.3
 12.3 %
Elizabeth Arden(c)
           
North America$143.6
 $87.6
 $56.0
 63.9 % $56.0
 63.9 %
International104.5
 47.6
 56.9
 119.5 % 56.9
 119.5 %
Professional           
North America$42.1
 $56.1
 $(14.0) (25.0)% $(14.2) (25.3)%
International64.9
 62.7
 2.2
 3.5 % (0.4) (0.6)%
Other           
North America$—
 $—
 $—
 N.M.
(b) 
$—
 N.M.
International4.7
 8.0
 (3.3) (41.3)% (3.3) (41.3)%
        Total Net Sales$666.5
 $604.8
 $61.7
 10.2 % $57.5
 9.5 %
Net SalesSegment Profit
Three Months Ended March 31,Change
XFX Change (a)
Three Months Ended March 31,Change
XFX Change (a)
20222021$%$%20222021$%$%
Revlon$182.1 $162.0 $20.1 12.4 %$25.0 15.4 %$23.6 $8.0 $15.6 195.0 %$16.6 207.5 %
Elizabeth Arden114.9 112.2 2.7 2.4 %4.2 3.7 %5.9 9.2 (3.3)(35.9)%(3.0)(32.6)%
Portfolio99.2 96.0 3.2 3.3 %5.2 5.4 %17.3 13.1 4.2 32.1 %4.6 35.1 %
Fragrances83.4 74.8 8.6 11.5 %9.6 12.8 %11.6 7.9 3.7 46.8 %3.9 49.4 %
Total$479.6 $445.0 $34.6 7.8 %$44.0 9.9 %$58.4 $38.2 $20.2 52.9 %$22.1 57.9 %
(a) XFX excludes the impact of foreign currency fluctuations.
(b)(N.M. - Not meaningfulmeaningful)
(c) 2016 Net Sales
Revlon Segment

Revlon segment net sales in the three months ended March 31, 2022 were $182.1 million, a $20.1 million, or 12.4%, increase, compared to $162.0 million in the three months ended March 31, 2021. Excluding the $4.9 million unfavorable FX impact, total Revlon segment net sales in the three months ended March 31, 2022 increased by $25.0 million, or 15.4%, compared to the three months ended March 31, 2021. The Revlon segment's XFX increase in net sales of $25.0 million in the three months endedMarch 31, 2022 was driven by higher net sales of Revlon color cosmetics in North America, and, to a lesser extent, higher net sales of Revlon-brandedprofessionalhair care products in International regions and higher net sales of Revlon ColorSilk in North America. This increase was due, primarily, to the mass retail channel continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic, as well as salons' increased activity in connection with progressive and/or temporary lifting of restrictions related to the ongoing COVID-19 pandemic.

46
REVLON, INC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Revlon segment profit in the three months ended March 31, 2022 was $23.6 million, a $15.6 million, or 195.0%, increase, compared to $8.0 million in the three months ended March 31, 2021. Excluding the $1.0 million unfavorable FX impact, Revlon segment profit in the three months ended March 31, 2022 increased by $16.6 million, or 207.5%, compared to the three months ended March 31, 2021. This increase was driven primarily by the Revlon segment's higher net sales, higher gross profit margin and lower brand support expenses, partially offset by higher other SG&A expenses.

Elizabeth Arden Segment Profit represent results for

Elizabeth Arden segment net sales in the partial periodthree months ended March 31, 2022 were $114.9 million, a $2.7 million, or 2.4%, increase, compared to $112.2 million in the three months ended March 31, 2021. Excluding the $1.5 million unfavorable FX impact, Elizabeth Arden segment net sales in the three months ended March 31, 2022 increased by $4.2 million, or 3.7%, compared to the three months ended March 31, 2021. The Elizabeth Arden segment XFX increase in net sales of September 7, 2016 through September 30, 2016.$4.2 million in the three months ended March 31, 2022 was driven primarily by higher net sales of Green Tea and White Tea fragrances in International regions, and, to a lesser extent, higher net sales of other Elizabeth Arden branded fragrances, partially offset by lower net sales of Ceramide, primarily in North America. This increase was due, primarily, to an increase in the travel retail business as well as signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets.


Elizabeth Arden segment profit in the three months ended March 31, 2022 was $5.9 million, a $3.3 million, or 35.9%, decrease, compared to $9.2 million in the three months ended March 31, 2021. Excluding the $0.3 million unfavorable FX impact, Elizabeth Arden segment profit in the three months ended March 31, 2022 decreased by $3.0 million, or 32.6%, compared to the three months ended March 31, 2021. This decrease was driven primarily by the Elizabeth Arden segment's higher brand support, partially offset by higher net sales and higher gross profit margin.

Portfolio Segment
Portfolio segment net sales in the three months ended March 31, 2022 were $99.2 million, a $3.2 million, or 3.3%, increase, compared to $96.0 million in the three months ended March 31, 2021. Excluding the $2.0 million unfavorable FX impact, total Portfolio segment net sales in the three months ended March 31, 2022 increased by $5.2 million, or 5.4%, compared to the three months ended March 31, 2021. The Portfolio segment XFX increase in net sales of $5.2 million in the three months ended March 31, 2022 was driven primarily by higher net sales of Mitchum anti-perspirant deodorants in International regions, higher net sales of Cutex, both in International regions and North America, higher net sales of CND nail products in International regions and higher net sales of Almay color cosmetics in North America, partially offset by lower net sales ofcertain local and regional skin care products brands, both in International regions and in North America. The increase was primarily in connection with retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic.
Portfolio segment profit in the three months ended March 31, 2022 was $17.3 million, a $4.2 million, or 32.1%, increase compared to $13.1 million in the three months ended March 31, 2021. Excluding the $0.4 million unfavorable FX impact, Portfolio segment profit in the three months ended March 31, 2022 increased by $4.6 million, or 35.1%, compared to the three months ended March 31, 2021. This increase was driven primarily by the Portfolio segment's higher net sales and higher gross profit margin, as well as lower SG&A and brand support expenses.

Fragrances Segment
Fragrances segment net sales in the three months ended March 31, 2022 were $83.4 million, a $8.6 million, or 11.5%, increase, compared to $74.8 million in the three months ended March 31, 2021. Excluding the $1.0 million unfavorable FX impact, total Fragrances segment net sales in the three months ended March 31, 2022 increased by $9.6 million, or 12.8%, compared to the three months ended March 31, 2021. The Fragrances segment XFX increase in net sales of $9.6 million in the three months ended March 31, 2022 was driven primarily by higher net sales of Britney Spears and, to a lesser extent, John Varvatos and Juicy Couture, primarily in International regions, as well as certain other licensedfragrance brands, both in North America and International regions, primarily due to continued recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels, as well as growth in e-commerce net sales and the travel retail business.
Fragrances segment profit in the three months ended March 31, 2022 was $11.6 million, a $3.7 million, increase, compared to $7.9 million in the three months ended March 31, 2021. Excluding the $0.2 million unfavorable FX impact, Fragrances segment profit in the three months ended March 31, 2022 increased by $3.9 million, compared to the three months ended
47
REVLON, INC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


March 31, 2021. This increase was driven primarily by the Fragrances segment's higher net sales and higher gross profit margin, partially offset by the segment's higher other SG&A and brand support expenses.

Geographic Results:

The following tables provide a comparative summary of the Company's North America and International net sales by region for the nine months ended September 30, 2017 and 2016:periods presented:
Three Months Ended March 31,Change
XFX Change (a)
20222021$%$%
Revlon
North America$101.6 $83.0 $18.6 22.4 %$18.4 22.2 %
International80.5 79.0 1.5 1.9 %6.6 8.4 %
Elizabeth Arden
North America$26.0 $28.4 $(2.4)(8.5)%$(2.4)(8.5)%
International88.9 83.8 5.1 6.1 %6.6 7.9 %
Portfolio
North America$64.7 $63.5 $1.2 1.9 %$1.4 2.2 %
International34.5 32.5 2.0 6.2 %3.8 11.7 %
Fragrances
North America$52.7 $51.3 $1.4 2.7 %$1.1 2.1 %
International30.7 23.5 7.2 30.6 %8.5 36.2 %
        Total Net Sales$479.6 $445.0 $34.6 7.8 %$44.0 9.9 %
 Nine Months Ended September 30,


Change 
XFX Change (a)
 2017 2016 $ % $ %
Consumer           
North America$534.8
 $656.7
 $(121.9) (18.6)% $(122.2) (18.6)%
International398.0
 365.6
 32.4
 8.9 % 35.3
 9.7 %
Elizabeth Arden(c)
           
North America$339.4
 $87.6
 $251.8
 287.4 % $251.8
 287.4 %
International299.9
 47.6
 252.3
 530.0 % 252.3
 530.0 %
Professional           
North America$129.4
 $167.0
 $(37.6) (22.5)% $(37.6) (22.5)%
International191.0
 190.2
 0.8
 0.4 % 0.7
 0.4 %
Other           
North America$—
 $—
 $—
 N.M.
(b) 
$—
 N.M.
International14.6
 18.6
 (4.0) (21.5)% (2.6) (14.0)%
        Total Net Sales$1,907.1
 $1,533.3
 $373.8
 24.4 % $377.7
 24.6 %
(a) XFX excludes the impact of foreign currency fluctuations.
(b) N.M. - Not meaningful
(c) 2016 Net SalesRevlon Segment

North America

In North America, Revlon segment net sales in the three months ended March 31, 2022 increased by $18.6 million, or 22.4%, to $101.6 million, compared to $83.0 million in the three months ended March 31, 2021. Excluding the $0.2 million favorable FX impact, Revlon segment net sales in North America in the three months ended March 31, 2022 increased by $18.4 million, or 22.2%, compared to the three months ended March 31, 2021.The Revlon segment's $18.4 million XFX increase in North America net sales in the three months ended March 31, 2022 was primarily due to higher net sales of Revlon color cosmetics and, Segment Profit represent results forto a lesser extent, higher net sales of Revlon ColorSilk hair color products and Revlon-branded beauty tools.

International

Internationally, Revlon segment net sales in the partial periodthree months ended March 31, 2022 increased by $1.5 million, or 1.9%, to $80.5 million, compared to $79.0 million in the three months ended March 31, 2021. Excluding the $5.1 million unfavorable FX impact, Revlon segment International net sales in the three months ended March 31, 2022 increased by $6.6 million, or 8.4%, compared to the three months ended March 31, 2021. The Revlon segment's $6.6 million XFX increase in International net sales in the three months ended March 31, 2022 was driven primarily by higher net sales of September 7, 2016 through September 30, 2016.Revlon-branded professional hair-care products, primarily in the EMEA region, and, to a lower extent, higher net sales of Revlon ColorSilk hair color products. This increase was partially offset primarily by lower net sales of Revlon-branded hair care products.

Elizabeth Arden Segment

North America

In North America, Elizabeth Arden segment net sales in the three months ended March 31, 2022 decreased by $2.4 million, or 8.5%, to $26.0 million, compared to $28.4 million in the three months ended March 31, 2021. The Elizabeth Arden segment's $2.4 million XFX decrease in North America net sales in the three months ended March 31, 2022 was driven
48
REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)




primarily by lower net sales of Ceramide skin care products, partially offset by higher net sales of certain other Elizabeth Arden-branded skin care products and fragrances.
Consumer Segment
Third quarter results:International
North America
In North America, ConsumerInternationally, Elizabeth Arden segment net sales in the third quarter of 2017 decreasedthree months ended March 31, 2022 increased by $53.3$5.1 million, or 25.3%6.1%, to $157.5$88.9 million, compared to $83.8 million in the three months ended March 31, 2021. Excluding the $1.5 million unfavorable FX impact, Elizabeth Arden segment International net sales in the three months ended March 31, 2022 increased by $6.6 million, or 7.9%, compared to the three months ended March 31, 2021.The Elizabeth Arden segment's $6.6 million XFX increase in International net sales in the three months ended March 31, 2022 was driven primarily by higher net sales of Ceramide skin care products, Green Tea fragrances and, to a lower extent, White Tea fragrances and other ElizabethArden-branded fragrances, partially offset by lower net sales of certain other ElizabethArden-branded skin care products. This increase was due, primarily, to growth in e-commerce net sales, as well as an increase in the travel retail business, while there are also continuing signs of improvements from the effects of the ongoing COVID-19 pandemic on foot traffic at department stores and other retail outlets.

Portfolio Segment
North America

In North America, Portfolio segment net sales in the three months ended March 31, 2022 increased by $1.2 million, or 1.9%, to $64.7 million, as compared to $210.8$63.5 million in the third quarter of 2016.three months ended March 31, 2021. Excluding the $0.5$0.2 million favorableunfavorable FX impact, ConsumerPortfolio segment net sales in North America in the third quarter of 2017 decreasedthree months ended March 31, 2022 increased by $53.8$1.4 million, or 25.5%2.2%, as compared to the third quarter of 2016. This decrease was primarily due to declinesthree months ended March 31, 2021. The Portfolio segment's $1.4 million XFX increase in the U.S. mass retail channel driven by continuing declines in consumption across several beauty categories, as well as higher sales returns and incentives, all of which resulted in declines in net sales of Revlon color cosmetics and Almay color cosmetics.

International
Internationally, Consumer segmentNorth America net sales in the third quarter of 2017 increased by $17.2 million, or 13.0%, to $149.2 million, as compared to $132.0 million in the third quarter of 2016. Excluding the $0.9 million favorable FX impact, Consumer segment International net sales in the third quarter of 2017 increased by $16.3 million, or 12.3%, as compared to the third quarter of 2016. This increasethree months ended March 31, 2022 was driven primarily by higher net sales of Revloncertain local and regional skin care products brands, Almay color cosmetics and Mitchum anti-perspirant deodorantCutex nail care products, primarily in connection with retail channels continuing to show signs of improvement from the effects of the ongoing COVID-19 pandemic. This increase was partially offset by lower net sales of American Crew men's grooming products. From a geographic perspective,

International

Internationally, Portfolio segment net sales in the three months ended March 31, 2022 increased by $2.0 million, or 6.2%, to $34.5 million, compared to $32.5 million in the three months ended March 31, 2021. Excluding the $1.8 million unfavorable FX impact, Portfolio segment International net sales increased by $3.8 million, or 11.7%, in the three months ended March 31, 2022, compared to the three months ended March 31, 2021.The Portfolio segment's $3.8 million XFX increase in International net sales in the three months ended March 31, 2022 was mainly driven primarily by increasedhigher net sales of Mitchum anti-perspirant deodorants and American Crew men's grooming products, primarily in certain distributor territories, as well as Japan, Hong Kongconnection with retail channels starting to show signs of improvement from the effects of the ongoing COVID-19 pandemic, partially offset by lower net sales of certain local and Australia.regional skin care products brands.


Year-to-date results:Fragrances Segment

North America

In North America, ConsumerFragrances segment net sales in the first ninethree months of 2017 decreasedended March 31, 2022 increased by $121.9$1.4 million, or 18.6%2.7%, to $534.8$52.7 million, as compared to $656.7$51.3 million in the first ninethree months of 2016.ended March 31, 2021. Excluding the $0.3 million favorable FX impact, ConsumerFragrances segment net sales in North America increased by $1.1 million, or 2.1%, in the first ninethree months of 2017 decreased by $122.2 million, or 18.6%, asended March 31, 2022, compared to the first ninethree months ended March 31, 2021. The Fragrances segment's $1.1 million XFX increase in North America net sales in the three months ended March 31, 2022 was driven primarily by higher net sales of 2016.certain other licensed fragrance brands, and to a lesser extent, BritneySpears and Curve, partially offset by lower net sales of Juicy Couture and John Varvatos fragrances. This decrease wasincrease is primarily due to declines ina recovery from the U.S. mass retail channel driven by declines in consumption across several beauty categories. The net sales of Revlon color cosmetics, Almay color cosmetics and SinfulColors color cosmetics all declined in the first nine months of 2017 compared to the first nine months of 2016.ongoing COVID-19 pandemic, as retailers are restocking their inventory levels.


International

Internationally, ConsumerFragrances segment net sales in the first ninethree months of 2017ended March 31, 2022 increased by $32.4$7.2 million, or 8.9%30.6%, to $398.0$30.7 million, as compared to $365.6$23.5 million in the first ninethree months of 2016.ended March 31, 2021. Excluding the $2.9$1.3 million unfavorable FX impact, ConsumerFragrances segment International net sales increased by $8.5 million, or 36.2%, in the first ninethree months of 2017 increased by $35.3 million, or 9.7%, as compared to the first nine months of 2016. This increase was driven by higher net sales of Revlon color cosmetics, Mitchum anti-perspirant deodorant products and Cutex nail care products. From a geographic perspective, the increase in International net sales was mainly driven by increased net sales in certain distributor territories, as well as Japan, Hong Kong and Australia.

Elizabeth Arden Segment
Third quarter and Year-to-date results:
The Elizabeth Arden segment is comprised of the operations that the Company acquired in the Elizabeth Arden Acquisition, which closed on September 7, 2016. As such, the results for the three and nine months ended September 30, 2016 reflect only amounts for the partial period of September 7, 2016 through September 30, 2016. Therefore, an analysis of net sales and segment profit for the Elizabeth Arden segment for the three and nine months ended September 30, 2017 is not included in this Form 10-Q, as the Company does not have full comparable prior period net sales or segment profit for the Elizabeth Arden segment.

Professional Segment
Third quarter results:
North America
In North America, Professional segment net sales in the third quarter of 2017 decreased by $14.0 million, or 25.0%, to $42.1 million, as compared to $56.1 million in the third quarter of 2016. Excluding the $0.2 million favorable FX impact, Professional segment net sales in North America in the third quarter of 2017 decreased by $14.2 million, or 25.3%, as compared to the third quarter of 2016. This decrease was primarily driven by declines in net sales of CND nail products, as well as American Crew men's grooming products, as the Company continues its efforts to manage trade inventory for the American Crew brand.
49
REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)





International

Internationally, Professional segment net sales in the third quarter of 2017 increased by $2.2 million, or 3.5%, to $64.9 million, as compared to $62.7 million in the third quarter of 2016. Excluding the $2.6 million favorable FX impact, Professional segment International net sales were essentially flat.

Year-to-date results:
North America
In North America, Professional segment net sales in the first nine months of 2017 decreased by $37.6 million, or 22.5%, to $129.4 million, as compared to $167.0 million in the first nine months of 2016. This decrease was primarily driven by declines in net sales of CND nail products and American Crew men's grooming products.

International

Internationally, Professional segment net sales in the first nine months of 2017 increased by $0.8 million, or 0.4%, to $191.0 million, as compared to $190.2 million in the first nine months of 2016. Excluding the $0.1 million favorable FX impact, Professional segment International net sales increased by $0.7 million, or 0.4%, in the first nine months of 2017, asended March 31, 2022, compared to the first ninethree months of 2016, as increases in net sales of Revlon Professional hair products and American Crew men's grooming products, were mostly offset by lower net sales of CND nail products. From a geographic perspective, theended March 31, 2021.The Fragrances segment's $8.5 million XFX increase in International net sales in the three months ended March 31, 2022 was mainly driven primarily by increasedhigher net sales of Britney Spears, John Varvatos and Juicy Couture fragrances,as well as, to a lower extent, of other certain licensed fragrance brands, primarily due to continued recovery from the ongoing COVID-19 pandemic, as retailers are restocking their inventory levels, as well as growth in Russia, Italye-commerce net sales and France.the travel retail business.


Gross profit:
The table below shows the Company's gross profit and gross margin for the periods presented:
Three Months Ended March 31,
20222021Change
Gross profit$282.7 $253.8 $28.9 
Percentage of net sales58.9 %57.0 %1.9 %
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2017 2016 Change 2017 2016 
Change
Gross profit$376.2
 $361.4
 $14.8
 $1,083.5
 $964.5
  $119.0
Percentage of net sales56.4% 59.8% (3.4)% 56.8% 62.9%  (6.1)%

Gross profit increased by $14.8$28.9 million in the third quarter of 2017,three months ended March 31, 2022, as compared to the third quarter of 2016.three months ended March 31, 2021. Gross profit decreased as a percentage of net sales in the third quarter of 2017 by 3.4 percentage points, as compared to the third quarter of 2016. The drivers of the decrease in gross profit as a percentage of net sales (i.e., gross margin) in the third quarter of 2017, as compared to the third quarter of 2016, primarily included:
the inclusion of gross profit from the Elizabeth Arden Acquisition, which decreased gross profit by 3.0 percentage points;
unfavorable product mix, which decreased gross profit by 0.2 percentage points; and
higher sales returns reserves, which decreased gross profit by 0.1 percentage points.

Unfavorable volume decreased gross profit by $26 million, with no impact on gross profit as a percentage of net sales.

Gross profitthree months ended March 31, 2022 increased by $119.0 million in the first nine months of 2017, as compared to the first nine months of 2016. Gross profit decreased as a percentage of net sales in the first nine months of 2017 by 6.11.9% percentage points, as compared to the first ninethree months of 2016.ended March 31, 2021. The drivers of the decreaseincrease in gross profit as a percentage of net salesmargin in the first ninethree months of 2017,ended March 31, 2022, as compared to the first nine months of 2016,prior year period, was impacted primarily included:
the inclusion of gross profit from the Elizabeth Arden Acquisition, which decreased gross profit by 3.8 percentage points;
higher sales allowances, which decreased gross profit by 1.3 percentage points;
unfavorableand favorable product mix, whichpartially offset by higher sales discounts and allowances and unfavorable foreign currency impacts.

SG&A expenses:
The table below shows the Company's SG&A expenses for the periods presented:
Three Months Ended March 31,
20222021Change
SG&A expenses$256.9 $260.5 $(3.6)

SG&A expenses decreased gross profit by 0.6 percentage points;
additional inventory costs as a result of the recognition of an increase$3.6 million in the fair valuethree months ended March 31, 2022, compared to the three months ended March 31, 2021, driven primarily by:
•lower product display costs of inventory acquiredapproximately $4.7 million;
•favorable FX impact of approximately $4.1 million; and
•lower brand support expenses of approximately $3.3 million, to align marketing initiatives with certain key brands;
with the foregoing partially offset by:
•higher distribution expenses of approximately $4.4 million, driven primarily by higher net sales and higher costs; and
•higher general and administrative expenses of approximately $4.3 million, primarily driven by higher professional, legal and software renewal fees, as well as higher cost reductions achieved during the three months ended March 31, 2021 through the Revlon 2020 Restructuring Program (subsequently renamed RGGA during 2021).

Restructuring charges and other, net:
The table below shows the Company's restructuring charges and other, net for the periods presented:
Three Months Ended March 31,
20222021Change
Restructuring charges and other, net$1.9 $5.4 $(3.5)

Restructuring charges and other, net, decreased by $3.5 million during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily related to lower expenditures under RGGA in the Elizabeth Arden Acquisition, which reduced gross profit by 0.2 percentage points; andthree months ended March 31, 2022, compared to the expenditures incurred primarily under the 2020 Revlon Restructuring Program in the three months ended March 31, 2021.
the unfavorable impact of less overhead absorption during the third quarter of 2017, which decreased gross profit by 0.1 percentage points.
50
REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)




Revlon Global Growth Accelerator Program

On March 2, 2022, the Company announced that it is extending and expanding its existing Revlon Global Growth Accelerator (“RGGA”) program through 2024. The extension and expansion will allow the Company to continue to focus on identifying and implementing new opportunities programmatically. The extension and expansion will provide an additional year to implement larger projects and help make up for supply chain headwinds and the extended COVID restrictions throughout the globe.
Unfavorable volume decreased gross profit by $64
The major initiatives underlying the RGGA Program will remain and include:
•    Strategic Growth: Boost organic sales growth behind our strategic pillars – brands, markets, and channels -- to deliver mid-single digit Compound Average Annual Growth Rate through 2024.
•    Operating Efficiencies: Drive additional operational efficiencies and cost savings for margin improvement and to fuel investments in growth.
•    Build Capabilities: Build capabilities and embed the Revlon culture of one vision, one team.

Under this extension and expansion, the Company expects to deliver an updated range of annualized cost reductions of approximately $325 million with no impact on gross profit as a percentageto $390 million from 2020 through the end of net sales.

SG&A expenses:
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2017 2016 Change 2017 2016 Change
SG&A expenses$360.2
 $283.4
 $76.8
 $1,068.2

$786.0

$282.2
2024. Approximately 50% of these annualized cost reductions were realized from the headcount reductions that occurred in 2020. The remaining cost reductions will be realized through reductions in SG&A expenses increased by $76.8and cost of goods sold. The Company achieved $7 million inof cost reductions during the third quarter of 2017, as compared tothree months ended March 31, 2022, bringing the third quarter of 2016, primarily driven by:
total cost reductions realized since the inclusion of SG&A expenses in the Elizabeth Arden segment as a resultinception of the Elizabeth Arden Acquisition, which contributed $84.6program to approximately $191 million and expects to achieve approximately $40 million to $55 million for the increase in SG&A expenses;
full year 2022, with the foregoing partially offset by:balance to be realized during 2023 and 2024.
lower general
In connection with implementing RGGA, the Company expects to recognize an updated cost range of approximately $193 million and administrative expenses$215 million of $12.5total pre-tax restructuring and related charges, consisting of employee-related costs, such as severance, pension and other termination costs, as well as related third party expenses. The Company also expects to incur approximately $20 million primarily dueof additional capital expenditures. Under the RGGA program, the Company expects to lower incentive compensation expense.

SG&A expenses increased by $282.2incur pre-tax restructuring and related charges of approximately $30 million to $40 million during 2022 and the remainder during 2023 and 2024. The Company expects that substantially all of these restructuring and related charges will be paid in cash, with $97.2 million of the total charges paid as of March 31, 2022 and $1.9 million paid during the first ninethree months of 2017, as compared2022. Approximately $25 million to the first nine months of 2016, primarily driven by:
the inclusion of SG&A expenses in the Elizabeth Arden segment as a result$30 million of the Elizabeth Arden Acquisition, which contributed $308.5 milliontotal charges are expected to be paid during the increase in SG&A expenses;
remainder of 2022, with the foregoing partially offset by:residual balance to be paid during 2023 and 2024.
a $18.4 million decrease in brand support expenses, primarily within
In connection with RGGA, during the Consumer segment, due tothree months ended March 31, 2022, the decline in net sales; and
lower general and administrative expenses of $8.1 million, primarily due to lower incentive compensation expense.

Acquisition and Integration Costs:
 Three Months Ended September 30,   Nine Months Ended September 30,  
 2017 2016 Change 2017 2016 Change
     Acquisition Costs$0.8
 $13.4
 $(12.6) $2.8
 $19.4
 $(16.6)
     Integration Costs11.9
 20.1
 (8.2) 37.4
 20.1
 17.3
Total acquisition and integration costs$12.7
 $33.5
 $(20.8) $40.2
 $39.5
 $0.7

The Company incurred $12.7recorded $4.0 million of acquisitiontotal pre-tax restructuring and integration costs in the third quarter of 2017,related charges consisting primarily of $0.8i) $1.9 million of acquisition costsemployee severance, other personnel benefits and $11.8other costs; and (ii) $2.1 million of integration costslease and other restructuring-related charges that were recorded within SG&A and cost of sales. Since its inception and through March 31, 2022, the Company recorded $105.9 million of total pre-tax restructuring and related to the integrationcharges consisting primarily of Elizabeth Arden. The acquisition costs primarily included legal fees directly attributable to the Elizabeth Arden Acquisition. The integration costs consistedi) $78.5 million of non-restructuring costs related primarilyemployee severance, other personnel benefits and other costs; and (ii) $27.4 million of lease and other restructuring-related charges that were recorded within SG&A and cost of sales.

Since its inception in March 2020 and through March 31, 2022, approximately 965 positions have been eliminated worldwide under RGGA.

For further information on RGGA, see Note 2, "Restructuring Charges," to the Company's integration of Elizabeth Arden's operations intoUnaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Interest expense:
The table below shows the Company's business, including professional fees, lease termination costs and employee related costs.interest expense for the periods presented:
The Company incurred $33.5 million of acquisition and integration costs in the third quarter of 2016, primarily related to the Elizabeth Arden Acquisition.
The Company incurred $40.2 million of acquisition and integration costs in the first nine months of 2017, consisting primarily of $0.8 million of acquisition costs and $37.3 million of integration costs related to the integration of Elizabeth Arden. The acquisition costs primarily included legal fees directly attributable to the Elizabeth Arden Acquisition. The integration costs consisted of non-restructuring costs related primarily to the Company's integration of Elizabeth Arden's operations into the Company's business, including professional fees, lease termination costs and employee related costs.
The Company incurred $39.5 million of acquisition and integration costs in the first nine months of 2016, primarily related
to the Elizabeth Arden Acquisition.

Three Months Ended March 31,
20222021Change
Interest expense$62.1 $58.9 $3.2 
51
REVLON, CONSUMER PRODUCTS CORPORATIONINC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions)millions, except share and per share amounts)





Restructuring charges and other, net:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2017 2016 Change 2017 2016 Change
Restructuring charges and other, net$6.4
 $0.5
 $5.9
 $11.3
 $2.3
 $9.0

EA Integration Restructuring Program

During the third quarter of 2017, the Company recorded charges totaling $9.9 million related to restructuring and related actions under the EA Integration Restructuring Program. Of this $9.9 million: (a) charges of $9.3 million were recorded in restructuring charges and included lease termination costs of approximately $3.9 million; (b) charges of 0.3 million were recorded in SG&A expenses; and (c) charges of $0.3 million were recorded in cost of sales.

During the first nine months of 2017, the Company recorded charges totaling $15.6 million related to restructuring and related actions under the EA Integration Restructuring Program. Of this $15.6 million: (a) charges of $14.1 million were recorded in restructuring charges and included lease termination costs of approximately $3.9 million; (b) charges of $1.0 million were recorded in SG&A expenses; and (c) charges of $0.5 million were recorded in cost of sales.

The Company expects approximately $55 million to $60 million of synergies and cost reductions to benefit 2017 from the EA Integration Restructuring Program and annualized synergies and cost reductions of approximately $190 million to be achieved over a multi-year period. During the three and nine months ended September 30, 2017, the Company realized approximately $18.0 million and $42.0 million, respectively, of these synergies and cost-reductions, which primarily benefited the Elizabeth Arden segment results and reduced the Company’s corporate-level SG&A expenses.

2015 Efficiency Program

During the third quarter of 2017, the Company performed a review of the 2015 Efficiency Program and determined that employees in certain positions that were initially identified to be eliminated would continue to be employed by the Company in varying positions in connection with integrating the Elizabeth Arden and Revlon organizations. As a result, the Company reversed approximately $3.2 million in previously accrued restructuring charges recognized in connection with the 2015 Efficiency Program.

During the three and nine months ended September 30, 2016, the Company recognized $0.5 million and $2.3 million, respectively, of restructuring charges and other, net, in connection with the 2015 Efficiency Program.

See Note 3, "Restructuring Charges," to the Unaudited Consolidated Financial Statements in this Form 10-Q for further discussion.

Interest expense:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2017 2016 Change 2017 2016 Change
Interest expense$38.6
 $27.4
 $11.2
 $110.3
 $69.3
 $41.0
The $11.2 million increase in interest expense in the third quarter of 2017,during the three months endedMarch 31, 2022, as compared to the third quarter of 2016, and the $41.0 million increase in interest expense in the first ninethree months of 2017, as compared to the first nine months of 2016, were primarily due to higher average debt outstanding and higher weighted average borrowing rates as a result of the debt transactions completed in connection with the Elizabeth Arden Acquisition and the complete refinancing and repayment of Products Corporation’s then-existing 2011 term loan (the "2011 Term Loan") and 2013 term loan (the "Old Acquisition Term Loan" and together with the 2011 Term Loan, the "Old Term Loan Facility") that was incurred in connection with completing the October 2013 acquisition of The Colomer Group Participations, S.L. (the "Colomer Acquisition”)endedMarch 31, 2021, as well as $178.5 million of higher borrowings under the 2016 Revolving Credit Facility.

REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


Foreign currency (gains) losses, net:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2017 2016 Change 2017 2016 Change
Foreign currency (gains) losses, net$(3.1) $1.2
 $(4.3) $(16.8) $6.3
 $(23.1)

The $4.3 million increase in foreign currency gains, net, during the third quarter of 2017, as compared to the third quarter of 2016, was primarily driven by higher borrowing and higher interest rates under the net favorable impact of the revaluation of certain U.S. Dollar intercompany payablesSISO Facility and foreign currency denominated receivables, partly offset by unrealized losses on derivative financial instruments.2021 Foreign Asset-Based Term Facility entered in March 2021.


The $23.1 million increase in foreign currency gains, net, during the first nine months of 2017, as compared to the first nine months of 2016, was primarily driven by the net favorable impact of the revaluation of certain U.S. Dollar intercompany payables and foreign currency receivables, partly offset by unrealized losses on derivative financial instruments.

Provision for income taxes:
 Three Months Ended September 30,   Nine Months Ended September 30, 
 2017 2016 Change 2017 2016 Change
(Benefit from) provision for income taxes$(10.0) $0.4
 $(10.4) $(35.4) $18.3
 $(53.7)
The Company's benefit from income taxes increased by $10.4 million intable below shows the third quarter of 2017, as compared to the third quarter of 2016, primarily due to the pre-tax loss from continuing operations in the third quarter of 2017.

The Company's provision for income taxes decreased by $53.7for the periods presented:
Three Months Ended March 31,
20222021Change
Provision for income taxes$9.8 $11.2 $(1.4)

The Company recorded a provision for income taxes of $9.8 million for the three months ended March 31, 2022, compared to a provision for income taxes of $11.2 million for the three months ended March 31, 2021. The $1.4 million decrease in the first nineprovision for income taxes for the three months of 2017, asended March 31, 2022, compared to the first nine months of 2016,same period in 2021, was primarily due to the pre-tax loss from continuing operations in the first nine monthsgeographical level and mix of 2017.earnings, net change of valuation allowance on its net federal and certain deferred tax assets, partially offset by state taxes for certain U.S. entities.


The Company's effective tax rate for the three months ended September 30, 2017March 31, 2022 and March 31, 2021 was lower than the 35% federal statutory rate of 21% primarily due to losses for which no tax benefit can be recognized, as well as state taxes for certain U.S. entities.
In assessing the recoverability of its deferred tax assets, the Company continually evaluates all available positive and negative evidence to assess the amount of deferred tax assets which are more likely than not to be realized. Deferred tax assets are reduced by a resultvaluation allowance if some portion or all of the level and mix of earnings between jurisdictions, foreign dividends and earnings taxable in the U.S., partially offset by the effect of certain favorable discrete items.

The Company's effectivedeferred tax rate for the nine months ended September 30, 2017 was lower than the 35% federal statutory rate as a result of the level and mix of earnings between jurisdictions, foreign dividends and earnings taxable in the U.S. and state and local taxes, partially offset by the effect of certain favorable discrete items.

The Company expects that its tax provision and effective tax rate in any individual quarter and year-to-date periodassets will vary and may not be indicative ofrealized.A valuation allowance is a non-cash charge, and it in no way limits the Company's ability to utilize its deferred tax provisionassets, including its ability to utilize tax loss and effectivecredit carryforward amounts.

For further information, see Note 12, "Income Taxes," to the Company's Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Results of Operations — Products Corporation

Products Corporation's Consolidated Statements of Operations and Comprehensive Loss are essentially identical to Revlon, Inc.'s Consolidated Statements of Operations and Comprehensive Loss, except for expenses incidental to being a public holding company and certain tax rate for the full year.adjustments as follows:

Three Months Ended March 31,
20222021
Net loss - Revlon, Inc.$(67.0)$(96.0)
Selling, general and administrative expenses2.1 1.0 
Miscellaneous, net(3.4)— 
Provision for income taxes0.1 0.1 
Net loss - Products Corporation$(68.2)$(94.9)


Refer to Revlon’s “Management Discussion and Analysis of Financial Condition and Results of Operations” herein.

52
REVLON, INC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Financial Condition, Liquidity and Capital Resources

At September 30, 2017,March 31, 2022, the Company had a liquidity position of $204.6$132.1 million,, consisting of $79.0of: (i) $70.0 million of unrestricted cash and cash equivalents as well as $125.6(with approximately $62.2 million held outside the U.S.); (ii) $65.1 million in available borrowingsborrowing capacity under Products Corporation's $400.0 millionAmendment No. 9 to the Amended 2016 Revolving Credit Facility based upon the borrowing base of $400.0(which had $268.0 million drawn at such date); and less $10.0(iii) approximately $3.0 million of outstanding undrawn letters of credit, $20.5 million of outstanding checkschecks.

Liquidity and $243.9 million of borrowings outstanding underAbility to Continue as a Going Concern
Each reporting period, the 2016 Revolving Credit Facility at such date.Company assesses its ability to continue as a going concern for one year from the date the financial statements are issued.

The Company continues to focus on cost reduction and risk mitigation actions to address the ongoing impact from the COVID-19 pandemic as well as other risks in the business environment. It expects to generate additional liquidity through continued cost control initiatives as well as funds provided by selling certain assets or other strategic transactions in connection with the Company's ongoing Strategic Review. If sales decline, the Company’s foreign operations held $75.4 million outcost control initiatives may include reductions in discretionary spend and reductions in investments in capital and permanent displays. Management believes that the debt transactions completed during the first quarter of the total $79.2 million in2022, along with existing cash and cash equivalents (netand cost control initiatives provides the Company with sufficient liquidity to meet its obligations and maintain business operations for the next twelve months.

However, there can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis, as, among other things, the Company’s liquidity can be impacted by a number of any outstanding checks)factors, including its level of sales, costs and expenditures, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of liquidity available under the asset-based revolving credit agreement, dated as of September 30, 2017. The cash held7, 2016, by and among Products Corporation and certain of its subsidiaries, as borrowers, the Company’s foreign operations is primarily used to fund such operations. The Company, regularly assesses its cash needsas holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (as amended, the "Amended 2016 Revolving Credit Agreement" and the available sources of cashcredit facility thereunder, the "Amended 2016 Revolving Credit Facility") and the 2021 Foreign Asset-Based Term Facility (as defined herein). For example, subject to fund these needs. As part of this assessment,certain exceptions, revolving loans under the Company determines the amount of foreign earnings, if any, that it intends to repatriate to help fund its domestic cash needs, including for the Company’s debt service obligations, and pays applicable U.S. income and foreign withholding taxes, if any, on such earnings to the extent repatriated, and otherwise records a tax liability for the estimated cost of repatriation in a future period. During 2017, the Company repatriated funds to the U.S. through the settlement of historical loans and payables due from certain foreign subsidiaries. The Company believes that the cash generated by its domestic operations, availability under theAmended 2016 Revolving Credit Facility and term loans under the 2021 Foreign Asset-Based Term Facility must be prepaid to the extent that such outstanding loans exceed the applicable borrowing base, consisting of certain accounts receivable, inventory and real estate.

First Quarter of 2022 Financing Transactions
Amendment No. 9 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and Second-In, Second-Out ("SISO") Term Loan Facility
On March 31, 2022, Products Corporation entered into Amendment No. 9 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 9”).
Amendment No. 9, among other permitted linesthings, made certain changes to the calculation of the borrowing base. Amendment No. 9 has the effect of temporarily increasing the borrowing base under the Amended 2016 Revolving Credit Agreement by up to $25 million until the earlier of (i) September 29, 2022 and (ii) the occurrence of an event of default or payment default (the “Amendment No. 9 Accommodation Period”). During the Amendment No. 9 Accommodation Period, Amendment No. 9 also establishes a reserve against availability under the Amended 2016 Revolving Credit Agreement in the amount of $10 million until June 29, 2022 and $15 million thereafter. Products Corporation was required to pay customary fees in connection with Amendment No. 9.
The Company incurred approximately $1.8 million of new debt issuance costs in connection with Amendment No. 9 to the 2016 Revolving Credit Agreement and SISO Term Loan Facility, which are amortized in accordance with the straight-line method within "Amortization of debt issuance costs" over the term of the Amendment No. 9 Accommodation Period.

First Amendment to 2021 Asset-Based Term Agreement
On March 30, 2022, Revlon Finance LLC, a Delaware limited liability company and wholly-owned subsidiary of Revlon (the “FABTL Borrower”), entered into the First Amendment (the “First Amendment”) to the 2021 Foreign Asset-Based Term Agreement.
The First Amendment, among other things, made certain changes to the calculation of the borrowing base that have the effect of temporarily increasing the borrowing base for one year after the effective date of the First Amendment. Initially the increase in the borrowing base is estimated to be approximately $7 million. The FABTL Borrower is required to pay customary fees in connection with the First Amendment.
Second Quarter of 2021 Financing Transactions
Amendment No. 8 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and Second-In, Second-Out Term Loan Facility
On May 7, 2021, Products Corporation entered into Amendment No. 8 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 8”). Amendment No. 8, among other things, made certain amendments pursuant to which: (i) the maturity date applicable to the “Tranche A” revolving loans and SISO Term Loan Facility (as defined further below in this section within "Amendment No. 7 to the Amended 2016 Revolving Credit Agreement: Tranche A - Revolving Credit Facility and SISO Term Loan Facility") was extended from June 8, 2023 to May 7, 2024, subject to a springing maturity to the earlier of: (x) 91 days prior to the maturity of the 2016 Term Loan Facility on September 7, 2023, to the extent such term loans are then outstanding, and (y) to the extent the Company’s first-in, last-out term loans (the “2020 ABL FILO Term Loans”) are then outstanding, the earliest stated maturity of the 2020 ABL FILO Term Loans; (ii) the commitments under the “Tranche A” revolving facility were reduced from $300 million to $270 million and under the SISO Term Loan Facility were upsized from $100 million to $130 million, (iii) the financial covenant was changed from (A)(x) a minimum excess availability requirement of $20 million when the fixed charge coverage ratio is greater than 1.00x or (y) a minimum excess availability requirement of $30 million when the fixed charge coverage ratio is less than 1.00x to (B) a springing minimum fixed charge coverage ratio of 1.00x when excess availability is less than $27.5 million, (iv) certain advance rates in respect of the borrowing base under the credit agreement were increased, and (v) the perpetual cash dominion requirement was replaced with a springing cash dominion requirement triggered only when excess availability is less than $45 million. In addition, Amendment No. 8 increased the interest rate margin applicable to the “Tranche A” revolving loans to 3.75% from a range of 2.50-3.00% and decreased the LIBOR “floor” applicable thereto from 1.75% to 0.50%.

On May 7, 2021, the Company also entered into a successor agent appointment and agency transfer agreement pursuant to which MidCap Funding IV Trust ("MidCap") succeeded Citibank, N.A. as the collateral agent and administrative agent for the Amended 2016 Revolving Credit Agreement. Products Corporation paid certain customary fees to MidCap and the lenders under the Amended 2016 Revolving Credit Facility in connection with Amendment No. 8.

Amendment No. 8 included an extinguishment, as defined by ASC 470, Debt, with the prior lenders under the Company's Tranche A Revolving Credit facility and the substitution of such lenders under the revolving credit facility with a new lender, MidCap, with which the Company had no prior loans outstanding. In connection with this transaction:

•Fees of $0.8 million paid to the old lenders that were extinguished under the Tranche A Revolving Credit facility were expensed within SG&A on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021;
•Deferred financing costs associated with the extinguished, old lenders prior to the effective date of Amendment No. 8, amounting to approximately $4.7 million, were expensed within "Amortization of debt issuance costs” on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021; and
•Fees of approximately $2.1 million paid to the new lender and third parties were recorded as deferred financing costs and are amortized in accordance with the straight-line method over the revised term of Tranche A through May 7, 2024.

The above-mentioned Amendment No. 8 also included an extinguishment and a modification of a term loan in connection with the existing SISO Term Loan Facility. More specifically, in accordance with ASC 470, Debt:

•Extinguishment accounting was applied to one existing prior lender, which was no longer involved with the SISO Term Loan Facility after Amendment No. 8. In connection with such extinguishment, deferred financing costs of approximately $1.4 million were expensed within "Amortization of debt issuance costs” on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021; and
•Modification accounting was applied to those exiting lenders for which the cash flow effect between the amount owed to them before and after the consummation of Amendment No. 8, on a present value basis, was less than 10% and, thus, the debt instruments were not considered to be substantially different. In connection with such modification, fees of approximately $0.9 million paid to the lenders were recorded as deferred financing costs and are amortized within "Amortization of debt issuance costs” (together with previously exiting deferred financing costs associated with these
lenders of approximately $4.0 million), in accordance with the new effective interest rate computed over the revised term of the SISO Term Loan Facility. Additionally, approximately $0.4 million of fees paid to third parties were expensed within SG&A on the Company's Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021.

First Quarter of 2021 Financing Transactions
Tranche A - Revolving Credit Facility and SISO Term Loan Facility

On March 8, 2021, Products Corporation entered into Amendment No. 7 to the Amended 2016 Revolving Credit Agreement (“Amendment No. 7”). Amendment No. 7, among other things, made certain amendments pursuant to which: (i) the maturity date applicable to the “Tranche A” revolving loans under the Amended 2016 Revolving Credit Agreement was extended from September 7, 2021 to June 8, 2023; (ii) the commitments under the “Tranche A” revolving facility were reduced from $400 million to $300 million; and (iii) a new $100 million senior secured second-in, second-out term loan facility maturing June 8, 2023 (the “SISO Term Loan Facility”) was established and Products Corporation borrowed $100 million of term loans thereunder.Except as to pricing, maturity, enforcement priority and certain voting rights, the terms of the SISO Term Loan Facility are substantially consistent with the first-in, last-out “Tranche B” term loan facility under the Amended 2016 Revolving Credit Agreement, including as to guarantees and collateral.

Term loans under the SISO Term Loan Facility accrue interest at the LIBOR rate, subject to a floor of 1.75%, plus a margin of 5.75%.In addition, Amendment No. 7 increased the interest rate margin applicable to the “Tranche A” revolving loans by 0.50% to a range of 2.50% to 3.0%, depending on average excess revolving availability.Products Corporation paid certain customary fees to Citibank, N.A. and the lenders under the Amended 2016 Revolving Credit Facility in connection with Amendment No. 7.

Amendment No. 7 represented an exchange of an existing revolving credit agreement with a new revolving credit agreement with the same lenders as defined by ASC 470, Debt, under the revolving credit facility. All pre-existing unamortized deferred financing costs associated with the old revolving credit agreement of approximately $0.8 million were added to the newly incurred deferred financing costs of approximately $4.2 million and their total of approximately $5.1 million started to be amortized in accordance with the straight-line method over the term of Tranche A through June 8, 2023. Additionally, approximately $4.3 million of new deferred financing costs were incurred in connection with the SISO Term Loan Facility with the new lenders, which are amortized in accordance with the effective interest method over the term of the facility.

2021 Foreign Asset-Based Term Facility
On March 2, 2021 (the “2021 ABTL Closing Date”), Revlon Finance LLC (the “ABTL Borrower”), a wholly owned indirect subsidiary of Products Corporation, certain foreign subsidiaries of Products Corporation party thereto as guarantors, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent (the “ABTL Agent”), entered into an Asset-Based Term Loan Credit Agreement (the “2021 Foreign Asset-Based Term Agreement”, and the term loan facility thereunder, the “2021 Foreign Asset-Based Term Facility”).

Principal and Maturity: The 2021 Foreign Asset-Based Term Facility provides for a U.S. dollar-denominated senior secured asset-based term loan facility in an aggregate principal amount of $75 million, the full amount of which was funded on the closing of the facility. On the 2021 ABTL Closing Date, approximately $7.5 million of the proceeds of the 2021 Foreign Asset-Based Term Facility were deposited in an escrow account by the ABTL Agent pending completion of certain post-closing perfection actions with respect to certain foreign real property of the guarantors constituting collateral securing the 2021 Foreign Asset-Based Term Facility. Such perfection actions were subsequently completed, and the escrowed funds were released to the ABTL Borrower. The 2021 Foreign Asset-Based Term Facility has an uncommitted incremental facility pursuant to which it may be increased from time to time by up to the amount of the borrowing base in effect at the time such incremental facility is incurred, subject to certain conditions and the agreement of the lenders providing such increase. The proceeds of the loans under the 2021 Foreign Asset-Based Term Facility were used: (i) to repay in full the obligations under the 2018 Foreign Asset-Based Term Facility (the “ABTL Refinancing”); (ii) to pay fees and expenses in connection with the 2021 Foreign Asset-Based Term Facility and the ABTL Refinancing; and (iii) for working capital and other general corporate purposes. The 2021 Foreign Asset-Based Term Facility matures on March 2, 2024, subject to a springing maturity date of August 1, 2023 if, on such date, any principal amount of loans under the term loan credit agreement, dated as of September 7, 2016, by and among Products Corporation, as the borrower, the Company, as holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent (as amended by Amendment No. 1 dated as of May 7, 2020, the “2016 Term Loan Agreement” and the credit facility thereunder, the “2016 Term Loan Facility”) due September 7, 2023 remain outstanding.

The 2021 Foreign Asset-Based Term Agreement requires the maintenance of a borrowing base supporting the borrowing thereunder, to be evidenced with the delivery of biweekly borrowing base certificates customary for facilities of this type, with more frequent reporting required upon the triggering of certain events. The borrowing base calculation under the 2021 Foreign Asset-Based Term Facility is based on the sum of: (i) 80% of eligible accounts receivable (later increased to 90% for one year from the effective date of the First Amendment); (ii) 65% of the net orderly liquidation value of eligible finished goods inventory receivable (later increased to 75% for one year from the effective date of the First Amendment); and (iii) 45% of the mortgage value of eligible real property, in each case with respect to certain of Products Corporation’s subsidiaries organized in Australia, Bermuda, Germany, Italy, Spain and Switzerland (the “ABTL Borrowing Base Guarantors”). The borrowing bases in each jurisdiction are subject to certain customary availability reserves set by the ABTL Agent.

Guarantees and Security: The 2021 Foreign Asset-Based Term Facility is guaranteed by the Borrowing Base Guarantors, as well as by the optiondirect parent entities of each ABTL Borrowing Base Guarantor (not including Revlon, Inc. or Products Corporation) on a limited recourse basis (the “ABTL Parent Guarantors”) and by certain subsidiaries of Products Corporation organized in Mexico (the “ABTL Other Guarantors” and, together with the ABTL Borrower and the ABTL Borrowing Base Guarantors, the “ABTL Loan Parties”). The obligations of the ABTL Loan Parties and the ABTL Parent Guarantors under the 2021 Foreign Asset-Based Term Facility are secured by first-ranking pledges of the equity of each ABTL Loan Party (other than the Other Guarantors), the inventory and accounts receivable of the ABTL Borrowing Base Guarantors, the material bank accounts of each Loan Party, the material intercompany indebtedness owing to further settleany Loan Party (including any intercompany loans made with the proceeds of the 2021 Foreign Asset-Based Term Facility) and payables with certain foreign subsidiaries, should be sufficientother material assets of the ABTL Borrowing Base Guarantors, subject to meet its domestic liquidity needscustomary exceptions and exclusions. The 2021 Foreign Asset-Based Term Facility includes a cash dominion feature customary for transactions of this type.

Interest and Fees: Interest is payable on each interest payment date as set forth in the 2021 Foreign Asset-Based Term Agreement, and in any event at least quarterly, and accrues on borrowings under the next 12 months. Therefore,2021 Foreign Asset-Based Term Facility at a rate per annum equal to the Company currently anticipatesLIBOR rate, with a floor of 1.50%, plus an applicable margin equal to 8.50%. The ABTL Borrower is obligated to pay certain fees and expenses in connection with the 2021 Foreign Asset-Based Term Facility, including a fee payable to Blue Torch Finance LLC for its services as Agent. Loans under the 2021 Foreign Asset-Based Term Facility may be prepaid without premium or penalty, subject to a prepayment premium equal to 3.0% of the aggregate principal amount of loans prepaid or repaid during the first year after the 2021 ABTL Closing Date, 2.0% of the aggregate principal amount of loans prepaid or repaid during the second year after the 2021 ABTL Closing Date and 1.0% of the aggregate principal amount of loans prepaid or repaid thereafter.

Affirmative and Negative Covenants: The 2021 Foreign Asset-Based Term Agreement contains certain affirmative and negative covenants that, restrictions and/among other things, limit the ABTL Loan Parties’ ability to, subject to various exceptions and qualifications: (i) incur additional debt; (ii) incur liens; (iii) sell, transfer or taxesdispose of assets; (iv) make investments; (v) make dividends and distributions on, repatriationor repurchases of, foreign earnings will not haveequity; (vi) make prepayments of contractually subordinated or junior lien debt; (vii) enter into certain transactions with their affiliates, including amending certain material intercompany agreements or trade terms; (viii) enter into sale-leaseback transactions; (ix) change their lines of business; (x) restrict dividends from their subsidiaries or restrict liens; (xi) change their fiscal year; and (xii) modify the terms of certain debt. The ABTL Parent Guarantors are subject to certain customary holding company covenants. The ability of the Loan Parties to make certain intercompany asset sales, investments, restricted payments and prepayments of intercompany debt is contingent on certain "cash movement conditions" or "payment conditions" being met, which among other things, require a materialcertain level of liquidity for the applicable Loan Party to effect onsuch type of transactions. The 2021 Foreign Asset-Based Term Agreement also contains a financial covenant requiring the Company’s liquidity during such period.

Changes in Cash Flows
At September 30, 2017, the Company hadABTL Loan Parties to maintain a minimum average balance of cash and cash equivalents of $79.2$3.5 million, tested monthly, based on the last 10 business days of each month, subject to certain cure rights. The 2021 Foreign Asset-Based Term Agreement also contains certain customary representations, warranties and events of default.

Prepayments: The ABTL Borrower must prepay loans under the 2021 Foreign Asset-Based Term Facility to the extent that outstanding loans exceed the borrowing base. In lieu of a mandatory prepayment, the Loan Parties may deposit cash into a designated U.S. bank account with the ABTL Agent that is subject to a control agreement (such cash, the “Qualified Cash”). If an event of default occurs and is continuing, the Qualified Cash may be applied, at the ABTL Agent’s option, to prepay the loans under the 2021 Foreign Asset-Based Term Facility. If the borrowing base subsequently exceeds the outstanding loans, the ABTL Borrower can withdraw Qualified Cash from such bank account to the extent of such excess. In addition, the 2021 Foreign Asset-Based Term Facility is subject to mandatory prepayments from the net proceeds from the incurrence by the Loan Parties of debt not permitted thereunder.

The proceeds from the 2021 Foreign Asset-Based Term Facility were used to extinguish the entire amount outstanding under the 2018 Foreign Asset-Based Term Facility as of the closing date, which was due on July 9, 2021. In connection with such extinguishment, approximately $1.0 million of pre-existing unamortized deferred financing costs were expensed within "Amortization of Debt Issuance Costs" on the Company’s Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2021. In accordance with the terms of the 2021 Foreign Asset-Based Term Agreement, approximately $13.8 million of the proceeds from the transaction are held in escrow and are recorded within "Prepaid expenses and other assets" on the Company's Consolidated Balance Sheet as of December 31, 2021.

The Company incurred approximately $3.2 million of new debt issuance costs in connection with the closing of the 2021 Foreign Asset-Based Term Facility, which are amortized within "Amortization of debt issuance costs" in accordance with the effective interest method over the term of the facility.

Changes in Cash Flows

As of March 31, 2022, the Company had cash, cash equivalents and restricted cash of $87.6 million, compared with $186.8$102.5 million at December 31, 2016.2021. The following table summarizes the Company’s cash flows from operating, investing and financing activities for the nine months ended September 30, 2017 and 2016:periods presented:                                 
Three Months Ended March 31,
20222021
Net cash provided by (used in) operating activities$6.7 $(28.4)
Net cash used in investing activities(2.3)(0.7)
Net cash (used in) provided by financing activities(37.6)29.6 
Effect of exchange rate changes on cash and cash equivalents(0.1)(1.3)
   Net decrease in cash, cash equivalents and restricted cash(33.3)(0.8)
Cash, cash equivalents and restricted cash at beginning of period120.9 102.5 
Cash, cash equivalents and restricted cash at end of period$87.6 $101.7 
 Nine Months Ended September 30,
 2017 2016
Net cash used in operating activities$(274.2) $(70.9)
Net cash used in investing activities(69.5) (1,061.3)
Net cash provided by financing activities226.7
 900.9
Effect of exchange rate changes on cash and cash equivalents9.4
 3.6


Operating Activities
Net cash used inprovided by (used in) operating activities was $274.2$6.7 million and $70.9$(28.4) million for the first ninethree months of 2017ended March 31, 2022 and 2016,2021, respectively. The increase in cash used inprovided by operating activities for the first ninethree months of 2017,ended March 31, 2022, compared to the first ninethree months of 2016,ended March 31, 2021, was primarily driven by higher inventory balances; higher interest payments as a result of increased debt incurred in the third quarter of 2016 in connection with financinglower loss and consummating the Elizabeth Arden Acquisition, as well as higher borrowings under the 2016 Revolving Credit Facility; higher payments for restructuring, acquisition and integration costs in connection with the EA Integration Restructuring Program during the first nine months of 2017; and higher purchases of permanent displays and capital expenditures, partially offset by favorable changes in working capital. changes.


Investing Activities
Net cash used in investing activities was $69.5 million and $1,061.3$2.3 million for the first ninethree months of 2017 and 2016, respectively, which included $69.5ended March 31, 2022, compared to $0.7 million and $33.1 million of cash used for the three months ended March 31, 2021 primarily due to an increase in capital expenditures respectively. Capital expenditures induring the first ninethree months of 2017 included approximately $22 million for Elizabeth Arden integration-related investments.ended March 31, 2022.


Financing Activities
Net cash (used in) provided by financing activities was $226.7$(37.6) million and $900.9$29.6 million for the first ninethree months of 2017ended March 31, 2022 and 2016,2021, respectively.
Net cash provided by financing activities for the first nine months of 2017 primarily included:
$243.9 million of borrowings under the 2016 Revolving Credit Facility;
with the foregoing partially offset by:
$13.5 million of repayments under the 2016 Term Loan Facility.

Net cash used in financing activities for the first ninethree months of 2016ended March 31, 2022 primarily included:
cash proceeds received•$21.6 million of net repayments under the Amended 2016 Revolving Credit Agreement;
•$4.7 million of repayments under the 2020 BrandCo Facilities;
•$3.6 million of interest payments in connection with originatingthe troubled debt restructuring accounting treatment of the 5.75% Senior Notes Exchange Offer, which were deemed as return of principal to the participating lenders;
•$2.3 million of repayments under the 2016 Term Loan Facility, in the aggregate principal amountFacility;
•$1.8 million of $1,800.0 million, or $1,791.0 million, netpayment of discounts;
cash proceeds receivedfinancing costs incurred in connection with issuancethe first quarter of 2022 refinancing transactions, comprised of: (i) approximately $1.1 million of payments of financing costs incurred in connection
with the 6.25% Senior Notes,SISO Term Loan Facility; and (ii) approximately $0.7 million of financing costs incurred in connection with the aggregate principal amount of $450.0 million;Tranche A revolving credit facility; and
•$0.3 million of decreases in short-term borrowings and overdraft.
Net cash provided by financing activities for the three months ended March 31, 2021 primarily included:
•$100.0 million of borrowings under the 2016 Revolving Credit FacilitySISO Term Loan Facility; and
•$75.0 million of $65.4 million;borrowings under the 2021 Foreign Asset-Based Term Facility;
with the foregoing partially offset by:
•$658.659.3 million of cashnet repayments under the Amended 2016 Revolving Credit Agreement;
•$58.9 million used to fully repay all of the aggregate principal balance outstanding under Products Corporation’s 20112018 Foreign Asset-Based Term Loan;Facility;
•$651.411.8 million of cash used to repay allpayment of the aggregate principal balance outstanding under Products Corporation’s Old Acquisition Term Loan;
(i) $45.0 million of feesfinancing costs incurred in connection with originatingthe first quarter of 2021 refinancing transactions, comprised of: (i) approximately $4.3 million of payments of financing costs incurred in connection with the SISO Term Loan Facility; (ii) approximately $4.2 million of financing costs incurred in connection with the Tranche A revolving credit facility; and (iii) approximately $3.2 million of payments of financing costs incurred in connection with the 2021 Foreign Asset-Based Term Facility;
•$10.6 million of decreases in short-term borrowings and overdraft; and
•$2.3 million of repayments under the 2016 Term Loan Facility; (ii) $5.7 million of fees incurred in connection with originating the 2016 Revolving Credit Facility; and (iii) $10.9 million of fees incurred in connection with issuing Products Corporation's 6.25% Senior Notes;Facility.
a $23.2 million required excess cash flow prepayment made under the Old Term Loan Facility, as discussed below;
$3.4 million of scheduled amortization payments on the Old Acquisition Term Loan;
$2.7 million utilized for the repurchase of shares from a former executive; and
a $2.6 million decrease in short-term borrowings and overdraft.


Long-Term Debt Instruments

For further detail regardingadditional information on the terms and conditions of Products Corporation's long-termCorporation’s various pre-existing debt instruments see Note 11, "Long-Term Debt,"and financing transactions, including, without limitation, 5.75% Senior Notes Exchange Offer, the 2020 BrandCo Facilities, 2016 Term Loan Facility, Amended 2016 Revolving Credit Facility, 2019 Term Loan Facility (which was fully repaid as part of entry into the 2020 BrandCo Facilities), 2018 Foreign Asset-Based Term Facility (which was refinanced by the 2021 Foreign Asset-Based Term Facility), 2020 Restated Line of Credit Facility (which was terminated in accordance with its term on December 31, 2020) and 6.25% Senior Notes Indenture, reference should be made to the Consolidated Financial Statements in Products Corporation's Annual Report on2021 Form 10-K for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (the "SEC") on March 3, 2017 (the "2016 Form 10-K"), as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition, Liquidity and Capital Resources" in Products Corporation's 2016 Form 10-K.


Covenants
Products Corporation was in compliance with all applicable covenants under the 2016 Credit FacilitiesBrandCo credit agreement, dated as of September 30, 2017.May 7, 2020, by and among Products Corporation, as borrower, the Company, as holdings, the lenders party thereto and Jefferies Finance, LLC as administrative agent and collateral agent (as amended by Amendment No. 1 dated as of November 13, 2020, the "2020 BrandCo Credit Agreement" and the credit facilities thereunder, the "2020 BrandCo Facilities"); the Amended 2016 Revolving Credit Agreement and the 2016 Term Loan Agreement (collectively, the "2016 Credit Agreements"); the 2021 Foreign Asset-Based Term Agreement; as well as with all applicable covenants under the indenture governing its 6.25% Senior Notes due 2024 (such notes, the "6.25% Senior Notes" and the related indenture, the 6.25% Senior Notes Indenture"), in each case as of March 31, 2022. At September 30, 2017,March 31, 2022, the aggregate principal amounts outstanding and availability under Products Corporation’s various revolving credit facilities were as follows:
CommitmentBorrowing BaseAggregate principal amount outstanding at March 31, 2022
Availability at September 30, 2021 (a)
Tranche A Revolving Credit Facility$270.0 $153.1 $88.0 $65.1 
SISO Term Loan Facility130.0 130.0 130.0 — 
2020 ABL FILO Term Loans50.0 43.2 50.0 — 
(a)Availability as of March 31, 2022 is based upon the 2016 Term Loan Facility andTranche A Revolving borrowing base then in effect under Amendment No.9 to the Amended 2016 Revolving Credit Facility were $1,782.0of $153.1 million and $243.9which includes a $6.8 million respectively. Availability underreserve for the $400.0 million 2016 Revolving Credit Facility asshortfall of September 30, 2017, based upon the calculated borrowing base that supports the 2020 ABL FILO Term Loans compared to the corresponding aggregate principal amount outstanding of $400.0 million,$50 million), less $10.0 million of outstanding undrawn letters of credit, $20.5 million of outstanding checks and $243.9$88.0 million then drawn on the 2016 Revolving Credit Facility, was $125.6 million.drawn.
Products Corporation was in compliance with all applicable covenants under its Senior Notes Indentures as of September 30, 2017.


Sources and Uses

The Company’s principal sources of funds are expected to be operating revenues, cash on hand and funds that may be available from time to time for borrowing under the Amended 2016 Revolving Credit Facility and other permitted lines of credit.permissible borrowings. The 2016 Credit Agreements, the 2020 BrandCo Credit Agreement, the 6.25% Senior Notes Indenture and the Senior Notes Indentures2021 Foreign Asset-Based Term Agreement contain certain provisions that by their terms limit Products Corporation's and its subsidiaries’ ability to, among other things, incur additional debt.debt, subject to certain exceptions.

The Company’s principal uses of funds are expected to be the payment of operating expenses, including expenses in connection with the continued execution of the Company’s business strategy; payments in connection with the Company's synergy and integration programs related to the Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); purchasespurchase of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company’s restructuring programs, such as the RGGA Program; severance not otherwise included in the Company’s restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions), if any; severance not otherwise included in the Company’s restructuring programs;additional debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade. For information regarding certain risks related to the Company’s indebtedness and cash flows, see Part II Other Information: Item 1A. "Risk Factors - A substantial portion of Products Corporation's indebtedness is subject to floating interest rates and the potential discontinuation or replacement of LIBOR could result in an increase to our interest expense."

The Company’s cash contributions to its pension and post-retirement benefit plans in the first ninethree months of 2017ended March 31, 2022 were $5.8$2.2 million. The Company expects that cash contributions to its pension and post-retirement benefit plans towill be approximately $10$8.8 million in the aggregate for 2017.2022. The Company’s cash taxes paid, net of refunds,refund in the first ninethree months of 2017ended March 31, 2022 were $11.1$0.5 million. The Company expects to pay net cash taxes oftotaling approximately $10$0 million to $15$10 million in the aggregate during 2017. 2022.

The Company’s purchases of permanent wall displays and capital expenditures in the first ninethree months of 2017ended March 31, 2022 were $37.3$4.2 million and $69.5$2.3 million, respectively. The Company expects that purchases of permanent wall displays to bewill total approximately $65$35 million to $75$40 million in the aggregate during 20172022 and expects that capital expenditures to bewill total approximately $100$15 million to $120$20 million in 2017. Capital expenditures for 2017 include approximately $50 million of expected spend for the EA Integration Restructuring Program, $22 million of which were incurred through September 30, 2017.
As a result of the EA Integration Restructuring Program, as well as other actions that the Company is continuing to evaluate related to integrating the Elizabeth Arden organization into the Company’s business, such as through the elimination of duplicative functions, leveraging purchasing scale and optimizing the manufacturing and distribution networks of the combined company, the Company currently expects to realize over a multi-year period annualized synergies and cost reductions of approximately $190 million, with approximately $55 million to $60 million of synergies and cost reductions from the EA Integration Restructuring Program expected to benefit 2017. In order to capture these annualized cost reductions, the Company anticipates that it will incur, over a multi-year period, approximately $100 million to $110 million of additional integration-related capital expenditures and approximately $70 million to $80 million of non-restructuring integration costs. Any of these actions, the intended purpose of which would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities. Any such activities may be funded with cash on hand, funds available under the 2016 Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt.aggregate during 2022.
The Company has undertaken, and continues to assess, refine and implement, a number of programs to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables and accounts payable; and controls on general and administrative spending. In the ordinary course of business, the Company’s source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows.
Continuing to execute the Company’s business strategyinitiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including, without limitation, through licensing transactions), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining the Company’s approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Colomer Acquisition, the Cutex Acquisitions and/or the Elizabeth Arden Acquisition.structure. Any of these actions, the intended purpose of which would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities. Any such activities may be funded with operating revenues, cash on hand, funds that may be available from time to time under the Amended 2016 Revolving Credit Facility, other permissible borrowings and/or other permitted additional sources of capital, which actions could increase the Company’s total debt.
The Company may also, from time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, block trades, privately negotiated purchase transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions. Any such retirement or purchase of debt and/or equity may be funded with operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material.
TheThe Company expects that operating revenues, cash on handand funds that may be available from time-to-time for borrowing under the Amended 2016 Revolving Credit Facility and other permitted lines of creditother permissible borrowings will be sufficient to enable the Company to pay its operating expenses for 2017,2022, including expenses in connection with executing the Company’s business strategy, payments in connection with the Company's synergy and integration programs related to the Elizabeth Arden Acquisition, purchasespurchase of permanent wall displays, capital expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company’s restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any,such as, currently, primarily the RGGA program, severance not otherwise included in the Company’s restructuring programs, business and/or brand acquisitions
(including, without limitation, through licensing transactions), if any, debt and/or equity repurchases, if any, costs related to litigation, discontinuing non-core business lines and/or entering and/or exiting certain territories and/or channels of trade. The Company also expects to generate additional liquidity from strategic initiatives and cost reductions resulting from the implementation of, currently, primarily the RGGA program, cost reductions generated from other cost control initiatives, price increases, as well as funds provided by selling certain assets in connection with the Company's ongoing Strategic Review.
There can be no assurance that available funds will be sufficient to meet the Company’s cash requirements on a consolidated basis, as, among other things, the Company’s liquidity can be impacted by a number of factors, including its level of sales, costs and expenditures. expenditures, as well as accounts receivable and inventory, which serve as the principal variables impacting the amount of liquidity available under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility. For example, subject to certain exceptions, revolving loans under the Amended 2016 Revolving Credit Facility and term loans under the 2021 Foreign Asset-Based Term Facility must be prepaid to the extent that outstanding loans exceed the applicable borrowing base, consisting of certain accounts receivable, inventory and real estate. For information regarding certain risks related to the Company’s indebtedness and cash flows, see Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q and the Company's 2021 Form 10-K.
If the Company’s anticipated level of revenues is not achieved because of, among other things, decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; segments, whether attributable to the COVID-19 pandemic or otherwise; adverse changes in tariffs, foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third party suppliers;third-party suppliers, whether due to shortages of raw materials or otherwise; changes in consumer purchasing habits, including with respect to retailer preferences and/or sales channels, such as due to the continuingany further consumption declines in core beauty categories inthat the mass retail channel in North America, which continues to have a negative impact on net sales of Revlon color cosmetics, Almay color cosmetics, SinfulColors color cosmetics and Mitchum anti-perspirant deodorant products;Company has experienced; inventory management and/or de-stocking by the Company's customers; space reconfigurations or reductions in display space by the Company's customers; retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; or less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, for synergy and integration programs related to the Elizabeth Arden Acquisition,purchase of permanent displays, capital expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company’s restructuring andprograms (such as the RGGA Program), severance costs, acquisition and integration costs,not otherwise included in the Company’s restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any, additional debt and/or equity repurchases, if any, costs related to litigation, discontinuing non-core business lines and/or entering and/or exiting certain territories and/or channels of trade, advertising, promotional and marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses, the Company’s current sources of funds may be insufficient to meet the Company’s cash requirements.
Any such developments, if significant, could reduce the Company’s revenues and operating income and could adversely affect Products Corporation’s ability to comply with certain financial and/or other covenants under the 2020 BrandCo Credit Agreement, 2016 Credit Agreements, the 6.25% Senior Notes Indenture and/or the Senior Notes Indentures2021 Foreign Asset-Based Term Agreement and in such event the Company could be required to take measures, including, among other things, reducing discretionary spending. (See Item 1A. "Risk Factors" in Products Corporation's 2016 Form 10-K forFor further discussion of certain risks associated with the Company's business and indebtedness.)

Derivative Financial Instruments
Foreign Currency Forward Exchange Contracts
Products Corporation enters into foreign currency forward exchange and option contracts from time-to-time to hedge certain net cash flows denominatedindebtedness, see Item 1A. "Risk Factors" in currencies other than the local currencies of the Company’s foreign and domestic operations. The FX Contracts are entered into primarily for the purpose of hedging anticipated inventory purchases and certain intercompany payments denominated in currencies other than the local currencies of the Company’s foreign and domestic operations and generally have maturities of less than one year. At September 30, 2017, the FX Contracts outstanding had a notional amount of $162.5 million and a net liability fair value of $2.4 million.
Interest Rate Swap Transaction
In November 2013, Products Corporation executed a forward-starting floating-to-fixed interest rate swap transaction (the "2013 Interest Rate Swap") that, at its inception, was basedthis Quarterly Report on a notional amount of $400 million in respect of indebtedness under the Old Acquisition Term Loan. The 2013 Interest Rate Swap initially had a floor of 1% that in December 2016 was amended to 0.75%. In connection with entering into the 2016 Term Loan Facility, the 2013 Interest Swap was carried over to apply to a notional amount of $400 million in respect of indebtedness under such loan for the remaining balance of the term of such swap. The Company initially designated the 2013 Interest Rate Swap as a cash flow hedge of the variability of the forecasted three-month LIBOR interest rate payments related to the $400 million notional amount under the Old Acquisition Term Loan over the three-year term of the 2013 Interest Rate Swap (and subsequently to the $400 million notional amount under the 2016 Term Loan Facility for the remaining balance of the term of such swap). Under the terms of the 2013 Interest Rate Swap, commencing in May 2015, Products Corporation receives from the counterparty a floating interest rate based on the higher of three-month U.S. Dollar LIBOR or the floor percentage in effect, while paying a fixed interest rate payment to the counterparty equal to 2.0709% (which, with respect to the 2016 Term Loan Facility, effectively fixes the interest rate on such notional amount at 5.5709% over the remaining balance of the three-year term of the 2013 Interest Rate Swap). At September 30, 2017 and December 31, 2016, the fair value of the 2013 Interest Rate Swap was a liability of $1.9 million and $4.7 million, respectively.
As a result of completely refinancing the Old Acquisition Term Loan with a portion of the proceeds from Products Corporation's consummation of the 2016 Senior Credit FacilitiesForm 10-Q and the 6.25% Senior Notes in connection with consummating the Elizabeth Arden Acquisition, the critical terms of the 2013 Interest Rate Swap no longer matched the terms of the underlying debt under the 2016 Term Loan Facility. At the refinancing date, or the September 7, 2016 Elizabeth Arden Acquisition Date (the "De-designation Date"), the 2013 Interest Rate Swap was determined to no longer be highly effective and the Company discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap, changes in fair value are accounted for as a component of other non-operating expenses. Accumulated deferred losses of $2.1 million, or $1.2 million net of tax, at September 30, 2017 that were previously recorded as a component of accumulated other comprehensive loss will be amortized into earnings over the remaining term of the 2013 Interest Rate Swap through its maturity.
Credit Risk
Exposure to credit risk in the event of nonperformance by any of the counterparties is limited to the gross fair value of the derivative instruments in asset positions, which totaled $0.5 million and $2.3 million as of September 30, 2017 and December 31, 2016, respectively. The Company attempts to minimize exposure to credit risk by generally entering into derivative contracts with counterparties that have investment-grade credit ratings and are major financial institutions. The Company also periodically monitors any changes in the credit ratings of its counterparties. Given the current credit standing of the counterparties to the Company's derivative instruments, the Company believes the risk of loss arising from any non-performance by any of the counterparties under these derivative instruments is remote.


Disclosures about Contractual Obligations and Commercial Commitments

As of September 30, 2017, there were no material changes to the Company's total contractual cash obligations, as set forth in
REVLON CONSUMER PRODUCTS CORPORATION AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(all tabular amounts in millions)


the contractual obligations and commercial commitments disclosure included in Products Corporation's 20162021 Form 10-K. The Company has recently extended its domestic vendor payment terms to better reflect industry standards. The extension became effective during the fourth quarter of 2017.



Off-Balance Sheet Transactions


The Company does not maintain any off-balance sheet transactions, arrangements, obligations or other relationships with unconsolidated entities or others that are reasonably likely to have a material current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



53
REVLON, INC AND SUBSIDIARIES
COMBINED MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(all tabular amounts in millions, except share and per share amounts)


Discussion of Critical Accounting Policies
For a discussion of the Company's critical accounting policies, see Products Corporation's 2016the Company's 2021 Form 10-K.


Effect of Recently Evaluated and/or Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 1,1., "Description of Business and BasisSummary of Presentation,Significant Accounting Policies," to the Company's Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.


54
Table of Contents
REVLON, CONSUMER PRODUCTS CORPORATIONINC. AND SUBSIDIARIES
( all tabular amounts in millions)


Item 3. Quantitative and Qualitative Disclosures about Market Risk


Interest Rate SensitivityNot applicable as a smaller reporting company.

The Company has exposure to changing interest rates primarily under Products Corporation's 2016 Senior Credit Facilities. The Company manages interest rate risk through a combination of fixed and floating rate debt. The Company from time-to-time makes use of derivative financial instruments to adjust its fixed and floating rate ratio, such as with the 2013 Interest Rate Swap. The Company does not hold or issue financial instruments for trading purposes.
The qualitative and quantitative information presented in Item 7A of Products Corporation's 2016 Form 10-K ("Item 7A") describes significant aspects of the Company's financial instrument program that have material market risk as of December 31, 2016. The following tables present this information as required by Item 7A as of September 30, 2017.
55
 Expected Maturity Date for the Year Ended December 31,  
 (dollars in millions, except for rate information)  
  2017 2018 2019 2020 2021 Thereafter Total Fair Value September 30, 2017
Debt                
Short-term variable rate (third-party - various currencies) $10.0
           $10.0
 $10.0
Average interest rate (a)    
 3.9%              
Short-term fixed rate (third party - EUR) $1.8
           $1.8
 $1.8
Average interest rate 11.8%              
Long-term fixed rate (third party - USD)         $500.0
 $450.0
 $950.0
 $780.6
Average interest rate         5.75% 6.25%    
Long-term fixed rate (third party - EUR) $—
 $0.1
 $0.1
 $0.1
 $0.1
 $0.1
 $0.5
 $0.5
Average interest rate —% —% —% —% —% —%    
Long-term variable rate (third party - USD) (b)
 $248.4
 $18.0
 $18.0
 $18.0
 $18.0
 $1,705.5
 $2,025.9
 $1,834.3
Average interest rate (a)(c)   
 3.0% 5.1% 5.2% 5.3% 5.4% 5.6%    
Total debt $260.2
 $18.1
 $18.1
 $18.1
 $518.1
 $2,155.6
 $2,988.2
 $2,627.2
(a)
Weighted average variable rates are based upon implied forward rates from the U.S. Dollar LIBOR and Euribor yield curves at September 30, 2017.
(b)
Includes total quarterly amortization payments required within each year under the 2016 Term Loan Facility and the borrowings under the 2016 Revolving Credit Facility.
(c)
At September 30, 2017, the interest rate for the 2016 Term Loan Facility was the Eurodollar Rate (as defined in the 2016 Term Loan Agreement) plus 3.50% per annum (with the Eurodollar Rate not to be less than 0.75%). At September 30, 2017, the interest rate for the 2016 Revolving Credit Facility was 2.9% per annum, which is based on the Eurodollar Rate plus applicable margin as defined in the Products Corporations 2016 Form 10-K.
If any
At September 30, 2017 and December 31, 2016, the fair value of the 2013 Interest Rate Swap was a liability of $1.9 million and $4.7 million, respectively. See "Financial Condition, Liquidity and Capital Resources - Derivative Financial Instruments" for additional detail on the 2013 Interest Rate Swap.
As a result of completely refinancing the Old Acquisition Term Loan in connection with the Elizabeth Arden Acquisition, the critical terms of the 2013 Interest Rate Swap no longer match the terms of the underlying debt under the 2016 Term Loan Facility. At the De-designation Date, the 2013 Interest Rate Swap was determined to no longer be highly effective and the Company discontinued hedge accounting for the 2013 Interest Rate Swap. Following the de-designation of the 2013 Interest Rate Swap,
REVLON, CONSUMER PRODUCTS CORPORATIONINC. AND SUBSIDIARIES
( all tabular amounts in millions)



changes in fair value will be accounted for as a component of other non-operating expenses. Accumulated deferred losses of $2.1 million, or $1.2 million net of tax, at September 30, 2017 that were previously recorded as a component of accumulated other comprehensive loss will be amortized to earnings over the remaining term of the 2013 Interest Rate Swap through its maturity.

Exchange Rate Sensitivity

The Company manufactures and sells its products in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange rates. In addition, a portion of the Company's borrowings are denominated in foreign currencies, which are also subject to market risk associated with exchange rate movement. The Company, from time-to-time, hedges major foreign currency cash exposures through foreign exchange forward and option contracts. Products Corporation enters into these contracts with major financial institutions in an attempt to minimize counterparty risk. These contracts generally have a duration of less than 12 months and are primarily against the U.S. Dollar. In addition, Products Corporation enters into foreign currency swaps to hedge intercompany financing transactions. The Company does not hold or issue financial instruments for speculative or trading purposes.
Forward Contracts (“FC”) 
Average Contractual Rate
$/FC
 U.S. Dollar Equivalent Notional Amount 
Contract Value
September 30, 2017
 
Asset (Liability) Fair Value
September 30, 2017
Sell British Pound/Buy USD 1.2952
 33.6
 32.4
 (1.2)
Sell Canadian Dollars/Buy USD 0.7803
 31.3
 30.4
 (0.9)
Sell Australian Dollars/Buy USD 0.7736
 30.9
 30.6
 (0.3)
Buy Mexican Peso/Sell USD 0.0534
 12.8
 12.9
 0.1
Sell Euro/Buy USD 1.0780
 2.1
 1.9
 (0.2)
Buy Euro/Sell USD 1.1779
 14.1
 14.2
 0.1
Sell USD/Buy Swiss Franc 1.0378
 10.5
 10.5
 —
Sell Japanese Yen/Buy USD 0.0091
 7.7
 7.9
 0.2
Sell South African Rand/Buy USD 0.0746
 1.2
 1.2
 —
Sell Danish Krone/Buy USD 0.1550
 4.8
 4.6
 (0.2)
Buy Australian Dollars/Sell NZ dollars 1.0838
 3.4
 3.4
 —
Buy Euro/Sell British Pound 0.8885
 7.0
 7.0
 —
Sell New Zealand Dollars/Buy USD 0.7315
 1.8
 1.8
 —
Sell USD/Buy British Pound 1.3395
 1.3
 1.3
 —
Total forward contracts   $162.5
 $160.1
 $(2.4)


Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the fiscal period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, the Company’sCompany's Chief Executive Officer and Chief Financial Officer have concluded that as of the end of such period, the Company's disclosure controls and procedures were effective.effective as of March 31, 2022.


(b) Changes in Internal Control Over Financial Reporting("ICFR").There have not been any changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2017March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.





56
Table of Contents
REVLON, CONSUMER PRODUCTS CORPORATIONINC. AND SUBSIDIARIES
( all tabular amounts in millions)




Forward-Looking Statements
This Quarterly Report on Form 10-Q for the interim period ended September 30, 2017,March 31, 2022, as well as the Company's other public documents and statements, may contain forward-looking statements that involve risks and uncertainties, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the beliefs, expectations, estimates, projections, assumptions, forecasts, plans, anticipations, targets, outlooks, initiatives, visions, objectives, strategies, opportunities, drivers, focus and intents of the Company’sCompany's management. While the Company believes that its estimates and assumptions are reasonable, the Company cautions that it is very difficult to predict the impact of known and unknown factors, and, of course, it is impossible for the Company to anticipate all factors that could affect its results. The Company's actual results may differ materially from those discussed in such forward-looking statements. Such statements include, without limitation, the Company's expectations, plans and estimates (whether qualitative or quantitative) as to:
(i)the Company's future financial performance and/or sales growth, including, without limitation, the Company's anticipation of achieving growth through opportunities presented by the combined Company's expanded sales channels and geographies, a broadened product portfolio and cost synergy opportunities;
(ii)the effect on sales of decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors and/or decreased performance by third-party suppliers, changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America; inventory management by the Company's customers; inventory de-stocking by certain retail customers; space reconfigurations or reductions in display space by the Company's customers; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, for pension expense under its benefit plans, acquisition and acquisition-related integration costs, capital expenditures, costs related to the Company’s synergy and integration programs in connection with the Elizabeth Arden Acquisition, restructuring and severance costs, costs related to litigation, advertising, promotional and marketing activities, or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
(iii)the Company's belief that the continued execution of its business strategy could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, including optimizing the Colomer Acquisition, the Cutex Acquisitions (including the Company's belief that such acquisition enhances and complements the Company's existing brand portfolio of nail care products) and/or the Elizabeth Arden Acquisition, any of which, the intended purpose would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities, which activities may be funded with cash on hand, funds available under the 2016 Revolving Credit Facility and/or other permitted additional sources of capital, which actions could increase the Company’s total debt;
(iv)
the Company’s belief that it is building a combined organization that is entrepreneurial, agile and boldly creative, with a passion for beauty, that it has strategic brand builders developing a diverse portfolio of iconic brands that delight consumers around the world wherever and however they shop for beauty and that it strives to be an ethical company that values inclusive leadership and is committed to sustainable and responsible growth and the Company’s belief in its strategy that is based on three key pillars: (a) strengthening our portfolio of brandsby:continuing to develop the leadership and aspiration for our flagship brands; Revlon, Elizabeth Arden and Almay; continuing to develop our product offerings across beauty segments with a focus on large and/or fast growing categories; leveraging our creativity, insights and agility to accelerate innovation to develop trend-relevant and first-of-its kind beauty solutions; delighting our customers with high performing products, superior services and unique experiences that exceed their expectations; and continuing to communicate our brand's heritage, expertise and purpose to create authentic, meaningful and lasting connections with consumers of all ages; (b) strategically expanding consumer's access to our brands by: taking steps to ensure that consumers have real-time access to our brands wherever and however they shop for beauty; strengthening and diversifying our channels, especially direct to consumer; accelerating our development in high-growth channels, with a focus on specialty, e-commerce and m-commerce; continuing to win in traditional channels (including mass, drug, selective and department stores) and expanding our combined reach into travel retail; and strengthening our position in the U.S., to ensure our growth base, and expanding into untapped geographic regions, with a focus on growth in Asia; and (c) developing a cost structure that fuels investment in our brands by: growing profitably and improving our operating performance; aligning our strategic investments behind the biggest growth opportunities and innovation that differentiates our brands; continuing to improve our category mix by shifting toward higher gross margin categories (e.g., skin care and fragrance); reducing sales returns, markdowns and inventory levels; and continuing to optimize our resource allocation;
(v)certain beliefs and expectations regarding actions that the Company is pursuing to enhance and accelerate its e-commerce and social media penetration, such as the following: (a) the Company’s belief that the shift in consumer behavior (such that changes in consumer shopping patterns for beauty products in which consumers have continued to increasingly engage with beauty brands through e-commerce and other social media channels have resulted in slower retail traffic in brick-and-mortar stores in the mass retail channel in North America) which has resulted in continuing declines in the brick-and-mortar retail channel will persist over time; (b) the Company’s expectation that, to address the pace and impact of this new commercial landscape, the Company’s shifting of its brand marketing spend toward enhancing its e-commerce and social media capabilities will ensure that consumers have real-time access to our brands wherever and however they shop for beauty and facilitate increased penetration of e-commerce and social media channels; (c) the Company’s belief that its renewed focus on e-commerce and its evolving marketing and sales initiatives will support the foundation for driving a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; (d) the Company's plan to (1) develop and implement effective content to enhance its online retail position; (2) improve its consumer engagement across social media platforms; and (3) transform its technology and data to support efficient management of its digital infrastructure; and (e) the Company’s belief that while executing these strategic initiatives may increase the Company’s expenses and debt, they are expected to have a long-term positive impact on the Company’s overall revenues and profitability;
(vi)the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities; including, without limitation, the Company’s expectation (a) that the 2015 Efficiency Program will drive certain organizational efficiencies across the Company's Consumer and Professional segments and reduce general and administrative expenses within the Consumer and Professional segments; and that cash payments related to the 2015 Efficiency Program will total approximately $7.6 million, including $0.2 million for capital expenditures (which capital expenditures are excluded from total restructuring and related charges expected to be recognized for the 2015 Efficiency Program), of which $6.1 million was paid through 2016, $7.0 million was paid through September 30, 2017 and the remaining balance is expected to be paid by the end of 2017;
(vii)the Company’s expectation that operating revenues, cash on hand and funds available for borrowing under Products Corporation's 2016 Revolving Credit Facility and other permitted lines of credit will be sufficient to enable the Company to cover its operating expenses for 2017, including the cash requirements referred to in item (ix) below, and the Company's beliefs that (a) the cash generated by its domestic operations and availability under the 2016 Revolving Credit Facility and other permitted lines of credit should be sufficient to meet its domestic liquidity needs for at least the next 12 months, and (b) restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
(viii)the Company’s expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under Products Corporation's 2016 Revolving Credit Facility and other permitted lines of credit, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending;
(ix)the Company's expected principal uses of funds, including amounts required for the payment of operating expenses, including expenses in connection with the continued execution of the Company’s business strategy; payments in connection with the Company’s synergy and integration programs related to the Elizabeth Arden Acquisition (including, without limitation, for the EA Integration Restructuring Program); payments in connection with the Company's purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions, if any); severance not otherwise included in the Company’s restructuring programs; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade (including, without limitation, that the Company may also, from time to time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, block trades, privately negotiated purchase transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any such retirement or purchase of debt and/or equity may be funded with operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material); and its estimates of the amount and timing of such operating and other expenses;
(x)matters concerning the Company's market-risk sensitive instruments, including that any risk of loss under its derivative instruments arising from any non-performance by any of the counterparties is remote;
(xi)the Company's expectation to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables and accounts payable; and controls on general and administrative spending; and the Company’s belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
(xii)the Company’s expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
(xiii)the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year;
(xiv)the Company's belief that the allegations contained in the Second Consolidated Amended Class Action Complaint are without merit and its plans to vigorously defend against them and its belief that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows, but that in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period;
(xv)certain estimates used by management in estimating the fair value of the assets acquired in the Elizabeth Arden Acquisition; and
(xvi)the Company's expected benefits and other impacts from the Elizabeth Arden Acquisition, including, without limitation: (a) as a result of the EA Integration Restructuring Program, as well as other actions related to integrating the Elizabeth Arden organization into the Company’s business, achieving annualized synergies and cost reductions of approximately $190 million over a multi-year period, with approximately $55 million to $60 million of synergies and cost reductions expected to benefit 2017 from the EA Integration Restructuring Program; (b) incurring, over a multi-year period, approximately $100 million to $110 million of integration-related capital expenditures and approximately $70 million to $80 million of non-restructuring integration costs related to these actions; and (c) in connection with implementing the EA Integration Restructuring Program: (1) consolidating offices, eliminating certain duplicative activities and streamlining back-office support (which are designed to reduce the Company’s SG&A expenses) and eliminating approximately 350 positions worldwide and (2) recognizing approximately $65 million to $75 million of the EA Integration Restructuring Charges (all of which are expected to be cash payments), consisting of: (i) approximately $40 million to $50 million of employee-related costs, including severance, retention and other contractual termination benefits; (ii) approximately $15 million of lease termination costs; and (iii) approximately $10 million of other related charges.

(i)the Company's future financial performance and/or sales growth;
(ii)the effect on sales of decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty products in one or more of the Company's segments, whether due to COVID-19 or otherwise; geopolitical risks, such as the ongoing Russia-Ukraine conflict; macroeconomic headwinds, such as high inflation or a potential recession/economic contraction; adverse changes in tariffs, foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors and/or decreased performance by third-party suppliers, whether due to shortages of raw materials or otherwise, changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels; inventory management by the Company's customers; inventory de-stocking by certain retail customers; space reconfigurations or reductions in display space by the Company's customers; retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company's customers; less than anticipated results from the Company's existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company's expenses, including, without limitation, for the purchase of permanent displays, capital expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company's restructuring programs, severance not otherwise included in the Company's restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any, additional debt and/or equity repurchases, if any, costs related to litigation, discontinuing non-core business lines and/or entering and/or exiting certain territories and/or channels of trade, advertising, promotional and marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise, exceed the anticipated level of expenses;
(iii)the Company's belief that continuing to execute its business initiatives could include taking advantage of additional opportunities to reposition, repackage or reformulate one or more brands or product lines, launching additional new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or taking further actions to optimize its manufacturing, sourcing and organizational size and structure, any of which, the intended purpose would be to create value through improving the Company's financial performance, could result in the Company making investments and/or recognizing charges related to executing against such opportunities, which activities may be funded with operating revenues, cash on hand, funds available under the Amended 2016 Revolving Credit Facility, other permissible borrowings and/or other permitted additional sources of capital, which actions could increase the Company's total debt;
(iv)the Company's plans to remain focused on its 3 key strategic pillars to drive its future success and growth, including (1) strengthening its iconic brands through innovation and relevant product portfolios; (2) building its capabilities to better communicate and connect with its consumers through media channels where they spend the most time; and (3) ensuring availability of its products where consumers shop, both in-store and increasingly online;
(v)the effect of restructuring activities, restructuring costs and charges, the timing of restructuring payments and the benefits from such activities;
(vi)the Company's expectation that operating revenues, cash on hand and funds that may be available from time to time for borrowing under the Amended 2016 Revolving Credit Facility, and other permissible borrowings will be sufficient to enable the Company to cover its operating expenses for 2022, including the cash requirements referred to in item (viii) below, and the Company's belief that (a) it has and will have sufficient liquidity to meet its cash needs for at least the next 12 months based upon the cash generated by its operations, cash on hand,
availability under the Amended 2016 Revolving Credit Facility, and other permissible borrowings, along with the option to further settle intercompany loans and payables with certain foreign subsidiaries, and that such cash resources will be further enhanced as the Company implements cost reductions from its cost control initiatives, as well as funds provided by selling certain assets in connection with the Company's ongoing Strategic Review, and (b) restrictions and/or taxes on repatriation of foreign earnings will not have a material effect on the Company's liquidity during such period;
(vii)the Company's expected principal sources of funds, including operating revenues, cash on hand and funds available for borrowing under the Amended 2016 Revolving Credit Facility, and other permissible borrowings, as well as the availability of funds from the Company taking certain measures, including, among other things, reducing discretionary spending and the Company's expectation to generate additional liquidity from cost reductions resulting from its cost reduction initiatives, as well as funds provided by selling certain assets in connection with the Company's ongoing Strategic Review;
(viii)the Company's expected principal uses of funds, including amounts required for payment of operating expenses including in connection with the purchase of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement benefit plan contributions; payments in connection with the Company's restructuring programs; severance not otherwise included in the Company's restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions), if any; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade (including, without limitation, that the Company may also, from time-to-time, seek to retire or purchase its outstanding debt obligations and/or equity in open market purchases, block trades, privately negotiated purchase transactions or otherwise and may seek to refinance some or all of its indebtedness based upon market conditions and that any such retirement or purchase of debt and/or equity may be funded with operating cash flows of the business or other sources and will depend upon prevailing market conditions, liquidity requirements, contractual restrictions and other factors, and the amounts involved may be material); and its estimates of the amount and timing of such operating and other expenses;
(ix)matters concerning the impact on the Company from changes in interest rates and foreign exchange rates;
(x)the Company's expectation to efficiently manage its working capital, including, among other things, initiatives intended to optimize inventory levels over time; centralized procurement to secure discounts and efficiencies; prudent management of trade receivables, accounts payable and controls on general and administrative spending; and the Company's belief that in the ordinary course of business, its source or use of cash from operating activities may vary on a quarterly basis as a result of a number of factors, including the timing of working capital flows;
(xi)the Company's expectations regarding its future net periodic benefit cost for its U.S. and international defined benefit plans;
(xii)the Company's expectation that its tax provision and effective tax rate in any individual quarter and year-to-date period will vary and may not be indicative of the Company's tax provision and effective tax rate for the full year and the Company's expectations regarding whether it will be required to establish additional valuation allowances on its deferred tax assets;
(xiii)the Company's belief that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows, but that in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company's operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company's income for that particular period; and
(xiv)the Company's plans to explore certain strategic transactions pursuant to the Strategic Review.

Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language such as "estimates," "objectives," "visions," "projects," "forecasts," "focus," "drive towards," "plans," "targets," "strategies," "opportunities," "assumptions," "drivers," "believes," "intends," "outlooks," "initiatives," "expects," "scheduled to," "anticipates," "seeks," "may," "will" or "should" or the negative of those terms, or other variations of those terms or comparable language, or by discussions of strategies, targets, long-range plans, models or intentions. Forward-looking statements speak only as of the date they are made, and except for the Company's ongoing obligations under the U.S. federal securities laws, the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investors are advised, however, to consult any additional disclosures the Company made or may make in its 2016the Company's 2021 Form 10-K and in its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case filed with the SEC in 2017 and 2016 (which, among other places, can be found on the SEC's website at http://www.sec.gov.www.sec.gov, as well as on the Company's corporate
website at www.revloninc.com). Except as expressly set forth in this Quarterly Report on Form 10-Q, the information available from time to timetime-to-time on such websites shall not be deemed incorporated by reference into this Quarterly Report on Form 10-Q. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. (See also Item 1A. "Risk Factors" in Products Corporation's 2016this Quarterly Report on Form 10-Q and the 2021 Form 10-K for further discussion of risks associated with the Company's business). In addition to factors that may be described in the Company's filings with the SEC, including this filing, the following factors, among others, could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by the Company:
(i)unanticipated circumstances or results affecting the Company's financial performance and or sales growth, including decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty care products in one or more of the Company's segments; adverse changes in foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors and/or decreased performance by third party suppliers; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products, including new product launches; changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to the continuing consumption declines in core beauty categories in the mass retail channel in North America; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company’s existing or new products; higher than expected restructuring or severance costs, acquisition costs and/or acquisition-related integration costs and capital expenditures, including, without limitation, synergy and integration program costs and expenses related to the Elizabeth Arden Acquisition; higher than expected pension expense and/or cash contributions under its benefit plans, costs related to litigation, advertising, promotional and/or marketing expenses or lower than expected results from the Company’s advertising, promotional, pricing and/or marketing plans; higher than expected sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise or decreased sales of the Company’s existing or new products; actions by the Company’s customers, such as greater than expected inventory management and/or de-stocking, and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing, marketing, advertising and/or promotional strategies by the Company's customers; and changes in the competitive environment and actions by the Company's competitors, including, among other things, business combinations, technological breakthroughs, implementation of new pricing strategies, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;
(ii)in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as continued volatility in the financial markets, inflation, monetary conditions and foreign currency fluctuations, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets) and political conditions (such as military actions and terrorist activities);
(iii)unanticipated costs or difficulties or delays in completing projects associated with the continued execution of the Company’s business strategy or lower than expected revenues or the inability to create value through improving our financial performance as a result of such strategy, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories), further refining its approach to retail merchandising and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company’s manufacturing, sourcing, supply chain or organizational size and structure, including optimizing the Colomer Acquisition, the Cutex Acquisitions and/or the Elizabeth Arden Acquisition (including difficulties or delays in and/or the Company’s inability to integrate the Elizabeth Arden business which could result in less than expected synergies and/or cost reductions, more than expected costs to achieve the expected synergies and/or cost reductions or delays in achieving the expected synergies and/or cost reductions and/or less than expected benefits from the EA Integration Restructuring Program, more than expected costs in implementing such program and/or difficulties or delays, in whole or in part, in executing the EA Integration Restructuring Program), as well as the unavailability of cash on hand and/or funds under the 2016 Revolving Credit Facility or from other permitted additional sources of capital to fund such potential activities;
(iv)(A) difficulties, delays in or less than expected results from the Company’s efforts to build a combined organization that is entrepreneurial, agile and boldly creative with a passion for beauty, having strategic brand builders developing a diverse portfolio of iconic brands that delight consumers around the world wherever and however they shop for beauty and striving to be an ethical company that values inclusive leadership and is committed to sustainable and responsible growth, such as due to, among other things, less than effective product development, less than expected acceptance of its new or existing products by consumers, salon professionals and/or other customers, less than expected acceptance of its advertising, promotional, pricing and/or marketing plans and/or brand communication by consumers, salon professionals and/or customers, less than expected investment in advertising, promotional and/or marketing activities or greater than expected competitive investment, less than expected levels of advertising, promotional and/or marketing activities for its new product launches and/or less than expected levels of execution with its customers or higher than expected costs and expenses; and/or (B) difficulties, delays in or less than expected results from the Company’s efforts to strengthen its portfolio of brands, strategically expand consumer's access to the Company’s brands and/or develop a cost structure that fuels investment in the Company’s brands, such as due to less than expected investment behind such activities, less than effective new product development and/or advertising, marketing or promotional programs, less than expected success in expanding geographically, into new channels and/or expanding the Company’s digital capabilities and/or less than expected results from the Company’s efforts to reduce costs, including, without limitation, due to higher than expected sales returns such as those that may be related to actions by the Company’s customers, such as inventory management or greater than anticipated space reconfigurations or reductions in display space;
(v)difficulties, delays in or less than expected results from the Company’s efforts to enhance and accelerate its e-commerce and social media penetration, such as: (a) greater than anticipated levels of consumers choosing to purchase their beauty products through e-commerce and other social media channels and/or greater than anticipated declines in the brick-and-mortar retail channel, or either of those conditions occurring at a rate faster than anticipated; (b) the Company’s inability to address the pace and impact of this new commercial landscape, such as its inability to enhance its e-commerce and social media capabilities and/or increase its penetration of e-commerce and social media channels; (c) the Company’s inability to drive a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; (d) difficulties, delays and/or the Company's inability to (in whole or in part): (1) develop and implement effective content to enhance its online retail position; (2) improve its consumer engagement across social media platforms; and/or (3) transform its technology and data to support efficient management of its digital infrastructure; and/or (e) the Company incurring greater than anticipated levels of expenses and/or debt to facilitate the foregoing objectives, which could result in, among other things, less than anticipated revenues and/or profitability;
(vi)difficulties, delays or unanticipated costs or charges or less than expected cost reductions and other benefits resulting from the Company's restructuring activities, such as greater than anticipated costs or charges or less than anticipated cost reductions or other benefits from the 2015 Efficiency Program and/or the EA Integration Restructuring Program and/or the risk that such programs may not satisfy the Company’s objectives;
(vii)lower than expected operating revenues, cash on hand and/or funds available under the 2016 Revolving Credit Facility and/or other permitted lines of credit or higher than anticipated operating expenses, such as referred to in clause (ix) below, and/or less than anticipated cash generated by the Company's domestic operations or unanticipated restrictions or taxes on repatriation of foreign earnings;
(viii)the unavailability of funds under Products Corporation's 2016 Revolving Credit Facility or other permitted lines of credit; or from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending;
(viii)higher than expected operating expenses, sales returns, working capital expenses, integration and/or synergy costs related to the Elizabeth Arden Acquisition, permanent wall display costs, capital expenditures, debt service payments, cash tax payments, cash pension plan contributions, other post-retirement benefit plan contributions and/or net periodic benefit costs for the pension and other post-retirement benefit plans, restructuring costs, (including, without limitation, in connection with implementing the EA Integration Restructuring Program), severance and discontinued operations not otherwise included in the Company’s restructuring programs, debt and/or equity repurchases, costs related to litigation and/or payments in connection with business and/or brand acquisitions (including, without limitation, through licensing transactions, if any), and discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade;
(ix)interest rate or foreign exchange rate changes affecting the Company and its market-risk sensitive financial instruments and/or difficulties, delays or the inability of the counterparty to perform such transactions;
(x)difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
(xi)lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
(xii)unexpected significant variances in the Company's tax provision, effective tax rate and/or unrecognized tax benefits;
(xiii)unanticipated adverse effects on the Company’s business, prospects, results of operations, financial condition and/or cash flows as a result of unexpected developments with respect to the Company's legal proceedings;
(xiv)changes in the fair values of the assets acquired in the Elizabeth Arden Acquisition due to, among other things, unanticipated future performance of the acquired licenses and/or other brands; and/or
(xv)difficulties with, delays in and/or the Company’s inability to achieve, in whole or in part, or within the expected timeframe the expected benefits from the Elizabeth Arden Acquisition, such as (a) the Company’s or the Elizabeth Arden’s respective businesses experiencing disruptions due to management’s focus on executing the business integration activities and/or due to employee uncertainty during the integration transition period or other factors making it more difficult to maintain relationships with customers, suppliers, employees and other business partners; (b) the Company being unable to successfully implement, in whole or in part, its integration strategies, including the possibility that the expected synergies and cost reductions from the Elizabeth Arden Acquisition will not be realized or will not be realized within the expected time period; (c) difficulties, delays or the inability of the Company to successfully complete the EA Integration Restructuring Program, in whole or in part, which could result in less than expected operating and financial benefits from such actions; (d) difficulties, delays or the inability of the Company to realize, in whole or in part, the anticipated benefits from the EA Integration Restructuring Program, such as difficulties with, delays in or the Company’s inability to generate certain reductions in its SG&A and/or eliminate certain positions; (e) delays in completing the EA Integration Restructuring Program, which could reduce the benefits realized from such activities; (f) higher than anticipated restructuring charges and/or payments in connection with completing the EA Integration Restructuring Program and/or changes in the expected timing of such charges and/or payments; and/or (g) difficulties with, delays in and/or the Company’s inability to achieve, in whole or in part, or within the expected timeframe approximately $190 million of multi-year annualized synergies and cost reductions and approximately $55 million to $60 million of synergies and cost reductions to benefit 2017, such as due to the Company being unable to successfully implement integration strategies and/or changes in the timing of realizing such synergies and cost reductions, such as due to less than anticipated liquidity to fund such activities and/or more than expected capital expenditures, non-restructuring integration costs or other costs to achieve the expected synergies and/or cost reductions.

(i)unanticipated circumstances or results affecting the Company's financial performance and or sales growth, including: greater than anticipated levels of consumers choosing to purchase their beauty products through e-commerce and other social media channels and/or greater than anticipated declines in the brick-and-mortar retail channel, or either of those conditions occurring at a rate faster than anticipated; the Company's inability to address the pace and impact of the new commercial landscape, such as its inability to enhance its e-commerce and social media capabilities and/or increase its penetration of e-commerce and social media channels; the Company's inability to drive a successful long-term omni-channel strategy and significantly increase its e-commerce penetration; difficulties, delays and/or the Company's inability to (in whole or in part) develop and implement effective content to enhance its online retail position, improve its consumer engagement across social media platforms and/or transform its technology and data to support efficient management of its digital infrastructure; the Company incurring greater than anticipated levels of expenses and/or debt to facilitate the foregoing objectives, which could result in, among other things, less than anticipated revenues and/or profitability; decreased consumer spending in response to weak economic conditions or weakness in the consumption of beauty products in one or more of the Company's segments, whether attributable to COVID-19 or otherwise; adverse changes in tariffs, foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company's products as a result of increased competitive activities by the Company's competitors; decreased performance by third-party suppliers, whether due to COVID-19, shortages of raw materials or otherwise; and/or supply disruptions at the Company's manufacturing facilities, whether attributable to COVID-19 or shortages of raw materials, components, and labor, or transportation constraints or otherwise; changes in consumer preferences, such as reduced consumer demand for the Company's color cosmetics and other current products, including new product launches; changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, whether attributable to COVID-19 or otherwise; lower than expected customer acceptance or consumer acceptance of, or less than anticipated results from, the Company's existing or new products, whether attributable to COVID-19 or otherwise; higher than expected retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels, whether attributable to COVID-19 or otherwise; higher than expected purchases of permanent displays, capital expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company's restructuring programs, severance not otherwise included in the Company's restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any, debt and/or equity repurchases, if any, costs related to litigation, discontinuing non-core business lines and/or entering and/or exiting certain territories and/or channels of trade, advertising, promotional and marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise or lower than expected results from the Company's advertising, promotional, pricing and/or marketing plans, whether attributable to COVID-19 or otherwise; decreased sales of the Company’s existing or new products, whether attributable to COVID-19 or otherwise; actions by the Company's customers, such as greater than expected inventory management and/or de-stocking, and greater than anticipated space reconfigurations or reductions in display space and/or product discontinuances or a greater than expected impact from pricing, marketing, advertising and/or promotional strategies by the Company's customers, whether attributable to COVID-19 or otherwise; and changes in the competitive environment and actions by the Company's competitors, including, among other things, business combinations, technological breakthroughs, implementation of new pricing strategies, new product offerings, increased advertising, promotional and marketing spending and advertising, promotional and/or marketing successes by competitors;

(ii)in addition to the items discussed in (i) above, the effects of and changes in economic conditions (such as volatility in the financial markets, whether attributable to COVID-19 or otherwise, inflation, increasing interest rates, monetary conditions and foreign currency fluctuations, tariffs, foreign currency controls and/or government-mandated pricing controls, as well as in trade, monetary, fiscal and tax policies in international markets), political conditions (such as military actions and terrorist activities) and natural disasters;
(iii)unanticipated costs or difficulties or delays in completing projects associated with continuing to execute the Company's business initiatives or lower than expected revenues or the inability to create value through improving
the Company's financial performance as a result of such initiatives, including lower than expected sales, or higher than expected costs, including as may arise from any additional repositioning, repackaging or reformulating of one or more brands or product lines, launching of new product lines, including higher than expected expenses, including for sales returns, for launching its new products, acquiring businesses or brands (including through licensing transactions, if any), divesting or discontinuing non-core business lines (which may include exiting certain territories or converting the Company's go-to-trade structure in certain countries to other business models), further refining its approach to retail merchandising and/or difficulties, delays or increased costs in connection with taking further actions to optimize the Company's manufacturing, sourcing, supply chain or organizational size and structure (including difficulties or delays in and/or the Company's inability to optimally implement its restructuring programs and/or less than expected benefits from such programs and/or more than expected costs in implementing such programs, which could cause the Company not to realize the projected cost reductions), as well as the unavailability of cash generated by operations, cash on hand and/or funds under the Amended 2016 Revolving Credit Facility, and/or other permissible borrowings and/or from other permissible additional sources of capital to fund such potential activities, as well as the unavailability of funds due to potential mandatory repayment obligations under the 2021 Foreign Asset-Based Term Facility;
(iv)difficulties, delays in or less than expected results from the Company's efforts to execute on its 3 key strategic pillars to drive its future success and growth, including, without limitation: (1) less than effective new product development and innovation, less than expected acceptance of its new products and innovations by the Company's consumers and/or customers in one or more of its segments and/or less than expected levels of execution vis-à-vis its new product launches with its customers in one or more of its segments or regions, in each case whether attributable to COVID-19 or otherwise; (2) less than expected levels of advertising, promotional and/or marketing activities for its new product launches, less than expected acceptance of its advertising, promotional, pricing and/or marketing plans and/or brand communication by consumers and/or customers in one or more of its segments, less than expected investment in advertising, promotional and/or marketing activities or greater than expected competitive investment, in each case whether attributable to COVID-19 or otherwise; and/or (3) difficulties or disruptions impacting the Company's ability to ensure availability of its products where consumers shop, both in-store and increasingly online, including, without limitation, difficulties with, delays in or the inability to achieve the Company’s expected results, such as due to, among other things, the Company’s business experiencing greater than anticipated disruptions due to COVID-19 related uncertainty or other related factors making it more difficult to maintain relationships with employees, business partners or governmental entities and/or other unanticipated circumstances, trends or events affecting the Company’s financial performance, including decreased consumer spending in response to the COVID-19 pandemic and related conditions and restrictions, weaker than expected economic conditions due to the COVID-19 pandemic and its related restrictions and conditions continuing for periods longer than currently estimated, or other weakness in the consumption of beauty-related products, lower than expected acceptance of the Company’s new products, adverse changes in foreign currency exchange rates, decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors, the unavailability of one or more forms of additional credit in the current capital markets and/or decreased performance by third party suppliers;
(v)difficulties, delays or unanticipated costs or charges or less than expected cost reductions and other benefits resulting from the Company's restructuring activities, higher than anticipated restructuring charges and/or payments and/or changes in the expected timing of such charges and/or payments; and/or less than expected additional sources of liquidity from such initiatives;
(vi)lower than expected operating revenues, cash on hand and/or funds available under the Amended 2016 Revolving Credit Facility, and/or other permissible borrowings or generated from cost reductions resulting from the implementation of cost control initiatives, and/or from selling certain assets in connection with the Company's ongoing Strategic Review; higher than anticipated operating expenses, such as referred to in clause (viii) below; and/or less than anticipated cash generated by the Company's operations or unanticipated restrictions or taxes on repatriation of foreign earnings;
(vii)the unavailability of funds under the Amended 2016 Revolving Credit Facility, and/or other permissible borrowings; the unavailability of funds under the 2021 Foreign Asset-Based Term Facility, such as due to reductions in the applicable borrowing base that could require certain mandatory prepayments; the unavailability of funds from difficulties, delays in or the Company's inability to take other measures, such as reducing discretionary spending and/or less than expected liquidity from cost reductions resulting from the implementation of its restructuring programs and from other cost reduction initiatives, and/or from selling certain assets in connection with the Company's ongoing Strategic Review;
(viii)higher than expected operating expenses, such as higher than expected purchases of permanent displays, capital expenditures, debt service payments and costs, cash tax payments, pension and other post-retirement plan contributions, payments in connection with the Company's restructuring programs, severance not otherwise
included in the Company's restructuring programs, business and/or brand acquisitions (including, without limitation, through licensing transactions), if any, additional debt and/or equity repurchases, if any, costs related to litigation, discontinuing non-core business lines and/or entering and/or exiting certain territories and/or channels of trade, advertising, promotional and marketing activities or for sales returns related to any reduction of space by the Company's customers, product discontinuances or otherwise;
(ix)unexpected significant impacts on the Company from changes in interest rates or foreign exchange rates;
(x)difficulties, delays or the inability of the Company to efficiently manage its cash and working capital;
(xi)lower than expected returns on pension plan assets and/or lower discount rates, which could result in higher than expected cash contributions, higher net periodic benefit costs and/or less than expected net periodic benefit income;
(xii)unexpected significant variances in the Company's tax provision, effective tax rate and/or unrecognized tax benefits, such as due to the issuance of unfavorable guidance, interpretations, technical clarifications and/or technical corrections legislation by the U.S. Congress, the U.S. Treasury Department or the IRS, unexpected changes in foreign, state or local tax regimes in response to the Tax Act, and/or changes in estimates that may impact the calculation of the Company's tax provisions, as well as changes in circumstances that could adversely impact the Company's expectations regarding the establishment of additional valuation allowances on its deferred tax assets;
(xiii)unanticipated adverse effects on the Company's business, prospects, results of operations, financial condition and/or cash flows as a result of unexpected developments with respect to the Company's legal proceedings; and/or
(xiv)difficulties or delays that could affect the Company's ability to consummate one or more transactions pursuant to the Strategic Review, such as due to the Company's respective businesses experiencing disruptions due to transaction-related uncertainty or other factors.

Factors other than those listed above could also cause the Company's results to differ materially from expected results. This discussion is provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
57
Table of Contents
REVLON, CONSUMER PRODUCTS CORPORATIONINC. AND SUBSIDIARIES




Website Availability of Reports, Corporate Governance Information and Other Financial Information
Revlon, Inc., which owns 100% of Products Corporation's common stock,The Company maintains a comprehensive corporate governance program, including Corporate Governance Guidelines for Revlon’s Board of Directors, Revlon’s Board Guidelines for Assessing Director Independence and charters for Revlon’s Audit Committee and Compensation Committee. Revlon maintains a corporate investor relations website, www.revloninc.com, where stockholders and other interested persons may review, without charge, among other things, Revlon's corporate governance materials and certain SEC filings (such as Revlon's annual reportsAnnual Reports on Form 10-K, quarterly reportsQuarterly Reports on Form 10-Q, current reports on Form 8-K, proxy statements, annual reports, Section 16 reports reflecting certain changes in the stock ownership of Revlon’s directors and Section 16 officers, and certain other documents filed with the SEC), each of which are generally available on the same business day as the filing date with the SEC on the SEC’s website http://www.sec.gov. Products Corporation's SEC filings are also available on the SEC's website http://www.sec.gov. In addition, under the section of the website entitled, "Corporate Governance," Revlon posts printable copies of the latest versions of its Corporate Governance Guidelines, Board Guidelines for Assessing Director Independence and charters for Revlon's Audit Committee and Compensation Committee, as well as Revlon's and the Company's Code of Conduct and Business Ethics, which includes Revlon's and the Company's Code of Ethics for Senior Financial Officers, and the Audit Committee Pre-Approval Policy. From time to time,time-to-time, the Company may post on www.revloninc.com certain presentations that may include material information regarding its business, financial condition and/or results of operations. The business and financial materials and any other statement or disclosure on, or made available through, the websites referenced herein shall not be deemed incorporated by reference into this report.




58
REVLON, INC. AND SUBSIDIARIES
(all tabular amounts in millions, except share and per share amounts)
PART II - OTHER INFORMATION


Item 1. Legal Proceedings
The Company is involved in various routine legal proceedings incidental to the ordinary course of its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likely to have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. However, in light of the uncertainties involved in legal proceedings generally, the ultimate outcome of a particular matter could be material to the Company’s operating results for a particular period depending on, among other things, the size of the loss or the nature of the liability imposed and the level of the Company’s income for that particular period.
As previously disclosed, following the announcement of the execution of the Elizabeth Arden Merger Agreement, several putative shareholder class action lawsuits and a derivative lawsuit were filed challenging the Merger.
Item 1A. Risk Factors

In addition to the complaints filedother information in this Quarterly Report on behalfForm 10-Q, when evaluating the Company’s business investors should consider carefully the below risk factors which have been updated since the Company’s 2021 Form 10-K.

The risk factors in this Quarterly Report on Form 10-Q below should be carefully considered, including the risk factors discussed in “Risk Factors” and other risks discussed in our 2021 Form 10-K. These risks could materially and adversely affect our results, operations, outlooks, plans, goals, growth, reputation, cash flows, liquidity, and stock price. Our business also could be affected by risks that we are not presently aware of plaintiffs Parker, Christiansen, Rossor that we currently consider immaterial to our operations.

Risks Related to the Company's Indebtedness

Products Corporation’s substantial indebtedness could adversely affect the Company’s operations and Stein, on July 25,flexibility and Products Corporation’s ability to service its debt.

Products Corporation has a substantial amount of outstanding indebtedness. As of March 31, 2022, the Company’s total third-party indebtedness was $3,520.9 million (or $3,423.4 million, including future interest and net of discounts and debt issuance costs), including: (i) $1,873.2 million in aggregate principal amount under the 2020 BrandCo Facilities; (ii) $872.4 million in aggregate principal amount of secured indebtedness under its 2016 a lawsuit (Hutson v. Elizabeth Arden, Inc., et al., Case No. CACE-16-013566) (referredTerm Loan Facility; (iii) $138.0 million of secured indebtedness under its Amended 2016 Revolving Credit Facility, consisting of $88.0 million of Tranche A revolving loans and $50.0 million of 2020 ABL FILO Term Loans; (iv) $130.0 million of loans under the senior secured second-in, second-out term loan facility under the SISO Term Loan Facility; (v) $75.0 million in aggregate principal amount of secured indebtedness under the 2021 Foreign Asset-Based Term Facility; (vi) $431.3 million in aggregate principal amount of its 6.25% Senior Notes and (vii) $1.0 million in aggregate principal amount of other short-term borrowings indebtedness.

If the Company is unable to asmaintain or increase its profitability and cash flow and sustain such results in future periods, the “Hutson complaint”) was filedCompany’s operations and Products Corporation’s ability to service its debt and/or comply with the financial and/or operating covenants under its various debt instruments could be adversely affected. (See also "Risk Factors - Restrictions and covenants in the Seventeenth Judicial Circuitvarious debt instruments of the Company’s subsidiaries limit its ability to take certain actions and impose consequences in the event of failure to comply.")

The Company is subject to the risks normally associated with substantial indebtedness, including the risk that the Company’s profitability and cash flow will be insufficient to meet required payments of principal and interest under Products Corporation’s various debt instruments, and the risk that Products Corporation will be unable to refinance existing indebtedness when it becomes due or, if it is unable to comply with the financial or operating covenants under its various debt instruments, to obtain any necessary consents, waivers or amendments or that the terms of any such refinancing and/or consents, waivers or amendments will be less favorable than the current terms of such indebtedness. Products Corporation’s substantial indebtedness could also have the effect of:

•limiting the Company’s ability to fund (including by obtaining additional financing) the costs and expenses of executing the Company’s business initiatives in the short-term and long-term, future working capital, capital expenditures, advertising, promotional and/or marketing expenses, new product development costs, purchases and reconfigurations of wall displays, acquisitions, and related integration costs, investments, restructuring programs and other general corporate purposes;

•requiring the Company to dedicate a substantial portion of its cash flow from operations to payments on Products Corporation’s indebtedness, thereby reducing the availability of the Company’s cash flow necessary for executing the Company’s business initiatives in the short-term and long-term and for Broward County, Florida (the “Court”) against Elizabeth Arden,other general corporate purposes;

59
REVLON, INC. AND SUBSIDIARIES


•placing the membersCompany at a competitive disadvantage compared to its competitors that have less debt;
•exposing the Company to potential events of default (if not cured or waived) under the board of directors of Elizabeth Arden, Revlon,financial and operating covenants contained in Products Corporation’s various debt instruments;

•limiting the Company’s flexibility in responding to changes in its business and the industry in which it operates;

•reducing the Company’s negotiating power and flexibility in dealings with important customers and suppliers, potentially putting pressure on the Company’s ability to obtain advantageous delivery, supply and/or pricing terms; and

•making the Company more vulnerable to adverse economic conditions, such as a tightening in the credit markets, rising interest rates, or a downturn in its business.

Although agreements governing Products Corporation’s indebtedness, including the 2016 Credit Agreements, the 6.25% Senior Notes Indenture and the 2020 BrandCo Credit Agreement, limit Products Corporation’s ability to borrow funds, under certain circumstances, Products Corporation is allowed to borrow a significant amount of additional money, some of which, in certain circumstances and Acquisition Sub. In general, the Hutson complaint alleges that: (i) the members of Elizabeth Arden’s board of directors breached their fiduciary dutiessubject to Elizabeth Arden’s shareholders with respect to the Merger, by, among other things, approving the Merger pursuant to an unfair process and at an inadequate and unfair price; and (ii) Revlon, Products Corporation and Acquisition Sub aided and abetted the breaches of fiduciary duty by the members of Elizabeth Arden’s board. The plaintiff seeks relief similar to that sought in the Parker case.
By Order dated August 4, 2016, all five cases were consolidated by the Court into a Consolidated Amended Class Action. Thereafter, on August 11, 2016 a Consolidated Amended Class Action Complaint was filed, seeking to enjoin defendants from consummating the Merger and/or from soliciting shareholder votes.certain limitations, could be secured indebtedness. To the extent that more debt, whether secured or unsecured, is added to the Merger was consummated,Company’s current debt levels, the risks described above would increase further.

Products Corporation’s ability to pay the principal amount of its indebtedness depends on many factors.

The Tranche A revolving loans and the SISO Term Loan Facility under the Amended 2016 Revolving Credit Facility mature in May 2024, subject to a springing maturity to the earlier of: (x) 91 days prior to the maturity of the 2016 Term Loan Facility, and (y) to the extent the 2020 ABL FILO Term Loans are then outstanding, the earliest stated maturity of the 2020 ABL FILO Term Loans; the non-extended portion of the 2016 Term Loan Facility matures no later than September 2023; the 2020 ABL FILO Term Loans mature no later than December 2023; the 2021 Foreign Asset-Based Term Facility matures no later than March 2024; and the 6.25% Senior Notes mature in August 2024. Also, while the 2020 BrandCo Facilities are scheduled to mature no later than June 2025, they are subject to a springing maturity on the 91st day prior to the maturity of the 6.25% Senior Notes if $100 million or more in aggregate principal amount of the 6.25% Senior Notes remain outstanding by such date. Additionally, while the extended portion of the 2016 Term Loan Facility (such certain extended portion, the “Extended Term Loans”) are scheduled to mature no later than June 2025, they are subject to a springing maturity to the earlier of (y) the same September 2023 springing maturity date of any non-extended term loans under Products Corporation’s existing 2016 Term Loan Facility if $75 million or more in aggregate principal amount of the non-extended term loans under the 2016 Term Loan Facility remains outstanding on such date, and (z) the 91st day prior to the maturity of the 6.25% Senior Notes if $100 million or more in aggregate principal amount of the 6.25% Senior Notes remain outstanding by such date. And, while the 2021 Foreign Asset-Based Term Facility matures no later than March 2024, it is subject to a springing maturity date of August 1, 2023 if any amount of the non-extended term loans under the 2016 Term Loan Facility remains outstanding on such date. For a more complete description of the maturities of these debt instruments, including events that could accelerate their respective maturities, see Note 8, “Debt,” to the Company’s Audited Consolidated Amended Class Action Complaint seeks to rescind the Merger or recover rescissory or other compensatory damages, along with costs and fees. The grounds for relief set forthFinancial Statements included in the Consolidated Amended Class Action Complaint2021 Form 10-K. Products Corporation currently anticipates that, in large part track those grounds as assertedorder to pay the principal amount of its outstanding indebtedness upon the occurrence of any event of default, or to repurchase any of the 6.25% Senior Notes if a change of control occurs, or in the five individual complaints, as previously disclosed. Class counsel advisedevent that post consummationProducts Corporation’s cash flows from operations are insufficient to allow it to pay the principal amount of its indebtedness by their respective maturity dates, the Merger they were goingCompany will be required to file a Second Consolidated Amended Class Action Complaint. The Second Consolidated Amended Class Action Complaint (which supersededrefinance some or all of Products Corporation’s indebtedness, seek to sell assets or operations, seek to sell additional Revlon equity, seek to sell debt securities of Revlon or Products Corporation and/or seek additional capital contributions or loans from MacAndrews & Forbes or from the Consolidated Amended Class Action Complaint) was ultimately filed on Company’s other affiliates and/or about January 26, 2017. Like the Consolidated Amended Class Action complaint, the grounds for relief set forth in the Second Consolidated Amended Class Action Complaint in large part track those grounds as asserted in the five individual complaints.
third parties. The Company believes the allegations contained in the Second Consolidated Amended Class Action Complaint are without merit and intends to vigorously defend against them. Additional lawsuits arising out of or relating to the Merger Agreement or the Merger may be filedunable to take any of these actions due to a variety of commercial or market factors or constraints in Products Corporation’s various debt instruments, including, for example, market conditions being unfavorable for an equity or debt issuance, additional capital contributions or loans not being available from affiliates and/or third parties, or that the future. The defendants' motions to dismisstransactions may not be permitted under the Second Consolidated Amended Class Action Complaint were filed on March 28, 2017. Plaintiffs' response was filed on June 6, 2017 and defendants' replies were filed on July 13, 2017. A hearingterms of Products Corporation’s various debt instruments then in effect, including restrictions on the defendants' motionincurrence of additional debt, incurrence of liens, asset dispositions and/or related party transactions included in such debt instruments. Such actions, if ever taken, may not enable the Company to dismiss was held on September 19, 2017 andsatisfy its cash requirements if the parties awaitactions do not result in sufficient cost reductions or generate a sufficient amount of additional capital, as the Court's decision.
case may be. The Company believes that the outcome of all pending legal proceedings in the aggregate is not reasonably likelyfailure to repay or repurchase any material indebtedness upon maturity, acceleration or otherwise would have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows. However, in lightEven if the Company can refinance any such indebtedness, the terms of such indebtedness may contain more restrictive covenants or be costly to the Company. The terms of any refinancing may adversely affect the Class A Common Stock and its trading price.

None of the uncertainties involvedCompany’s affiliates are required to make any capital contributions, loans or other payments to Products Corporation regarding its obligations on its indebtedness. Products Corporation may not be able to pay the principal amount of its indebtedness using any of the above actions because, under certain circumstances, the 2016 Credit Agreements, the 2020
60
REVLON, INC. AND SUBSIDIARIES

BrandCo Credit Agreement, the 2021 Foreign Asset-Based Term Agreement, the 6.25% Senior Notes Indenture, any of Products Corporation’s other debt instruments and/or the debt instruments of Products Corporation’s subsidiaries then in legal proceedings generally,effect may not permit the ultimate outcomeCompany to take such actions. (See also "Risk Factors - Restrictions and covenants in the various debt instruments of the Company’s subsidiaries limit its ability to take certain actions and impose consequences in the event of failure to comply”).

The future state of the credit markets, including any volatility and/or tightening of the credit markets and reduction in credit availability, and rising interest rates could adversely impact the Company’s ability to refinance or replace, in whole or in part, Products Corporation’s outstanding indebtedness by their respective maturity dates, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

Restrictions and covenants in the various debt instruments of the Company’s subsidiaries limit its ability to take certain actions and impose consequences in the event of failure to comply .

The agreements that govern the indebtedness of the Company’s subsidiaries, including the 2016 Credit Agreements, the 2020 BrandCo Credit Agreement, the 2021 Foreign Asset-Based Term Agreement, and the 6.25% Senior Notes Indenture, contain a number of significant restrictions and covenants that limit the ability of the Company’s subsidiaries (subject in each case to certain exceptions) to, among other things:

•borrow money;
•use assets as security in other borrowings or transactions;
•pay dividends on stock or purchase stock;
•sell assets and use the proceeds from such sales;
•enter into certain transactions with affiliates;
•make certain investments;
•prepay, redeem or repurchase specified indebtedness; and
•permit restrictions on the payment of dividends to Products Corporation by its subsidiaries.

These covenants affect the operating flexibility of the Company’s subsidiaries by, among other things, restricting their ability to incur indebtedness that could be used to fund the costs of executing the Company’s business initiatives and to grow the Company’s business, as well as to fund general corporate purposes.

Certain breaches under the 2016 Credit Agreements, the 2020 BrandCo Credit Agreement, the 2021 Foreign Asset-Based Term Agreement and/or the 6.25% Senior Notes Indenture would permit the Company’s lenders to accelerate amounts outstanding thereunder. The acceleration of amounts outstanding under the 2016 Credit Agreements, the 2020 BrandCo Credit Agreement, the 2021 Foreign Asset-Based Term Agreement and/or the 6.25% Senior Notes would in certain circumstances constitute an event of default under the other instruments permitting amounts outstanding under such instruments to be accelerated. In addition, holders of the 6.25% Senior Notes may require Products Corporation to repurchase their notes in the event of a particular matterchange of control under the applicable indenture and a change of control would be an event of default under the 2016 Credit Agreements, the 2020 BrandCo Credit Agreement and the 2021 Foreign Asset-Based Term Agreement. Products Corporation may not have sufficient funds at the time of any such breach or change of control to repay, in full or in part, amounts outstanding under the 2016 Credit Agreements, the 2020 BrandCo Credit Agreement or the 2021 Asset-Based Term Agreement or to repay, repurchase or redeem, in full or in part, the 6.25% Senior Notes.

Factors and events beyond the Company’s control could be materialimpair the Company’s operating performance, which could affect Products Corporation’s ability to comply with the terms of Products Corporation’s debt instruments. Such factors and events may include: decreased consumer spending in response to the ongoing and prolonged COVID-19 pandemic, including the re-imposition of face mask mandates, lockdowns and other restrictive measures in the United States or globally from time to time; decreased discretionary consumer spending in the short or long-term as a result of macroeconomic headwinds due to high inflation and increased pricing pressure on consumers or a future economic contraction or recession in the United States or globally; weakness in the consumption of beauty products in one or more of the Company’s segments; geopolitical risks such as the ongoing Russia/Ukraine conflict; continued outbreaks of COVID-19 in key global commerce and manufacturing hubs from time to time and the related significant disruptions to the Company’s operatingsupply chain resulting from lockdowns and other restrictive measures imposed in such hubs; continued delays at U.S. ports or other modes of transportation and the impact of such delays on the Company’s supply chain or its ability to ship products to customers; any prolonged and/or significant disruptions, shutdowns or closures in the manufacturing facilities of the Company or its key third-party suppliers both within the U.S. and abroad due to COVID-19; continued labor shortages at the Company and within the Company’s supply chain; increasing inflation globally that materially impacts the cost of raw materials, labor and transportation; the inability of the Company to increase prices of its products or otherwise offset cost increases in response to inflationary pressure; adverse changes in tariffs, foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors, decreased advertising, promotional and marketing spending by the Company and/or decreased performance by third-party
61
REVLON, INC. AND SUBSIDIARIES

suppliers, whether due to shortages of raw materials or otherwise; changes in consumer purchasing habits, including with respect to retailer preferences and/or among sales channels, such as due to any further consumption declines that the Company has experienced; inventory management by the Company’s customers; inventory de-stocking by certain retail customers; space reconfigurations or reductions in display space by the Company’s customers; retail store closures in the brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company’s customers; less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, those for pension expense under its benefit plans, restructuring programs and related severance expenses, acquisitions and related integration costs, capital expenditures, costs related to litigation, advertising, promotional and/or marketing activities or for sales returns related to any reduction of space by the Company’s customers, product discontinuances or otherwise, exceed the Company’s anticipated level of expenses.

Under such circumstances, Products Corporation or its subsidiaries may be unable to comply with the requirements of one or more of its or their various debt instruments, including any financial covenants in the Amended 2016 Revolving Credit Agreement or the 2021 Foreign Asset-Based Term Agreement. If Products Corporation or its subsidiaries are unable to satisfy such requirements at any future time, Products Corporation or its subsidiaries would need to seek an amendment or waiver of such requirements. The respective lenders under the Amended 2016 Revolving Credit Agreement, the 2021 Foreign Asset-Based Term Agreement and/or the other applicable debt instruments may not consent to any amendment or waiver requests that Products Corporation or its subsidiaries may make in the future, and, if they do consent, they may only do so on terms that are unfavorable or costly to Products Corporation and/or Revlon.

If Products Corporation or its subsidiaries are unable to obtain any such waiver or amendment, Products Corporation’s or its subsidiaries’ inability to meet the requirements of the Amended 2016 Revolving Credit Agreement, the 2021 Foreign Asset-Based Term Agreement and/or other applicable debt instruments would constitute an event of default under such agreements, which, under certain circumstances, would permit the lenders to accelerate the repayment of the Amended 2016 Revolving Credit Facility or the 2021 Foreign Asset-Based Term Agreement, as the case may be, and, under certain circumstances, would constitute an event of default under the 2016 Term Loan Agreement, the 2020 BrandCo Credit Agreement and the 6.25% Senior Notes Indenture. An event of default under the 6.25% Senior Notes Indenture would permit the trustee for the 6.25% Senior Notes or the requisite note holders to accelerate payment of the principal and accrued, but unpaid, interest on the 6.25% Senior Notes.

Products Corporation’s assets and/or cash flows and/or that of Products Corporation’s subsidiaries may not be sufficient to fully repay borrowings under its various debt instruments, either upon maturity or if accelerated upon an event of default or change of control, and if the Company is required to repay, repurchase and/or redeem, in whole or in part, amounts outstanding under the 2016 Credit Agreements, the 2020 BrandCo Facilities, the 2021 Foreign Asset-Based Term Agreement and/or its 6.25% Senior Notes, it may be unable to refinance or restructure the payments on such debt. Further, if the Company is unable to repay, refinance or restructure its indebtedness under the 2016 Credit Agreements, the 2020 BrandCo Facilities and/or the 2021 Foreign Asset-Based Term Agreement, the lenders could proceed against the collateral securing that indebtedness, subject to certain conditions and limitations as set forth in the related intercreditor agreements and collateral agreements. As described above, the consequences of failing to comply with the foregoing restrictions, covenants and limitations under the Company’s various debt instruments could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

Limits on the borrowing capacity under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility and other factors may affect the Company’s ability to finance its operations both on a short-term and long-term basis. Any material limitation on the borrowing capacity under these credit facilities or other material adverse development to the Company’s liquidity could have a material adverse effect on the Company.

At March 31, 2022, Products Corporation and its subsidiaries had $138.0 million in aggregate borrowings outstanding under the Amended 2016 Revolving Credit Facility and $75.0 million outstanding under the 2021 Foreign Asset-Based Term Facility. While the Tranche A revolving loans under the Amended 2016 Revolving Credit Facility provide for up to $270.0 million of commitments, the Company’s ability to borrow funds under such facility is limited by a borrowing base determined relative to the value, from time-to-time, of certain eligible assets.

While the 2021 Foreign Asset-Based Term Facility provides for a particular periodU.S. dollar-denominated senior secured asset-based term loan facility which currently has a principal balance of $75.0 million, the 2021 Foreign Asset-Based Term Agreement requires the maintenance of a borrowing base supporting the borrowing thereunder, based on the sum of: (i) 80% of eligible accounts receivable (temporarily increased to 90% for one year following March 30, 2022) (ii) 65% of the net orderly liquidation value of eligible finished goods inventory (temporarily increased to 75% for one year following March 30, 2022) and (ii) 45% of the mortgage value of certain owned real property, in each case with respect to certain of Products Corporation’s subsidiaries organized in Australia, Bermuda, Germany, Italy, Spain and Switzerland, subject to certain customary availability reserves.

62
REVLON, INC. AND SUBSIDIARIES

Under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility, if the value of the Company’s eligible assets is not sufficient to support the full borrowing base under the respective facility, Products Corporation and its subsidiaries will not have complete access to the entire commitment available under such facilities, but rather would have access to a lesser amount as determined by the borrowing base.

The applicable borrowers must prepay loans under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility to the extent that outstanding loans exceed its respective borrowing base. Under the 2021 Foreign Asset-Based Term Facility, in lieu of a mandatory prepayment, certain subsidiaries of the Company may deposit cash into a designated U.S. bank account with the agent thereunder, that is subject to a control agreement (such cash, the “Qualified Cash”). To the extent the borrowing base subsequently exceeds the amount of outstanding loans, the Qualified Cash can be withdrawn from such bank account. In addition, the 2021 Foreign Asset-Based Term Facility is subject to mandatory prepayments from the net proceeds from the incurrence of debt by certain of the Company’s subsidiaries not permitted thereunder.

As Products Corporation continues to manage its working capital (including its and its subsidiaries’ inventory and accounts receivable, which are significant components of the eligible assets comprising the borrowing base under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility), this could reduce the borrowing base under the Amended 2016 Revolving Credit Facility and/or the 2021 Asset-Based Term Facility. Further, if Products Corporation borrows funds under the Amended 2016 Revolving Credit Facility, subsequent changes in the value or eligibility of the assets within the borrowing base could require Products Corporation to pay down amounts outstanding under such facility so that there is no amount outstanding in excess of the then-existing borrowing base. Likewise, subsequent changes in the value or eligibility of the assets within the borrowing base under the 2021 Foreign Asset-Based Term Facility could require Products Corporation and its subsidiaries to pay down amounts outstanding under such facility so that there is no amount outstanding in excess of the then-existing borrowing base, which, unlike the Amended 2016 Revolving Credit Facility, cannot be re-borrowed.

The Company’s ability to borrow under the Amended 2016 Revolving Credit Facility is also conditioned upon its compliance with the covenants in the Amended 2016 Revolving Credit Facility. Because of these limitations, the Company may not always be able to meet its cash requirements with funds borrowed under the Amended 2016 Revolving Credit Facility, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

If one or more lenders under the Amended 2016 Revolving Credit Facility are unable to fulfill their commitment to advance funds to Products Corporation under such facility, it would impact the Company’s liquidity and, depending upon the amount involved and the Company’s liquidity requirements, it could have an adverse effect on the Company’s ability to fund its operations, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

Recently, the Company’s working capital and borrowing base availability under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset‑Based Term Facility have been negatively impacted by global supply chain issues which have affected the Company’s accounts receivable and inventory. These global supply chain issues have resulted from the COVID-19 pandemic and macroeconomic headwinds, and have led to the unavailability of raw materials and cost increases in raw materials, labor and transportation. Although the Company has taken actions, such as the recent March 2022 amendments to the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility, to increase its liquidity, these global supply chain issues and other developments that may negatively affect the Company’s liquidity, such as the ongoing Russia-Ukraine conflict, may continue or recur in the future. Actions previously taken by the Company to address these issues, such as cost cutting, may have a negative effect on the future business and results of operations of the Company. There can be no assurance that these global supply chain issues and other developments will not impact the Company’s liquidity in the future. If the Company is unable to finance its business on either a short-term or long-term basis due to a decrease in borrowing capacity or liquidity, it could result in a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

At March 31, 2022, the Company had a liquidity position of $132.1 million, consisting of: (i) $70.0 million of unrestricted cash and cash equivalents (with approximately $62.2 million held outside the U.S.); (ii) $65.1 million in available borrowing capacity under the Amended 2016 Revolving Credit Facility (which had $268.0 million drawn at such date); and less (iii) approximately $3.0 million of outstanding checks.

A substantial portion of Products Corporation’s indebtedness is subject to floating interest rates and the discontinuation or replacement of LIBOR could result in an increase to our interest expense.

A substantial portion of Products Corporation’s indebtedness is subject to floating interest rates, which makes the Company more vulnerable in the event of adverse economic conditions, such as a tightening in the credit markets, increases in prevailing
63
REVLON, INC. AND SUBSIDIARIES

interest rates or an economic downturn. As of March 31, 2022, $3,089.0 million of Products Corporation’s total indebtedness, or approximately 88% of its total indebtedness, was subject to floating interest rates.

In July 2017, the U.K.’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. On March 5, 2021, the U.K.’s Financial Conduct Authority formally confirmed its intention to cease publishing 24 LIBOR settings, including all seven euro LIBOR settings after December 31, 2021, and the overnight and 12- month U.S. dollar LIBOR setting after June 30, 2023. It is unclear whether or not LIBOR will cease to exist at that time (and if so, what reference rate will replace it) or if new methods of calculating LIBOR will be established such that it continues to exist after June 30, 2023. Certain of Products Corporation’s financing agreements, including its 2016 Term Loan Facility, the Amended 2016 Revolving Credit Facility, the 2020 BrandCo Facilities and the 2021 Foreign Asset-Based Term Facility are made at variable rates that use LIBOR as a benchmark for establishing the applicable interest rate. While the 2016 Term Loan Facility contains limited “fallback” provisions providing for comparable or successor rates in the event LIBOR is unavailable, these provisions may not adequately address the actual changes to LIBOR or its successor rates. For example, if future rates based upon the successor reference rate (or a new method of calculating LIBOR) are higher than LIBOR rates as currently determined, it may have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows. On the other hand, if future rates based upon the successor reference rate (or a new method of calculating LIBOR) are lower than LIBOR rates as currently determined, the lenders under such credit agreements may seek amendments to increase the applicable interest rate margins or invoke their right to require the use of the alternate base rate in place of LIBOR, which could result in an increase to our interest expense as discussed below. By contrast, the Amended 2016 Revolving Credit Facility, the 2020 BrandCo Credit Agreement and the 2021 Foreign Asset-Based Term Facility contain provisions governing the selection and adjustment of replacement reference rates. More generally, a phase-out of LIBOR could cause market volatility or disruption and may adversely affect our access to the capital markets and cost of funding, which would have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.

As of March 31, 2022, the entire $872.4 million in aggregate principal amount outstanding under the 2016 Term Loan Facility bore interest, at Product Corporation’s option, at a rate per annum of LIBOR (which has a floor of 0.75%) plus a margin of 3.5% or an alternate base rate plus a margin of 2.5%, payable quarterly, at a minimum. At March 31, 2022, LIBOR and the alternate base rate for the 2016 Term Loan Facility were 0.75% and 3.50%, respectively. As of March 31, 2022, $88.0 million in aggregate principal amount outstanding under the Tranche A revolving loans of the Amended 2016 Revolving Credit Facility bore interest, at Products Corporation’s option, at a rate per annum equal to either: (i) the alternate base rate plus an applicable margin equal to 2.75%; or (ii) the Eurocurrency rate (which has a floor of 0.50%) plus an applicable margin equal to 3.75%. Term loans under the SISO Term Loan Facility accrue interest, at Products Corporation’s option, at a rate per annum of LIBOR (which has a floor of 1.75%) plus a margin of 5.75% or at an alternate base rate plus a margin of 4.75%. The 2020 ABL FILO Term Loans accrue interest, at Products Corporation’s option, at a rate per annum of LIBOR (which has a floor of 1.75%) plus a margin of 8.50% or at an alternate base rate plus a margin of 7.50%. Interest accrues on the term loan facility under the 2020 BrandCo Credit Agreement at a rate per annum equal to (i) 2.00%, payable in kind, plus (ii) LIBOR (which has a floor of 1.50%) plus a margin of 10.5%. Interest accrues on the roll-up term loans under the 2020 BrandCo Credit Agreement at a rate per annum of LIBOR (which has a floor of 0.75%) plus a margin of 3.5%. Under the 2021 Foreign Asset-Based Term Facility, which currently has $75.0 million in aggregate principal amount outstanding, interest accrues on borrowings at a rate per annum equal to the LIBOR rate (which had a floor of 1.50%) plus an 8.50% applicable margin.

If any of LIBOR (or its successor rate), the prime rate or the federal funds effective rate increases, Products Corporation’s debt service costs will increase to the extent that Products Corporation has elected such rates for its outstanding loans. Based on the amounts outstanding under the 2016 Credit Agreements, the 2020 BrandCo Facilities, the 2021 Foreign Asset-Based Term Facility and other short-term borrowings (which, in the aggregate, are Products Corporation’s only debt currently subject to floating interest rates) as of March 31, 2022, a 1% increase in LIBOR (or an equivalent successor rate) would increase the Company’s annual interest expense by $20.6 million. Based on the same amounts outstanding, a change from LIBOR to the alternate base rate in the case of the 2016 Credit Agreements would increase the Company’s annual interest expense by $15.9 million. Increased debt service costs would adversely affect the Company’s cash flows and could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

The Company’s ability to service its debt and meet its cash requirements depends on many factors, including achieving anticipated levels of revenue and expenses. If such revenue or expense levels prove to be other than as anticipated, the Company may be unable to meet its cash requirements or its subsidiaries may be unable to meet the requirements of the 2016 Credit Agreements, 2020 BrandCo Credit Agreement and/or 2021 Foreign Asset-Based Term Agreement, which could have a material adverse effect on the Company’s business, prospects, results of operations, financial condition and/or cash flows.

The Company currently expects that operating revenues, cash on hand, and funds that may be available for borrowing under the Amended 2016 Revolving Credit Facility and other permissible borrowings will be sufficient to enable the Company to cover its operating expenses for 2022, including: cash requirements for the payment of expenses in connection with
64
REVLON, INC. AND SUBSIDIARIES

executing the Company’s business initiatives and its advertising, promotional, pricing and/or marketing plans; purchases of permanent wall displays; capital expenditure requirements; debt service payments and costs; cash tax payments; pension and other post-retirement plan contributions; payments in connection with the Company’s restructuring programs; severance not otherwise included in the Company’s restructuring programs; business and/or brand acquisitions (including, without limitation, through licensing transactions), if any; debt and/or equity repurchases, if any; costs related to litigation; and payments in connection with discontinuing non-core business lines and/or exiting and/or entering certain territories and/or channels of trade.

As discussed in “Risk Factors –Limits on the borrowing capacity under the Amended 2016 Revolving Credit Facility and the 2021 Foreign Asset-Based Term Facility and other factors may affect the Company’s ability to finance its operations both on a short-term and long-term basis. Any material limitation on the borrowing capacity or other material adverse development to the Company’s liquidity could have a material adverse effect on the Company,” the Company’s liquidity has been negatively impacted by global supply chain disruptions, the unavailability of raw materials and cost increases in raw materials, labor and transportation. Although the Company has taken actions to increase its liquidity, if the Company’s anticipated level of revenue is not achieved because of any of the following factors or events: decreased consumer spending in response to the ongoing and prolonged COVID-19 pandemic, including the re-imposition of face mask mandates, lockdowns and other restrictive measures in the United States or globally from time to time; decreased discretionary consumer spending in the short or long-term as a result of macroeconomic headwinds due to high inflation and increased pricing pressure on consumers or a future economic contraction or recession in the United States or globally; weakness in the consumption of beauty products in one or more of the Company’s segments; geopolitical risks such as the ongoing Russia/Ukraine conflict; continued outbreaks of COVID-19 in key global commerce and manufacturing hubs from time to time and the related significant disruptions to the Company’s supply chain resulting from lockdowns and other restrictive measures imposed in such hubs; continued delays at U.S. ports or other modes of transportation and the impact of such delays on the Company’s supply chain or its ability to ship products to customers; any prolonged and/or significant disruptions, shutdowns or closures in the manufacturing facilities of the Company or its key third-party suppliers both within the U.S. and abroad due to COVID-19; continued labor shortages at the Company and within the Company’s supply chain; increasing inflation globally that materially impacts the cost of raw materials, labor and transportation; the inability of the Company to increase prices of its products or otherwise offset cost increases in response to inflationary pressure; adverse changes in tariffs, foreign currency exchange rates, foreign currency controls and/or government-mandated pricing controls; decreased sales of the Company’s products as a result of increased competitive activities by the Company’s competitors, decreased advertising, promotional and marketing spending by the Company and/or decreased performance by third-party suppliers, whether due to shortages of raw materials or otherwise; changes in consumer purchasing habits, including with respect to retailer preferences and/or sales channels; inventory management by the Company’s customers; space reconfigurations or reductions in display space by the Company’s customers; retail store closures in brick-and-mortar channels where the Company sells its products, as consumers continue to shift purchases to online and e-commerce channels; changes in pricing, marketing, advertising and/or promotional strategies by the Company’s customers; less than anticipated results from the Company’s existing or new products or from its advertising, promotional, pricing and/or marketing plans; or if the Company’s expenses, including, without limitation, those for pension expense under its benefit plans, capital expenditures, restructuring and severance costs (including, without limitation, for the EA Integration Restructuring Program, the 2018 Optimization Program and the Revlon 2020 Restructuring Program (subsequently renamed during 2021 as RGGA)), acquisition and integration costs, costs related to litigation, advertising, promotional and/or marketing activities or for sales returns related to any reduction of space by the Company’s customers, product discontinuances or otherwise, exceed the anticipated level of expenses, the Company’s current sources of funds may be insufficient to meet its cash requirements. In addition, such developments, if significant, could reduce the Company’s revenues and could have a material adverse effect on Products Corporation’s ability to comply with the terms of the 2016 Credit Agreements, 2020 BrandCo Credit Agreement and/or 2021 Foreign Asset-Based Term Loan Agreement (See also "Risk Factors - Restrictions and covenants in the various debt instruments of the Company’s subsidiaries limit its ability to take certain actions and impose consequences in the event of failure to comply,” which discusses, among other things, the sizeconsequences of noncompliance with Products Corporation’s debt covenants).

If the Company’s operating revenues, cash on hand and/or funds that may be available for borrowing are insufficient to cover the Company’s expenses and/or are insufficient to enable Products Corporation and its subsidiaries to comply with the requirements of the loss 2016 Credit Agreements, 2020 BrandCo Credit Agreement and/or 2021 Foreign Asset-Based Term Agreement, the natureCompany could be required to adopt one or more of the liability imposed andalternatives listed below:

•delaying the levelimplementation of or revising certain aspects of the Company’s incomebusiness initiatives;
•reducing or delaying purchases of wall displays and/or expenses related to the Company’s advertising, promotional and/or marketing activities;
•reducing or delaying capital spending;
•implementing new restructuring programs;
•refinancing Products Corporation’s indebtedness;
•selling assets or operations;
•seeking additional capital contributions and/or loans from MacAndrews & Forbes, the Company’s other affiliates and/or third parties;
65
REVLON, INC. AND SUBSIDIARIES

•selling additional Revlon equity or debt securities or Products Corporation’s debt securities; and/or
•reducing other discretionary spending.

The Company may not be able to take any of these actions because of a variety of commercial or market factors or constraints in one or more of Products Corporation’s various debt instruments, including, for example, market conditions being unfavorable for an equity or a debt issuance, additional capital contributions or loans not being available from affiliates and/or third parties, or that particularthe transactions may not be permitted under the terms of one or more of Products Corporation’s various debt instruments then in effect, such as due to restrictions on the incurrence of debt, incurrence of liens, asset dispositions and/or related party transactions. If the Company is required to take any of these actions, it could have a material adverse effect on its business, prospects, results of operations, financial condition and/or cash flows.

Such actions, if ever taken, may not enable the Company to satisfy its cash requirements or enable Products Corporation and its subsidiaries to comply with the terms of the 2016 Credit Agreements, 2020 BrandCo Credit Agreement and/or 2021 Foreign Asset-Based Term Agreement if the actions do not result in sufficient cost reductions or generate a sufficient amount of additional capital, as the case may be. (See also "Risk Factors - Restrictions and covenants in the various debt instruments of the Company’s subsidiaries limit its ability to take certain actions and impose consequences in the event of failure to comply,” which discusses, among other things, the consequences of noncompliance with Products Corporation’s debt covenants).

Risks Related to the Company's Industry, Business and Operations

The ongoing and prolonged COVID-19 pandemic has resulted in significantly decreased net sales for the Company and has had, and could continue to have, a significant adverse effect on the Company’s business, results of operations, financial condition and/or cash flows.

The ongoing and prolonged COVID-19 pandemic has had, and continues to have, a significant adverse effect on the Company’s business around the globe, which could continue for the foreseeable future. The COVID-19 pandemic has adversely impacted net sales in all major commercial regions that are important to the Company’s business. COVID-19’s adverse impact on the global economy has contributed to the imposition of face mask mandates, lockdowns and other significant restrictions in the United States and abroad from time to time; global supply chain disruptions, including manufacturing and transportation delays, due to closures, employee absences, port congestion, labor and container shortages, and shipment delays, increased transportation costs, and shortages in raw materials, tight labor markets and inflationary pressures for a number of industries, including consumer retail, and related consumer products shortages and price increases; closures, bankruptcies and/ or reduced operations of retailers, beauty salons, spas, offices and manufacturing facilities; labor shortages with employers in many industries, including consumer retail, experiencing increased competition to recruit, hire and retain employees; travel and transportation restrictions leading to declines in consumer traffic in key shopping and tourist areas around the globe; and import and export restrictions. These adverse economic conditions have resulted in the general slowdown of the global economy, in turn contributing to a significant decline in net sales within each of the Company’s reporting segments and regions. However, with the roll out of COVID-19 vaccinations in 2021 and the easing of COVID-19 restrictions in the United States and in many of the Company’s key markets around the globe, the Company saw a gradual rebound in consumer spending and consumption in 2021, which continued into 2022. The Company continues to closely monitor the associated impacts of COVID-19, including the impacts of any new variants of COVID-19 and subsequent “waves” of the pandemic, and will take appropriate actions in an effort to mitigate the COVID-19 pandemic’s negative effects on the Company’s operations and financial results.

In April 2020, the Company took several cost reduction measures designed to mitigate the adverse impact of the ongoing and prolonged COVID-19 pandemic on its net sales, including, without limitation: (i) reducing brand support, as a result of the abrupt decline in retail store traffic; (ii) continuing to monitor the Company’s sales and order flow and periodically scaling down operations and cancelling promotional programs; and (iii) closely managing cash flow and liquidity and prioritizing cash to minimize COVID-19’s impact on the Company’s production capabilities. In April 2020, the Company also implemented various organizational interim measures designed to reduce costs in response to COVID-19, including, without limitation: (i) switching to a reduced work week in the U.S. and in the Company’s international locations and reducing executive and employee compensation in the range of 20% to 40%; (ii) furloughing approximately 40% of the Company’s U.S.-based office-based employees and 30% factory-based employees, as well as employees in a majority of the Company’s other locations; (iii) suspending the Company’s 2020 merit base salary increases, discretionary profit sharing contributions and matching contributions to the Company’s 401(k) plan; (iv) reducing Board and committee compensation by 50% and eliminating Board and committee meeting fees; and (v) suspending or terminating services and payments under consulting agreements with certain directors. During the third quarter of 2020, the Company started to gradually roll back some of these measures especially with regards to some of the employees previously furloughed and/or on a reduced work week. With these measures, including the Revlon 2020 Restructuring Program, the Company achieved cost reductions of approximately $286 million during the year ended December 31, 2020 that have substantially offset the impact of the decline in the Company’s net sales over such period. No such organizational interim measures were taken in 2021 besides the Company’s ongoing Revlon 2020 Restructuring Program. Prolonged reductions in brand support and other investments in the Company’s business could have a material adverse effect on the Company’s results of operations.

66

REVLON, INC. AND SUBSIDIARIES

Item 1A. Risk Factors
From time to time, the ongoing and prolonged COVID-19 pandemic has caused disruptions at the Company and various of its key third-party suppliers’ manufacturing facilities in the United States and abroad which has led to shortages of raw materials, components and finished products. While these disruptions have been temporary, prolonged and/or significant disruptions could cause the Company to be unable to ship products to retailers and consumers and could adversely affect the Company’s net sales. Also, if one or more of the Company’s key customers were required to suspend operations or close for an extended period, the Company might not be able to ship products to them and consumers may decrease their level of purchasing activity, which would adversely impact the Company’s net sales.

In addition, U.S. and/or foreign governmental authorities may from time to time recommend or impose other measures that could cause significant disruptions to the Company’s business operations in the regions most impacted by the coronavirus. The continuation of any of the foregoing events or other informationunforeseen consequences of the COVID-19 pandemic would continue to significantly adversely affect the Company’s business, results of operations, financial condition and/or cash flows.

The Company's success depends, in this report, investors should consider carefullypart, on the risk factors discussedquality, efficacy and safety of its products.

The Company's success depends, in Part I, Item 1A. "Risk Factors"part, on the quality, efficacy and safety of its products. If the Company's products are found or alleged to be defective or unsafe, or if they fail to meet customer or consumer standards, the Company's relationships with its customers or consumers could suffer, the appeal of one or more of the Company's brands could be diminished and the Company could lose sales and/or become subject to liability claims, any of which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition and/or cash flows. For example, the Company is named in Products Corporation's 2016 Form 10-K.lawsuits alleging product liability issues, all of which the Company believes are without merit and defends against vigorously, however, the outcome and impact of these lawsuits, which include cases based on the presence of talc in certain products, cannot be predicted with certainty.



The Company’s success largely depends upon its ability to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce, as well as effectively implement succession planning for its senior management team, and, as such, the Company’s inability to do so could adversely affect the Company’s business, prospects, results of operations, financial condition and/or cash flows.

Continuing to execute the Company’s business initiatives largely depends on the Company’s ability to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce, as well as effectively implement succession planning for its senior management team. The Company has recently experienced increased employee attrition and labor shortages primarily due to COVID-19. The Company’s failure to adequately address increased employee turnover or to maintain an adequate succession plan to effectively transition current management leadership positions and/or the Company’s failure to attract, hire and retain its senior management team, other key employees and a highly skilled and diverse workforce could adversely affect the Company’s institutional knowledge base and/or competitive advantage. If the Company is unable to attract, hire and/or retain talented and highly qualified senior management, other key employees and/or a highly skilled and diverse workforce, or if the Company is unable to effectively provide for the succession of its senior management team, the Company’s business, prospects, results of operations, financial condition and/or cash flows could be adversely affected.


Item 5. Other Information


None.Extension of E. Scott Beattie's Consulting Agreement.


On May 4, 2022, the Company and Mr. Beattie entered into Amendment No. 3 to his Amended and Restated Consulting Agreement, Dated March 11, 2020, pursuant to which he will continue to provide advisory services to the Company until April 1, 2023 (such Amendment No. 3, "Amendment No. 3"). As compensation for Mr. Beattie’s advisory services, the Company agreed to grant him restricted stock units with an intended value of approximately $250,000, which will vest in installments during the period of his services. The foregoing description of Amendment No. 3 is qualified in its entirety by reference to the full text of Amendment No. 3, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

67

REVLON, INC. AND SUBSIDIARIES



Item 6. Exhibits


*31.1
4.1
*10.1
*31.1
*31.2
32.1 (furnished herewith)*31.3
*31.4
**32.1
**32.2 (furnished herewith)
**32.3
**32.4
*101.INSInline XBRL Instance Document
*101.SCHInline XBRL Taxonomy Extension Schema
*101.CALInline XBRL Taxonomy Extension Calculation Linkbase
*101.DEFInline XBRL Taxonomy Extension Definition Linkbase
*101.LABInline XBRL Taxonomy Extension Label Linkbase
*101.PREInline XBRL Taxonomy Extension Presentation Linkbase
*104Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101

*Filed herewith.
**Furnished herewith.




68



S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, theeach Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Dated: November 3, 2017

May 4, 2022
Revlon, Inc.
(Registrant)
By: /s/ Debra PerelmanBy: /s/ Victoria DolanBy: /s/ Beril Yildiz
Debra PerelmanVictoria DolanBeril Yildiz
President, Chief Executive Officer &Chief Financial OfficerVice President,
DirectorChief Accounting Officer
& Controller
Revlon Consumer Products Corporation
(Registrant)
By: /s/ Fabian T. GarciaDebra PerelmanBy: /s/ Christopher H. PetersonVictoria DolanBy: /s/ Beril Yildiz
Fabian T. GarciaDebra Perelman
Christopher H. Peterson

Victoria Dolan		Beril Yildiz
President,Chief Operating Officer, Operations &
Chief Executive Officer and Director&Chief Financial OfficerVice President,
DirectorChief Accounting Officer
& Controller



55
69